CREDIT AGREEMENT
DATED AS OF FEBRUARY 27, 1998
AMONG
XXXX INTERNATIONAL HOLDINGS, INC.,
AS GUARANTOR,
DEFLECTA-SHIELD CORPORATION,
AS BORROWER,
XXXX INDUSTRIES, INCORPORATED,
AS BORROWER,
BELMOR AUTOTRON CORP.,
AS BORROWER,
DFM CORP.,
AS BORROWER,
XXXX ACQUISITION CORP.,
AS GUARANTOR,
BAC ACQUISITION CO.,
AS GUARANTOR,
TRAILMASTER PRODUCTS, INC.,
AS GUARANTOR,
DELTA III, INC.,
AS GUARANTOR,
THE LENDERS NAMED HEREIN,
AS LENDERS
AND
XXXXXX FINANCIAL, INC.,
AS AGENT AND AS LENDER
TABLE OF CONTENTS
PAGE
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SECTION 1
AMOUNTS AND TERMS OF LOANS . . . . . . . . . . . . . . . . . . 2
1.1 Loans. . . . . . . . . . . . . . . . . . . . . . . . 2
(A) Term Loans. . . . . . . . . . . . . . . . . . . 2
----------
(B) Revolving Loans . . . . . . . . . . . . . . . . 4
---------------
(C) Acquisition Loans . . . . . . . . . . . . . . . 6
-----------------
(D) Letters of Credit and Risk Participation
----------------------------------------
Agreements . . . . . . . . . . . . . . . . . . . 6
----------
(1) Maximum Amount . . . . . . . . . . . . . . 7
--------------
(2) Reimbursement . . . . . . . . . . . . . . . 7
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(3) Conditions of Issuance of Letters of Credit
-------------------------------------------
or Risk Participation Agreements . . . . . 8
--------------------------------
(4) Request for Lender Letters of Credit or Risk
--------------------------------------------
Participation Agreements . . . . . . . . . 8
------------------------
(5) Other Letter of Credit Provisions . . . . . 8
---------------------------------
(E) Notes . . . . . . . . . . . . . . . . . . . . 10
-----
(F) Borrowing Mechanics . . . . . . . . . . . . . 10
-------------------
(G) Maximum Amount To Be Borrowed on Closing Date 11
---------------------------------------------
(H) Appointment of Borrower Representative . . . . 11
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1.2 Interest and Related Fees . . . . . . . . . . . . . 11
-------------------------
(A) Interest. . . . . . . . . . . . . . . . . . . 11
--------
(1) Revolving Loans . . . . . . . . . . . . . 11
---------------
(2) Term Loan A . . . . . . . . . . . . . . . 11
-----------
(3) Term Loan B . . . . . . . . . . . . . . . 12
-----------
(4) Acquisition Loans . . . . . . . . . . . . 12
-----------------
(B) Commitment Fee . . . . . . . . . . . . . . . . 15
--------------
(C) Risk Participation Fee . . . . . . . . . . . . 16
----------------------
(D) Computation of Interest and Related Fees . . . 16
----------------------------------------
(E) Default Rate of Interest . . . . . . . . 16
------------------------
(F) Excess Interest . . . . . . . . . . . . . 17
---------------
(G) LIBOR Rate Election. . . . . . . . . . . 17
-------------------
1.3 Other Fees and Expenses . . . . . . . . . . . 17
-----------------------
(A) Certain Fees . . . . . . . . . . . . . . . . . 17
------------
(B) LIBOR Breakage Fee . . . . . . . . . . . . . . 17
------------------
(C) Expenses and Attorneys Fees . . . . . . . . . . 18
---------------------------
1.4 Payments . . . . . . . . . . . . . . . . . . . 18
--------
1.5 Prepayments. . . . . . . . . . . . . . . . . . 19
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(A) Voluntary Prepayment of Term Loans and
--------------------------------------
Acquisition Loans. . . . . . . . . . . . 19
-----------------
(B) Prepayments from Excess Cash Flow . . . . 19
---------------------------------
(C) Prepayments from Asset Dispositions . . . 19
-----------------------------------
(D) Prepayment from Issuance of Securities . 20
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(E) Application of Proceeds . . . . . . . . . 20
-----------------------
(F) Overadvance . . . . . . . . . . . . . . . . . 21
-----------
1.6 Maturity . . . . . . . . . . . . . . . . . . . 21
--------
1.7 Loan Accounts . . . . . . . . . . . . . . . . 21
-------------
1.8 Capital Adequacy and Other Adjustments . . . . 22
--------------------------------------
1.9 Taxes . . . . . . . . . . . . . . . . . . . . 22
-----
(A) No Deductions . . . . . . . . . . . . . . 22
-------------
(B) Changes in Tax Laws . . . . . . . . . . . 22
-------------------
(C) Foreign Lenders . . . . . . . . . . . . . 23
---------------
1.10 Optional Prepayment/Replacement of Lenders . . . . 24
------------------------------------------
SECTION 2
AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . 25
2.1 Compliance With Laws and Contractual Obligations . 25
------------------------------------------------
2.2 Maintenance of Properties; Insurance . . . . . . . 26
------------------------------------
2.3 Inspection; Lender Meeting . . . . . . . . . . . . 27
--------------------------
2.4 Corporate Existence, Etc. . . . . . . . . . . . . . 27
------------------------
2.5 Further Assurances . . . . . . . . . . . . . . . . 27
------------------
2.6 Collateral Records . . . . . . . . . . . . . . . . 27
------------------
2.7 Payment of Taxes . . . . . . . . . . . . . . . . . 28
----------------
2.8 Collateral Locations . . . . . . . . . . . . . . . 28
--------------------
2.9 Instruments; Chattel Paper . . . . . . . . . . . . 28
--------------------------
2.10 Compliance with Environmental Laws . . . . . . . . 28
----------------------------------
2.11 Preparation of Reports and Reviews . . . . . . . . 29
----------------------------------
(A) Environmental Reports . . . . . . . . . . . . 29
---------------------
(B) Health and Safety Reviews . . . . . . . . . . 29
-------------------------
2.12 Interest Rate Agreement . . . . . . . . . . . . . . 30
-----------------------
SECTION 3
NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . 30
3.1 Indebtedness . . . . . . . . . . . . . . . . . . . 30
------------
3.2 Liens and Related Matters . . . . . . . . . . . . . 32
-------------------------
(A) No Liens . . . . . . . . . . . . . . . . . . . 32
--------
(B) No Negative Pledges . . . . . . . . . . . . . 33
-------------------
(C) No Restrictions on Subsidiary Distributions to
----------------------------------------------
Holdings, any Borrower or any other Loan Party 33
----------------------------------------------
3.3 Investments; Joint Ventures. . . . . . . . . . . . 34
---------------------------
3.4 Contingent Obligations . . . . . . . . . . . . . . 35
----------------------
3.5 Restricted Junior Payments . . . . . . . . . . . . 36
--------------------------
3.6 Restriction on Fundamental Changes . . . . . . . . 37
----------------------------------
3.7 Disposal of Assets or Subsidiary Stock . . . . . . 41
--------------------------------------
3.8 Transactions with Affiliates . . . . . . . . . . . 43
----------------------------
3.9 Conduct of Business . . . . . . . . . . . . . . . . 43
-------------------
3.10 Changes Relating to Subordinated Indebtedness . . . 44
---------------------------------------------
3.11 Fiscal Year . . . . . . . . . . . . . . . . . . . . 44
-----------
3.12 Press Release; Public Offering Materials . . . . . 44
----------------------------------------
3.13 Subsidiaries . . . . . . . . . . . . . . . . . . . 44
------------
3.14 Bank Accounts . . . . . . . . . . . . . . . . . . . 44
-------------
3.15 Environmental Liabilities . . . . . . . . . . . . . 44
-------------------------
3.16 Tax Consolidations . . . . . . . . . . . . . . . . 44
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SECTION 4
FINANCIAL COVENANTS/REPORTING . . . . . . . . . . . . . . . . 45
4.1 Capital Expenditure Limits . . . . . . . . . . . . 45
--------------------------
4.2 Lease Limits . . . . . . . . . . . . . . . . . . . 46
------------
4.3 EBITDA . . . . . . . . . . . . . . . . . . . . . . 46
------
4.4 Fixed Charge Coverage . . . . . . . . . . . . . . . 47
---------------------
4.5 Total Interest Coverage . . . . . . . . . . . . . . 48
-----------------------
4.6 Total Indebtedness to Pro Forma EBITDA Ratio . . . 49
--------------------------------------------
4.7 Financial Statements and Other Reports . . . . . . 51
--------------------------------------
(A) Monthly Financials . . . . . . . . . . . . . . 51
------------------
(B) Quarterly Financials . . . . . . . . . . . . . 51
--------------------
(C) Year-End Financials . . . . . . . . . . . . . 51
-------------------
(D) Compliance Certificate . . . . . . . . . . . . 52
----------------------
(E) Accountants' Reports . . . . . . . . . . . . . 52
--------------------
(F) Borrowing Base Certificate . . . . . . . . . . 52
--------------------------
(G) Management Report . . . . . . . . . . . . . . 52
-----------------
(H) Collateral Value Report . . . . . . . . . . . 52
-----------------------
(I) Appraisals . . . . . . . . . . . . . . . . . . 53
----------
(J) Projections . . . . . . . . . . . . . . . . . 53
-----------
(K) SEC Filings and Press Releases . . . . . . . . 53
------------------------------
(L) Events of Default, Etc . . . . . . . . . . . . 53
----------------------
(M) Litigation . . . . . . . . . . . . . . . . . . 54
----------
(N) Notice of Corporate and other Changes . . . . 54
-------------------------------------
(O) Government Notices . . . . . . . . . . . . . . 54
------------------
(P) Environmental Disclosure . . . . . . . . . . . 55
------------------------
(Q) Trade Names . . . . . . . . . . . . . . . . . 55
-----------
(R) Locations . . . . . . . . . . . . . . . . . . 55
---------
(S) Bank Accounts . . . . . . . . . . . . . . . . 56
-------------
(T) Other Information . . . . . . . . . . . . . . 56
-----------------
4.8 Accounting Terms; Utilization of GAAP for Purposes of
-----------------------------------------------------
Calculations Under Agreement . . . . . . . . . . . 56
----------------------------
SECTION 5
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . 56
5.1 Disclosure . . . . . . . . . . . . . . . . . . . . 56
----------
5.2 No Material Adverse Effect . . . . . . . . . . . . 57
--------------------------
5.3 No Default . . . . . . . . . . . . . . . . . . . . 57
----------
5.4 Organization, Powers, Capitalization and Good
---------------------------------------------
Standing . . . . . . . . . . . . . . . . . . . . . 57
--------
(A) Organization and Powers . . . . . . . . . . . 57
-----------------------
(B) Capitalization . . . . . . . . . . . . . . . . 57
--------------
(C) Binding Obligation . . . . . . . . . . . . . . 58
------------------
(D) Qualification . . . . . . . . . . . . . . . . 58
-------------
(E) Authorization of Borrowing, No Conflict . . . 58
---------------------------------------
5.5 Financial Statements and Projections . . . . . . . 58
------------------------------------
5.6 Intellectual Property . . . . . . . . . . . . . . . 59
---------------------
5.7 Payment of Taxes; Audits, Etc . . . . . . . . . . . 59
-----------------------------
5.8 Employee Matters . . . . . . . . . . . . . . . . . 59
----------------
5.9 Solvency . . . . . . . . . . . . . . . . . . . . . 60
--------
5.10 Names . . . . . . . . . . . . . . . . . . . . . . . 60
-----
5.11 Locations; FEIN . . . . . . . . . . . . . . . . . . 60
---------------
5.12 Title to Properties; Liens . . . . . . . . . . . . 60
--------------------------
5.13 Litigation; Adverse Facts . . . . . . . . . . . . . 61
-------------------------
5.14 Performance of Agreements . . . . . . . . . . . . . 61
-------------------------
5.15 Employee Benefit Plans . . . . . . . . . . . . . . 61
----------------------
5.16 Broker's Fees . . . . . . . . . . . . . . . . . . . 62
-------------
5.17 Insurance . . . . . . . . . . . . . . . . . . . . . 62
---------
5.18 Compliance with Laws . . . . . . . . . . . . . . . 62
--------------------
5.19 Environmental Compliance . . . . . . . . . . . . . 62
------------------------
5.20 Perfected Security Interest . . . . . . . . . . . . 63
---------------------------
5.21 Bank Accounts . . . . . . . . . . . . . . . . . . . 63
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5.22 Subsidiaries . . . . . . . . . . . . . . . . . . . 63
------------
5.23 Indebtedness and Liabilities . . . . . . . . . . . 63
----------------------------
5.24 Governmental Regulation . . . . . . . . . . . . . . 63
-----------------------
5.25 Use of Proceeds and Margin Security . . . . . . . . 64
-----------------------------------
5.26 Deflecta Acquisition . . . . . . . . . . . . . . . 64
--------------------
5.27 Amendments to Schedules . . . . . . . . . . . . . . 64
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SECTION 6
DEFAULT, RIGHTS AND REMEDIES . . . . . . . . . . . . . . . . 65
6.1 Event of Default . . . . . . . . . . . . . . . . . 65
----------------
(A) Payment . . . . . . . . . . . . . . . . . . . 65
-------
(B) Default in Other Agreements . . . . . . . . . 65
---------------------------
(C) Breach of Certain Provisions . . . . . . . . . 65
----------------------------
(D) Breach of Warranty . . . . . . . . . . . . . . 65
------------------
(E) Other Defaults Under Loan Documents . . . . . 65
-----------------------------------
(F) Involuntary Bankruptcy; Appointment of Receiver,
-----------------------------------------------
Etc . . . . . . . . . . . . . . . . . . . . . 66
---
(G) Voluntary Bankruptcy; Appointment of Receiver,
---------------------------------------------
Etc . . . . . . . . . . . . . . . . . . . . . 66
----
(H) Judgment and Attachments . . . . . . . . . . . 66
------------------------
(I) Dissolution . . . . . . . . . . . . . . . . . 66
-----------
(J) Solvency . . . . . . . . . . . . . . . . . . . 66
--------
(K) Injunction . . . . . . . . . . . . . . . . . . 66
----------
(L) ERISA; Pension Plans . . . . . . . . . . . . . 67
--------------------
(M) Environmental Matters . . . . . . . . . . . . 67
---------------------
(N) Invalidity of Loan Documents . . . . . . . . . 67
----------------------------
(O) Damage; Strike; Casualty . . . . . . . . . . . 67
------------------------
(P) Licenses and Permits . . . . . . . . . . . . . 67
--------------------
(Q) Failure of Security . . . . . . . . . . . . . 67
-------------------
(R) Liens . . . . . . . . . . . . . . . . . . . . 67
-----
(S) Business Activities . . . . . . . . . . . . . 68
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(T) Change in Control . . . . . . . . . . . . . . 68
-----------------
(U) Xxxx International FSC Activities . . . . . . 68
---------------------------------
6.2 Suspension of Commitments . . . . . . . . . . . . . 68
-------------------------
6.3 Acceleration . . . . . . . . . . . . . . . . . . . 68
------------
6.4 Performance by Agent . . . . . . . . . . . . . . . 69
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SECTION 7
CONDITIONS TO LOANS . . . . . . . . . . . . . . . . . . . . . 69
7.1. Conditions to Initial Loans . . . . . . . . . . . . 69
---------------------------
7.2. Conditions to All Loans . . . . . . . . . . . . . . 70
-----------------------
(A) Notice of Borrowing . . . . . . . . . . . . . 70
-------------------
(B) Representations and Warranties . . . . . . . . 70
------------------------------
(C) No Default or Event of Default . . . . . . . . 70
------------------------------
(D) No Order, Judgment, etc. . . . . . . . . . . . 70
------------------------
(E) Fees and Expenses . . . . . . . . . . . . . . 70
-----------------
(F) Consents and Approvals . . . . . . . . . . . . 70
----------------------
(G) Access to Books and Records . . . . . . . . . 70
---------------------------
7.3 Additional Conditions to Loans to Fund Permitted
------------------------------------------------
Acquisitions . . . . . . . . . . . . . . . . . . . 71
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SECTION 8
ASSIGNMENT AND PARTICIPATION . . . . . . . . . . . . . . . . 71
8.1 Assignments and Participations in Loans and Notes . 71
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8.2 Agent . . . . . . . . . . . . . . . . . . . . . . . 72
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(A) Appointment . . . . . . . . . . . . . . . . . 72
-----------
(B) Nature of Duties . . . . . . . . . . . . . . . 73
----------------
(C) Rights, Exculpation, Etc . . . . . . . . . . . 73
------------------------
(D) Reliance . . . . . . . . . . . . . . . . . . . 74
--------
(E) Indemnification . . . . . . . . . . . . . . . 74
---------------
(F) Xxxxxx Individually . . . . . . . . . . . . . 74
-------------------
(G) Successor Agent . . . . . . . . . . . . . . . 75
---------------
(1) Resignation . . . . . . . . . . . . . . . 75
-----------
(2) Appointment of Successor . . . . . . . . 75
------------------------
(3) Successor Agent . . . . . . . . . . . . . 75
---------------
(H) Collateral Matters. . . . . . . . . . . . . . 75
------------------
(1) Release of Collateral . . . . . . . . . . 75
---------------------
(2) Confirmation of Authority; Execution of
---------------------------------------
Releases . . . . . . . . . . . . . . . . 76
--------
(3) Absence of Duty . . . . . . . . . . . . . 76
---------------
(I) Agency for Perfection . . . . . . . . . . . . 76
---------------------
(J) Dissemination of Information . . . . . . . . . 77
----------------------------
8.3 Amendments, Consents and Waivers for Certain Actions 77
----------------------------------------------------
8.4 Set Off and Sharing of Payments . . . . . . . . . . 77
-------------------------------
8.5 Disbursement of Funds . . . . . . . . . . . . . . . 78
---------------------
8.6 Disbursements of Advances; Payment . . . . . . . . 78
----------------------------------
(A) Revolving Loan Advances, Payments and Settlements;
-------------------------------------------------
Interest and Fee Payments . . . . . . . . . . 78
-------------------------
(B) Term Loans and Acquisition Loans Principal
------------------------------------------
Payments . . . . . . . . . . . . . . . . . . . 80
--------
(C) Availability of Lender's Pro Rata Share . . . 80
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(D) Return of Payments . . . . . . . . . . . . . . 80
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SECTION 9
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 81
9.1 Indemnities . . . . . . . . . . . . . . . . . . . . 81
-----------
9.2 Amendments and Waivers . . . . . . . . . . . . . . 82
----------------------
9.3 Notices . . . . . . . . . . . . . . . . . . . . . . 82
-------
9.4 Failure or Indulgence Not Waiver; Remedies Cumulative 84
-------------------------------
9.5 Marshalling; Payments Set Aside . . . . . . . . . . 84
-------------------------------
9.6 Severability . . . . . . . . . . . . . . . . . . . 84
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9.7 Lenders' Obligations Several; Independent Nature of
---------------------------------------------------
Lenders' Rights . . . . . . . . . . . . . . . . . . 84
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9.8 Headings . . . . . . . . . . . . . . . . . . . . . 85
--------
9.9 Applicable Law . . . . . . . . . . . . . . . . . . 85
--------------
9.10 Successors and Assigns . . . . . . . . . . . . . . 85
----------------------
9.11 No Fiduciary Relationship . . . . . . . . . . . . . 85
-------------------------
9.12 Construction . . . . . . . . . . . . . . . . . . . 85
------------
9.13 Confidentiality . . . . . . . . . . . . . . . . . . 85
---------------
9.14 CONSENT TO JURISDICTION . . . . . . . . . . . . . . 85
-----------------------
9.15 WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . 86
--------------------
9.16 Survival of Warranties and Certain Agreements . . . 86
---------------------------------------------
9.17 Entire Agreement . . . . . . . . . . . . . . . . . 86
----------------
9.18 Counterparts; Effectiveness . . . . . . . . . . . . 86
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SECTION 10
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 86
INDEX OF DEFINED TERMS
----------------------
Defined Term Defined in Section
------------ ------------------
Active Subsidiaries Preamble
Accounting Changes 4.8
Acquisition Costs 10.1
Acquisition EBITDA 3.6(B)(12)
Acquisition Loans 1.1C
Acquisition Loan Commitment 1.1(C)
Acquisition Note 10.1
Acquisition Pro Forma 3.6(B)(7)
Acquisition Total Indebtedness 3.6(B)(12)
Adjustment Date 10.1
Affected Lender 1.10
Affiliate 10.1
Agent 10.1
Agent's Account 1.4
Agreement 10.1
Assignment and Acceptance Agreement 10.1
Asset Disposition 10.1
Autotron Preamble
Bankruptcy Code 10.1
Base Rate 1.2(A)
Base Rate Loans 1.2(A)
Base Rate Margin 1.2(A)
Borrower or Borrowers Preamble & 10.1
Borrower Representative 1.1(H)
Borrowing Base 1.1(B)(3)
Borrowing Base Availability 1.1(B)(2)
Borrowing Base Certificate 1.1(B)(3)
Business Day 10.1
Calculation Period 1.2(A)
Capex Acquisition Limit 4.1
Capital Expenditure 4.1
Cap Limit 4.1
Cash Equivalents 3.3
Certification of Exemption 1.9(C)
Closing Date 10.1
Collateral 10.1
Commitment 10.1
Consulting Agreement 10.1
Contingent Obligations 3.4
Defined Term Defined in Section
------------ ------------------
Contractual Obligations 2.1
Corporate Guarantors 3rd Recital
Cut-Off Date 3.6(B)(12)
Daily Interest Amount 8.6
Daily Interest Rate 8.6
Daily Loan Balance 8.6
Default 10.1
Deflecta Preamble
Deflecta Subsidiaries 10.1
Delta Preamble
DFM Preamble
EBITDA 4.3
Employee Benefit Plan 10.1
Environmental Claims 10.1
Environmental Indemnity Agreement 10.1
Environmental Laws 10.1
Environmental Permits 10.1
ERISA 10.1
ERISA Affiliates 10.1
Eurocurrency Liabilities 1.2(A)
Event of Default 6.1
Expiry Date 10.1
Fee Letter 1.3(A)
Fiscal Quarter 10.1
Fiscal Year 10.1
Fixed Coverage Charge 4.4
Foreign Lender 10.1
Funding Date 7.2
GAAP 10.1
Harvest Partners 10.1
Xxxxxx Preamble
Holdings Preamble
IDRB 10.1
IDRB Reserve 1.1(B)(4)
IDRB Documents 10.1
IDRB Indenture 10.1
IDRB Loan Agreement 10.1
IDRB Mortgage 10.1
IDRB Payment 10.1
Indebtedness 10.1
Indemnitee 9.1
Defined Term Defined in Section
------------ ------------------
Intellectual Property 10.1
Interest Period 1.2(A)
Interest Rate Agreements 2.12
Interest Ratio 8.6
Interest Settlement Date 8.6
Investments 3.3
IRC 10.1
Lender(s) 10.1
Lender Letter of Credit 1.1(D)
Letter of Non-Exemption 1.9(C)
Liabilities 10.1
LIBOR 1.2(A)
LIBOR Breakage Fee 1.3(B)
LIBOR Loans 1.2(A)
Lien 10.1
Loan Accounts 1.7
Loan Documents 10.1
Loan Party or Loan Parties 10.1
Loans 10.1
LAC Preamble
LII Preamble
Xxxx Preamble
Xxxx FSC 10.1
Xxxx Guaranty 10.1
Xxxx International FSC 10.1
Xxxx Subsidiaries 10.1
Management Fees 10.1
Material Adverse Effect 10.1
Maximum Revolving Loan Balance 1.1(B)(1)
Merger 10.1
Merger Date 10.1
Mortgage 10.1
Mortgaged Property 10.1
Net Proceeds 10.1
Note(s) 10.1
Obligations 10.1
Old World 10.1
Operating Cash Flow 4.6
Overadvance Revolving Loans 1.1(B)(2)
Permitted Acquisition Documents 3.6(B)(1)
Permitted Encumbrances 3.2(A)
Defined Term Defined in Section
------------ ------------------
Person 10.1
Pledge Agreement 10.1
Pro Forma 10.1
Pro Forma EBITDA 4.6
Pro Rata Share 10.1
Projections 10.1
Purchase Agreement 3.6(B)(1)
Real Estate Documents 10.1
Related Transactions 10.1
Replacement Lender 1.10
Related Transactions Documents 10.1
Requisite Lenders 10.1
Restricted Junior Payment 3.5
Restricted Cash 10.1
Revolving Loan Commitment 1.1(B)(1)
Revolving Loans 1.1(B)(1)
Revolving Note 10.1
Revolving Termination Date 1.1(B)(1)
Risk Participation Agreement 1.1(D)
Risk Participation Liability 10.1
Scheduled Acquisition Installments 1.1(C)
Scheduled Term Installments 1.1(A)
SEC 10.1
Security Agreement 10.1
Security Documents 10.1
Settlement Date 8.6(A)(2)
Subordinated Indebtedness 10.1
Subsidiary 10.1
Target 10.1
Tax Liabilities 1.9(A)
Term A Note 10.1
Term B Note 10.1
Term Loans 1.1(A)
Term Loan A 1.1(A)
Term Loan B 1.1(A)
Test Date 3.6(B)(12)
Total Indebtedness 4.6
Total Indebtedness to Pro Forma EBITDA 4.6
Total Interest Coverage 4.5
Trailmaster Preamble
Unused Fee 1.2(B)
Zephyros 10.1
EXHIBITS TO THE CREDIT AGREEMENT
Exhibit 1.1 (F) - Notice of Borrowing
Exhibit 1.5(B) - Excess Cash Flow Certificate
Exhibit 3.6(B)(12) - Acquisition Total Indebtedness to
Acquisition EBITDA
Exhibit 4.7(D) - Compliance Certificate
Exhibit 4.7(F) - Borrowing Base Certificate
Exhibit 10.1(A) - Form of Revolving Note, Form of
Term A Note, Form of Term B Note,
Form of Acquisition Note
Exhibit 10.1(B) - Form of Assignment and Acceptance
Agreement
SCHEDULES TO THE CREDIT AGREEMENT
Schedule 2.8 - Collateral Locations
Schedule 3.2(A)(10) - Liens
Schedule 3.3(G) - Investments
Schedule 3.4 - Contingent Obligations
Schedule 3.5 - Restricted Junior Payments
Schedule 3.8 - Affiliate Transactions
Schedule 3.9 - Business Description
Schedule 5.3 - Defaults
Schedule 5.4(A) - Jurisdictions of Organization
Schedule 5.4(B) - Capitalization
Schedule 5.4(D) - Foreign Qualifications
Schedule 5.6 - Intellectual Property
Schedule 5.7 - Payment of Taxes; Audits
Schedule 5.8 - Employee Matters
Schedule 5.10 - Names, Trade Names
Schedule 5.11 - Locations; FEIN
Schedule 5.12(A) - Owned Real Estate
Schedule 5.12(B) - Leased Real Estate
Schedule 5.13 - Litigation; Adverse Facts
Schedule 5.16 - Broker's Fees
Schedule 5.19(B) - Environmental Reports
Schedule 5.21 - Bank Accounts
Schedule 5.22 - Indebtedness; Liabilities
Schedule 7.1 - List of Closing Documents
Schedule 10.1(A) - Pro Forma
Schedule 10.1(B) - Indebtedness to be Repaid
CREDIT AGREEMENT
----------------
This CREDIT AGREEMENT is dated as of February 27, 1998 and
entered into by and among:
XXXX INTERNATIONAL HOLDINGS, INC., a Delaware corporation ("Xxxx"
or "Holdings");
DEFLECTA-SHIELD CORPORATION, a Delaware corporation ("Deflecta"),
XXXX INDUSTRIES, INCORPORATED, a Minnesota corporation ("LII"),
BELMOR AUTOTRON CORP., a Delaware corporation ("Autotron"),
DFM CORP., an Iowa corporation ("DFM"),
(each a "Borrower" and, collectively, "Borrowers");
XXXX ACQUISITION CORP., a Minnesota corporation ("LAC"),
BAC ACQUISITION CO., a Delaware corporation ("BAC"),
TRAILMASTER PRODUCTS, INC., a Delaware corporation
("Trailmaster"),
DELTA III, INC., a Delaware corporation ("Delta"),
(each an "Active Subsidiary" and, collectively, "Active
Subsidiaries");
The financial institution(s) listed on the signature pages hereof
and their respective successors and assigns (each a "Lender" and,
collectively, "Lenders"); and
XXXXXX FINANCIAL, INC., a Delaware corporation (in its individual
capacity "Xxxxxx"), with offices at 000 Xxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000, as a Lender (as hereinafter defined in Section
10), and as Agent for all Lenders.
R E C I T A L S:
- - - - - - - -
WHEREAS, Holdings and Borrowers desire that Lenders extend
certain term facilities, an acquisition facility and a revolving
credit facility to Borrowers (i) to fund the repayment of certain
indebtedness of Borrowers, (ii) to provide working capital
financing for Borrowers and (iii) to provide funds for Permitted
Acquisitions (which shall not include the Deflecta Acquisition)
and other general corporate purposes of Borrowers; and
WHEREAS, Borrowers desire to secure all of their Obligations
(as hereinafter defined in Section 10) under the Loan Documents
----------
(as hereinafter defined in Section 10) by granting to Agent, for
----------
the benefit of Agent and Lenders, a security interest in and
lien upon all the personal and real property of Borrowers, and
the pledging to Agent, for the benefit of Agent and Lenders, the
capital stock of each of their respective Subsidiaries (as
defined in Section 10); and
----------
WHEREAS, Holdings, all Borrowers and all Active Subsidiaries
(each of Holdings, Borrowers and Active Subsidiaries referred to
herein individually as a "Corporate Guarantor" and, collectively,
as "Corporate Guarantors") are willing to guaranty all of the
Obligations of Borrowers to Lenders under the Loan Documents and
to grant to Agent, for the benefit of Agent and Lenders, a
security interest in and lien upon all of personal and real
property of the Corporate Guarantors, and pledge to Agent, for
the benefit of Agent and Lenders, the capital stock of each of
their respective Subsidiaries (as defined in Section 10) to
----------
secure such guaranties; and
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, Holdings,
Borrowers, the Corporate Guarantors, Lenders and Agent agree as
follows:
SECTION 1
AMOUNTS AND TERMS OF LOANS
1.1 Loans. Subject to the terms and conditions of this
-----
Agreement and in reliance upon the representations and
warranties of Holdings, Borrowers and the Active Subsidiaries
contained herein and in the other Loan Documents:
(A) Term Loans. Each Lender agrees, severally and not
----------
jointly, to lend to Borrowers in one draw, on the Closing Date,
its Pro Rata Share of the following amounts:
(i) "Term Loan A", in an amount equal to $20,000,000;
and
(ii) "Term Loan B", in an amount equal to $22,000,000.
Collectively, Term Loan A and Term Loan B will be referred to as
the "Term Loans". Borrowers shall repay the Term Loans through
periodic payments on the dates and in the amounts indicated below
("Scheduled Term Installments"):
Term Loan A
-----------
Term Loan A
Date Scheduled Installments
---- ----------------------
June 30, 1998 $ 375,000
September 30, 1998 375,000
December 31, 1998 375,000
March 31, 1999 775,000
June 30, 1999 775,000
September 30, 1999 775,000
December 31, 1999 775,000
March 31, 2000 1,025,000
June 30, 2000 1,025,000
September 30, 2000 1,025,000
December 31, 2000 1,025,000
March 31, 2001 1,250,000
June 30, 2001 1,250,000
September 30, 2001 1,250,000
December 31, 2001 1,250,000
March 31, 2002 1,575,000
June 30, 2002 1,575,000
September 30, 2002 1,575,000
December 31, 2002 1,950,000
; provided, however, that the final principal Scheduled Term
-------- -------
Installment for Term Loan A shall be an amount equal to the
aggregate principal amount of the Term Loan A outstanding on such
date.
Term Loan B
-----------
Term Loan B
Date Scheduled Installments
---- ----------------------
June 30, 1998 $ 25,000
September 30, 1998 25,000
December 31, 1998 25,000
March 31, 1999 25,000
June 30, 1999 25,000
September 30, 1999 25,000
December 31, 1999 25,000
March 31, 2000 25,000
June 30, 2000 25,000
September 30, 2000 25,000
December 31, 2000 25,000
March 31, 2001 25,000
June 30, 2001 25,000
September 30, 2001 25,000
December 31, 2001 25,000
March 31, 2002 25,000
June 30, 2002 25,000
September 30, 2002 25,000
December 31, 2002 25,000
March 31, 2003 2,625,000
June 30, 2003 2,625,000
September 30, 2003 2,625,000
December 31, 2003 2,625,000
March 31, 2004 2,750,000
June 30, 2004 2,750,000
September 30, 2004 2,750,000
December 31, 2004 2,775,000
; provided, however, that the final principal Scheduled Term
-------- -------
Installment for Term Loan B shall be in an amount equal to the
aggregate principal amount of the Term Loan B outstanding on such
date. Amounts borrowed under this subsection 1.1(A) and repaid
-----------------
may not be reborrowed.
(B) Revolving Loans. (1) Each Lender agrees, severally and
---------------
not jointly, to lend to Borrowers from time to time from the
Closing Date to the earlier to occur of (x) the suspension
(subject to reinstatement) of the Lenders' obligations to make
Revolving Loans pursuant to subsection 6.2, (y) the acceleration
--------------
of the Obligations pursuant to subsection 6.3 and (z) the date
--------------
specified in clause (b)(i) in the definition of the term "Expiry
Date" its Pro Rata Share of the loans requested by Borrowers to
be made by Lenders under this subsection 1.1(B), up to an
-----------------
aggregate maximum for all Lenders of $30,000,000 (as the same may
be reduced from time to time hereunder, the "Revolving Loan
Commitment"). Advances or amounts outstanding under the
Revolving Loan Commitment and any amounts added to the principal
balance of the Revolving Loans pursuant to this Agreement will be
called "Revolving Loans". Revolving Loans may be repaid and
reborrowed. The "Maximum Revolving Loan Balance" will be, as of
any date of determination, the lesser of (a) the Borrowing Base
or (b) the Revolving Loan Commitment less the sum of (x)
----
outstanding Risk Participation Liability and (y) the IDRB
Reserve. If at any time the outstanding Revolving Loans exceed
the Maximum Revolving Loan Balance (as it may be deemed increased
from time to time pursuant to subsection 1.1(B)(2)), Lenders
--------------------
shall not be obligated to make additional Revolving Loans and
issue additional Lender Letters of Credit and Risk Participation
Agreements, and the outstanding Revolving Loans must be repaid by
Borrowers immediately in an amount sufficient to eliminate any
excess. The Borrowers shall repay on the Expiry Date the
aggregate outstanding principal amount of the Revolving Loans
then outstanding (the "Revolving Termination Date").
(2) If Borrowers request that Lenders make, or permit
to remain outstanding, Revolving Loans in an aggregate amount in
excess of the Borrowing Base (hereinafter, "Borrowing Base
Availability"), Lenders having sixty-six and two-thirds percent
(66-2/3%) or more of the Revolving Loan Commitment may in their
discretion elect to cause all Lenders having a Revolving Loan
Commitment to make, or permit to remain outstanding, such excess
Revolving Loans (such Revolving Loans in excess of Borrowing Base
Availability being referred to as "Overadvance Revolving Loans");
provided, however, that such Lenders may not cause all Lenders
-------- -------
having a Revolving Loan Commitment to make, or permit to remain
outstanding, (a) Revolving Loans in excess of the Revolving Loan
Commitment less the sum of (x) outstanding Risk Participation
----
Liability and (y) the IDRB Reserve or (b) Overadvance Revolving
Loans in excess of ten (10%) percent of the Revolving Loan
Commitment. If Overadvance Revolving Loans are made, or
permitted to remain outstanding, pursuant to the preceding
sentence, then (a) the Maximum Revolving Loan Balance shall be
deemed increased by the amount of such permitted Overadvance
Revolving Loans, but only for so long as Lenders having sixty-six
and two-thirds percent (66-2/3%) or more of the Revolving Loan
Commitment allow such Overadvance Revolving Loans to be
outstanding and (b) all Lenders that have committed to make
Revolving Loans shall be bound to make, or permit to remain
outstanding, such Overadvance Revolving Loans based upon their
Pro Rata Shares in accordance with the terms of this Agreement.
If Overadvance Revolving Loans remain outstanding for more than
sixty (60) days during any 180-day period unless otherwise
approved by all Lenders having Revolving Loan Commitments,
Revolving Loans must be repaid immediately in an amount
sufficient to eliminate all of such Overadvance Revolving Loans.
(3) "Borrowing Base" means, as of any date of
determination, an amount as calculated on Exhibit 4.7(F)
--------------
("Borrowing Base Certificate").
(4) "IDRB Reserve" means, as of any date of
determination, an amount equal to the outstanding principal
balance owing under the IDRB as of such date less Restricted
----
Cash, which amount shall be applied as a reserve reducing the
Maximum Revolving Loan Balance by a corresponding amount until
the earlier to occur of (x) the provision for payment in full or
the defeasance, payment or retirement in full of the Indebtedness
owing under the IDRB pursuant to the IDRB Documents (the "IDRB
Payment") or (y) LII has obtained from the holders of the IDRB
the necessary consents or waivers, in form and substance
reasonably satisfactory to Agent, under the IDRB Documents to
permit the Loans contemplated by this Agreement.
(C) Acquisition Loans. Each Lender agrees, severally and
-----------------
not jointly, to lend to Borrowers from the Closing Date to the
earlier of (x) the suspension (subject to reinstatement) of the
Lenders' obligations to make Acquisition Loans pursuant to
subsection 6.2, (y) the acceleration of the Obligations pursuant
--------------
to subsection 6.3 and (z) the date specified in clause (b)(v) in
--------------
the definition of the term "Expiry Date" its Pro Rata Share of
the loans requested by the Borrowers to be made by Lenders from
time to time under this subsection 1.1(C), up to an aggregate
-----------------
maximum for all Lenders of $15,000,000 (the "Acquisition Loan
Commitment"). Advances or amounts outstanding under the
Acquisition Loan Commitment will be called "Acquisition Loans".
No portion of the proceeds of any Acquisition Loans shall be used
by Borrowers for any purpose other than in connection with the
consummation of Permitted Acquisitions pursuant to subsection
----------
3.6(B). Lenders shall not be obligated to make Acquisition
-------
Loans if the terms and conditions set forth in subsection 3.6(B)
-----------------
are not complied with to the satisfaction of Agent and Requisite
Lenders.
Borrowers shall repay the aggregate outstanding
principal amount of the Acquisition Loans in equal quarterly
installments of principal on the last day of each Fiscal Quarter
during the period commencing on the last day of March of 2001 and
ending on December 31, 2004 (the "Scheduled Acquisition
Installments") with the first Scheduled Acquisition Installment
due and payable on March 31, 2001; provided, however, that the
-------- -------
final principal Scheduled Acquisition Installments shall be made
on December 31, 2004 and in an amount equal to the aggregate
principal amount of the Acquisition Loans outstanding on such
date.
Amounts borrowed under this subsection 1.1(C) and
-----------------
repaid may not be reborrowed.
(D) Letters of Credit and Risk Participation
----------------------------------------
Agreements. The Revolving Loan Commitment may, in addition to
----------
advances under the Revolving Loans, be utilized, upon the request
of Borrower Representative, for (i) the issuance of standby
letters of credit for the account of any Borrower by Agent (each
such letter of credit, a "Lender Letter of Credit") or (ii) the
issuance by Agent of risk participation agreements (each such
agreement, a "Risk Participation Agreement") to confirm payment
to banks which issue letters of credit for the account of any
Borrower.
(1) Maximum Amount. The aggregate amount of Risk
--------------
Participation Liability with respect to all Lender Letters of
Credit and Risk Participation Agreements outstanding for the
account of Borrowers at any time shall not exceed $4,000,000. If
Agent is required to provide a Risk Participation Agreement and
the issuing bank is unwilling or unable to provide Agent with
automated daily reporting of the amounts issued under such Bank
Letters of Credit then the amount of Risk Participation Liability
for such Bank Letters of Credit used in calculating the Maximum
Revolving Loan Balance shall be adjusted weekly and shall be an
amount equal to the maximum amount potentially owing under such
Risk Participation Agreement. If the issuing bank automatically
reports on a daily basis draws and other activity under the
issued Bank Letters of Credit, then the amount of Risk
Participation Liability for such Bank Letters of Credit used in
calculating the Maximum Revolving Loan Balance shall be the
actual daily amounts reported by the banks issuing such Bank
Letters of Credit supported by such Risk Participation Agreement.
In addition, such Borrower must (i) have an account at the
issuing bank or (ii) be directly charged by the issuing bank for
drawings under the Bank Letters of Credit and debits relating to
applicable fees.
(2) Reimbursement. Borrowers shall be
-------------
irrevocably and unconditionally obligated forthwith without
presentment, demand, protest or other formalities of any kind, to
reimburse Agent for any amounts paid by Agent with respect to a
Lender Letter of Credit or a Risk Participation Agreement issued
for the account of any Borrower, including all fees, costs and
expenses paid by Agent to any bank that issues letters of credit.
Borrowers hereby authorize and direct Agent, at Agent's option,
to debit each Borrower's account (by increasing the principal
balance of the Revolving Loans) in the amount of any payment made
by Agent with respect to any Lender Letter of Credit or any Risk
Participation Agreement. All amounts paid by Agent with respect
to any Lender Letter of Credit or Risk Participation Agreement
that are not immediately repaid by Borrowers with the proceeds of
a Revolving Loan or otherwise shall bear interest at the interest
rate applicable to Revolving Loans calculated using the Base
Rate. Each Lender agrees to fund its Pro Rata Share of any
Revolving Loans made pursuant to this subsection 1.1(D)(2). If
--------------------
no such Revolving Loan is made, each Lender agrees to purchase,
and shall be deemed to have purchased, a participation in such
Lender Letter of Credit or Risk Participation Agreement, as the
case may be, in an amount equal to its Pro Rata Share of the Risk
Participation Liability of such Lender Letter of Credit or Risk
Participation Agreement, as the case may be, and each Lender
agrees to pay to Agent such Lender's Pro Rata Share of any
payments made by Agent under such Lender Letter of Credit and
Risk Participation Agreement. The obligation of each Lender to
deliver to Agent an amount equal to its respective Pro Rata Share
pursuant to the preceding two (2) sentences shall be absolute and
unconditional and such remittance shall be made notwithstanding
the occurrence or continuation of an Event of Default or Default
or the failure to satisfy any condition set forth in subsection
----------
7.2. If any Lender fails to make available to Agent the amount
---
of such Lender's Pro Rata Share of any payments made by Agent in
respect of such Lender Letter of Credit or Risk Participation
Agreement as provided in this subsection 1.1(D)(2), Agent shall
-------------------
be entitled to recover such amount on demand from such Lender
together with interest at the Base Rate.
Borrowers shall repay their obligations under each such
Lender Letter of Credit and Risk Participation Agreement on the
earlier of (a) the date or dates on which payment for amounts
owing under each Lender Letter of Credit and Risk Participation
Agreement, as applicable, are required to be made thereunder,
(b) the acceleration of the Obligations pursuant to subsection
----------
6.3, (c) the Revolving Termination Date or (d) in accordance
---
with the terms of this Agreement.
(3) Conditions of Issuance of Letters of Credit
-------------------------------------------
or Risk Participation Agreements. In addition to all other
---------------------------------
terms and conditions set forth in this Agreement, the issuance by
Agent of any Lender Letter of Credit or Risk Participation
Agreement shall be subject to the conditions precedent that the
Lender Letter of Credit, the Risk Participation Agreement or the
letter of credit for which any Borrower requests a Risk
Participation Agreement shall support a transaction entered into
in the ordinary course of such Borrower's business and shall be
in such form, be for such amount, and contain such terms and
conditions as are reasonably satisfactory to Agent. The
expiration date of each Lender Letter of Credit and each letter
of credit to be issued under a Risk Participation Agreement shall
be on a date which is the earlier of (a) one year from its date
of issuance, or (b) the thirtieth (30th) day before the date set
forth in clause (b)(i) of the definition of the term "Expiry
Date". Each Risk Participation Agreement shall provide that the
agreement terminates and all demand or claims for payment must be
presented by a date certain, which date will be at least thirty
(30) days before the date set forth in clause (b)(i) of the
definition of the term "Expiry Date".
(4) Request for Lender Letters of Credit or Risk
--------------------------------------------
Participation Agreements. Borrower Representative shall give
------------------------
Agent at least three (3) Business Days prior notice specifying
the date a Lender Letter of Credit is requested to be issued,
identifying the beneficiary and describing the nature of the
transactions proposed to be supported thereby. Upon Borrower
Representative's request, Agent shall use reasonable efforts to
arrange Risk Participation Agreements. After the issuance of a
Risk Participation Agreement in favor of a bank that will issue
letters of credit on behalf of a Borrower, Borrower
Representative shall give Agent at least two (2) Business Days
prior written notice specifying the date a letter of credit is to
be issued under a Risk Participation Agreement, identifying the
beneficiary and describing the nature of the transactions
proposed to be supported thereby. Any notice described in this
subsection 1.1(D)(4) shall be accompanied by the form of the
--------------------
Lender Letter of Credit or the Bank Letter of Credit to which
such Risk Participation Agreement relates.
(5) Other Letter of Credit Provisions.
---------------------------------
(i) Obligations Absolute. The obligation of
--------------------
Borrowers to reimburse Agent for payments made under, and other
amounts payable in connection with, any Lender Letter of Credit
or Risk Participation Agreement shall be unconditional and
irrevocable and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances including the
following circumstances:
(a) any lack of validity or enforceability
of any Lender Letter of Credit, Bank Letter of
Credit or any other agreement;
(b) the existence of any claim, set-off,
defense or other right which any Borrower, any of
its Affiliates, Agent or any Lender, on the one
hand, may at any time have against any beneficiary
or transferee of any Lender Letter of Credit or
Bank Letter of Credit (or any Persons for whom any
such transferee may be acting), Agent, any Lender
or any other Person, on the other hand, whether in
connection with this Agreement, the transactions
contemplated herein or any unrelated transaction
(including any underlying transaction between any
Borrower or any of its Affiliates and the
beneficiary of the letter of credit);
(c) any draft, demand, certificate or any
other document presented under any Lender Letter
of Credit or Bank Letter of Credit is alleged to
be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue
or inaccurate in any respect;
(d) payment under any Lender Letter of
Credit or Bank 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;
(e) any other circumstance or happening
whatsoever, which is similar to any of the
foregoing; or
(f) the fact that a Default or an Event of
Default shall have occurred and be continuing.
(ii) Nature of Lender's Duties. As between
-------------------------
Agent and Lenders, on the one hand, and Borrowers, on the other
hand, Borrowers assume all risks of the acts and omissions of, or
misuse of any Lender Letter of Credit by the beneficiary thereof.
In furtherance and not in limitation of the foregoing, neither
Agent nor any Lender shall be responsible: (a) 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 Lender Letter of Credit, even if it should in
fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (b) for the validity or
sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Lender 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; (c) for failure of the beneficiary of any Lender Letter
of Credit to comply fully with conditions required in order to
demand payment thereunder; (d) for errors, omissions,
interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise; (e) for
errors in interpretation of technical terms; (f) for any loss or
delay in the transmission or otherwise of any document required
in order to make a payment under any Lender Letter of Credit; (g)
for the credit of the proceeds of any drawing under any Lender
Letter of Credit; and (h) for any consequences arising from
causes beyond the control of Agent or any Lender as the case may
be. None of the above shall affect, impair, or prevent the
vesting of any of Agent's or any Lender's rights or powers
hereunder.
(iii) Liability. In furtherance and
---------
extension of and not in limitation of, the specific provisions
herein above set forth, any action taken or omitted by Agent or
any Lender under or in connection with any Lender Letter of
Credit, if taken or omitted in good faith, shall not put Agent or
any Lender under any resulting liability to any Borrower or any
other Loan Party.
(E) Notes. Borrowers shall jointly and severally
-----
execute and deliver to each Lender the following: (i) a
Revolving Note to evidence the Revolving Loans, such Note to be
in the principal amount of such Lender's Pro Rata Share of the
Revolving Loan Commitment; (ii) a Term A Note to evidence the
Term Loan A; such Note to be in the principal amount of such
Lender's Pro Rata Share of such Term Loan A; (iii) a Term B Note
to evidence the Term Loan B, such Note to be in the principal
amount of such Lender's Pro Rata Share of such Term Loan B; and
(iv) an Acquisition Note to evidence the Acquisition Loans, such
Note to be in the principal amount of such Lender's Pro Rata
Share of such Acquisition Loan Commitment. In the event of an
assignment under subsection 8.1, Borrowers shall, upon surrender
--------------
of the assigning Lender's Notes, issue new Notes to reflect the
interests of the assigning Lender and the Person to which
interests are to be assigned.
(F) Borrowing Mechanics. (1) Revolving Loans or
-------------------
Acquisition Loans made on any Funding Date shall be in an
aggregate minimum amount of $500,000 and integral multiples of
$250,000 in excess of such amount. (2) On any day when any
Borrower desires an advance under this subsection 1.1, Borrower
--------------
Representative shall give Agent telephonic notice of the proposed
borrowing by noon Chicago, Illinois time on the Funding Date of a
Base Rate Loan and three (3) Business Days in advance of the
Funding Date of a LIBOR Loan, which notice shall also specify the
proposed Funding Date (which shall be a Business Day), whether
such Loans shall consist of Base Rate Loans or LIBOR Loans, and
for LIBOR Loans the Interest Period applicable thereto, and
whether such Loans shall be Revolving Loans or Acquisition Loans.
Any such telephonic notice shall be confirmed in writing on the
same day by delivery by Borrower Representative of a Notice of
Borrowing in the form of Exhibit 1.1(F) annexed hereto. Neither
--------------
Agent nor Lender shall incur any liability to any Borrower for
acting upon any telephonic notice Agent believes in good faith to
have been given by a duly authorized officer or other Person
authorized to convey such notice on behalf of a Borrower or for
otherwise acting in good faith under this subsection 1.1(F).
-----------------
With respect to Revolving Loans, neither Agent nor Lender will
make any advance pursuant to any telephonic notice unless Agent
has also received the most recent Borrowing Base Certificate and
all other documents required under subsection 4.7 by noon
--------------
Chicago, Illinois time on the related Funding Date. Each
Revolving Loan and each Acquisition Loan shall be deposited by
wire transfer in immediately available funds in such account of
the Borrowers as Borrower Representative may from time to time
designate to Agent in writing.
(G) Maximum Amount To Be Borrowed on Closing Date.
---------------------------------------------
The aggregate amount that may be borrowed by the Borrowers on the
Closing Date shall not exceed $54,500,000; provided, however,
-------- -------
that the aggregate amount that may be borrowed by the Borrowers
under the Revolving Loan Commitment on the Closing Date shall not
exceed $12,500,000, and, in each case, Lenders shall not have any
obligation to lend more than such amount on such date.
(H) Appointment of Borrower Representative. Each
--------------------------------------
Borrower hereby designates Holdings as its representative and
agent ("Borrower Representative") for the purposes of initiating
borrowing requests, requesting Lender Letters of Credit or Risk
Participation Agreements, selecting interest rate options and
giving and receiving notices and consents hereunder or under any
of the other Loan Documents. Any action by the Borrower
Representative in its Borrower Representative capacity hereunder
shall be made by the chairman of the board of directors, chief
executive officer or chief financial officer of Holdings. Agent
and each Lender may regard any notice or other communication
pursuant to any Loan Document from Borrower Representative as a
notice or communication from Borrowers. Each Borrower hereby
covenants and agrees that each representation and warranty,
covenant, agreement and undertaking made in its name or on its
behalf by Borrower Representative shall be deemed for all
purposes to have been made by such Borrower and shall be binding
upon and enforceable against such Borrower to the same extent as
if the same had been made directly by such Borrower.
1.2 Interest and Related Fees.
-------------------------
(A) Interest. From the date the Loans are made and
--------
the date the other Obligations become due, depending upon
Borrowers election from time to time, as permitted herein, to
have portions of the Loans accrue interest based upon the LIBOR,
the Loans and the other Obligations shall bear interest at the
rates set forth in paragraphs (1), (2), (3) and (4) below:
(1) Revolving Loans: The Revolving Loans and all
---------------
other Obligations (other than the principal portion of the Term
Loans and the Acquisition Loans) shall bear interest as follows:
(a) If a Base Rate Loan, then at the sum of
the Base Rate plus the Base Rate Margin applicable
----
to Revolving Loans.
(b) If a LIBOR Loan, then at the sum of the
LIBOR plus the LIBOR Margin applicable to
----
Revolving Loans.
(2) Term Loan A: The Term Loan A shall bear interest
-----------
as follows:
(a) If a Base Rate Loan, then at the sum of
the Base Rate plus the Base Rate Margin applicable
----
to the Term Loan A.
(b) If a LIBOR Loan, then at the sum of the
LIBOR plus the LIBOR Margin applicable to the Term
----
Loan A.
(3) Term Loan B: The Term Loan B shall bear interest
-----------
as follows:
(a) If a Base Rate Loan, then at the sum of
the Base Rate plus the Base Rate Margin applicable
----
to the Term Loan B.
(b) If a LIBOR Loan, then at the sum of the
LIBOR plus the LIBOR Margin applicable to the Term
----
Loan B.
(4) Acquisition Loans: The Acquisition Loans shall
-----------------
bear interest as follows:
(a) If a Base Rate Loan, then at the sum of
the Base Rate plus the Base Rate Margin applicable
----
to Acquisition Loans.
(b) If a LIBOR Loan, then at the sum of the
LIBOR plus the LIBOR Margin applicable to
----
Acquisition Loans.
"Base Rate" means a variable rate of interest per annum
---------
equal to the rate of interest from time to time published by the
Board of Governors of the Federal Reserve System in Federal
Reserve statistical release H.15 (519) entitled "Selected
Interest Rates" as the Bank prime loan rate. Base Rate also
includes rates published in any successor publications of the
Federal Reserve System reporting the Bank prime loan rate or its
equivalent. The statistical release generally sets forth a Bank
prime loan rate for each business day. The applicable Bank prime
loan rate for any date that Bank prime loan rate is not set forth
shall be the rate set forth for the last preceding date. In the
event the Board of Governors of the Federal Reserve System ceases
to publish a Bank prime loan rate or its equivalent, the term
"Base Rate" shall mean a variable rate of interest per annum
equal to the highest of the "prime rate," "reference rate," "base
rate" or other similar rate as determined by Agent announced from
time to time by any of Bankers Trust Company, The Chase Manhattan
Bank or Citibank, N.A. (with the understanding that any such rate
may merely be a reference rate and may not necessarily represent
the lowest or best rate actually charged to any customer by such
bank).
"Base Rate Loans" means Loans bearing interest at rates
---------------
determined by reference to the Base Rate.
"Base Rate Margin" shall mean, (i) for the period commencing
----------------
on the Closing Date and ending on August 31, 1998, (x) one and a
quarter percent (1.25%) per annum for Revolving Loans and the
Term Loan A and (y) one and one-half per cent (1.50%) per annum
for Acquisition Loans and the Term Loan B, and (ii) during the
period commencing on (x) September 1, 1998 and (y) each
Adjustment Date subsequent thereto and ending on the day
immediately preceding each subsequent Adjustment Date (each such
Fiscal Quarter immediately prior to each such Adjustment Date
being hereinafter referred to as a "Calculation Period"), the
applicable percent per annum set forth in the Base Rate Margin
Pricing Table below opposite the Total Indebtedness to Pro Forma
EBITDA ratio for such Calculation Period. Total Indebtedness to
Pro Forma EBITDA for any Calculation Period will be as calculated
on the Compliance Certificate most recently delivered pursuant to
subsection 4.7(D); provided, however, that for purposes of
----------------- -------- -------
determining the Base Rate Margin for the Adjustment Dates
occurring on September 1, 1998 and December 1, 1998, EBITDA (as
calculated in Covenant 4.3 of Exhibit 4.7(D)) for each respective
--------------
Calculation Period shall be annualized based on actual results
for Fiscal Year 1998 through the last day of such Calculation
Period.
"LIBOR" means, for each Interest Period, a rate equal to:
-----
(a) the rate of interest determined by Agent at which deposits in
U.S. dollars for the relevant Interest Period are offered based
on information presented on the Reuters Screen LIBO Page as of
11:00 a.m. (London time) on the day which is two (2) Business
Days prior to the first day of such Interest Period, provided
--------
that if at least two such offered rates appear on the Reuters
Screen LIBO Page in respect of such Interest Period, the
arithmetic mean of all such rates (as determined by Agent) will
be the rate used, provided, further, that if fewer than two
-------- -------
offered rates appear or if Reuters ceases to provide LIBOR
quotations, such rate shall be the rate of interest determined by
Agent at which deposits in U.S. dollars are offered for the
relevant Interest Period by any of Bankers Trust Company, The
Chase Manhattan Bank or Citibank, N.A. to prime banks in the
London interbank market at approximately 11:00 a.m. (London Time)
two (2) Business Days prior to the commencement of the applicable
Interest Period, divided by (b) a number equal to 1.0 minus the
------- -- -----
aggregate (but without duplication) of the rates (expressed as a
decimal fraction) of reserve requirements in effect on the day
which is two (2) Business Days prior to the beginning of such
Interest Period (including, without limitation, basic, supple-
mental, marginal and emergency reserves under any regulations of
the Board of Governors of the Federal Reserve System or other
governmental authority having jurisdiction with respect thereto,
as now and from time to time in effect) for Eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in
Regulation D of such Board) which are required to be maintained
by a member bank of the Federal Reserve System; such rate to be
rounded upward to the next whole multiple of one-sixteenth of one
percent (.0625%).
"LIBOR Loans" means Loans bearing interest at rates
-----------
determined by reference to the LIBOR.
"LIBOR Margin" shall mean, (i) for all LIBOR Loans having an
------------
Interest Period commencing during the period commencing on the
Closing Date and ending on or prior to August 31, 1998, (x) two
and one-half percent (2.50%) per annum for Revolving Loans and
the Term Loan A and (y) two and three-quarters percent (2.75%)
per annum for Acquisition Loans and the Term Loan B, and (ii) for
all LIBOR Loans having an Interest Period commencing during the
period commencing on (x) September 1, 1998 and (y) each
Adjustment Date subsequent thereto and ending on the day
immediately preceding the subsequent Adjustment Date (each such
Fiscal Quarter immediately prior to such Adjustment Date being
hereinafter referred to as a "Calculation Period"), the
applicable percent per annum set forth in the LIBOR Margin
Pricing Table below opposite the Total Indebtedness to Pro Forma
EBITDA ratio for such Calculation Period. Total Indebtedness to
Pro Forma EBITDA for any Calculation Period will be as calculated
on the Compliance Certificate most recently delivered pursuant to
subsection 4.7(D); provided, however, that for purposes of
----------------- -------- -------
determining the LIBOR Margin for the Adjustment Dates occurring
on September 1, 1998, and December 1, 1998, EBITDA (as calculated
in Covenant 4.3 of Exhibit 4.7(D)) for each respective
--------------
Calculation Period shall be annualized based on actual results
for Fiscal Year 1998 through the last day of such Calculation
Period.
BASE RATE MARGIN
PRICING TABLE
---------------------
Total
Indebtedness Base Rate Margin
to Pro Forma
EBITDA is:
Revolving Acquisition
Loans Term Loan A Term Loan B Loans
greater than 1.50% 1.50% 1.75% 1.75%
4.00 to 1.00
equal to or 1.25% 1.25% 1.50% 1.50%
less than 4.00
to 1.00 but
equal to or
greater than
3.50 to 1.00
less than 3.50 1.00% 1.00% 1.25% 1.25%
to 1.00 but
equal to or
greater than
3.00 to 1.00
less than 3.00 .75% .75% 1.25% 1.25%
to 1.00 but
equal to or
greater than
2.50 to 1.00
less than 2.50 .50% .50% 1.00% 1.00%
to 1.00
LIBOR MARGIN
PRICING TABLE
-------------
Total
Indebtedness LIBOR Margin
to Pro Forma
EBITDA is:
Revolving Acquisition
Loans Term Loan A Term Loan B Loans
greater than 2.75% 2.75% 3.25% 3.25%
4.00 to 1.00
equal to or 2.50% 2.50% 3.00% 3.00%
less than
4.00 to 1.00
but equal to
or greater
than 3.50 to
1.00
less than 2.25% 2.25% 2.75% 2.75%
3.50 to 1.00
but equal to
or greater
than 3.00 to
1:00
less than 2.00% 2.00% 2.50% 2.50%
3.00 to 1.00
but equal to
or greater
than 2.50 to
1.00
less than 1.75% 1.75% 2.25% 2.25%
2.50 to 1.00
If Borrowers shall fail to deliver a Compliance Certificate
within thirty (30) days after the date required pursuant to
subsection 4.7(D), retroactive to the first Adjustment Date
-----------------
subsequent to the date such Compliance Certificate was required
to be delivered pursuant to subsection 4.7(D), (other than with
----------------
respect to Fiscal Quarters ending December 31, then retroactive
to the Adjustment Date preceding the date such Compliance
Certificate was required to be delivered pursuant to subsection
----------
4.7(D)), then and continuing until delivery of such Compliance
--------
Certificate, each applicable Base Rate Margin and each applicable
LIBOR Margin shall be equal to the highest applicable Base Rate
Margin and the highest applicable LIBOR Margin specified in the
Base Rate Margin Pricing Table and the LIBOR Margin Pricing
Table, respectively, set forth above.
Each LIBOR Loan may be obtained for a one (1), three (3) or
six (6) month period (each being an "Interest Period"). With
respect to all LIBOR Loans: (a) the Interest Period will
commence on the date that the LIBOR Loan is made or the date on
which a Base Rate Loan is converted into a LIBOR Loan, as
applicable, or in the case of immediately successive Interest
Periods, each successive Interest Period shall commence on the
day on which the next preceding Interest Period expires, (b) if
the Interest Period expires on a day that is not a Business Day,
then such Interest Period will expire on the next Business Day,
(c) no Interest Period for a Revolving Loan shall extend beyond
the date set forth in clause (b)(i) of the definition of the term
"Expiry Date", (d) no Interest Period for any portion of the Term
Loan A shall extend beyond the date of the final Scheduled Term
Installment thereof, (e) no Interest Period for any portion of
the Term Loan B shall extend beyond the date of the final
Scheduled Term Installment thereof, and (f) no Interest Period
for the Acquisition Loans shall extend beyond the date of the
final Scheduled Acquisition Installment thereof.
If the introduction of or the interpretation of any law,
rule, or regulation subsequent to the Closing Date, would
increase the reserve requirement or otherwise increase the cost
to any Lender of making or maintaining a LIBOR Loan, then Agent,
on behalf of all affected Lenders, shall submit a certificate to
Borrower Representative demonstrating the calculation of the
increased cost and requiring payment thereof to Agent for the
benefit of the affected Lenders within ten (10) days after the
date of the certificate. There are no limitations on the number
of times such certificate may be submitted.
(B) Commitment Fee. Borrowers shall pay Agent, for the
--------------
benefit of all Lenders committed to make Revolving Loans and
Acquisition Loans, subject to the immediately following sentence,
in each case based upon their respective Pro Rata Shares, a fee
("Unused Fee") in an amount equal to (1)(a) the Revolving Loan
Commitment plus (b) the Acquisition Loan Commitment less (c) the
---- ----
sum of (i) the average daily balance of the Revolving Loans plus
----
(ii) the average daily balance of the Acquisition Loans plus
----
(iii) the average daily aggregate amount of outstanding Risk
Participation Liability, in each case during the preceding month,
multiplied by (2) the applicable percent per annum set forth in
---------- --
the Unused Fee Pricing Table below opposite the Total
Indebtedness to Pro Forma EBITDA ratio calculated for the most
recent Calculation Period; provided, however, that during the
-------- -------
period commencing on the Closing Date and ending on August 31,
1998, the applicable percent per annum shall be 0.50%. Commencing
on the day immediately following the date specified in clause
(b)(v) in the definition of the term "Expiry Date" and continuing
thereafter, the Unused Fee shall only be for the benefit of all
Lenders committed to make Revolving Loans (based upon their
respective Pro Rata Shares) and clauses (1)(a), (1)(c)(i) and
(iii) and (2) above shall only apply for purposes of calculating
such Unused Fee. Any Unused Fee is to be paid monthly in arrears
on the first day of the first month following the Closing Date
and the first day of each month thereafter. For purposes of
determining the Unused Fee for the months of September, October
and November of 1998, EBITDA (as calculated in Covenant 4.3 of
Exhibit 4.7(D)) shall be annualized based on actual results for
--------------
Fiscal Year 1998 through the date of determination.
UNUSED FEE PRICING TABLE
------------------------
Total Indebtedness
to Pro Forma EBITDA is: Percent
equal to or greater than 3.00 to 1.00 0.50%
less than 3.00 to 1.00 0.375%
(C) Risk Participation Fee. From the Closing Date,
----------------------
Borrowers shall pay Agent, for the benefit of all Lenders
committed to make Revolving Loans (based upon their respective
Pro Rata Shares), a fee for each Lender Letter of Credit and each
Risk Participation Agreement from the date of issuance to the
date of termination thereof equal to the average daily aggregate
amount of outstanding Risk Participation Liability thereunder
multiplied by the applicable LIBOR Margin. Such fee is to be
----------
paid monthly in arrears on the first day of each month.
Borrowers shall also reimburse Agent for any and all fees and
expenses paid by Agent to the issuer of any Bank Letter of Credit
that is supported by a Risk Participation Agreement.
(D) Computation of Interest and Related Fees.
----------------------------------------
Interest on all Loans and all other Obligations and any fees set
forth in this subsection 1.2 shall be calculated daily on the
--------------
basis of a three hundred sixty (360) day year for the actual
number of days elapsed in the period during which it accrues.
The date of funding a Base Rate Loan and the first day of an
Interest Period with respect to a LIBOR Loan shall be included in
the calculation of interest. The date of payment of a Base Rate
Loan and the last day of an Interest Period with respect to a
LIBOR Loan shall be excluded from the calculation of interest.
If a Loan is repaid on the same day that it is made, one (1)
days' interest shall be charged. Interest on all Base Rate Loans
is payable in arrears on the first day of each month and on the
Expiry Date, whether by acceleration or otherwise. Interest on
LIBOR Loans shall be payable on the last day of the applicable
Interest Period, unless the Interest Period is greater than three
(3) months, in which case interest will be payable on the last
day of each three (3) month interval. In addition, interest on
LIBOR Loans is due on the Expiry Date, whether by acceleration or
otherwise.
(E) Default Rate of Interest. At the election of
------------------------
Agent or Requisite Lenders, after the occurrence of an Event of
Default and for so long as it continues, all the Loans and other
Obligations shall bear interest at a rate that is two percent
(2%) per annum in excess of the rates otherwise payable under
this Agreement. Furthermore, during any period in which any
Event of Default is continuing, as the Interest Periods for LIBOR
Loans then in effect expire, such Loans shall be converted at
Agent's discretion into Base Rate Loans and the LIBOR election
will not be available to Borrowers until all Events of Default
are cured or waived.
(F) Excess Interest. Under no circumstances will
---------------
the rate of interest chargeable be in excess of the maximum
amount permitted by law. If excess interest is charged and paid,
then the excess amount will be promptly refunded.
(G) LIBOR Rate Election. All Loans made on the
-------------------
Closing Date shall be Base Rate Loans and shall remain so for
three (3) days. Thereafter, subject to the provisions of
subsection 1.2(A), Borrower Representative shall have the option
---------- ------
to (1) convert at any time all or any part of outstanding Loans
equal to $2,500,000 and integral multiples of $250,000 in excess
of that amount from Base Rate Loans to LIBOR Loans or (2) upon
the expiration of any Interest Period applicable to a LIBOR Loan,
to (a) continue all or any portion of such LIBOR Loan equal to
$2,500,000 and integral multiplies of $250,000 in excess of that
amount as a LIBOR Loan or (b) convert all or any portion of such
LIBOR Loan to a Base Rate Loan. Borrower Representative shall
deliver a LIBOR Loan request no later than noon Chicago, Illinois
time at least three (3) Business Days in advance of the proposed
conversion/continuation date. A LIBOR Loan request shall state
and certify: (1) the proposed conversion/continuation date
(which shall be a Business Day); (2) the amount of the Loan to be
converted/continued; (3) the nature of the proposed
conversion/continuation; (4) in the case of conversion to, or a
continuation of, a LIBOR Loan, the requested Interest Period; and
(5) that no Default or Event of Default has occurred and is
continuing or would result from the proposed
conversion/continuation. Once given, a LIBOR Loan request shall
be irrevocable and Borrowers shall be bound thereby. Upon the
expiration of an Interest Period, in the absence of a new LIBOR
Loan request submitted to Agent not less than three (3) Business
Days prior to the end of such Interest Period, the LIBOR Loan
then maturing shall be automatically converted to a Base Rate
Loan. There may be no more than nine (9) LIBOR Loans outstanding
at any one time. Loans which are not the subject of a LIBOR Loan
request shall be Base Rate Loans. Agent will notify Lenders, by
telephonic or facsimile notice, of each LIBOR Loan request
received by Agent not less than two (2) Business Days prior to
the first day of the Interest Period of the LIBOR Loan requested
thereby.
1.3 Other Fees and Expenses.
-----------------------
(A) Certain Fees. Borrowers shall pay to Xxxxxx
------------
(individually) for Agent's account, the fees specified in that
certain letter agreement dated November 24, 1997 between Xxxx and
Xxxxxx (as such letter agreement may be amended, supplemented or
otherwise modified from time to time, the "Fee Letter") and due
under and pursuant to such Fee Letter.
(B) LIBOR Breakage Fee. Upon (i) any default by any
------------------
Borrower in making any borrowing of, conversion into or
continuation of any LIBOR Loan following Borrower
Representative's delivery to Agent of any Notice of Borrowing or
LIBOR Loan request in respect thereof, as applicable, or (ii) any
payment of a LIBOR Loan on any day that is not the last day of
the Interest Period applicable thereto (regardless of the source
of such prepayment and whether voluntary, by acceleration or
otherwise) or the failure of such Borrower to borrow any amount
on the date for which it has given notice that it wishes to
borrow as a LIBOR Loan, Borrowers shall pay Agent, for the
benefit of all affected Lenders, an amount (the "LIBOR Breakage
Fee") equal to the amount of any losses, expenses and liabilities
(including, without limitation, any loss (including interest
paid) sustained by each such affected Lender in connection with
the re-employment of such funds) that any such affected Lender
may sustain as a result of such default or such payment.
(C) Expenses and Attorneys Fees. Borrowers
---------------------------
jointly and severally agree to promptly pay all reasonable fees,
costs and expenses (including those of outside attorneys)
incurred by Agent in connection with any matters contemplated by
or arising out of the Loan Documents, in connection with the
examination, review, due diligence investigation, documentation,
negotiation, closing and syndication of the transactions
contemplated herein and in connection with the continued
administration of the Loan Documents including any amendments,
modifications and waivers. Borrowers jointly and severally agree
to promptly pay all fees, costs and expenses (including those of
attorneys) incurred by Agent and Lenders in connection with any
action to enforce any Loan Document or to collect any payments
due from Borrowers or any other Loan Party. All fees, costs and
expenses (including those of attorneys) for which Borrowers are
responsible under this subsection 1.3(C) shall be deemed part of
----------------
the Obligations when incurred, payable in accordance with the
final two sentences of subsection 1.4 and secured by the
--------------
Collateral.
1.4 Payments. All payments by Borrowers of the
--------
Obligations shall be made in same day funds and delivered to
Agent, for the benefit of Agent and Lenders, as applicable, by
wire transfer to the following account ("Agent's Account") or
such other place as Agent may from time to time designate.
ABA No. 0000-0000-0
Account Number 55-00540
The First National Bank of Chicago
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Reference: Xxxxxx Corporate Finance Group
for the benefit of Xxxx International
Holdings, Inc.
Borrowers shall receive credit on the day of receipt for funds
received by Agent by 1:00 p.m. Chicago, Illinois time. In the
absence of timely receipt, such funds shall be deemed to have
been paid on the next Business Day. Whenever any payment to be
made hereunder shall be stated to be due on a day that is not a
Business Day, the payment may be made on the next succeeding
Business Day and such extension of time shall be included in the
computation of the amount of interest and fees due hereunder.
Borrowers hereby authorize Lenders to make Revolving Loans,
on the basis of their Pro Rata Shares, for the payment of
Scheduled Term Installments, Scheduled Acquisition Installments,
interest, commitment fees, Risk Participation Liability fees,
LIBOR Breakage Fees, and Risk Participation Liability payments.
Prior to an Event of Default, other fees, costs and expenses
(including those of attorneys) reimbursable to Agent pursuant to
subsections 1.3(A) and 1.3(C) or elsewhere in any Loan Document
-----------------------------
may be debited to the Revolving Loans after fifteen (15) days
notice by Agent to Borrower Representative. After the occurrence
of an Event of Default, no notice will be required.
1.5 Prepayments.
-----------
(A) Voluntary Prepayment of Term Loans and
--------------------------------------
Acquisition Loans. (a) With respect to the Term Loans and
-----------------
Acquisition Loans, Borrowers may, upon at least one (1) Business
Day's notice in the case of Base Rate Loans and three (3)
Business Days' notice in the case of LIBOR Loans, in each case to
the Agent stating the proposed date and aggregate principal
amount of the prepayment and, if such notice is given, Borrowers
shall permanently prepay the outstanding aggregate principal
amount of the Term Loan A, the Term Loan B or the Acquisition
Loans, in whole or in part as stated in such notice, with LIBOR
Breakage fees, if applicable; provided, however, that (i) each
-------- -------
such partial prepayment shall be in an aggregate principal amount
of $1,000,000 or an integral multiple of $250,000 in excess
thereof with respect to each such Loan to be so prepaid and (ii)
no such prepayment of a LIBOR Loan shall be made other than on
the last day of an Interest Period therefor. The payments shall
be applied in accordance with subsection 1.5(E) or as otherwise
-----------------
may be agreed by Requisite Lenders.
(B) Prepayments from Excess Cash Flow. Within
---------------------------------
one hundred (100) days after the end of each Fiscal Year,
Borrowers shall prepay the Loans in an amount equal to seventy-
five percent (75%) of the Excess Cash Flow for such Fiscal Year
determined pursuant to the calculation as illustrated on Exhibit
-------
1.5(B). The calculation shall be based on the audited financial
------
statements for Holdings, Borrowers, the other Loan Parties and
their respective Subsidiaries. The payments shall be applied in
accordance with subsection 1.5(E).
-----------------
(C) Prepayments from Asset Dispositions. (1) At such
-----------------------------------
time that the sum of all Net Proceeds of all Asset Dispositions
in each Fiscal Year received by Borrowers and their respective
Subsidiaries exceeds $250,000, then any Net Proceeds received
above such amount ("Excess Proceeds") shall be subject to this
subsection 1.5(C). Borrowers shall, immediately upon receipt of
-----------------
such Excess Proceeds by a Loan Party or any of its Subsidiaries,
prepay, or cause any such Subsidiary to prepay, the Loans in an
amount equal to such Excess Proceeds. The payments shall be
applied in accordance with subsection 1.5(E).
-----------------
(2) Notwithstanding the foregoing, in the event
that Borrowers reasonably expect such Excess Proceeds to be
reinvested or committed to be reinvested within six (6) months in
productive assets of a kind then used or usable in the business
of a Borrower or any of its Subsidiaries, then the portion of
such Excess Proceeds expected to be reinvested (other than any
such Net Proceeds from an Asset Disposition subject to the IDRB
Mortgage so long as the Indebtedness under the IDRB Documents is
not defeased or otherwise repaid or retired and the IDRB Mortgage
is in effect) shall be temporarily applied against the
outstanding principal balance of the Revolving Loans, and Agent
shall apply a reserve against the Revolving Loans reducing the
Maximum Revolving Loan Balance by a corresponding amount until
such Excess Proceeds are released to Borrowers for reinvestment
as provided herein or applied to the Loans as set forth in
subsection 1.5(E). Upon Borrowers' request after such
-----------------
reinvestment has occurred, and provided that no Default or Event
--------
of Default has occurred and is continuing, Agent shall release
such Excess Proceeds to Borrowers for reinvestment as described
above; provided that such reinvestment has occurred within six
--------
(6) months after such disposition or Borrowers have entered into
a binding commitment for such reinvestment within such period and
has affected such reinvestment pursuant to such commitment as
soon thereafter as reasonably practicable. If any Borrower fails
to (x) reinvest such proceeds or (y) enter into a binding
commitment for the reinvestment of such proceeds and then
reinvest such proceeds, in the case of clause (x) and (y) within
the required period, Borrowers hereby authorize and direct Agent
to apply such amounts as a prepayment of the Loans as set forth
in subsection 1.5(E).
-----------------
(3) Notwithstanding clause (1) in this subsection
-----------
1.5(C), (i) if the Net Proceeds of a casualty loss or
------
condemnation awards exceed $250,000, all such Net Proceeds shall
be applied as provided in clause (2) above.
(D) Prepayment from Issuance of Securities.
--------------------------------------
Immediately upon the receipt by Holdings, Borrowers or any of
their Subsidiaries of the cash proceeds of the issuance of equity
securities (other than (1) proceeds of the issuance of equity
securities received on or before the Closing Date, (2) proceeds
from the issuance of equity securities to members of the
management, directors, officers or employees of, or consultants
to, any Loan Party, (3) proceeds of the issuance of equity
securities to any Loan Party and (4) proceeds of the issuance of
equity securities which shall be used to finance the purchase of
any Permitted Acquisition permitted under subsection 3.6(B)),
-----------------
Borrowers shall prepay the Loans in an amount equal to such
proceeds, net of underwriting discounts and commissions and other
costs associated therewith. The payments shall be applied in
accordance with subsection 1.5(E).
-----------------
(E) Application of Proceeds. With respect to the
-----------------------
prepayments described in subsections 1.5(A), 1.5(B), 1.5(C) and
--------------------------------------
1.5(D), such prepayments shall first be applied to repay the
------
Term Loan A, the Term Loan B and the Acquisition Loans pro rata
and to the unpaid Scheduled Term Installments of each Term Loan
and the unpaid Scheduled Acquisition Installments of the
Acquisition Loans pro rata and, any time after the Term Loans and
the Acquisition Loans shall have been prepaid in full, such
prepayments shall be applied to reduce the outstanding principal
balance of the Revolving Loans and as a permanent reduction of
the Revolving Loan Commitment. Notwithstanding the foregoing,
any Lender holding any portion of Term Loan B may elect, by
notice to Agent and Borrower Representative at least one (1)
Business Day prior notice to any prepayment of Term Loans
required or permitted to be made by Borrowers for the account of
such Lender pursuant to this subsection 1.5, to cause all or a
--------------
portion of such prepayments to be applied instead to repay the
Term Loan A, in which case such prepayment shall be applied in
payment of Term Loan A pro rata against all remaining Scheduled
Installments of Term Loan A, provided that, prior to such
--------
application of such prepayment amounts, Borrower Representative
consents to such application (which consent shall not be
unreasonably withheld). Agent shall, to the extent practicable
and giving effect to the preceding sentence, apply such mandatory
prepayments first against the unpaid principal amount of Base
Rate Loans and then against the unpaid principal amount of LIBOR
Rate Loans. Agent shall use its best efforts to time the
application of such prepayments so as to minimize or avoid any
LIBOR Breakage Fee.
(F) Overadvance. At any time that the Revolving Loans
-----------
exceed the Maximum Revolving Loan Balance (as it may be deemed
increased from time to time pursuant to subsection 1(B)(2)),
------------------
Borrowers shall immediately repay the Revolving Loans to the
extent necessary to reduce the principal balance to an amount
equal to or less than the Maximum Revolving Loan Balance. Such
Borrower shall immediately repay the Revolving Loans to eliminate
such excess.
1.6 Maturity. All of the Obligations shall
--------
become due and payable as otherwise set forth herein, but in any
event, all of the remaining Obligations shall become due and
payable on the date set forth in clause (c) of the definition of
the term "Expiry Date". Upon such date and following repayment
in full of all of the remaining Obligations, this Agreement will
terminate. Notwithstanding any such termination, until all
Obligations have been fully paid and satisfied (other than the
indemnity Obligations hereunder which survive the termination of
this Agreement), the Revolving Loan Commitment and the
Acquisition Loan Commitment have been terminated and all Lender
Letters of Credit and Risk Participation Agreements have been
terminated, Agent, for the benefit of Agent and Lenders, shall be
entitled to retain the security interests in the Collateral
granted under the Security Documents and the ability to exercise
all rights and remedies available to them under the Loan
Documents and applicable laws.
1.7 Loan Accounts. Agent will maintain loan account
-------------
records for (a) all Loans, interest charges and payments thereof,
(b) all Risk Participation Liability, (c) the charging and
payment of all fees, costs and expenses and (d) all other debits
and credits pursuant to this Agreement. The balance in the loan
accounts ("Loan Accounts") shall be presumptive evidence of the
amounts due and owing to Lenders, provided that any failure by
--------
Agent to so record shall not limit or affect the Borrowers'
obligation to pay. Within five (5) days of the first of each
month, Agent shall provide to Borrower Representative a statement
for each loan account setting forth the principal of each account
and interest due thereon. Borrower Representative must deliver a
written objection within sixty (60) days after receipt of the
statement or the statement will be presumptive evidence of the
Obligations absent manifest error. During the continuance of an
Event of Default, Borrowers irrevocably waive the right to direct
the application of any and all payments and Borrowers hereby
irrevocably agree that Agent shall have the continuing exclusive
right to apply and reapply payments in any manner it deems
appropriate.
1.8 Capital Adequacy and Other Adjustments. In
--------------------------------------
the event that any Lender shall have determined that the adoption
after the date hereof of any law, treaty, governmental (or quasi-
governmental) rule, regulation, guideline or order regarding
capital adequacy, reserve requirements or similar requirements or
compliance by any Lender or any corporation controlling such
Lender with any request or directive regarding capital adequacy,
reserve requirements or similar requirements (whether or not
having the force of law and whether or not failure to comply
therewith would be unlawful) from any central bank or
governmental agency or body having jurisdiction does or shall
have the effect of increasing the amount of capital, reserves or
other funds required to be maintained by such Lender or any
corporation controlling such Lender and thereby reducing the rate
of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder, then Borrowers shall
from time to time within fifteen (15) days after notice and
demand from such Lender (together with the certificate referred
to in the next sentence and with a copy to Agent) pay to Agent,
for the account of such Lender, additional amounts sufficient to
compensate such Lender for such reduction. A certificate as to
the amount of such cost and showing in reasonable detail the
basis of the computation of such cost and the allocation to
Borrowers of such amount submitted by such Lender to Borrower
Representative and Agent shall, absent manifest error, be final,
conclusive and binding for all purposes.
1.9 Taxes.
-----
(A) No Deductions. Any and all payments or
-------------
reimbursements made hereunder or under the Notes shall be made
free and clear of and without deduction for any and all taxes,
levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto (all such taxes, levies,
imposts, deductions, charges or withholdings and all liabilities
with respect thereto excluding such taxes imposed on net income,
herein "Tax Liabilities"), excluding, however, taxes imposed on
the net income of a Lender or Agent. If any Loan Party shall be
required by law to deduct any such amounts from or in respect of
any sum payable hereunder to any Lender or Agent, then the sum
payable hereunder shall be increased as may be necessary so that,
after making all required deductions, such Lender or Agent
receives an amount equal to the sum it would have received had no
such deductions been made.
(B) Changes in Tax Laws. In the event that,
-------------------
subsequent to the Closing Date, (1) any changes in any existing
law, regulation, treaty or directive or in the interpretation or
application thereof, (2) any new law, regulation, treaty or
directive enacted or any interpretation or application thereof,
or (3) compliance by Agent or any Lender with any request or
directive (whether or not having the force of law) from any
governmental authority, agency or instrumentality:
(a) does or shall subject Agent or any
Lender to any tax of any kind whatsoever with
respect to this Agreement, the other Loan
Documents or any Loans made or Lender Letters of
Credit or Risk Participation Agreements issued
hereunder, or change the basis of taxation of
payments to Agent or such Lender of principal,
fees, interest or any other amount payable
hereunder (except for net income taxes, or
franchise taxes imposed in lieu of net income
taxes, imposed generally by federal, state or
local taxing authorities with respect to interest
or commitment or other fees payable hereunder or
changes in the rate of tax on the overall net
income of Agent or such Lender); or
(b) does or shall impose on Agent or any
Lender any other condition or increased cost in
connection with the transactions contemplated
hereby or participations herein;
and the result of any of the foregoing is to increase the cost to
Agent or any such Lender of issuing any Lender Letter of Credit
or Risk Participation Agreement or making or continuing any Loan
hereunder, as the case may be, or to reduce any amount receivable
hereunder, then, in any such case, the Loan Parties shall
promptly pay to Agent or such Lender, upon its demand, any
additional amounts necessary to compensate Agent or such Lender,
on an after-tax basis, for such additional cost or reduced amount
receivable, as determined by Agent or such Lender with respect to
this Agreement or the other Loan Documents. If Agent or such
Lender becomes entitled to claim any additional amounts pursuant
to this subsection, it shall promptly notify Borrower
Representative of the event by reason of which Agent or such
Lender has become so entitled. A certificate as to any
additional amounts payable pursuant to the foregoing sentence and
showing in reasonable detail the basis of the computation of such
amounts and the allocation to Borrowers of such amounts submitted
by Agent or such Lender to Borrower Representative and Agent
shall, absent manifest error, be final, conclusive and binding
for all purposes.
(C) Foreign Lenders. Each Lender organized under
---------------
the laws of a jurisdiction outside the United States (a "Foreign
Lender") as to which payments to be made under this Agreement or
under the Notes are exempt from United States withholding tax or
are subject to United States withholding tax at a reduced rate
under an applicable statute or tax treaty shall provide to
Borrower Representative and Agent (1) a properly completed and
executed Internal Revenue Service Form 4224 or Form 1001 or other
applicable form, certificate or document prescribed by the
Internal Revenue Service of the United States certifying as to
such Foreign Lender's entitlement to such exemption or reduced
rate of withholding with respect to payments to be made to such
Foreign Lender under this Agreement and under the Notes (a
"Certificate of Exemption") or (2) a letter from any such Foreign
Lender stating that it is not entitled to any such exemption or
reduced rate of withholding (a "Letter of Non-Exemption"). Prior
to becoming a Lender under this Agreement and within fifteen (15)
days after a reasonable written request of Borrower
Representative or Agent from time to time thereafter, each
Foreign Lender that becomes a Lender under this Agreement shall
provide a Certificate of Exemption or a Letter of Non-Exemption
to Borrower Representative and Agent.
If a Foreign Lender is entitled to an exemption with respect
to payments to be made to such Foreign Lender under this
Agreement (or to a reduced rate of withholding) and does not
provide a Certificate of Exemption to Borrower Representative and
Agent within the time periods set forth in the preceding
paragraph, Borrowers shall withhold taxes from payments to such
Foreign Lender at the applicable statutory rates and Borrowers
shall not be required to pay any additional amounts as a result
of such withholding, provided that all such withholding shall
--------
cease upon delivery by such Foreign Lender of a Certificate of
Exemption to Borrower Representative and Agent.
1.10 Optional Prepayment/Replacement of Lenders.
------------------------------------------
Within fifteen (15) days after receipt by Borrower Representative
of written notice and demand from any Lender for payment pursuant
to subsection 1.8 or 1.9 or, as provided in subsection 8.3(C), in
--------------------- ----------------
the case of certain refusals by any Lender to consent to certain
proposed amendments, modifications, terminations or waivers with
respect to this Agreement that have been approved by Requisite
Lenders (any such Lender demanding such payment or refusing to
consent an "Affected Lender"), Borrowers may, at their option,
notify Agent and such Affected Lender of their intention to do
one of the following:
(A) Borrowers may obtain, at Borrowers' expense, a
replacement Lender ("Replacement Lender") for such Affected
Lender, which Replacement Lender shall be reasonably satisfactory
to Agent. In the event Borrowers obtain a Replacement Lender
that will refinance all outstanding Obligations owed to such
Affected Lender and assume its Commitments hereunder within
ninety (90) days following notice of Borrowers' intention to do
so, the Affected Lender shall sell and assign its Loans and
Commitments and all of its rights and delegate all of its
obligations under this Agreement to such Replacement Lender in
accordance with the provisions of subsection 8.1, provided that
-------------- --------
Borrowers have reimbursed such Affected Lender for any
administrative fee payable pursuant to subsection 8.1 and, in any
--------------
case where such replacement occurs as the result of a demand for
payment pursuant to subsection 1.8 or 1.9, paid all amounts
---------------------
required to be paid to such Affected Lender pursuant to
subsection 1.8 or 1.9 through the date of such sale and
---------------------
assignment; or
(B) Borrowers may prepay in full all outstanding
Obligations owed to such Affected Lender and terminate such
Affected Lender's Pro Rata Share of the Commitments, in each case
the Commitments will be reduced by the amount of such Pro Rata
Share. Borrowers shall, within ninety (90) days following notice
of its intention to do so, prepay in full all outstanding
Obligations owed to such Affected Lender (including, in any case
where such replacement occurs as the result of a demand for
payment for increased costs, such Affected Lender's increased
costs for which it is entitled to reimbursement under this
Agreement through the date of such prepayment), and terminate
such Affected Lender's Commitments.
SECTION 2
AFFIRMATIVE COVENANTS
Each Loan Party covenants and agrees that so long as any of
the Commitments hereunder shall be in effect and until payment in
full of all Obligations and termination of all Lender Letters of
Credit and Risk Participation Agreements, unless Requisite
Lenders shall otherwise give their prior written consent, each
Loan Party shall perform and comply with, and shall cause each of
the other Loan Parties and each of their respective Subsidiaries
to perform and comply with, all covenants in this Section 2
applicable to such Person or Persons.
2.1 Compliance With Laws and Contractual
------------------------------------
Obligations. Each Loan Party will (a) comply with and will cause
-----------
each of their respective Subsidiaries to comply with (i) the
requirements of all applicable laws, rules, regulations and
orders of any governmental authority (including, without
limitation, laws, rules, regulations and orders relating to
taxes, employer and employee contributions, securities, employee
retirement and welfare benefits, environmental protection
matters, ERISA and employee health and safety) as now in effect
and which may be imposed in the future in all jurisdictions in
which such Loan Party or its Subsidiaries is now doing business
or may hereafter be doing business other than those laws, rules,
regulations and orders the noncompliance with which could not
reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect, and (ii) the obligations,
covenants and conditions contained in all Contractual Obligations
of such Loan Party or its Subsidiaries, as applicable, other than
those provisions of such Contractual Obligations (other than the
Related Transaction Documents) the noncompliance with which could
not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect, and (b) maintain or obtain
and will cause each of their respective Subsidiaries to maintain
or obtain, all licenses, qualifications and permits now held or
hereafter required to be held by such Loan Party and its
Subsidiaries, for which the loss, suspension, revocation or
failure to obtain or renew could reasonably be expected to have a
Material Adverse Effect. Each Loan Party represents and warrants
that as of the date hereof, it (i) is in compliance and each of
its Subsidiaries is in compliance with the requirements of all
applicable laws, rules, regulations and orders of any
governmental authority as now in effect other than those laws,
rules, regulations and orders the noncompliance with which could
not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect, and (ii) maintains and each
of its Subsidiaries maintains all licenses, qualifications and
permits referred to above.
"Contractual Obligations," as applied to any Person, means
any indenture, mortgage, deed of trust, leasehold mortgage,
leasehold deed of trust, lease, contract, undertaking, agreement
or other instrument to which that Person is a party or by which
it or any of its properties is bound or to which it or any of its
properties is subject including, without limitation, the Related
Transactions Documents.
2.2 Maintenance of Properties; Insurance. Each
------------------------------------
Loan Party will maintain or cause to be maintained in good
repair, working order and condition (ordinary wear and tear
excepted) all material properties used in the business of any
Loan Party and its Subsidiaries and will make or cause to be made
all appropriate repairs, renewals and replacements thereof. Each
Loan Party will maintain or cause to be maintained and will cause
each of their respective Subsidiaries to maintain, with
financially sound and reputable insurers, public liability,
workers compensation, and property damage insurance with respect
to its business and properties and the business and properties of
its Subsidiaries against loss or damage of the kinds customarily
carried or maintained by corporations of established reputation
engaged in similar businesses and in amounts reasonably
acceptable to Agent and will deliver evidence thereof to Agent,
which evidence shall be reasonably satisfactory to Agent.
Holdings will maintain for itself and all the other Loan Parties
and their respective Subsidiaries business interruption insurance
providing coverage for a period of at least six months and in an
amount not less than $4,500,000 in the aggregate. Each Loan
Party shall cause Agent, pursuant to endorsements and/or
assignments in form and substance reasonably satisfactory to
Agent, to be named as lender's loss payee in the case of casualty
insurance, additional insured in the case of all liability
insurance and assignee in the case of all business interruption
insurance, in each case for the benefit of Lenders; provided,
--------
however, that so long as the Indebtedness under the IDRB
-------
Documents is not defeased or otherwise repaid or retired and the
IDRB Mortgage is still in effect, such endorsements to and/or
assignments of the insurance policies with respect to the
operations and properties subject to the IDRB Mortgage shall name
Agent, if so permitted by the IDRB Documents, as second loss
payee, additional insured or assignee, as applicable. Each Loan
Party represents and warrants that it and each of its
Subsidiaries currently maintains or causes to be maintained all
material properties as set forth above and maintains or causes to
be maintained all insurance described above. In the event the
Loan Parties fail to provide Agent with evidence of the insurance
coverage required by this Agreement, Agent may purchase insurance
at Borrowers' expense to protect Agent s interests in the
Collateral. This insurance may, but need not, protect Loan
Parties' and their respective Subsidiaries' interests. The
coverage purchased by Agent may not pay any claim made by a Loan
Party or its Subsidiary or any claim that is made against any
Loan Party or its Subsidiaries in connection with the Collateral.
Borrowers may later cancel any insurance purchased by Agent, but
only after providing Agent with evidence, in form and substance
reasonably satisfactory to Agent, that the Loan Parties or their
respective Subsidiaries have obtained insurance as required by
this Agreement. If Agent purchases insurance to protect Agent's
interest in the Collateral, Borrowers will be responsible for the
costs of that insurance, including interest and other charges
reasonably imposed by Agent in connection with the placement of
the insurance, until the effective date of the cancellation or
expiration of the insurance. The costs of the insurance may be
added to the Obligations. The costs of the insurance purchased
by Agent may be more than the cost of insurance Borrowers are
able to obtain on their own. The Loan Parties shall apply any
proceeds received from any policies of insurance relating to any
Collateral to the Obligations as set forth in subsection 1.5(C).
-----------------
Each Loan Party will, and will cause each of their respective
Subsidiaries to, deliver to Agent, within ten (10) Business Days
prior to the expiration or termination of any such insurance
policy, a certificate of renewal or replacement of such insurance
policy, as issued by the applicable insurance company or its duly
authorized agent.
2.3 Inspection; Lender Meeting. Upon one (1)
--------------------------
Business Day prior notice to Borrower Representative by the
Agent, the Loan Parties shall permit, and hereby authorize, any
authorized representatives of Agent to visit and inspect any of
the properties of any Loan Party or any of their respective
Subsidiaries, including its and their financial and accounting
records, and to make copies and take extracts therefrom, and to
discuss its and their affairs, finances and business with its and
their principal executive officers and certified public
accountants, at such reasonable times during normal business
hours and as often as may be reasonably requested; provided,
--------
however, that no more than four (4) in person visits or
-------
inspections shall occur during any twelve (12) month period,
unless an Event of Default has occurred and is continuing.
Representatives of each Lender will be permitted to accompany
representatives of Agent during each visit, inspection and
discussion referred to in the immediately preceding sentence.
Without in any way limiting the foregoing, the Loan Parties will
participate and will cause their key management personnel to
participate in a meeting with Agent and Lenders at least once
during each year, which meeting shall be held at such time and
such place as may be reasonably requested by Agent.
2.4 Corporate Existence, Etc. Except as
------------------------
otherwise permitted by subsection 3.6, each Loan Party will, and
--------------
will cause each of their respective Subsidiaries to, at all times
preserve and keep in full force and effect its corporate
existence and all rights and franchises material to its business.
2.5 Further Assurances.
------------------
(A) Each Loan Party shall, and shall cause each
of their respective Subsidiaries to, from time to time, execute
such guaranties, financing statements or continuation statements,
documents, security agreements, reports and other documents as
Agent or Requisite Lenders at any time may reasonably request to
evidence, perfect or otherwise implement the guaranties and
security for repayment of the Obligations contemplated by the
Loan Documents.
(B) At Agent's request, each Loan Party shall
cause any newly created Subsidiary of Holdings or a Borrower
promptly to become a Borrower and/or Corporate Guarantor
hereunder and the other Loan Documents and to grant to Agent, for
the benefit of Agent and Lenders, a security interest in the
real, personal and mixed property and assets of such Subsidiary
to secure the Obligations. The documentation for such guaranty
or security or for such Borrower shall be substantially similar
to the Loan Documents executed concurrently herewith with such
modifications as are reasonably requested by Agent.
2.6 Collateral Records. The Loan Parties shall keep
------------------
full and accurate books and records relating to the Collateral
and shall xxxx such books to indicate Agent's security interests
in the Collateral, for the benefit of Lenders.
2.7 Payment of Taxes. Each Loan Party will, and will
----------------
cause each of their respective Subsidiaries to, pay and discharge
(i) all taxes, assessments and other governmental charges imposed
upon it or any of its properties or assets or with respect to any
of its franchises, business, income or property before any
penalty accrues thereon and (ii) all claims that, if unpaid,
might by law become a Lien upon its property or assets; provided,
--------
however, that no such tax need be paid if such Loan Party or one
-------
of its Subsidiaries is contesting same in good faith in a manner
which stays enforcement thereof by appropriate proceedings
promptly instituted and diligently conducted and if such Loan
Party or such Subsidiary has established reserves or other
appropriate provisions as shall be required in conformity with
GAAP.
2.8 Collateral Locations. Each Loan Party will
--------------------
keep the Collateral at the locations specified on Schedule 2.8,
------------
provided that any Loan Party may move Collateral from a location
--------
specified on Schedule 2.8 to another location specified on
Schedule 2.8. With respect to any new location not listed on
------------
Schedule 2.8 (which in any event shall be within the continental
------------
United States) or in the event of any transfer of any Collateral
from one location listed on Schedule 2.8 to any other location
------------
listed on Schedule 2.8, the applicable Loan Party will execute
------------
such documents and take such actions as Agent deems necessary to
perfect and protect the security interests of Agent, on behalf of
Lenders, in the Collateral prior to the transfer or removal of
any Collateral to such new or other location.
2.9 Instruments; Chattel Paper. Except to the extent
--------------------------
Indebtedness evidenced thereby does not exceed $250,000
outstanding at any time in the aggregate, Loan Parties will
deliver and pledge to Agent all notes and instruments (as defined
in the UCC) duly endorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance
reasonably satisfactory to Agent. The Loan Parties will xxxx
conspicuously all chattel paper with a legend, in form and
substance reasonably satisfactory to Agent, indicating that such
chattel paper is subject to the security interest of Agent, for
the benefit of itself and Lenders.
2.10 Compliance with Environmental Laws. Each Loan
----------------------------------
Party will (a) comply, and will cause each other Loan Party and
each of their respective Subsidiaries and all lessees and other
Persons operating or occupying properties of any Loan Party or
any of its Subsidiaries to comply, in all respects, with all
applicable Environmental Laws and Environmental Permits other
than those Environmental Laws and Environmental Permits the
noncompliance with which could not reasonably be expected to
have, either individually or in the aggregate, a Material Adverse
Effect; (b) obtain and renew, and will cause each other Loan
Party and each of their respective Subsidiaries to obtain and
renew, all Environmental Permits necessary for operations and
properties of any Loan Party or any of its Subsidiaries, except
where the failure to obtain or renew such Environmental Permit or
Permits could not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect; and
(c) conduct, and will cause each other Loan Party and each of
their respective Subsidiaries to conduct, any investigation,
study, sampling and testing, and undertake any cleanup, removal,
remedial or other action necessary to remove and clean up all
Hazardous Materials from any properties of any Loan Party or any
of its Subsidiaries, in compliance with the requirements of all
Environmental Laws, except where the failure to so conduct could
not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.
2.11 Preparation of Reports and Reviews.
----------------------------------
(A) Environmental Reports. At any time after an Event
---------------------
of Default or if Holdings is required to make any disclosure
pursuant to the Securities Exchange Act of 1934 as a result of
any change in the environmental condition of, or relating to any
environmental matter with respect to, any property of any Loan
Party, Agent shall have the right, upon reasonable prior notice,
from time to time in its reasonable discretion, to retain, at
Borrowers' expense, an independent professional consultant to
prepare environmental site assessment reports for each Loan Party
or any of its Subsidiaries and/or to review any report relating
to Hazardous Materials prepared by or for such Loan Party or any
of its Subsidiaries and, upon a reasonable belief that such Loan
Party or any of its Subsidiaries has breached any covenant or
representation with respect to environmental matters or that
there has been a violation of Environmental Laws by such Loan
Party or any of its Subsidiaries, the Agent may conduct its own
investigation of such matter at any facility or property
currently owned, leased, operated or used by such Loan Party or
any of its Subsidiaries. Such Loan Party or any of its
Subsidiaries agrees to obtain permission for the Agent's
professional consultant to conduct its own investigation of any
such matter at any facility or property previously owned, leased,
operated or used by such Loan Party of any of its Subsidiaries.
Any such investigation of any such facility or property shall be
conducted, unless otherwise agreed to by such Loan Party and the
Agent, during normal business hours and, to the extent reasonably
practicable, shall be conducted so as not to interfere with the
ongoing operations at any facility or property or to cause any
damage or loss to any facility or property. Each Loan Party and
the Agent hereby acknowledge and agree that any report of any
investigation conducted at the request of the Agent will be
obtained and shall be used by the Agent and Lender Parties for
the purpose of internal credit decisions to monitor and police
the Loans and/or protect the Agent's and Lender's security
interests in the Collateral. Each Loan Party acknowledges and
agrees that (i) each Loan Party will indemnify and hold harmless
the Agent and each Lender from any costs, losses or liabilities
relating to a Loan Party's or its Subsidiaries' use of or
reliance on such report and (ii) neither the Agent nor any Lender
makes any representation or warranty with respect to such report.
(B) Health and Safety Reviews. At any time after an
-------------------------
Event of Default or if Holdings is required to make any
disclosure pursuant to the Securities Exchange Act of 1934
relating to the health or safety of the business or properties of
any Loan Party or the compliance or non-compliance with
subsection 2.1, Agent shall have the right to engage an
--------------
independent consultant to perform an audit and inspection of a
Loan Party's or its Subsidiaries premises and operations to
perform health and safety inspection and to ensure compliance
with subsection 2.1 and the other provisions hereof. The
--------------
procedures to be used to perform such investigation and audit
shall be reasonably acceptable to the Loan Parties, and the fees
and expenses of such consultant shall be paid by the Borrowers.
Agent shall provide Borrower Representative with reasonable
notice of a time when such inspections are to incur.
2.12 Interest Rate Agreement. Borrowers may enter into
-----------------------
Interest Rate Agreements with counterparties reasonably
acceptable to Agent providing for interest rate protection (1)
for an aggregate amount equal to the aggregate amount outstanding
under the Term Loan A and Term Loan B and (2) with terms and
conditions reasonably satisfactory to Agent.
"Interest Rate Agreement" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar
agreement or similar agreement or arrangement designed to protect
Borrowers against fluctuations in interest rates.
SECTION 3
NEGATIVE COVENANTS
Each Loan Party covenants and agrees that so long as
any of the Commitments is in effect and until payment in full of
all Obligations and termination of all Lender Letters of Credit
and Risk Participation Agreements, unless Requisite Lenders shall
otherwise give their prior written consent, each Loan Party shall
perform and comply with, and shall cause each of the other Loan
Parties to perform and comply with, all covenants in this Section
3 applicable to such Person.
3.1 Indebtedness. Each Loan Party will not and will
------------
not permit any of their respective Subsidiaries directly or
indirectly to create, incur, assume, guaranty or otherwise become
or remain directly or indirectly liable with respect to any
Indebtedness (other than pursuant to a Contingent Obligation)
except:
(A) the Obligations;
(B) (1) intercompany Indebtedness among Borrowers;
(2) intercompany Indebtedness owing from any
Subsidiary of a Borrower to any Borrower;
(3) intercompany Indebtedness owing from any
Corporate Guarantor (other than Borrowers and Holdings) to any
other Corporate Guarantor (other than Borrowers and Holdings);
and
(4) intercompany Indebtedness owing from Holdings
to any Borrower, provided that (x) no Default or Event of Default
shall have occurred and be continuing at the time of the
incurrence thereof or would result therefrom, (y) all such
Indebtedness incurred by Holdings shall not exceed $250,000
outstanding in the aggregate at any time and (z) such
Indebtedness shall be incurred by Holdings to permit Holdings to
pay expenses incurred in the ordinary course of its business and
to make Restricted Junior Payments permitted under subsection
----------
3.5; provided that, with respect to any Indebtedness permitted
--- --------
under clauses (B)(2), (B)(3) and (B)(4) of this subsection 3.1,
--------------
such Indebtedness shall: (i) be subordinated in right of payment
to the Obligations; (ii) be unsecured; (iii) be evidenced by any
promissory note or other instrument, in form and substance
satisfactory to Agent and the Requisite Lenders, the sole
originally executed counterparts of which shall be pledged and
delivered to Agent, for the benefit of Agent and Lenders, as
security for the Obligations; and (iv) be on such other terms and
conditions reasonably acceptable to Agent and Requisite Lenders.
(C) Indebtedness not to exceed $3,000,000 in the
aggregate at any time outstanding secured by purchase money Liens
or incurred with respect to Capital Leases;
(D) Indebtedness existing on the Closing Date and
identified on Schedule 5.23; and
-------------
(E) Indebtedness (other than the Acquisition Loans and
the Indebtedness permitted under clause (F) below) incurred by
any Borrower or Holdings in connection with Permitted
Acquisitions permitted under subsection 3.6(B); provided that (1)
----------------- --------
such Indebtedness (i) shall not be incurred to finance the
purchase of the Permitted Acquisition, (ii) shall be unsecured
and subordinated in right of payment to the Obligations,
(iii) shall not exceed $250,000 outstanding at any time in the
aggregate with respect to any individual Permitted Acquisition
and (iv) shall be on terms and conditions reasonably acceptable
to Agent, and (2) all such Indebtedness incurred by Borrowers and
Holdings shall not exceed $500,000 outstanding in the aggregate
with respect to all Permitted Acquisitions at any time; provided,
--------
however, that any such Indebtedness that is incurred for the
-------
purpose of (x) earn-outs or (y) hold-backs arising with respect
to customary indemnification obligations shall not be subject to
clause (1)(iii) of this subsection 3.1(E) and included in the
----------------
calculation for purposes of clause (2) of this subsection 3.1(E);
-----------------
and
(F) Indebtedness (other than Acquisition Loans and
Indebtedness permitted under clause (E) above) incurred by any
Borrower or Holdings to finance the purchase of a Permitted
Acquisition permitted under subsection 3.6(B), provided that
--------
(1) such Indebtedness (i) shall be evidenced by a promissory note
payable to the seller of Target, (ii) shall be unsecured and
subordinated in right of payment to the Obligations, (iii) shall
not exceed the lesser of (x) $1,000,000 or (y) twenty percent
(20%) of the Acquisition Costs, or such greater amount as may be
approved in writing by the Requisite Lenders prior to the
incurrence of such Indebtedness, and (iv) shall be on terms and
conditions reasonably acceptable to Requisite Lenders, and (2)
all such Indebtedness incurred by Borrowers and Holdings shall
not exceed $3,000,000 (or such greater amount as may be approved
in writing by the Requisite Lenders prior to the incurrence of
such Indebtedness) outstanding in the aggregate at any time.
Except for Indebtedness permitted under clauses (A),
(B), (C), (D), (E) and (F) of this subsection 3.1, Holdings and
--------------
Borrowers will not, and will not permit any other Loan Party or
any of their respective Subsidiaries to, incur any Liabilities
except for trade payables and normal accruals in the ordinary
course of business not yet due and payable or with respect to
which any Loan Party or any of their respective Subsidiaries is
contesting in good faith the amount or validity thereof by
appropriate proceedings and then only to the extent such Loan
Party or any of their respective Subsidiaries has established
adequate reserves therefor, if appropriate under GAAP.
3.2 Liens and Related Matters.
-------------------------
(A) No Liens. Each Loan Party will not and will not
--------
permit any of their respective Subsidiaries directly or
indirectly to create, incur, assume or permit to exist any Lien
on or with respect to any property or asset (including any
document or instrument with respect to goods or accounts
receivable) of such Loan Party or such Subsidiaries, whether now
owned or hereafter acquired, or any income or profits therefrom,
except Permitted Encumbrances. "Permitted Encumbrances" means
the following:
(1) Liens (other than Liens relating to Environmental
Claims and ERISA) for taxes, assessments or other
governmental charges (x) not yet due and payable or (y) due
and payable that are being contested in good faith by
appropriate proceedings; provided, that in the case of Liens
--------
under this clause (y), reserves or other appropriate
provisions shall have been established therefor in
accordance with GAAP;
(2) statutory Liens of landlords, carriers,
warehousemen, mechanics, materialmen and other similar liens
imposed by law, which are incurred in the ordinary course of
business for sums not more than thirty (30) days delinquent
or which are being diligently contested in good faith,
provided that a reserve or other appropriate provisions
shall have been established therefor in accordance with GAAP
and the aggregate amount of liabilities secured by such
Liens does not exceed $250,000 at any time;
(3) Liens (other than any Lien imposed by ERISA)
incurred or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure
the performance of tenders, statutory obligations, surety,
stay, customs and appeal bonds, bids, leases, government
contracts, trade contracts, performance and return of money
bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money);
(4) deposits, in an aggregate amount not to exceed
$500,000, made in the ordinary course of business to secure
liability to insurance carriers;
(5) Liens for purchase money obligations; provided
--------
that: (a) the purchase of the asset subject to any such
Lien is permitted under subsection 4.1; (b) the Indebtedness
--------------
secured by any such Lien is permitted under subsection 3.1;
--------------
and (c) any such Lien encumbers only the asset so purchased;
(6) any attachment or judgment Lien not
constituting an Event of Default under subsection 6.1(H);
-----------------
(7) easements, rights of way, restrictions, and other
similar charges or encumbrances not interfering in any
material respect with the ordinary conduct of the business
of any Loan Party or any of its Subsidiaries;
(8) any interest or title of a lessor or sublessor
under any lease permitted by subsection 4.2;
--------------
(9) Liens in favor of Agent, for the benefit of
Agent and Lenders; and
(10) Liens existing on the date hereof and renewals and
extensions thereof, which Liens are set forth on Schedule
--------
3.2(A)(10) hereto.
----------
(B) No Negative Pledges. Each Loan Party will not and
-------------------
will not permit any of their respective Subsidiaries directly or
indirectly to enter into or assume any agreement (other than the
Loan Documents) prohibiting the creation or assumption of any
Lien upon its properties or assets, whether now owned or
hereafter acquired.
(C) No Restrictions on Subsidiary Distributions to
----------------------------------------------
Holdings, any Borrower or any other Loan Party. Except as
----------------------------------------------
provided herein and in the IDRB Documents, each Loan Party will
not and will not permit any of their respective Subsidiaries
directly or indirectly to create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or
restriction of any kind on the ability of any Loan Party or any
Subsidiary of such Loan Party to: (1) pay dividends or make any
other distribution on any of such Loan Party's (other than
Holdings') or such Subsidiary's capital stock owned by any Loan
Party or any Subsidiary of any Loan Party; (2) subject to
subordination provisions for the benefit of Agent and Lenders,
pay any Indebtedness owed to any Loan Party or any Subsidiary of
such Loan Party; (3) make loans or advances to any Loan Party or
any Subsidiary of such Loan Party; or (4) transfer any of its
property or assets to any Loan Party or any Subsidiary of such
Loan Party.
3.3 Investments; Joint Ventures. Each Loan Party will
---------------------------
not and will not permit any of their respective Subsidiaries
directly or indirectly to make or own any Investment in any
Person except:
(A) Each Loan Party and its Subsidiaries may make and
own Investments in Cash Equivalents; provided that such Cash
--------
Equivalents are not subject to set off rights;
(B) Each Loan Party may make intercompany loans to the
extent permitted under subsection 3.1;
--------------
(C) Each Loan Party and its Subsidiaries may make
loans and advances to employees for (i) payment of taxes in
connection with restricted stock awards and (ii) moving,
entertainment, travel and other similar expenses in the ordinary
course of business, in the case of clauses (i) and (ii), not to
exceed $500,000 in the aggregate at any time outstanding;
(D) Permitted Acquisitions to the extent permitted
under subsection 3.6(B);
-----------------
(E) Holdings may make Investments (other than loans or
advances to) in any Borrower, any Subsidiary of Borrower, or any
Corporate Guarantor;
(F) Each Borrower may make Investments in any Borrower
or any Subsidiary of Borrower; and
(G) Investments existing on the Closing Date and
described on Schedule 3.3(G).
---------------
"Investment" means (i) any direct or indirect purchase
or other acquisition by a Loan Party or any of its Subsidiaries
of any beneficial interest in, including stock, partnership
interest or other equity securities of, or ownership interest in,
any other Person; and (ii) any direct or indirect loan, advance
or capital contribution (other than trade credit extended on
usual and customary terms in the ordinary course of business) by
a Loan Party or any of its Subsidiaries to any other Person,
including all indebtedness and accounts receivable from that
other Person that are not current assets or did not arise from
sales to that other Person in the ordinary course of business.
The amount of any Investment shall be the original cost of such
Investment plus the cost of all additions thereto, without any
----
adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment.
"Cash Equivalents" means: (i) marketable direct
obligations issued or unconditionally guarantied by the United
States Government or issued by any agency thereof and backed by
the full faith and credit of the United States, in each case
maturing within one (1) year from the date of acquisition
thereof; (ii) commercial paper maturing no more than one (1) year
from the date issued and, at the time of acquisition, having a
rating of at least A-1 from Standard & Poor's Corporation or at
least P-1 from Xxxxx'x Investors Service, Inc.; (iii) certifi-
xxxxx of deposit or bankers' acceptances maturing within one (1)
year from the date of issuance thereof issued by, or overnight
reverse repurchase agreements from, any commercial bank organized
under the laws of the United States of America or any state
thereof or the District of Columbia having combined capital and
surplus of not less than $500,000,000; (iv) time deposits
maturing no more than thirty (30) days from the date of creation
thereof with commercial banks having membership in the Federal
Deposit Insurance Corporation in amounts not exceeding the lesser
of $100,000 or the maximum amount of insurance applicable to the
aggregate amount of a Loan Party's deposits at such institution;
and (v) deposits or investments in mutual or similar funds
offered or sponsored by brokerage or other companies having
membership in the Securities Investor Protection Corporation in
amounts not exceeding the lesser of $100,000 or the maximum
amount of insurance applicable to the aggregate amount of a Loan
Party's deposits at such institution. Notwithstanding the
foregoing definition, with respect to any Cash Equivalents
obtained and deposited with the Trustee (as defined in the IDRB
Documents) for purposes of the IDRB Payment, the maturity of such
Cash Equivalents may exceed one year.
3.4 Contingent Obligations. Each Loan Party will not
----------------------
and will not permit any of their respective Subsidiaries directly
or indirectly to create or become or be liable with respect to
any Contingent Obligation, except:
(A) Risk Participation Liability;
(B) those resulting from Interest Rate Agreements
entered into by Borrowers pursuant to subsection 2.12;
---------------
(C) those resulting from endorsement of negotiable
instruments for collection in the ordinary course of business;
(D) those existing on the Closing Date and described
in Schedule 3.4 annexed hereto;
------------
(E) those arising under indemnity agreements to title
insurers to cause such title insurers to issue to Agent mortgagee
title insurance policies;
(F) those arising with respect to customary
indemnification obligations incurred in connection with Asset
Dispositions;
(G) those incurred in the ordinary course of business
with respect to surety and appeal bonds, performance and return-
of-money bonds and other similar obligations not exceeding at any
time outstanding $250,000 in aggregate liability;
(H) those incurred with respect to Indebtedness
permitted by subsection 3.1;
--------------
(I) those not expressly permitted by clauses (A)
through (H) above, so long as any such other Contingent
Obligations, in the aggregate at any time outstanding, do not
exceed $100,000; and
(J) earn-outs incurred in connection with any
Permitted Acquisition.
"Contingent Obligations", as applied to any Person,
means any direct or indirect liability of that Person: (i) with
respect to any indebtedness, lease, dividend or other obligation
of another Person if the purpose or intent of the Person
incurring such liability, or the effect thereof, is to provide
assurance to the obligee of such liability that such liability
will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such
liability will be protected (in whole or in part) against loss
with respect thereto; (ii) with respect to any letter of credit
issued for the account of that Person or as to which that Person
is otherwise liable for reimbursement of drawings; (iii) under
any foreign exchange contract, currency swap agreement, interest
rate swap agreement or other similar agreement or arrangement
designed to alter the risks of that Person arising from
fluctuations in currency values or interest rates; (iv) to make
take-or-pay or similar payments if required regardless of
nonperformance by any other party or parties to an agreement; or
(v) pursuant to any agreement to purchase, repurchase or
otherwise acquire any obligation or any property constituting
security therefor, to provide funds for the payment or discharge
of such obligation or to maintain the solvency, financial
condition or any balance sheet item or level of income of
another. The amount of any Contingent Obligation shall be equal
to the amount of the obligation so guaranteed or otherwise
supported or, if not a fixed and determined amount, the maximum
amount so guaranteed.
3.5 Restricted Junior Payments. Each Loan Party will
--------------------------
not and will not permit any of their respective Subsidiaries
directly or indirectly to declare, order, pay, make or set apart
any sum for any Restricted Junior Payment, except that, so long
as no Default or Event of Default shall have occurred and be
continuing or would result therefrom: a Borrower, any Subsidiary
of a Borrower or any Subsidiary of Holdings may make Restricted
Junior Payments with respect to its common stock to the extent
necessary (i) to permit Borrowers to pay the Obligations, (ii) to
permit Holdings to make payments in cash directly related to
compliance by it with laws and regulations applicable to it by
virtue of its status as a publicly-held corporation, and (iii) to
permit any Borrower to pay expenses incurred in the ordinary
course of business.
"Restricted Junior Payment" means: (i) any dividend or
other distribution, direct or indirect, on account of any shares
of any class of stock or other equity security of, or ownership
interest in, Holdings, any Borrower or any of its Subsidiaries
now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock to the holders of that class; (ii)
any redemption, conversion, exchange, retirement, sinking fund or
similar payment, purchase or other acquisition for value, direct
or indirect, of any shares of any class of stock or other equity
security of, or ownership interest in, Holdings, any Borrower or
any of its Subsidiaries now or hereafter outstanding; (iii) any
payment or prepayment of interest on, principal of, premium, if
any, redemption, conversion, exchange, purchase, retirement,
defeasance, sinking fund or similar payment with respect to, any
Indebtedness subordinated to the Obligations; and (iv) any
payment made to retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares
of any class of stock or other equity security of, or ownership
interest in, any Borrower or any of its Subsidiaries now or
hereafter outstanding.
3.6 Restriction on Fundamental Changes. (A) Each Loan
----------------------------------
Party will not and will not permit any of their respective
Subsidiaries directly or indirectly to: (i) amend, modify or
waive any term or provision of its organizational documents,
including, without limitation, its articles of incorporation,
certificates of designations pertaining to preferred stock, by-
laws, partnership agreement or members agreement unless required
by law or such Loan Party obtained the prior written consent of
Agent; provided, however, that Holdings may amend, modify or
-------- -------
waive any term or provision of its organizational documents
without the prior consent of Agent, provided that such amendment,
--------
modification or waiver could not reasonably be expected to have a
Material Adverse Effect; (ii) enter into any transaction of
merger or consolidation; (iii) liquidate, wind-up or dissolve
itself (or suffer any liquidation or dissolution); provided,
--------
however, that upon not less than five (5) Business Days prior
-------
written notice to Agent, (1) any Borrower may merge or
consolidate with and into, or liquidate, wind-up or dissolve
into, any other Borrower; (2) any Corporate Guarantor (other than
Holdings) may merge or consolidate with and into, or liquidate,
wind-up or dissolve into, any Borrower, provided such Borrower is
--------
the surviving entity; (3) any Corporate Guarantor (other than
Borrowers and Holdings) that is a Subsidiary of a Borrower may
merge or consolidate with and into, or liquidate, wind-up or
dissolve into, any other Corporate Guarantor (other than
Borrowers and Holdings) that is a Subsidiary of such Borrower;
(4) LAC may merge or consolidate with and into, or liquidate,
wind-up or dissolve into, Holdings, provided Holdings is the
--------
surviving entity; and (5) Xxxx FSC and Xxxx International FSC may
merge with and into, or liquidate, wind-up or dissolve into, any
Loan Party, provided such Loan Party is the surviving entity.
--------
(B) Each Loan Party will not and will not permit any
of their respective Subsidiaries directly or indirectly to
acquire by purchase or otherwise, all or any substantial part of
the business or assets of, or stock or other evidence of
beneficial ownership of, any Person; provided, however, that so
-------- -------
long as no Default or Event of Default has occurred and is
continuing before and after giving effect thereto, any Borrower
(or Holdings, so long as contemporaneously therewith, all assets
so acquired are transferred to one or more Borrowers) may acquire
by purchase or otherwise, all or any substantial part of the
business or assets of, or stock or other evidence of beneficial
ownership of, any Person (in each case, a "Permitted
Acquisition"); provided, further that each Permitted Acquisition
-------- -------
shall be subject to the satisfaction of each of the following
conditions precedent:
(1) Agent shall receive not less than fifteen
(15) Business Days' prior written notice of such
proposed Permitted Acquisition, which notice shall
include a reasonably detailed description of such
proposed Permitted Acquisition, together with a copy of
the most recent draft (and subsequent thereto any
redlined drafts and, when completed, a final copy) of
(x) the asset or stock purchase agreement, as the case
may be, covering such Permitted Acquisition with
respect to each Permitted Acquisition, the "Purchase
Agreement") and (y) all other material agreements,
documents or instruments to be executed and/or
delivered by any Loan Party or any of its Subsidiaries
or any other Person pursuant thereto or in connection
therewith (with respect to each Permitted Acquisition
and, together with the Purchase Agreement with respect
to such Permitted Acquisition, the "Permitted
Acquisition Documents"), in each case certified as true
and accurate by the chief executive officer of Holdings
and Borrowers, and the Purchase Agreement and such
other Permitted Acquisition Documents shall be in form
reasonably satisfactory to Agent in all respects;
(2) such Permitted Acquisition shall only be of
those assets and properties and/or stock of a Target
engaged in substantially the same or similar line of
business, or utilizing substantially the same or
similar distribution channels, in each case as any
Borrower or its Subsidiaries as of the Closing Date,
and which assets and properties are located solely in
the United States, and which business or Target would
not subject Agent or any Lender to regulatory or third
party approvals in connection with the exercise of its
rights and remedies under this Agreement or any other
Loan Documents (other than such regulatory or third
party approvals to which Agent or any Lenders are
subject in connection with the exercise of such rights
and remedies as of the Closing Date and still in
effect);
(3) such Permitted Acquisition shall be
consensual and shall have been approved by the Target's
board of directors (or, if other than a corporation,
the equivalent governing body);
(4) the business, properties and assets and/or
stock of the Target acquired in such Permitted
Acquisition shall be acquired free and clear of all
Liens (other than Permitted Encumbrances);
(5) no Indebtedness, Contingent Obligations or
other liabilities shall be incurred or assumed in
connection with such Permitted Acquisition, except (x)
the Acquisition Loan advances, (y) ordinary course
trade payables, accrued expenses and Indebtedness of
Target assumed in connection therewith to the extent
permitted to be incurred by Borrowers pursuant to
subsection 3.1 and (z) Indebtedness incurred in
--------------
connection therewith to the extent permitted to be
incurred by a Borrower or Holdings, as the case may be,
pursuant to subsection 3.1;
--------------
(6) on or prior to the date thereof, Agent will
be granted a first and prior perfected security
interest (subject to Permitted Encumbrances) in all
assets and properties and/or stock being acquired
pursuant to such Permitted Acquisition, and Holdings
and Borrowers and their respective Subsidiaries shall
have executed such documents and taken such actions as
may be reasonably required by Agent in connection
therewith;
(7) Holdings and Borrowers shall have delivered
to Agent, in form and substance reasonably satisfactory
to Agent:
(i) pro forma balance sheets of Holdings,
Borrowers and their respective Subsidiaries (the
"Acquisition Pro Forma") (except that notes to the
Acquisition Pro Forma need not be provided) on a
consolidated basis, based on financial data as of
the most recent Fiscal Quarter, which shall
accurately and fairly represent in all material
respects the assets, liabilities, financial
condition and results of operations of Holdings,
Borrowers and their respective Subsidiaries in
accordance with GAAP consistently applied, but
taking into account such Permitted Acquisition and
the funding of all Acquisition Loans in connection
therewith;
(ii) updated versions of the most recently
delivered projections covering the one (1) year
period commencing on the date of such Permitted
Acquisition and otherwise prepared in accordance
with subsections 5.5 (the "Acquisition
---------------
Projections") and based upon historical financial
data of the most recent Fiscal Quarter, taking
into account such Permitted Acquisition; provided,
--------
that Acquisition Projections for any Permitted
Acquisition for which the total consideration
therefor does not exceed $1,000,000 may be limited
to projected revenues and EBITDA for such one year
period; and
(iii) a certificate of the chief
financial officer of Holdings and each Borrower to
the effect that: (I) each Borrower (after taking
into consideration all rights of contribution and
indemnity such Borrower has against Holdings and
each other Subsidiary of Holdings) will be solvent
(as represented by Borrowers in subsection 5.9)
--------------
upon the consummation of the transaction
contemplated by the Permitted Acquisition; (II)
the Acquisition Pro Forma fairly presents in all
material respects the financial condition of
Holdings and Borrowers (on a consolidated basis)
as of the date hereof after giving effect to the
transactions contemplated by such Permitted
Acquisition; (III) the Acquisition Projections are
good faith estimates, based on assumptions
believed at the date of such certificate in good
faith to be reasonable, of the future financial
performance of Holdings, Borrowers and their
respective Subsidiaries subsequent to the date
thereof based upon the historical performance and
the projected future financial performance of
Holdings, Borrowers and their respective
Subsidiaries; and (IV) Holdings and Borrowers have
completed their due diligence investigation with
respect to the Target and such Permitted
Acquisition, which investigation was conducted in
a manner similar to that which would have been
conducted by a prudent purchaser of a comparable
business and the results of which investigation
were acceptable to Holdings and Borrowers;
(8) Agent shall have received evidence reasonably
satisfactory to it (including, without limitation, all
investigations, reviews or reports prepared by or on
behalf of any Borrower or Holdings with respect to
Target) that the representations, warranties and
conditions of the respective parties to the applicable
Purchase Agreement or Permitted Acquisition Documents
are true and correct in all material respects in the
case of representations and warranties (to the best
knowledge of Holdings and Borrowers after due inquiry
with respect to such representations and warranties
made by Target), and satisfied in all material respects
in the case of conditions (to the best knowledge of
Holdings and Borrowers after due inquiry with respect
to such conditions of Target), except for any such
representations, warranties or conditions that have
been waived by the Loan Parties with the Agent's prior
written consent, which consent shall not be
unreasonably withheld. Insofar as Agent deems
reasonably necessary and material, it may request such
additional investigations, reviews, or reports with
respect to such representations, warranties and
conditions to confirm that such representations and
warranties are true and correct and such conditions
have been satisfied;
(9) Agent shall have received evidence reasonably
satisfactory to Agent that (i) the respective
provisions of Article Six of the Uniform Commercial
Code or any similar statute in effect in all applicable
jurisdictions (the "Applicable Bulk Transfer Laws") do
not apply to such Permitted Acquisition or (b) Agent
and Lenders shall be indemnified by a Person and
pursuant to an agreement in form and substance
satisfactory to Agent for any failure by any Person to
comply with such Applicable Bulk Transfer Laws;
(10) Agent shall have received, all collateral and
security documents, opinions, resolutions,
certificates, lien search results and other agreements,
documents and instruments reasonably requested by Agent
to evidence compliance with the foregoing provisions of
this subsection 3.6(B);
-----------------
(11) the total Acquisition Costs payable in
connection with such Permitted Acquisition shall not
exceed $5,000,000, and the sum of all Acquisition Costs
payable in connection with all Permitted Acquisitions
shall not exceed $7,500,000 in the aggregate in any
given Fiscal Year; and
(12) As of the date ("Test Date") immediately
preceding the date on which the Permitted Acquisition
is consummated, the ratio of Acquisition Total
Indebtedness (calculated as of the Cut-Off Date) to
Acquisition EBITDA (calculated for the rolling twelve
month period (or such shorter period as indicated in
Exhibit 3.6(B)(12)) ending on the Cut-Off Date), after
------------------
giving pro forma effect to both Acquisition Total
Indebtedness and Acquisition EBITDA for the Permitted
Acquisition, shall not exceed the ratio set forth below
for the period in which the Test Date occurs.
"Cut-Off Date" means the last day of the most recent
month preceding the month in which the Permitted Acquisition is
consummated for which recent month Borrowers or Holdings has
delivered to Agent the corresponding financial statements.
Period Maximum Ratio
------ -------------
Closing Date through December 31, 1998 4.00 to 1.0
January 1,1999 through March 31, 1999 3.75 to 1.0
April 1, 1999 through June 30, 1999 3.50 to 1.0
July 1, 1999 through September 30, 1999 3.50 to 1.0
October 1, 1999 through December 31, 1999 3.25 to 1.0
January 1, 2000 through March 31, 2000 3.25 to 1.0
April 1, 2000 through June 30, 2000 3.00 to 1.0
July 1, 2000 through September 30, 2000 3.00 to 1.0
October 1, 2000 through December 31, 2000 2.75 to 1.0
For purposes of this clause (12), "Acquisition Total
Indebtedness" and "Acquisition EBITDA" will be calculated as
illustrated on Exhibit 3.6(B)(12).
------------------
(C) If Holdings or a Borrower purchases stock or other
evidence of beneficial ownership of Target (to the extent
permitted under clause (B) of this subsection 3.6), Holdings or
---------------
Borrower, as the case may be, shall cause the merger of such
Target with and into any Borrower to be consummated as soon as
reasonably practicable after such purchase (with such Borrower as
the surviving entity).
(D) Should Borrower Representative request Agent's and
Requisite Lenders consent to an acquisition which would not
otherwise qualify as a Permitted Acquisition, Agent agrees to use
its best efforts to communicate its and such Requisite Lenders'
response to Borrower Representative in a reasonably prompt
manner, it being understood that Agent and the Requisite Lenders'
shall have no obligation to consent to any such acquisition and
no failure or delay on the part of Agent in the delivery of such
response shall be construed to be a consent to such acquisition.
3.7 Disposal of Assets or Subsidiary Stock. Each Loan
--------------------------------------
Party will not and will not permit any of their respective
Subsidiaries directly or indirectly to: convey, sell, lease,
sublease, transfer or otherwise dispose of, or grant any Person
an option to acquire, in one transaction or a series of
transactions, any of its property, business or assets, or the
capital stock of or other equity interests in any of its
Subsidiaries, whether now owned or hereafter acquired, except
for:
(a) bona fide sales of inventory to customers
for fair value in the ordinary course of business
and dispositions of obsolete equipment not used or
useful in the business;
(b) the sale or disposition of the Indianola
Property and the Corydon Property; and
(c) Asset Dispositions if all of the
following conditions are met: (i) the market
value of assets sold or otherwise disposed of in
any single transaction or series of related
transactions does not exceed $250,000 and the
aggregate market value of assets sold or otherwise
disposed of in any Fiscal Year does not exceed
$500,000; (ii) the consideration received is at
least equal to the fair market value of such
assets; (iii) the consideration received is either
cash and/or a promissory note; (iv) the Net
Proceeds of such Asset Disposition are applied as
required by subsection 1.5(C); (v) after giving
-----------------
effect to the Asset Disposition and the repayment
of Obligations with such Net Proceeds thereof, the
Loan Parties and their respective Subsidiaries are
in compliance on a pro forma basis with the
covenants set forth in Section 4 recomputed for
---------
the most recently ended Fiscal Quarter for which
information is available and is in compliance with
all other terms and conditions contained in this
Agreement and the other Loan Documents; and (vi)
no Default or Event of Default then exists or
shall result from such Asset Disposition;
provided, however, that such promissory note shall
-------- -------
be in form and substance reasonably satisfactory
to Agent and the Requisite Lenders, the sole
originally executed counterparty or
counterparties, as the case may be, of which shall
be endorsed, pledged and delivered to Agent, for
the benefit of Lenders, as security for the
Obligations. Any Net Proceeds (including, without
limitation, payments received by a Loan Party
under a promissory note referred to in clause
(iii) of this clause (c)) shall be applied as
required by subsection 1.5(C); and
-----------------
(d) the conveyance, sale, transfer or
disposition of its property, business or assets
(including the capital stock of any of its
Subsidiaries): (i) from any Borrower to any other
Borrower; (ii) from any Subsidiary of a Borrower
to any Borrower; (iii) from any Corporate
Guarantor (other than Holdings and Borrowers) to
any other Corporate Guarantor (other than
Holdings); and, (iv) with respect to only the
capital stock of any Subsidiary of Holdings, from
Holdings to any Borrower; provided that, in the
--------
case of clauses (i) through (iv), the applicable
Loan Party shall execute and deliver, or cause to
be executed or delivered, to Agent such documents
and take, or cause to be taken, such actions as
Agent deems reasonably necessary to perfect and
protect the security interests of Agent, on behalf
of Lenders, in the Collateral prior to any such
conveyance, sale, transfer, or disposition to such
other Loan Party.
3.8 Transactions with Affiliates. Each Loan Party
----------------------------
will not and will not permit any of their respective Subsidiaries
directly or indirectly to enter into or permit to exist any
transaction (including the purchase, sale, lease or exchange of
any property or the rendering of any management, consulting,
investment banking, advisory or other similar services) with any
Affiliate or with any director, officer or employee of any Loan
Party, except:
(a) as set forth on Schedule 3.8;
------------
(b) transactions in the ordinary course of
and pursuant to the reasonable requirements of the
business of a Loan Party or any of its
Subsidiaries and upon fair and reasonable terms
which are fully disclosed to Agent and are no less
favorable to such Loan Party or such Subsidiary
than would be obtained in a comparable arm's
length transaction with a Person that is not an
Affiliate;
(c) payment of director s fees not to exceed
$100,000 in the aggregate for any Fiscal Year,
provided that this clause (c) shall not limit the
--------
issuance of stock options, warrants or other
similar rights to directors;
(d) as permitted under clause (d) of
subsection 3.7;
--------------
(e) LII may make payments in cash to Old
World pursuant to and in accordance with the terms
of the Consulting Agreement; and
(f) any Loan Party (other than Holdings) may
make payments in cash in respect of Management
Fees to Holdings, provided such Management Fees
are reasonably satisfactory to Agent.
Notwithstanding the foregoing, unless otherwise approved by
Requisite Lenders, no payments may be made with respect to any
items set forth on Schedule 3.8 after the occurrence and during
------------
the continuation of a Default or Event of Default.
3.9 Conduct of Business. Each Borrower will not and
-------------------
will not permit any of their respective Subsidiaries directly or
indirectly to engage in any business other than businesses of the
type described on Schedule 3.9. Holdings will not permit any of
------------
its Subsidiaries to directly or indirectly engage in any business
other than businesses of the type described in Schedule 3.9.
------------
Holdings shall not engage in any type of business activity other
than (i) ownership of its Subsidiaries' capital stock, (ii)
activities incidental to the maintenance of is corporate
existence and (iii) the management and general corporate
administration of each Loan Party and Xxxx FSC.
3.10 Changes Relating to Subordinated Indebtedness.
---------------------------------------------
Each Loan Party will not and will not permit any of their
respective Subsidiaries directly or indirectly to change or amend
the terms of any of its Indebtedness of its subordinated in right
of payment to the Obligations if the effect of such amendment is
to: (a) increase the interest rate on such Indebtedness; (b)
change the dates upon which payments of principal or interest are
due on such Indebtedness; (c) change any event of default or add
or make more restrictive any covenant with respect to such
Indebtedness; (d) change the prepayment provisions of such
Indebtedness; (e) change the subordination provisions thereof (or
the subordination terms of any guaranty thereof); or (f) change
or amend any other term if such change or amendment would
materially increase the obligations of the obligor or confer
additional material rights on the holder of such Indebtedness in
a manner adverse to a Loan Party, any of its Subsidiaries or
Lenders.
3.11 Fiscal Year. None of the Loan Parties nor any of
-----------
their respective Subsidiaries shall change its Fiscal Year.
3.12 Press Release; Public Offering Materials. Each
----------------------------------------
Loan Party will not and will not permit any of their respective
Subsidiaries to disclose the name of Agent or any Lender in any
press release or in any prospectus, proxy statement or other
materials filed with any governmental entity relating to a public
offering of the capital stock of any Loan Party or its
Subsidiaries, unless required by any rule or regulation of the
SEC or any comment of the staff thereof or without the prior
written consent of the Agent (which consent will not be
unreasonably withheld).
3.13 Subsidiaries. Each Loan Party will not and will
------------
not permit any of their respective Subsidiaries directly or
indirectly to establish, create or acquire any new Subsidiary,
except to the extent permitted by subsection 3.6(B).
-----------------
3.14 Bank Accounts. Each Loan Party will not and will
-------------
not permit any of their respective Subsidiaries to establish any
new bank accounts without prior written notice to Agent and
unless Agent and the bank at which the account is to be opened
enter into an agreement in form and substance reasonably
satisfactory to Agent regarding such bank account.
3.15 Environmental Liabilities. Each Loan Party will
-------------------------
not and will not permit any of their respective Subsidiaries to:
(a) violate any applicable Environmental Law; (b) dispose of any
Hazardous Materials (except in accordance with applicable law)
into or onto or from, any real property owned, leased or operated
by any Loan Party; or (c) permit any Lien imposed pursuant to any
Environmental Law to be imposed or to remain on any real property
owned, leased or operated by any Loan Party, if any such event or
circumstance could reasonably be expected to have a Material
Adverse Effect.
3.16 Tax Consolidations. Each Loan Party will not and
------------------
will not permit any of their respective Subsidiaries to file or
consent to the filing of any consolidated income tax return with
any Person other than Holdings, Borrowers or any of their
respective Subsidiaries; provided that in the event Borrowers or
--------
their Subsidiaries files a return with Holdings, such Borrowers'
or their Subsidiaries' contribution in the aggregate with respect
to taxes as a result of the filing of such consolidated return
shall not be greater, nor the receipt of tax benefits in the
aggregate less, than they would have been had such Borrowers or
Subsidiaries not filed a consolidated return with Holdings.
SECTION 4
FINANCIAL COVENANTS/REPORTING
Each Loan Party covenants and agrees that so long as
any of the Commitments remain in effect and until payment in full
of all Obligations and termination of all Lender Letters of
Credit and Risk Participation Agreements, unless Requisite
Lenders shall otherwise give their prior written consent, each
Loan Party shall perform and comply with, and shall cause each of
the other Loan Parties to perform and comply with, all covenants
in this Section 4 applicable to such Person.
---------
4.1 Capital Expenditure Limits. The aggregate amount
--------------------------
of all Capital Expenditures of Holdings and Borrowers and their
respective Subsidiaries will not exceed the following amounts
("Capex Limit") during the following periods:
Maximum Amount
Period of Capital Expenditures
------ -----------------------
From January 1, 1998 through December 31, 1998 $6,000,000
From January 1, 1999 through December 31, 1999 $6,000,000
Each Fiscal Year thereafter $4,000,000
provided, however, that if Holdings or a Borrower consummates any
-------- -------
Permitted Acquisition during any Fiscal Year, the Capex Limit for
such Fiscal Year shall increase on a pro rata basis upon
consummation thereof by the "Capex Acquisition Increment" (as
defined below), if any, with respect to such Permitted
Acquisition. For purposes of this subsection 4.1, "Capex
--------------
Acquisition Increment" shall mean, with respect to any Permitted
Acquisition, an amount equal to twenty percent (20%) of EBITDA
(determined on a pro forma basis) for the most recent twelve (12)
month period of the Person or Persons acquired in connection with
such Permitted Acquisition.
Notwithstanding the foregoing, in the event the Loan
Parties and their respective
Subsidiaries do not expend the entire Capex Limit permitted in
any Fiscal Year, the Loan Parties and their respective
Subsidiaries may carry forward to the immediately succeeding
Fiscal Year the unutilized portion of the Capex Limit, provided
--------
that the amount so carried forward shall not exceed 50% of the
Capex Limit for such immediately succeeding Fiscal Year. All
Capital Expenditures made by Loan Parties and their respective
Subsidiaries shall first be applied to reduce the applicable
Capex Limit for such Fiscal Year and then to reduce the amount,
if any, carried forward from the previous Fiscal Year.
"Capital Expenditures" will be calculated as illustrated on
Exhibit 4.7(D).
-------------
4.2 Lease Limits. Each Loan Party will not and will
------------
not permit any of their respective Subsidiaries directly or
indirectly to become or remain liable in any way, whether
directly or by assignment or as a guarantor or other surety, for
the obligations of the lessee under any operating lease (other
than intercompany leases between a Borrowers and its Subsidiary),
if the aggregate amount of all rents paid by the Loan Parties and
their respective Subsidiaries under all such leases would exceed
$1,500,000 in any Fiscal Year.
4.3 EBITDA. Holdings and Borrowers shall not permit
------
EBITDA for the four Fiscal Quarters (or such shorter period as
indicated below) ending on the last day of any Fiscal Quarter
ending during the periods set forth below to be less than the
amount set forth below for such period.
Minimum
Period Amount
------ --------
Fiscal Quarter Ending on March 31, 1998 $2,500,000
For the Six Months Ending on June 30, 1998 $6,000,000
For the Nine Months Ending on $10,500,000
September 30, 1998
For the Twelve Months Ending on $16,000,000
December 31, 1998
FOR THE FOUR FISCAL QUARTERS ENDING:
March 31, 1999 $16,000,000
June 30, 1999 $16,750,000
September 30, 1999 $16,750,000
December 31, 1999 $17,500,000
March 31, 2000 $17,500,000
June 30, 2000 $18,750,000
September 30, 2000 $18,750,000
December 31, 2000 $20,000,000
March 31, 2001 $20,000,000
June 30, 2001 $21,125,000
September 30, 2001 $21,125,000
December 31, 2001 $22,500,000
March 31, 2002 $22,500,000
June 30, 2002 $22,500,000
September 30, 2002 $22,500,000
December 31, 2002 $22,500,000
March 31, 2003 $22,500,000
June 30, 2003 $22,500,000
September 30, 2003 $22,500,000
December 31, 2003 $22,500,000
March 31, 2004 $22,500,000
June 30, 2004 $22,500,000
September 30, 2004 $22,500,000
December 31, 2004 $22,500,000
"EBITDA" will be calculated as illustrated on Exhibit 4.7(D).
--------------
4.4 Fixed Charge Coverage. Holdings and Borrowers
---------------------
shall not permit Fixed Charge Coverage for the four Fiscal
Quarters (or such shorter period as indicated below) ending on
the last day of any Fiscal Quarter ending during the periods set
forth below to be less than the ratio set forth below for such
period.
Minimum
Period Ratio
------ ----------
For the Six Months Ending on June 30, 1998 1.100 to 1.0
For the Nine Months Ending on September 30, 1998 1.100 to 1.0
For the Twelve Months Ending on December 31, 1998 1.100 to 1.0
FOR THE FOUR FISCAL QUARTERS ENDING:
March 31, 1999 1.100 to 1.0
June 30, 1999 1.125 to 1.0
September 30, 1999 1.125 to 1.0
December 31, 1999 1.150 to 1.0
March 31, 2000 1.150 to 1.0
June 30, 2000 1.150 to 1.0
September 30, 2000 1.150 to 1.0
December 31, 2000 1.150 to 1.0
March 31, 2001 1.150 to 1.0
June 30, 2001 1.150 to 1.0
September 30, 2001 1.150 to 1.0
December 31, 2001 1.150 to 1.0
March 31, 2002 1.150 to 1.0
June 30, 2002 1.150 to 1.0
September 30, 2002 1.150 to 1.0
December 31, 2002 1.150 to 1.0
March 31, 2003 1.150 to 1.0
June 30, 2003 1.150 to 1.0
September 30, 2003 1.150 to 1.0
December 31, 2003 1.150 to 1.0
March 31, 2004 1.150 to 1.0
June 30, 2004 1.150 to 1.0
September 30, 2004 1.150 to 1.0
December 31, 2004 1.150 to 1.0
"Fixed Charge Coverage" will be calculated as illustrated on
Exhibit 4.7(D).
-------------
4.5 Total Interest Coverage. Holdings and Borrowers
-----------------------
shall not permit Total Interest Coverage for the four Fiscal
Quarters (or such shorter period as indicated below) ending on
the last day of any Fiscal Quarter ending during the periods set
forth below to be less than the ratio set forth below for such
period.
Minimum
Period Ratio
------ ----------
For the Six Months Ending on June 30, 1998 2.250 to 1.0
For the Nine Months Ending on September 30, 1998 2.250 to 1.0
For the Twelve Months Ending on December 31, 1998 2.250 to 1.0
FOR THE FOUR FISCAL QUARTERS ENDING:
March 31, 1999 2.250 to 1.0
June 30, 1999 2.375 to 1.0
September 30, 1999 2.375 to 1.0
December 31, 1999 2.500 to 1.0
March 31, 2000 2.500 to 1.0
June 30, 2000 2.500 to 1.0
September 30, 2000 2.500 to 1.0
December 31, 2000 2.500 to 1.0
March 31, 2001 2.500 to 1.0
June 30, 2001 2.750 to 1.0
September 30, 2001 2.750 to 1.0
December 31, 2001 3.000 to 1.0
March 31, 2002 3.000 to 1.0
June 30, 2002 3.000 to 1.0
September 30, 2002 3.000 to 1.0
December 31, 2002 3.000 to 1.0
March 31, 2003 3.000 to 1.0
June 30, 2003 3.000 to 1.0
September 30, 2003 3.000 to 1.0
December 31, 2003 3.000 to 1.0
March 31, 2004 3.000 to 1.0
June 30, 2004 3.000 to 1.0
September 30, 2004 3.000 to 1.0
December 31, 2004 3.000 to 1.0
"Total Interest Coverage" will be calculated as illustrated on
Exhibit 4.7(D).
--------------
4.6 Total Indebtedness to Pro Forma EBITDA Ratio.
--------------------------------------------
Holdings and Borrowers shall not permit the ratio of Total
Indebtedness (calculated as of the last day of any Fiscal Quarter
ending during the periods set forth below) to Pro Forma EBITDA
(calculated for the four Fiscal Quarters ending the last day of
any Fiscal Quarter ending during the periods set forth below) to
be greater than the ratio set forth below for such period.
Maximum
Period Ratio
------ ----------
FOR THE FOUR FISCAL QUARTERS ENDING:
December 31, 1998 4.000 to 1.0
March 31, 1999 4.000 to 1.0
June 30, 1999 3.750 to 1.0
September 30, 1999 3.750 to 1.0
December 31, 1999 3.500 to 1.0
March 31, 2000 3.500 to 1.0
June 30, 2000 3.250 to 1.0
September 30, 2000 3.250 to 1.0
December 31, 2000 3.000 to 1.0
March 31, 2001 3.000 to 1.0
June 30, 2001 2.750 to 1.0
September 30, 2001 2.750 to 1.0
December 31, 2001 2.500 to 1.0
March 31, 2002 2.500 to 1.0
June 30, 2002 2.250 to 1.0
September 30, 2002 2.250 to 1.0
December 31, 2002 2.000 to 1.0
March 31, 2003 2.000 to 1.0
June 30, 2003 2.000 to 1.0
September 30, 2003 2.000 to 1.0
December 31, 2003 2.000 to 1.0
March 31, 2004 2.000 to 1.0
June 30, 2004 2.000 to 1.0
September 30, 2004 2.000 to 1.0
December 31, 2004 2.000 to 1.0
"Total Indebtedness" and "Pro Forma EBITDA" will be calculated as
illustrated on Exhibit 4.7(D).
--------------
4.7 Financial Statements and Other Reports. Holdings
--------------------------------------
and Borrowers will maintain, and cause each of the other Loan
Parties and their respective Subsidiaries to maintain, a system
of accounting established and administered in accordance with
sound business practices to permit preparation of financial
statements in conformity with GAAP (it being understood that
monthly financial statements are not required to have footnote
disclosures). Borrowers will deliver each of the financial
statements and other reports described below to Agent (and each
Lender in the case of the financial statements and other reports
described in clauses (A), (B), (C), (D), (H), (J) (K) and (L) of
this subsection 4.7.
--------------
(A) Monthly Financials. As soon as available and in
------------------
any event within twenty-five (25) days after the end of each
month (within forty-five (45) days after the last month of each
Fiscal Quarter), Borrowers will deliver (1) the consolidated and
consolidating balance sheets of Holdings and Borrowers, as at the
end of such month, and the related consolidated and consolidating
statements of income, stockholders' equity and cash flow for such
month and for the period from the beginning of the then current
Fiscal Year to the end of such month and (2) a schedule of the
outstanding Indebtedness for borrowed money of each Loan Party
and its Subsidiaries describing in reasonable detail each such
debt issue or loan outstanding and the principal amount and
amount of accrued and unpaid interest with respect to each such
debt issue or loan.
(B) Quarterly Financials. As soon as available and in
--------------------
any event within forty-five (45) days after the end of each
Fiscal Quarter, Borrowers will deliver to Agent: (1) the
consolidated and consolidating balance sheet of Holdings and
Borrowers as at the end of such period and the related
consolidated and consolidating statements of income,
stockholders' equity and cash flow for such Fiscal Quarter and
for the period from the beginning of the then current Fiscal Year
to the end of such Fiscal Quarter and such financial statements
shall have been reviewed by Coopers & Xxxxxxx LLC or a firm of
independent certified public accounts selected by Holdings and
Borrowers and reasonably acceptable to Agent; and (2) a schedule
of the outstanding Indebtedness for borrowed money of each Loan
Party and its Subsidiaries describing in reasonable detail each
such debt issue or loan outstanding and the principal amount and
amount of accrued and unpaid interest with respect to each such
debt issue or loan.
(C) Year-End Financials. As soon as available and in
-------------------
any event within ninety (90) days after the end of each Fiscal
Year or, if earlier, the date on which Holdings files its annual
report or Form 10-K with the SEC in respect of such Fiscal Year,
Borrowers will deliver (1) the consolidated and consolidating
balance sheets of Holdings, Borrowers and their respective
Subsidiaries, as at the end of such year, and the related
consolidated and consolidating statements of income,
stockholders' equity and cash flow for such Fiscal Year, (2) a
schedule of the outstanding Indebtedness for borrowed money of
Holdings, Borrowers and their respective Subsidiaries describing
in reasonable detail each such debt issue or loan outstanding and
the principal amount and amount of accrued and unpaid interest
with respect to each such debt issue or loan and (3) a report
with respect to the consolidated financial statements of
Holdings, Borrowers and their respective Subsidiaries from
Coopers & Xxxxxxx LLC or a firm of certified public accountants
selected by Holdings and Borrowers and reasonably acceptable to
Agent, which report shall be prepared in accordance with
Statement of Auditing Standards No. 58 (the "Statement") entitled
"Reports on Audited Financial Statements" and such report shall
be "Unqualified" (as such term is defined in such Statement).
(D) Compliance Certificate. Together with each
----------------------
delivery of financial statements of Holdings, Borrowers and their
respective Subsidiaries pursuant to subsection 4.7(B) above,
-----------------
Borrowers will deliver a fully and properly completed Compliance
Certificate (in substantially the same form as Exhibit 4.7(D))
---------------
signed by Borrower Representative.
(E) Accountants' Reports. Promptly upon receipt
--------------------
thereof, Borrowers will deliver copies of all significant
reports submitted by Holding's and Borrowers' firm of
certified public accountants in connection with each annual,
interim or special audit or review of any type of the financial
statements or related internal control systems of Holdings,
Borrowers and their respective Subsidiaries made by such
accountants, including any comment letter submitted by such
accountants to management in connection with their services.
(F) Borrowing Base Certificate. As soon as available
--------------------------
and in any event within ten (10) days after the end of each
month, and from time to time within ten (10) days after the
request of Agent, Borrowers will deliver a Borrowing Base
Certificate (in substantially the same form as Exhibit 4.7(F)) as
---------------
at the last day of such period.
(G) Management Report. Together with each delivery of
-----------------
financial statements of Holdings, Borrowers and their respective
Subsidiaries pursuant to subsections 4.7(A), 4.7(B) and (C),
----------------------------------
Borrowers will deliver a management report (1) describing the
operations and financial condition of Holdings, Borrowers and
their respective Subsidiaries for the Fiscal Quarter then ended
and the portion of the current Fiscal Year then elapsed (or for
the Fiscal Year then ended in the case of year-end financials),
(2) setting forth in comparative form the corresponding figures
for the corresponding periods of the previous Fiscal Year and the
corresponding figures from the most recent Projections for the
current Fiscal Year delivered pursuant to subsection 4.7(J), and
-----------------
(3) discussing the reasons for any significant variations. The
information above shall be presented in reasonable detail and
shall be certified by the chief financial officer of Holdings and
each Borrower to the effect that such information fairly presents
the results of operations and financial condition of Holdings,
Borrowers and their respective Subsidiaries as at the dates and
for the periods indicated.
(H) Collateral Value Report. Upon the request of
-----------------------
Agent, which may be made not more than once each year prior to an
Event of Default and at any time (but not more often than
quarterly) while and so long as an Event of Default shall be
continuing, Borrowers will obtain and deliver to Agent a report
of an independent collateral auditor reasonably satisfactory to
Agent (which may be, or be affiliated with, a Lender) with
respect to the accounts and inventory components included in the
Borrowing Base, which report shall indicate whether or not the
information set forth in the Borrowing Base Certificate most
recently delivered is accurate and complete in all material
respects based upon a review by such auditors of the accounts
(including verification with respect to the amount, aging,
identity and credit of the respective account debtors and the
billing practices of Borrower) and inventory (including
verification as to the value, location and respective types).
(I) Appraisals. From time to time, if Agent or any
----------
Lender reasonably determines that obtaining appraisals is
necessary in order for Agent or such Lender to comply with
applicable laws or regulations, Agent will, at Borrowers'
expense, obtain appraisal reports in form and substance and from
appraisers reasonably satisfactory to Agent stating the then
current fair market values of all or any portion of the real
estate owned by Holdings, any Borrower or any of their respective
Subsidiaries. In addition to the foregoing, from time to time,
upon the occurrence and during the continuance of any Event of
Default, Agent may require Borrowers to obtain and deliver to
Agent appraisal reports in form and substance and from appraisers
reasonably satisfactory to Agent stating the then current market
values of all or any portion of the real estate and personal
property owned by Holdings, any Borrower or any of their
respective Subsidiaries.
(J) Projections. As soon as available and in any
-----------
event no later than the last day of each Fiscal Years of Holdings
or Borrowers, Borrowers will deliver Projections of Holdings,
Borrowers and their respective Subsidiaries for the forthcoming
three Fiscal Years, year by year, and for the forthcoming Fiscal
Year, month by month.
(K) SEC Filings and Press Releases. Within five (5)
------------------------------
Business Day after the filing or release thereof, Borrowers will
deliver copies of (1) all financial statements, reports, notices
and proxy statements sent or made available by Holdings, any
Borrower or any of their respective Subsidiaries, to security
holders and (2) all regular and periodic reports and all
registration statements and prospectuses, if any, filed by
Holdings, any Borrower or any of their respective Subsidiaries
with any securities exchange or with the SEC or any governmental
or private regulatory authority.
(L) Events of Default, Etc. Promptly upon (but in any
----------------------
event within three (3) Business Days after) any chief executive
officer, chief financial officer or president of Holdings or any
Borrower obtaining knowledge of any of the following events or
conditions, shall deliver copies of all notices given or received
by any Loan Party with respect to any such event or condition and
a certificate of Holdings or such Borrower's chief executive
officer specifying the nature and period of existence of such
event or condition and what action such Loan Party or its
Subsidiaries has taken, is taking and proposes to take with
respect thereto: (1) any condition or event that constitutes an
Event of Default or Default; (2) any notice that any Person has
given to any Loan Party or any of its Subsidiaries or any other
action taken with respect to a claimed default or event or
condition of the type referred to in subsection 6.1(B); or (3)
-----------------
any event or condition that could reasonably be expected to
result in any Material Adverse Effect.
(M) Litigation. Promptly upon (but in any event
----------
within three (3) Business Days after) any chief executive
officer, chief financial officer, president or vice-president of
any Loan Party or its Subsidiaries obtaining knowledge of (1) the
institution of any action, suit, proceeding, governmental
investigation or arbitration against or affecting any Loan Party
or any of their respective Subsidiaries or any property of any
Loan Party or any of their respective Subsidiaries not previously
disclosed by a Loan Party to Agent or (2) any material
development in any action, suit, proceeding, governmental
investigation or arbitration at any time pending against or
affecting any Loan Party or any of their respective Subsidiaries
or any property of any Loan Party or any of their respective
Subsidiaries which, in each case, could reasonably be expected to
have a Material Adverse Effect, Borrowers will promptly give
notice thereof to Agent and provide such other information as may
be reasonably available to them to enable Agent and its counsel
to evaluate such matter.
(N) Notice of Corporate and other Changes.
-------------------------------------
(a) Borrowers shall provide prompt written notice of (1) all
jurisdictions in which a Loan Party and its Subsidiaries becomes
qualified after the Closing Date to transact business, (2) any
material change after the Closing Date in the authorized and
issued capital stock or other equity interests of any Loan Party
or any of their respective Subsidiaries or any other material
amendment to their charter, by-laws or other organization
documents, (3) any Subsidiary created or acquired by any Loan
Party after the Closing Date, such notice, in each case, to
identify the applicable jurisdictions, capital structures or
Subsidiaries, as applicable, and (4) any other event that occurs
after the Closing Date which would cause any of the
representations and warranties in Section 5 of this Agreement or
---------
in any other Loan Document to be untrue or misleading in any
material respect.
(b) Holdings and each Borrower will promptly
notify Agent in writing of any change in any Borrower's, any
Borrower's Subsidiaries' or Holdings' Subsidiaries' ownership or
corporate structure. Holdings will promptly (i) after receiving
any Schedule 13-D or 13-G, or any amendment thereto, under the
Securities Exchange Act of 1934, as amended, provide a copy
thereof to the Agent, and (ii) notify Agent in writing of any
change in its corporate structure.
(O) Government Notices. Loan Parties will deliver to
------------------
Agent promptly after receipt copies of all notices, requests,
subpoenas, inquiries or writings or other similar documents
received from any Person or governmental agency concerning any
Employee Benefit Plan, the violation or alleged violation of any
Environmental Laws, the storage, use or disposal of any Hazardous
Material, the violation or alleged violation of the Fair Labor
Standards Act or a Loan Party's payment or non-payment of any
taxes including any tax audit, in each case seeking corrective
action, damages in excess of $100,000, injunction relief or a
halt to a Loan Party's or any of its Subsidiary's operations.
(P) Environmental Disclosure. In addition to the
------------------------
requirements set forth in clause (O) of this subsection 4.7 (but
--------------
without limiting the generality thereof), (1) the Loan Parties
shall promptly advise Agent in writing and in reasonable detail
of: (a) violation or alleged violation of any Environmental Laws
which could reasonably be expected to have a Material Adverse
Effect; (b) storage, use, disposal or discharge by a Loan Party
or any of its Subsidiaries of any Hazardous Material which could
reasonably be expected to have a Material Adverse Effect; (c) any
and all written communications sent or received by a Loan Party
or any of its Subsidiaries with respect to any Environmental
Claims or any discharge of Hazardous Material required to be
reported to any federal, state or local governmental or
regulatory agency; (d) any remedial action taken by a Loan Party
or any of its Subsidiaries or any other Person in response to any
Hazardous Material on or under any real property owned, leased or
operated by a Loan Party or any of its Subsidiaries; (e) the
discovery by a Loan Party or any of its Subsidiaries of any
occurrence or condition on any real property adjoining any real
property owned, leased or operated by such Loan Party or such
Subsidiary that could reasonably be expected to cause such real
property to be subject to any restrictions on the ownership,
occupancy, transferability or use thereof under any Environmental
Laws; and (f) notwithstanding anything to the contrary in clause
(O) of this subsection 4.7, any request for information from any
--------------
agency or Person that indicates such agency or Person is
investigating whether a Loan Party or any of its Subsidiaries may
be potentially responsible for a release, disposal or discharge
of Hazardous Materials.
(2) Borrowers shall promptly notify Agent of (a) any
proposed acquisition of stock, assets, or property by a Loan
Party that could reasonably be expected to expose such Person to,
or result in, Environmental Claims that could have a Material
Adverse Effect and (b) any proposed action to be taken by a Loan
Party or any of its Subsidiaries to commence any operations that
could reasonably be expected to subject such Person to additional
laws, rules or regulations, including laws, rules and regulations
requiring additional or amended environmental permits or
licenses. Borrowers shall, at its own expense, provide copies of
such documents or information as Agent may reasonably request in
relation to any matters disclosed pursuant to this subsection
----------
4.7(P).
-------
(Q) Trade Names. Borrowers will give Agent at least
-----------
ten (10) days advance written notice of any change of name or of
any new trade name or fictitious business name by any Loan Party
or any of its Subsidiaries. Each Loan Party's and any of their
respective Subsidiaries' use of any trade name or fictitious
business name will be in compliance with all laws regarding the
use of such names.
(R) Locations. Borrowers will give Agent at least
---------
thirty (30) days advance written notice of any change in any Loan
Party's or any of their respective Subsidiaries' principal place
of business or any change in the location of its books and
records or the Collateral or of any new location for its books
and records or the Collateral.
(S) Bank Accounts. Loan Parties will give Agent
-------------
prompt notice of any new bank accounts any Loan Party or any of
their respective Subsidiaries intends to establish prior to its
opening same.
(T) Other Information. With reasonable promptness,
-----------------
Borrowers will deliver such other information and data with
respect to any Loan Party or any Subsidiary of any Loan Party as
from time to time may be reasonably requested by Agent.
4.8 Accounting Terms; Utilization of GAAP for Purposes
--------------------------------------------------
of Calculations Under Agreement. For purposes of this Agreement,
-------------------------------
all accounting terms not otherwise defined herein shall have the
meanings assigned to such terms in conformity with GAAP.
Financial statements and other information furnished to Agent
pursuant to subsection 4.7 shall be prepared in accordance with
--------------
GAAP as in effect at the time of such preparation. No
"Accounting Changes" (as defined below) shall affect financial
covenants, standards or terms in this Agreement; provided that
--------
Holdings and Borrowers shall prepare footnotes to each Compliance
Certificate and the financial statements required to be delivered
hereunder that show the differences between the financial
statements delivered (which reflect such Accounting Changes) and
the basis for calculating financial covenant compliance (without
reflecting such Accounting Changes). "Accounting Changes" means:
(a) changes in accounting principles required by GAAP and
implemented by any Loan Party; (b) changes in accounting
principles recommended by any Loan Party's certified public
accountants and implemented by a Loan Party; and (c) changes in
carrying value of any Loan Party's or any of their respective
Subsidiaries' assets, liabilities or equity accounts resulting
from (i) the application of purchase accounting principles
(A.P.B. 16 and/or 17 and EITF 88-16 and FASB 109) to the Related
Transactions or (ii) as the result of any other adjustments that,
in each case, were applicable to, but not included in, the Pro
Forma. All such adjustments described in clause (c) above
resulting from expenditures made subsequent to the Closing Date
(including, but not limited to, capitalization of costs and
expenses or payment of pre-Closing Date liabilities) shall be
treated as expenses in the period the expenditures are made.
SECTION 5
REPRESENTATIONS AND WARRANTIES
To induce Agent and Lenders to enter into this
Agreement, to make Loans and to issue Lender Letters of Credit
and Risk Participation Agreements, each Loan Party represents and
warrants to Agent and each Lender that the following statements
are and, after giving effect to the Related Transactions, will be
true, correct and complete:
5.1 Disclosure. No representation or warranty of any
----------
Loan Party contained in this Agreement, the financial statements
referred to in subsection 5.5, the other Loan Documents, and the
--------------
other Related Transactions Documents or any other document,
certificate or written statement furnished to Agent or any Lender
by or on behalf of any such Person for use in connection with the
Loan Documents or the Related Transactions Documents contains any
untrue statement of a material fact or omitted, omits or will
omit to state a material fact necessary in order to make the
statements contained herein or therein not misleading in light of
the circumstances in which the same were made.
5.2 No Material Adverse Effect. Since September 30,
--------------------------
1997, there have been no events or changes in facts or
circumstances affecting any Loan Party or any of their respective
Subsidiaries which individually or in the aggregate have had or
could reasonably be expected to have a Material Adverse Effect
and that have not been disclosed herein or in the attached
Schedules.
5.3 No Default. The consummation of the Related
----------
Transactions does not and will not violate or conflict with any
laws, rules, regulations or orders of any governmental authority
or violate, conflict with, result in a breach of, or constitute a
default (with due notice or lapse of time or both) under any
Contractual Obligation of any Loan Party or any of their
respective Subsidiaries except if such violations, conflicts,
breaches or defaults have either been waived on or before the
Closing Date and are not disclosed on Schedule 5.3 or could not
------------
reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.
5.4 Organization, Powers, Capitalization and Good
---------------------------------------------
Standing.
--------
(A) Organization and Powers. Each of the Loan Parties
-----------------------
is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation
(which jurisdiction is set forth on Schedule 5.4(A)). Each of
----------------
the Loan Parties has all requisite corporate power and authority
to own and operate its properties, to carry on its business as
now conducted and proposed to be conducted and to enter into each
Loan Document to which it is a party.
(B) Capitalization. The authorized capital stock of
--------------
each of the Loan Parties is as set forth on Schedule 5.4(B). All
---------------
issued and outstanding shares of capital stock of each of the
Loan Parties are duly authorized and validly issued, fully paid,
nonassessable, free and clear of all Liens other than those in
favor of Agent, for the benefit of Agent and Lenders, and such
shares were issued in compliance with all applicable state and
federal laws concerning the issuance of securities. The capital
stock of each of the Loan Parties is owned by the stockholders
and in the amounts set forth on Schedule 5.4(B) (in the case of
---------------
Holdings with shares held by the public being specified in the
aggregate). To the best knowledge of Holdings and Borrowers, each
Person or group having beneficial ownership of more than (5%) of
the capital stock of Holdings is identified on Schedule 5.4 (B)
----------------
(the terms "group" and "beneficial ownership", as used herein,
have the meanings given in Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended, and Rule 13d-3 promulgated
thereunder). No shares of the capital stock of any Loan Party,
other than those described above, are issued and outstanding.
Except as set forth on Schedule 5.4(B), there are no preemptive
---------------
or other outstanding rights, options, warrants, conversion rights
or similar agreements or understandings for the purchase or
acquisition from any Loan Party, of any shares of capital stock
or other securities of any such entity.
(C) Binding Obligation. This Agreement is, and the
------------------
other Loan Documents, including all the Notes when executed and
delivered will be, the legally valid and binding obligations of
the applicable Loan Parties and their respective Subsidiaries
party thereto, each enforceable against each such Loan Parties
and Subsidiaries, as applicable, in accordance with their
respective terms.
(D) Qualification. Each of the Loan Parties is duly
-------------
qualified and in good standing wherever necessary to carry on its
business and operations, except in jurisdictions in which the
failure to be qualified and in good standing could not reasonably
be expected to have a Material Adverse Effect. All jurisdictions
in which each Loan Party is qualified to do business are set
forth on Schedule 5.4(D).
---------------
(E) Authorization of Borrowing, No Conflict. Each of
---------------------------------------
the Loan Parties has the corporate power and authority to incur
the Obligations and to grant security interests in the
Collateral. On the Closing Date, the execution, delivery and
performance of the Loan Documents by each Loan Party signatory
thereto will have been duly authorized by all necessary corporate
and shareholder action. The execution, delivery and performance
by each Loan Party of each Loan Document to which it is a party
and the consummation of the transaction contemplated by this
Agreement and the other Loan Documents by each Loan Party do not
contravene and will not be in contravention of any law, rule,
regulation, order, writ, judgment, injunction, decree
determination, award, the corporate charter or by laws of any
Loan Party or any agreement by which any Loan Party or any Loan
Party's property is bound.
5.5 Financial Statements and Projections. All
------------------------------------
financial statements concerning Holdings, Borrowers and their
respective Subsidiaries which have been or will hereafter be
furnished to Agent pursuant to this Agreement (other than
Projections and pro formas), including those listed below, have
been or will be prepared in accordance with GAAP consistently
applied (except as disclosed therein) and do or will present
fairly in all material respects the financial condition of the
corporations covered thereby as at the dates thereof and the
results of their operations for the periods then ended
((i) subject, in the case of financial statements for interim
periods, to normal recurring year-end adjustments, and (ii)
except that such interim statements need not include notes).
(A) (i) The consolidated balance sheets at June 30,
1997 and the related statement of earnings of Holdings and the
Xxxx Subsidiaries (other than Zephyros) for the Fiscal Year then
ended, audited by Coopers & Xxxxxxx, and (ii) the consolidated
balance sheets at December 31, 1996 and the related statement of
income of Deflecta and the Deflecta Subsidiaries for the Fiscal
Year then ended audited by Price & Waterhouse.
.
(B) (i) The consolidated balance sheets at September
30, 1997 and the related statement of earnings of Holdings and
the Xxxx Subsidiaries (other than Zephyros) and for the three (3)
months then ended, and (ii) the consolidated balance sheets at
September 30, 1997 and the related statement of income of
Deflecta and Deflecta Subsidiaries for the nine (9) months then
ended.
The Projections delivered on or prior to the Closing Date and the
updated Projections delivered pursuant to subsection 4.7(J)
-----------------
represent and will represent as of the date thereof the good
faith estimate of Holdings and Borrowers and their respective
senior management concerning the most probable course of their
respective businesses. The Projections and pro forma financial
information contained in such materials are based upon good faith
estimates and assumptions believed by such Persons to be
reasonable at the time made, it being recognized by Agent and
Lenders that such projections as to future events are not to be
viewed as facts and that actual results during the period or
periods covered by any such projections may differ from the
projected results.
5.6 Intellectual Property. Each Loan Party and each
---------------------
of its Subsidiaries owns, is licensed to use or otherwise has the
right to use, all Intellectual Property used in or necessary for
the conduct to its business as currently conducted, and all such
Intellectual Property is identified on Schedule 5.6, and fully
------------
protected and/or duly and properly registered, filed or issued in
the appropriate office and jurisdictions for such registrations,
filings or issuances. Except as disclosed in Schedule 5.6, the
------------
use of such Intellectual Property by any Loan Party or any of
their respective Subsidiaries does not and has not been alleged
by any Person to infringe on the rights of any Person.
5.7 Payment of Taxes; Audits, Etc. All material tax
-----------------------------
returns and reports of any Loan Party and each of its
Subsidiaries required to be filed by any of them have been timely
filed, and all taxes, assessments, fees and other governmental
charges upon such Persons and upon their respective properties,
assets, income and franchises which are shown on such returns as
due and payable have been paid when due and payable or are being
contested in good faith by appropriate proceedings and
appropriate reserves therefor have been established in accordance
with GAAP. Except as set forth on Schedule 5.7, as of the Closing
------------
Date, none of the United States income tax returns of any Loan
Party or any of their respective Subsidiaries are under audit.
No tax liens have been filed and no claims (except as otherwise
permitted by Section 2.7) are being asserted with respect to any
-----------
such taxes. The charges, accruals and reserves on the books of
any Loan Party and each of its Subsidiaries in respect of any
taxes or other governmental charges are in accordance with GAAP.
5.8 Employee Matters. Except as set forth on Schedule
---------------- --------
5.8, (a) no Loan Party nor any of its Subsidiaries nor any of
---
their respective employees is subject to any collective
bargaining agreement, (b) no petition for certification or union
election is pending with respect to the employees of any Loan
Party and no union or collective bargaining unit has sought such
certification or recognition with respect to the employees of any
Loan Party and (c) there are no strikes, slowdowns, work
stoppages or controversies pending or, to the best knowledge of
Borrowers after due inquiry, threatened between any Loan Party
and its respective employees, other than employee grievances
arising in the ordinary course of business which could not
reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect. Except as set forth on
Schedule 5.8, no Loan Party nor any of its Subsidiaries is a
------------
party to an employment contract.
5.9 Solvency. Each Loan Party (a) owns and will own
--------
assets the fair saleable value of which are (i) greater than the
total amount of liabilities (including contingent liabilities) of
such Loan Party and (ii) greater than the amount that will be
required to pay the probable liabilities of such Loan Party then
existing debts as they become absolute and matured considering
all financing alternatives and potential asset sales reasonably
available to such Party; (b) has capital that is not unreasonably
small in relation to its business as presently conducted or after
giving effect to any contemplated transaction; and (c) does not
intend to incur and does not believe that it will incur debts
beyond its ability to pay such debts as they become due.
5.10 Names. Schedule 5.10 sets forth all names, trade
----- -------------
names, fictitious names and business names under which any Loan
Party currently conducts business or has at any time during the
past five years conducted business.
5.11 Locations; FEIN. Schedule 5.11 sets forth:
--------------- -------------
(i) the location of each Loan Party's and its Subsidiaries'
principal place of business and chief executive office; (ii) the
location of each Loan Party's and its Subsidiaries' books and
records; and (iii) the location of all other offices of such Loan
Party and such Subsidiaries. Schedule 2.8 sets forth all
------------
Collateral locations. All the locations identified on Schedule
--------
5.11 and Schedule 2.8 are such Loan Party's and such Subsidiaries
---- ------------
sole locations for their respective business and the Collateral.
Each Loan Party's and each of its Subsidiaries' federal employer
identification number is also set forth on Schedule 5.11.
-------------
5.12 Title to Properties; Liens.
--------------------------
(A) Set forth on Schedule 5.12(A) is a complete and
----------------
accurate list of all real property owned by any Loan Party or any
of its Subsidiaries showing as of the date hereof the street
addresses, county or other relevant jurisdiction, state, record
owner and book and estimate fair value thereof. Each Loan Party
and each of its Subsidiaries has good, sufficient and legal
title, subject to Permitted Encumbrances, to all its respective
properties and assets, including, without limitation, the
Mortgaged Properties. Except for Permitted Encumbrances, all
such properties and assets (including the Mortgaged Properties)
are free and clear of Liens.
(B) Set forth on Schedule 5.12(B) is a complete and
----------------
accurate list of all leases of real property under which any Loan
Party or any of its Subsidiaries is the lessee, showing as of the
date hereof the street address, county or other relevant
jurisdiction, state, lessor, lessee, expiration date and annual
rental cost thereof. To the best knowledge of the Loan Parties,
(x) there are no actual, threatened or alleged defaults with
respect to any leases of real property under which any Loan Party
or any of its Subsidiaries is lessee or lessor which would have a
Material Adverse Effect and (y) each such lease is the legal,
valid and binding obligation of the lessor thereof, enforceable
in accordance with its terms, subject to bankruptcy and other
laws affecting creditors' rights and the availability of
equitable remedies.
(C) Each Mortgage creates, as security for the
obligations purported to be secured thereby, a valid and
enforceable perfected security interest in and Lien on the
related Mortgaged Property (and will create a valid and
enforceable perfected security interest in and Lien on all
fixtures and improvements relating to such Mortgaged Property and
affixed or added thereto on or after the Closing Date) in favor
of Agent (or such other trustee as may be named therein) for the
benefit of the Lenders, superior to and prior to the rights of
all third Persons (except that the security interest created in
the Mortgaged Property may be subject to the Permitted
Encumbrances related thereto) and subject to no other Liens
(other than Permitted Encumbrances).
5.13 Litigation; Adverse Facts. Except as set forth on
-------------------------
Schedule 5.13, there are no judgments outstanding against any
-------------
Loan Party or any of their respective Subsidiaries affecting any
property of any Loan Party or any of their respective
Subsidiaries nor is there any action, charge, claim, demand,
suit, proceeding, petition, governmental investigation,
arbitration or Environmental Claims now pending or, to the
knowledge of any Loan Party, threatened against or affecting any
Loan Party or any of their respective Subsidiaries or any
property of any Loan Party or any of their respective
Subsidiaries which could reasonably be expected to result in any
Material Adverse Effect. No Loan Party has received any opinion
or memorandum or legal advice from legal counsel to the effect
that it is exposed to any liability which could reasonably be
expected to result in any Material Adverse Effect.
5.14 Performance of Agreements. None of the Loan
-------------------------
Parties and none of their respective Subsidiaries is in default
in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any Contractual
Obligation of any such Person, which default (with respect to any
Contractual Obligation other than the Related Transaction
Documents) could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect, and
no condition exists that, with the giving of notice or the lapse
of time or both, would constitute such a default.
5.15 Employee Benefit Plans. Each Loan Party, each of
----------------------
its Subsidiaries and each ERISA Affiliate is in compliance in all
material respects with all applicable provisions of ERISA, the
IRC and all other applicable laws and the regulations and
interpretations thereof with respect to all Employee Benefit
Plans other than those provisions of ERISA, the IRC and other
applicable laws and regulations and interpretations thereof the
non-compliance with which could not reasonably be expected to
have, either individually or in the aggregate, a Material Adverse
Effect. No liability has been incurred by any Loan Party, any of
their respective Subsidiaries or any ERISA Affiliate which
remains unsatisfied for any funding obligation, taxes or
penalties with respect to any Employee Benefit Plan and which
could reasonably be expected to have, either individually or in
the aggregate, a Material Adverse Effect.
5.16 Broker's Fees. Except as set forth on Schedule
------------- --------
5.16, no broker's or finder's fee or commission will be payable
-----
with respect to any of the transactions contemplated hereby.
5.17 Insurance. Each Loan Party and each of its
---------
Subsidiaries maintains adequate insurance policies for public
liability, workers compensation, property damage for its
business and properties, product liabilities, and business
interruption insurance as required pursuant to subsection 2.2.
---------------
Such policies are in full force and effect. No notice of
cancellation has been received with respect to such policies and
such Loan Party and each of its Subsidiaries is in compliance
with all conditions contained in such policies.
5.18 Compliance with Laws. Neither any Loan Party nor
--------------------
any of its Subsidiaries is in violation of any law, ordinance,
rule, regulation, order, policy, guideline or other requirement
of any domestic or foreign government or any instrumentality or
agency thereof, having jurisdiction over the conduct of its
business or the ownership of its properties, including, without
limitation, any violation relating to any use, release, storage,
transport or disposal of any Hazardous Material, which violation
would (x) subject such Loan Party or any of its respective
Subsidiaries, or any of their respective officers to criminal
liability or (y) have a Material Adverse Effect; and, to the
knowledge of any Loan Party, no such violation has been alleged.
5.19 Environmental Compliance.
------------------------
(A) Except as disclosed in the environmental
assessment reports listed on Schedule 5.19(B), each Loan Party
----------------
has been and is currently in compliance with all applicable
Environmental Laws, including obtaining and maintaining in effect
all permits, licenses or other authorizations required by
applicable Environmental Laws, other than the Environmental Laws
the noncompliance with which could not reasonably be expected to
have, either individually or in the aggregate, a Material Adverse
Effect. There are no claims, liabilities, investigations,
litigation, administrative proceedings, whether pending or, to
the knowledge of any Loan Party, threatened, or asserted, or
judgments or orders relating to any Hazardous Materials or, to
the knowledge of any Loan Party, threatened against any Loan
Party or relating to any real property currently or formerly
owned, leased or operated by any Loan Party.
(B) Except as disclosed in the environmental
assessment reports listed on Schedule 5.19(B) and except for any
----------------
of the following in clauses (ii), (iii) and (iv) below which
could not reasonably be expected to have, either individually or
in the aggregate, a Material Adverse Effect, (i) none of the
properties currently or formerly owned, leased or operated by any
Loan Party or any of their respective Subsidiaries is listed or
proposed for listing on the NPL or on the CERCLIS or any
analogous foreign, state or local list or is adjacent to any such
property; (ii) there are no and never have been any underground
or aboveground storage tanks or any surface impoundments, septic
tanks, pits, sumps or lagoons in which Hazardous Materials are
being or have been treated, stored or disposed on any property
currently owned or operated by any Loan Party or any of their
respective Subsidiaries or on any property formerly owned or
operated by any Loan Party or any of their respective
Subsidiaries; (iii) there is no asbestos or asbestos-containing
material on any property currently owned or operated by any Loan
Party or any of their respective Subsidiaries; and (iv) Hazardous
Materials have not been released, discharged or disposed of on
any property currently owned or operated by any Loan Party or any
of their respective Subsidiaries, or any property formerly owned
or operated by any Loan Party or any of its Subsidiaries. With
respect to only those representations and warranties set forth in
this clause (B) relating to properties formerly owned, operated
and/or leased by any Loan Party or any of their respective
Subsidiaries, such representations and warranties relating to the
period after the disposition of such properties shall be made to
the knowledge of each Loan Party.
(C) Except as disclosed in the environmental
assessment reports listed on Schedule 5.19(B), neither any Loan
----------------
Party nor any of its Subsidiaries is undertaking, or has
completed, either individually or together with other potentially
responsible parties, any investigation or assessment or remedial,
response or removal action relating to any actual or threatened
release, discharge or disposal of Hazardous Materials at any
site, location or operation, either voluntarily or pursuant to
the order of any governmental or regulatory authority or the
requirements of any Environmental Law. All Hazardous Materials
generated, used, treated, handled or stored at, or transported to
or from, any property currently owned or operated by any Loan
Party or any of their respective Subsidiaries or any property
formerly owned or operated by any Loan Party or any of their
respective Subsidiaries have been disposed of in a manner that
could not reasonably be expected to have a Material Adverse
Effect.
5.20 Perfected Security Interest. The Security
---------------------------
Documents create in favor of Agent, for the benefit of Lenders, a
valid and perfected first priority security interest in the
Collateral securing the payment of the Obligations, and all
filings and other actions necessary or reasonably desirable to
perfect and protect such security interest have been duly taken.
The Loan Parties are the legal and beneficial owners of the
Collateral free and clear of any Lien, except for the liens and
security interests created or expressly permitted under the Loan
Documents.
5.21 Bank Accounts. Schedule 5.21 sets forth the
------------- -------------
account numbers and locations of all bank accounts of each Loan
Party and its Subsidiaries.
5.22 Subsidiaries. Neither Holdings nor any Borrower
------------
has any Subsidiaries other than as set forth on Schedule 5.4(B).
---------------
5.23 Indebtedness and Liabilities. As of the Closing
----------------------------
Date, no Loan Party or any of its Subsidiaries has (a) any
Indebtedness except as reflected on Schedule 5.23 and the Pro
-------------
Forma or (b) any Liabilities other than as reflected on the Pro
Forma or as incurred in the ordinary course of business following
the date of the Pro Forma.
5.24 Governmental Regulation. None of the Loan Parties
-----------------------
is, or after giving effect to any Loan will be, subject to
regulation under the Public Utility Holding Company Act of 1935,
the Federal Power Act or the Investment Company Act of 1940 or to
any federal or state statute or regulation limiting its ability
to incur indebtedness for borrowed money. Neither the making of
any Loan, nor the issuance of any Lender Letters of Credit, nor
the application of the proceeds or repayment thereof by the
Borrowers, nor the consummation of the Merger or the other
transactions contemplated hereby, will violate any provision of
any act, law, rule, regulation or order of the SEC thereunder or
any takeover, disclosure or other federal, state or foreign
securities law or Regulations G, T, U or X of the Federal Reserve
Board.
5.25 Use of Proceeds and Margin Security. (A) No
-----------------------------------
portion of the proceeds of any Loan shall be used by any Borrower
or any other Loan Party for the purpose of purchasing or carrying
margin stock within the meaning of Regulation G or Regulation U
of the Board of Governors of the Federal Reserve System, or in
any manner that might cause the borrowing, the application of
such proceeds, or the transactions contemplated hereby or by the
other Loan Documents to violate Regulation T or Regulation X or
any other regulation of the Board of Governors of the Federal
Reserve System or to violate the Securities Exchange Act of 1934,
as amended, or the rules and regulations promulgated thereunder.
(B) No portion of the proceeds of the Acquisition
Loans shall be used by
Borrowers for any purpose other than in connection with the
consummation of Permitted Acquisitions permitted under subsection
----------
3.6(B).
------
(C) No portion of the proceeds of the Revolving Loans
or the Term Loans shall be used by Borrowers for any purpose
other than for proper business purposes (as described in the
recitals to this Agreement (other than for Permitted
Acquisitions)).
5.26 Deflecta Acquisition. The Deflecta Acquisition
--------------------
Documents have been duly executed and delivered and are in full
force and effect. The representations and warranties contained
in the Deflecta Acquisition Documents were true and correct in
all material respects at the date thereof and will be true and
correct in all material respects on the Closing Date, as if made
on such date, and Agent and Lenders shall be entitled to rely
upon such representations and warranties with the same force and
effect as if they were incorporated in this Agreement and made to
Agent and each Lender directly as of the date hereof and the
Closing Date. The Deflecta Acquisition shall have been
consummated on or prior to the Closing Date in accordance with
and pursuant to the terms and conditions of the Deflecta
Acquisition Documents (without any waiver or amendment of any
term or condition therein not consented to by Agent and Lenders)
and in compliance with all applicable laws and all necessary
approvals.
5.27 Amendments to Schedules. The Loan Parties may at
-----------------------
any time and from time to time and subject to subsection 2.8,
--------------
amend any one or more of the Schedules referred in this Section 5
---------
and any representation or warranty contained herein which refers
to any such Schedule shall from and after the date of any such
amendment refer to such Schedule as so amended; provided,
--------
however, that in no event may the Loan Parties amend any such
-------
Schedule if such amendment would reflect or evidence a Default or
Event of Default.
SECTION 6
DEFAULT, RIGHTS AND REMEDIES
6.1 Event of Default. "Event of Default" shall mean
----------------
the occurrence or existence of anyone or more of the following:
(A) Payment. (1) Failure of any Borrower to pay any
-------
installment or other payment of principal of any Loan when due,
or to repay Revolving Loans to reduce their balance to the
Maximum Revolving Loan Balance or to reimburse Agent for any
payment made by Agent under or in respect of any Lender Letters
of Credit or Risk Participation Agreements when due or (2)
failure of any Borrower to pay, within five (5) days after the
due date, any interest on any Loan or any other amount due under
this Agreement or any of the other Loan Documents; or
(B) Default in Other Agreements. (1) Failure of any
---------------------------
Loan Party or any of its Subsidiaries to pay when due or within
any applicable grace period any principal or interest on
Indebtedness (other than the Loans) or any Contingent Obligations
or (2) breach or default of any Loan Party or any of its
Subsidiaries, or the occurrence of any condition or event, with
respect to any Indebtedness (other than all the Loans) or any
Contingent Obligations, if the effect of such failure to pay,
breach, default or occurrence is to cause or to permit the holder
or holders then to cause, Indebtedness and/or Contingent
Obligations having an individual principal amount in excess of
$250,000 or having an aggregate principal amount in excess of
$500,000 to become or be declared due prior to their stated
maturity; or
(C) Breach of Certain Provisions. Failure of any
----------------------------
Loan Party to perform or comply with any term or condition
contained in that portion of subsection 2.2 relating to the Loan
--------------
Parties' obligation to maintain insurance, subsection 2.3, 2.4,
-------------- ---
2.5, or 2.11(A) or Section 3 or Section 4; or
--- ------- --------- ---------
(D) Breach of Warranty. Any representation, warranty,
------------------
certification or other statement made by any Loan Party in any
Loan Document or in any statement or certificate at anytime given
by such Person in writing pursuant or in connection with any Loan
Document is false in any material respect on the date made; or
(E) Other Defaults Under Loan Documents. Any Loan
-----------------------------------
Party defaults in the performance of or compliance with any term
contained in this Agreement or the other Loan Documents and such
default is not remedied or waived within ten (10) days after
receipt by Borrower Representative of notice from Agent or
Requisite Lenders of such default (other than occurrences
described in other provisions of this subsection 6.1 for which a
--------------
different grace or cure period is specified or which constitute
immediate Events of Default); or
(F) Involuntary Bankruptcy; Appointment of Receiver,
-----------------------------------------------
Etc. (1) A court enters a decree or order for relief with
----
respect to any Loan Party or any of its Subsidiaries in an
involuntary case under the Bankruptcy Code, which decree or order
is not stayed or other similar relief is not granted under any
applicable federal or state law; or (2) the continuance of any of
the following events for forty-five (45) days unless dismissed,
bonded or discharged: (a) an involuntary case is commenced
against any Loan Party or any of its Subsidiaries, under any
applicable bankruptcy, insolvency or other similar law now or
hereafter in effect; or (b) a decree or order of a court for the
appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over any Loan
Party or any of its Subsidiaries, or over all or a substantial
part of its property, is entered; or (c) an interim receiver,
trustee or other custodian is appointed without the consent of
any Loan Party or any of its Subsidiaries, for all or a
substantial part of the property of any such Loan Party, or any
such Subsidiary; or
(G) Voluntary Bankruptcy; Appointment of Receiver,
---------------------------------------------
Etc. (1) any Loan Party or any of its Subsidiaries commences a
-----
voluntary case under the Bankruptcy Code, or consents to the
entry of an order for relief in an involuntary case or to the
conversion of an involuntary case to a voluntary case under any
such law or consents to the appointment of or taking possession
by a receiver, trustee or other custodian for all or a
substantial part of its property; or (2) any Loan Party or any of
its Subsidiaries makes any assignment for the benefit of
creditors; or (3) the Board of Directors of any Loan Party or any
of its Subsidiaries adopts any resolution or otherwise authorizes
action to approve any of the actions referred to in this
subsection 6.1(G); or
-----------------
(H) Judgment and Attachments. Any money judgment,
------------------------
writ or warrant of attachment, or similar process (other than
those described in subsection 6.1(H)) involving (1) an amount in
------------------
any individual case in excess of $250,000 or (2) an amount in the
aggregate at any time in excess of $500,000 (in either case to
the extent not adequately covered by insurance as to which the
insurance company has acknowledged coverage) is entered or filed
against any Loan Party or any of its Subsidiaries or any of their
respective assets and remains undischarged, unvacated, unbonded
or unstayed for a period of thirty (30) days or in any event
later than five (5) Business Days prior to the date of any
proposed sale thereunder; or
(I) Dissolution. Any order, judgment or decree is
-----------
entered against any Borrower or any Loan Party or any of its
Subsidiaries decreeing the dissolution or split up of such Loan
Party or that Subsidiary and such order remains undischarged or
unstayed for a period in excess of fifteen (15) days; or
(J) Solvency. Any Loan Party ceases to be solvent (as
--------
represented by Holdings or Borrowers in subsection 5.9) or admits
--------------
in writing its present or prospective inability to pay its debts
as they become due; or
(K) Injunction. Any Loan Party or any of its
----------
Subsidiaries is enjoined, restrained or in any way prevented by
the order of any court or any administrative or regulatory agency
from conducting all or any material part of its business for more
than fifteen (15) days; or
(L) ERISA; Pension Plans. (1) Any Loan Party or any
--------------------
of its Subsidiaries or Affiliates fails to make full payment when
due of all amounts which, under the provisions of any Employee
Benefit Plans or any applicable provisions of the IRC, any such
Person is required to pay as contributions thereto and such
failure results in or is likely to result in a Material Adverse
Effect; or (2) an accumulated funding deficiency in excess of
$250,000 occurs or exists, whether or not waived, with respect to
any such employee benefit plans; or (3) there is a final non-
appealable determination that any employee benefit plan has lost
its status as a qualified plan under the IRC which results in or
could reasonably be expected to result in a Material Adverse
Effect; or
(M) Environmental Matters. Any Loan Party or any of
---------------------
its Subsidiaries fails to: (1) obtain or maintain any operating
licenses or permits required by environmental authorities;
(2) begin, continue or complete any remediation activities as
required by any environmental authorities; (3) store or dispose
of any Hazardous Materials in accordance with applicable
Environmental Laws and regulations; or (4) comply with any
Environmental Laws; if any such failure, individually or in the
aggregate, could reasonably be expected to have a Material
Adverse Effect; or
(N) Invalidity of Loan Documents. Any of the Loan
----------------------------
Documents for any reason, other than a partial or full release in
accordance with the terms thereof, ceases to be in full force and
effect or is declared to be null and void, or any Loan Party or
any of its Subsidiaries denies that it has any further liability
under any Loan Documents to which it is party, or gives notice to
such effect; or
(O) Damage; Strike; Casualty. Any material damage to,
------------------------
or loss, theft or destruction of, any Collateral, whether or not
insured, or any strike, lockout, labor dispute, embargo,
condemnation, act of God or public enemy, or other casualty which
causes, for more than fifteen (15) consecutive days, the
cessation or substantial curtailment of revenue producing
activities at any facility of any Loan Party or any of its
Subsidiaries, if any such event or circumstance could reasonably
be expected to have a Material Adverse Effect; or
(P) Licenses and Permits. The loss, suspension or
--------------------
revocation of, or failure to renew, any license or permit now
held or hereafter acquired by any Loan Party or any of its
Subsidiaries, if such loss, suspension, revocation or failure to
renew could reasonably be expected to have a Material Adverse
Effect; or
(Q) Failure of Security. Agent, for the benefit of
-------------------
Agent and Lenders, does not have or ceases to have a valid and
perfected first priority security interest in the Collateral
(subject to Permitted Encumbrances) or any substantial portion
thereof, in each case, for any reason other than the failure of
Agent to take any action within its control; or
(R) Liens. Any lien, levy or assessment is filed or
-----
recorded with respect to or otherwise imposed upon all or any
part of (i) any assets of the Loan Parties not constituting
Collateral and having a value at any time in excess of $250,000
in the aggregate or (ii) any Collateral, in any case by the
United States or any department or instrumentality thereof or by
any state, county, municipality or other governmental agency
(other than Permitted Encumbrances) and such lien, levy or
assessment is not stayed, vacated, paid or discharged within
thirty (30) days; or
(S) Business Activities. Xxxx engages in any type of
-------------------
business activity other than activities solely related to the
ownership of stock of Borrowers and in the performances of its
obligations under the Loan Documents to which it is a party.
(T) Change in Control. (1) Harvest Partners ceases to
-----------------
be the largest single shareholder of Holdings in terms of the
number of shares of capital stock beneficially owned, (2) Harvest
Partners ceases to beneficially own 50% of the voting and non-
voting shares of capital stock of Holdings that Harvest Partners
beneficially owns as of the Closing Date, or (3) Xxxx ceases to
beneficially own and control, directly or indirectly, free and
clear of all Liens other than Liens in favor of Agent, at least
one-hundred percent (100%) of the issued and outstanding shares
of each class of capital stock of each Borrower and the Corporate
Guarantors (other than Holdings) (except for any Loan Party that
is liquidated, dissolved or wound-up into, or merged or
consolidated with and into, any other Loan Party as permitted in
subsection 3.6(A)), entitled (without regard to the occurrence of
-----------------
any contingency) to vote for the election of a majority of the
members of the boards of directors of such Borrowers and the
Corporate Guarantors (other than Holdings).
(U) Xxxx International FSC Activities. Xxxx
---------------------------------
International FSC shall hold any assets, incur any liabilities
(other than corporate franchise taxes and other similar charges
incidental to the maintenance of its corporate existence) or
engage in any business activity, unless, within ten (10) days
after the first to occur of any such activity, such entity's
capital stock (65% thereof) shall have been pledged in favor of
Agent, on benefit of Lenders, and the Loan Parties (i) shall have
executed and delivered to Agent such instruments and documents
(x) as shall be reasonably satisfactory in form and substance to
Agent and (y) as Agent shall deem necessary to perfect and
protect the security interests of Agent, on behalf of Lenders, in
such stock and in any Collateral, and (ii) shall have amended the
Schedules and Exhibits to this Agreement and any other Loan
Documents to include Xxxx International FSC therein as
appropriate.
6.2 Suspension of Commitments. Upon the occurrence of
-------------------------
any Default or Event of Default, Agent and each Lender without
notice or demand, may immediately cease making additional Loans
and issuing Lender Letters of Credit and Risk Participation
Agreements and cause its obligation to lend its Pro Rata Share of
the Commitments to be suspended; provided that, in the case of a
--------
Default, if the subject condition or event is waived, cured or
removed by Requisite Lenders within any applicable grace or cure
period, any suspended portion of the Loan Commitments shall be
reinstated. Each Lender may alternatively suspend only a portion
of its obligation to lend its Pro Rata Share of the Commitments.
6.3 Acceleration. Upon the occurrence of any Event of
------------
Default described in the foregoing subsections 6.1(F) or 6.1(G),
--------------------------
the unpaid principal amount of and accrued interest and fees on
the Term Loans, the Acquisition Loans and the Revolving Loans,
payments under the Lender Letters of Credit and Risk
Participation Agreements and all other Obligations shall
automatically become immediately due and payable, without
presentment, demand, protest, notice of intent to accelerate,
notice of acceleration or other requirements of any kind, all of
which are hereby expressly waived any Loan Party, and the
Commitments and the obligations of Agent and Lenders to make
Loans and issue Lender Letters of Credit and Risk Participation
Agreements shall thereupon terminate. Upon the occurrence and
during the continuance of any other Event of Default, Agent may,
and upon written demand by Requisite Lenders shall, by written
notice to Borrower Representative (a) declare all or any portion
of the Loans and all or some of the other Obligations to be, and
the same shall forthwith become, immediately due and payable
together with accrued interest thereon, and the Commitments and
the obligations of Agent and Lenders to make Loans and issue
Lender Letters of Credit and Risk Participation Agreements shall
thereupon terminate and (b) demand that Borrowers immediately
deposit with Agent an amount equal to the aggregate outstanding
Risk Participation Liability to enable Agent to make payments
under the Lender Letters of Credit and Risk Participation
Agreements when required and such amount shall become immediately
due and payable.
6.4 Performance by Agent. If any Loan Party shall
--------------------
fail to perform any covenant, duty or agreement contained in any
of the Loan Documents, Agent may perform or attempt to perform
such covenant, duty or agreement on behalf of such Loan Party
after the expiration of any cure or grace periods set forth
herein. In such event, the Loan Parties shall, at the request of
Agent, promptly pay any amount reasonably expended by Agent in
such performance or attempted performance to Agent, together with
interest thereon at the highest rate of interest in effect upon
the occurrence of an Event of Default as specified in subsection
----------
1.2(E) from the date of such expenditure until paid.
-----
Notwithstanding the foregoing, it is expressly agreed that Agent
shall not have any liability or responsibility for the
performance of any obligation of any Loan Party under this
Agreement or any other Loan Document.
SECTION 7
CONDITIONS TO LOANS
The obligations of Lenders to make Loans and of Agent to
issue Lender Letters of Credit and Risk Participation Agreements
are subject to satisfaction of all of the applicable conditions
set forth below.
7.1. Conditions to Initial Loans. The obligations of
---------------------------
Lenders to make the initial Loans and of Agent to issue any
Lender Letters of Credit and Risk Participation Agreements on the
Closing Date are, in addition to the conditions precedent
specified in subsection 7.2 and 7.3 , subject to the delivery of
-------------- ---
all documents listed on Schedule 7.1, all in form and substance
------------
reasonably satisfactory to Agent, and subject to Agent's
satisfaction that the Merger has been consummated and completed
on or prior to the Closing Date in accordance with the terms and
conditions of the Deflecta Acquisition Documents.
7.2. Conditions to All Loans. The obligations of
------------------------
Lenders to make Loans and of Agent to issue Lender Letters of
Credit and Risk Participation Agreements on any date ("Funding
Date") are subject to the further conditions precedent set forth
below.
(A) Notice of Borrowing. Agent shall have received,
-------------------
in accordance with the provisions of subsection 1.1 , a Notice of
--------------
Borrowing requesting an advance of a Revolving Loan or an
Acquisition Loan or a notice requesting the issuance of a Lender
Letter of Credit or Risk Participation Agreement.
(B) Representations and Warranties. The
------------------------------
representations and warranties contained in Section 5 of this
---------
Agreement and elsewhere herein and in the Loan Documents shall be
(and each request by Borrowers for a Loan or a Lender Letters of
Credit and Risk Participation Agreement shall constitute a
representation and warranty by Borrowers that such
representations and warranties are) true, correct and complete
in all material respects on and as of that Funding Date to the
same extent as though made on and as of that date, except for any
representation or warranty limited by its terms to a specific
date and taking into account any amendments to the Schedules or
Exhibits as a result of any disclosures made in writing by any
Loan Party to Agent after the Closing Date and approved by Agent
in writing.
(C) No Default or Event of Default. No event shall
------------------------------
have occurred and be continuing or would result from the
consummation of the borrowing contemplated (or notice requesting
issuance of a Lender Letters of Credit and Risk Participation
Agreement) that would constitute an Event of Default or Default.
(D) No Order, Judgment, etc. No order, judgement or
------------------------
decree of any court, arbitrator or governmental authority shall
purport to enjoin or restrain any Lender from making any Loan or
Agent from issuing any Lender Letter of Credit or Risk
Participation Agreement.
(E) Fees and Expenses. All accrued fees and expenses
-----------------
of Agent and Lenders (including the fees and expenses of counsel
for Agent and local counsel for Agent) shall have been paid.
(F) Consents and Approvals. All governmental and
----------------------
third party consents and approvals necessary in connection with
each aspect of the Related Transactions shall have been obtained
and shall remain in effect; all applicable waiting periods shall
have expired without any adverse action being taken by any
competent authority; and no law or regulation shall be applicable
in the reasonable judgment of Lenders that restrains, prevents or
imposes materially adverse conditions upon any aspect of the
Related Transactions.
(G) Access to Books and Records. Each Loan Party
---------------------------
shall have given Agent such access to their respective books and
records as Agent may have requested in order to carry out its
investigations, appraisals and analyses, including, but not
limited to, calculation of eligible accounts and eligible
inventory; and the Lenders shall have received all additional
financial, business and other information regarding Loan Parties
and properties as they shall have reasonably requested.
7.3 Additional Conditions to Loans to Fund Permitted
------------------------------------------------
Acquisitions. The obligations of Agent and each Lender to make
------------
Acquisition Loans to fund Permitted Acquisitions are subject to
satisfaction of all of the conditions set forth in subsection
----------
3.6(B), in addition to those conditions set forth in
-------
subsections 7.1 and 7.2 .
--------------- ---
SECTION 8
ASSIGNMENT AND PARTICIPATION
8.1 Assignments and Participations in Loans and Notes.
-------------------------------------------------
Each Lender (including Xxxxxx) may from time to time assign,
subject to the terms of an Assignment and Acceptance Agreement,
its rights and delegate its obligations under this Agreement to
another Person, provided that (a) such Lender (excluding Xxxxxx)
--------
shall first obtain the written consent of Agent, which consent
shall not be unreasonably withheld; (b) the Pro Rata Share of the
Revolving Loan Commitment, the Acquisition Loan Commitment and
the Term Loans being assigned shall in no event be less than the
lesser of (i) $5,000,000 and (ii) the entire amount of the Pro
Rata Share of the Revolving Loan Commitment, the Acquisition Loan
Commitment and the Term Loans of the assigning Lender; and (c)
upon the consummation of each such assignment the assigning
Lender shall pay Agent an administrative fee of $3,500. The
administrative fee referred to in clause (c) of the preceding
sentence shall not apply to an assignment from a Lender to an
Affiliate of such Lender. In the case of an assignment
authorized under this subsection 8.1, the assignee shall have, to
--------------
the extent of such assignment, the same rights, benefits and
obligations as it would if it were an initial Lender hereunder.
The assigning Lender shall be relieved of its obligations
hereunder with respect to its Pro Rata Share of the Revolving
Loan Commitment and Acquisition Loan Commitment or assigned
portion thereof. The Loan Parties hereby acknowledge and agree
that any assignment will give rise to a direct obligation of
Borrowers to the assignee and that the assignee shall be
considered a "Lender".
Each Lender (including Xxxxxx) may sell participations in
all or any part of its Pro Rata Share of the Revolving Loan
Commitment, the Acquisition Loan Commitment and the Term Loans to
another Person, provided that (a) such Lender shall first obtain
--------
the prior written consent of Agent, which consent shall not be
unreasonably withheld; and (b) any such participation shall be in
a minimum amount of $5,000,000, and provided, further, that all
-------- -------
amounts payable by Borrowers hereunder shall be determined as if
that Lender had not sold such participation and the holder of any
such participation shall not be entitled to require such Lender
to take or omit to take any action hereunder except action
directly effecting (i) any reduction in the principal amount,
interest rate or fees payable with respect to any Loan in which
such holder participates; (ii) any increase of the aggregate
principal amount of the Loans; (iii) any extension of the Expiry
Date, any extension of the date on which any Scheduled Term
Installment or Scheduled Acquisition Installment is to be paid or
any extension of any date fixed for any payment of interest or
fees payable with respect to any Loan in which such holder
participates; (iv) any change of the percentage of Lenders which
shall be required for Lenders or any of them to take any action
hereunder; (v) any release of Collateral (except if the sale,
disposition or release of such Collateral is permitted under
subsection 3.7 or 8.2 or any other Loan Document); (v) any
-------------- ----
amendment or waiver of this subsection 8.1 or the definitions of
--------------
the terms used in this subsection 8.1 insofar as the definitions
--------------
affect the substance of this subsection 8.1; (vi) any consent to
--------------
the assignment, delegation or other transfer by any Loan Party or
any of its rights and obligations under any Loan Document; (vii)
any change in the form in which interest is required to be paid;
and (viii) any change of any advance rate set forth in the
Borrowing Base Certificate. The Loan Parties hereby acknowledge
and agree that any participation will give rise to a direct
obligation of Borrowers to the participant, and the participant
shall for purposes of subsection 1.8, subsection 1.9, subsection
-------------- -------------- ----------
8.4 and subsection 9.1 be considered to be a "Lender".
--- --------------
Except as otherwise provided in this subsection 8.1 no
--------------
Lender shall, as between Borrowers and that Lender, be relieved
of any of its obligations hereunder as a result of any sale,
assignment, transfer or negotiation of, or granting of a
participation in, all or any part of the Loans, the Notes or
other Obligations owed to such Lender. Each Lender may furnish
any information concerning any Loan Party and its Subsidiaries in
the possession of that Lender from time to time to assignees and
participants (including prospective assignees and participants),
subject to the provisions of subsection 9.13.
----------------
Each Borrower agrees that it will use its best efforts
to assist and cooperate with Agent and any Lender in any manner
reasonably requested by Agent or such Lender to effect the sale
of a participation or an assignment described above, including,
without limitation, assistance in the preparation of appropriate
disclosure documents or placement memoranda.
Agent shall provide Borrower Representative with
written notice of the name and address of any new Lender after
the date hereof.
Notwithstanding anything contained in this agreement to
the contrary, so long as the Requisite Lender shall remain
capable of making LIBOR Loans, no Person shall become a "Lender"
hereunder unless such Person shall also be capable of making
LIBOR Loans.
8.2 Agent.
-----
(A) Appointment. Each Lender hereby designates and
-----------
appoints Xxxxxx as its Agent under this Agreement and the other
Loan Documents, and each Lender hereby irrevocably authorizes
Agent to take such action or to refrain from taking such action
on its behalf under the provisions of this Agreement and the
other Loan Documents and to exercise such powers as are set forth
herein or therein, together with such other powers as are
reasonably incidental thereto. Agent is authorized and empowered
to amend, modify, or waive any provisions of this Agreement or
the other Loan Documents on behalf of Lenders subject to the
requirement that certain of Lenders' consent be obtained in
certain instances as provided in subsections 8.2, 8.3 and 9.2.
----------------------------
Agent agrees to act as such on the express conditions contained
in this subsection 8.2. The provisions of this subsection 8.2
-------------- --------------
are solely for the benefit of Agent and Lenders and no Loan Party
shall have any rights as a third party beneficiary of any of the
provisions hereof. In performing its functions and duties under
this Agreement, Agent shall act solely as agent of Lenders and
does not assume and shall not be deemed to have assumed any
obligation toward or relationship of agency or trust with or for
any Loan Party. Agent may perform any of its duties hereunder,
or under the Loan Documents, by or through its agents or
employees.
(B) Nature of Duties. The duties of Agent shall be
----------------
mechanical and administrative in nature. Agent shall not have by
reason of this Agreement a fiduciary relationship in respect of
any Lender. Nothing in this Agreement or any of the Loan
Documents, express or implied, is intended to or shall be
construed to impose upon Agent any obligations in respect of this
Agreement or any of the Loan Documents except as expressly set
forth herein or therein. Each Lender shall make its own
independent investigation of the financial condition and affairs
of any Borrower or any other Loan Party in connection with the
extension of credit hereunder and shall make its own appraisal of
the creditworthiness of any Borrower or any other Loan Party, and
Agent shall have no duty or responsibility, either initially or
on a continuing basis, to provide any Lender with any credit or
other information with respect thereto (other than as expressly
required herein). If Agent seeks the consent or approval of any
Lenders to the taking or refraining from taking any action
hereunder, then Agent shall send notice thereof to each Lender.
Agent shall promptly notify each Lender any time that the
Requisite Lenders have instructed Agent to act or refrain from
acting pursuant hereto.
(C) Rights, Exculpation, Etc. Neither Agent nor any
-------------------------
of its officers, directors, employees or agents shall be liable
to any Lender for any action taken or omitted by them hereunder
or under any of the Loan Documents, or in connection herewith or
therewith, except that Agent shall be liable with respect to its
own gross negligence or willful misconduct. Agent shall not be
liable for any apportionment or distribution of payments made by
it in good faith and if any such apportionment or distribution is
subsequently determined to have been made in error the sole
recourse of any Lender to whom payment was due but not made,
shall be to recover from other Lenders any payment in excess of
the amount to which they are determined to be entitled (and such
other Lenders hereby agree to return to such Lender any such
erroneous payments received by them). In performing its
functions and duties hereunder, Agent shall exercise the same
care which it would in dealing with loans for its own account,
but Agent shall not be responsible to any Lender for any
recitals, statements, representations or warranties herein or for
the execution, effectiveness, genuineness, validity,
enforceability, collectibility, or sufficiency of this Agreement
or any of the Loan Documents or the transactions contemplated
thereby, or for the financial condition of any Loan Party. Agent
shall not be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or
conditions of this Agreement or any of the Loan Documents or the
financial condition of any Loan Party, or the existence or
possible existence of any Default or Event of Default. Agent may
at any time request instructions from Lenders with respect to any
actions or approvals which by the terms of this Agreement or of
any of the Loan Documents Agent is permitted or required to take
or to grant, and if such instructions are promptly requested,
Agent shall be absolutely entitled to refrain from taking any
action or to withhold any approval and shall not be under any
liability whatsoever to any Person for refraining from any action
or withholding any approval under any of the Loan Documents until
it shall have received such instructions from Requisite Lenders
or all of the Lenders, as applicable. Without limiting the
foregoing, no Lender shall have any right of action whatsoever
against Agent as a result of Agent acting or refraining from
acting under this Agreement, the Notes, or any of the other Loan
Documents in accordance with the instructions of Requisite
Lenders.
(D) Reliance. Agent shall be entitled to rely, and
--------
shall be fully protected in relying, upon any written or oral
notices, statements, certificates, orders or other documents or
any telephone message or other communication (including any
writing, telex, telecopy or telegram) believed by it in good
faith to be genuine and correct and to have been signed, sent or
made by the proper Person, and with respect to all matters
pertaining to this Agreement or any of the Loan Documents and its
duties hereunder or thereunder, upon advice of counsel selected
by it. Agent shall be entitled to rely upon the advice of legal
counsel, independent accountants, and other experts selected by
Agent in its sole discretion.
(E) Indemnification. Lenders will reimburse and
---------------
indemnify Agent for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses (including, without limitation, attorneys'
fees and expenses), advances or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or
asserted against Agent in any way relating to or arising out of
this Agreement or any of the Loan Documents or any action taken
or omitted by Agent under this Agreement or any of the Loan Docu-
ments, in proportion to each Lender's Pro Rata Share; provided,
--------
however, that no Lender shall be liable for any portion of such
-------
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses, advances or disbursements
resulting from Agent's gross negligence or willful misconduct.
If any indemnity furnished to Agent for any purpose shall, in the
opinion of Agent, be insufficient or become impaired, Agent may
call for additional indemnity and cease, or not commence, to do
the acts indemnified against until such additional indemnity is
furnished. The obligations of Lenders under this subsection
----------
8.2(E) shall survive the payment in full of the Obligations and
------
the termination of this Agreement.
(F) Xxxxxx Individually. With respect to its
-------------------
obligations under the Revolving Loan Commitment, Acquisition Loan
Commitment, the Loans made by it, and the Notes issued to it,
Xxxxxx shall have and may exercise the same rights and powers
hereunder and is subject to the same obligations and liabilities
as and to the extent set forth herein for any other Lender. The
terms "Lenders" or "Requisite Lenders" or any similar terms
shall, unless the context clearly otherwise indicates, include
Xxxxxx in its individual capacity as a Lender or one of the
Requisite Lenders. Xxxxxx may lend money to, acquire equity or
other ownership interests in, and generally engage in any kind
of banking, trust or other business with any Loan Party as if it
were not acting as Agent pursuant hereto.
(G) Successor Agent.
---------------
(1) Resignation. Agent may resign from the
-----------
performance of all its agency functions and duties hereunder at
any time by giving at least thirty (30) Business Days' prior
written notice to Borrower Representative and the Lenders. Such
resignation shall take effect upon the acceptance by a successor
Agent of appointment pursuant to clause (2) below or as otherwise
provided below.
(2) Appointment of Successor. Upon any such
------------------------
notice of resignation pursuant to clause (1) above, Requisite
Lenders shall, upon receipt of a Borrower Representative's prior
consent which shall not be unreasonably withheld, appoint a
successor Agent. If a successor Agent shall not have been so
appointed within the thirty (30) Business Day period, referred to
in clause (1) above, the retiring Agent, upon notice to Borrower
Representative, shall then appoint a successor Agent who shall
serve as Agent until such time, if any, as Requisite Lenders,
upon receipt of a Borrower Representative's prior written consent
which shall not be unreasonably withheld, appoint a successor
Agent as provided above.
(3) Successor Agent. Upon the acceptance of any
---------------
appointment as Agent under the Loan Documents by a successor
Agent, such successor Agent shall thereupon 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 the Loan Documents. After any
retiring Agent's resignation as Agent under the Loan Documents,
the provisions of this subsection 8.2 shall inure to its benefit
--------------
as to any actions taken or omitted to be taken by it while it was
Agent under the Loan Documents.
(H) Collateral Matters.
------------------
(1) Release of Collateral. Lenders hereby
---------------------
irrevocably authorize Agent, at its option and in its discretion,
to release any Lien granted to or held by Agent upon any property
covered by the Security Documents (i) upon termination of the
Revolving Loan Commitment and the Acquisition Loan Commitment and
payment and satisfaction of all Obligations (other than
contingent indemnification obligations to the extent no claims
giving rise thereto have been asserted); (ii) constituting
property being sold or disposed of if each Borrower certifies to
Agent that the sale or disposition is made in compliance with the
provisions of this Agreement (and Agent may rely in good faith
conclusively on any such certificate, without further inquiry);
(iii) constituting property leased to any Borrower under a lease
which has expired or been terminated in a transaction permitted
under this Agreement or is about to expire and which has not
been, and is not intended by such Borrower to be, renewed or
extended; or (iv) in accordance with the provisions of the
succeeding sentence. Agent may release or compromise any
Collateral and the proceeds thereof having a value not greater
than ten percent (10%) of the total book value of all Collateral,
either in a single transaction or in a series of related
transactions, with the consent of Lenders owning an aggregate of
at least eighty percent (80%) of the Revolving Loan Commitment,
the Acquisition Loan Commitment (after the third anniversary of
the Closing Date, the outstanding Acquisition Loans) and the
outstanding Term Loans, provided that in no event will Agent,
--------
acting under the authority granted to it pursuant to this
sentence, release or compromise Collateral or the proceeds
thereof having a total book value in excess of twenty percent
(20%) of the book value of all Collateral, as determined by
Agent, during any calendar year.
(2) Confirmation of Authority; Execution of
---------------------------------------
Releases. Without in any manner limiting Agent's authority to
--------
act without any specific or further authorization or consent by
Lenders (as set forth in subsection 8.2(H)(1)), each Lender
--------------------
agrees to confirm in writing, upon request by Agent or Borrower
Representative, the authority to release any property covered by
the Security Documents conferred upon Agent under clauses (i)
through (iii) of subsection 8.2(H)(1). Upon receipt by Agent of
--------------------
confirmation from the requisite percentage of Lenders required by
subsection 8.2(H)(1), if any, of its authority to release or
--------------------
compromise any particular item or types of property covered by
the Security Documents, and upon at least ten (10) Business Days
prior written request by Borrower Representative, Agent shall
(and is hereby irrevocably authorized by Lenders to) execute such
documents as may be necessary to evidence the release or
compromise of the Liens granted to Agent, for the benefit of
Agent and Lenders, upon such Collateral, provided that (i) Agent
--------
shall not be required to execute any such document on terms
which, in Agent's opinion, would expose Agent to liability or
create any obligation or entail any consequence other than the
release or compromise of such Liens without recourse or warranty,
and (ii) such release or compromise shall not in any manner
discharge, affect or impair the Obligations or any Liens upon (or
obligations of any Loan Party, in respect of), all interests
retained by any Loan Party, including (without limitation) the
proceeds of any sale, all of which shall continue to constitute
part of the property covered by the Security Documents.
(3) Absence of Duty. Agent shall have no
---------------
obligation whatsoever to any Lender or any other Person to assure
that the property covered by the Security Documents exists or is
owned by any Loan Party or is cared for, protected or insured or
has been encumbered or that the Liens granted to Agent have been
properly or sufficiently or lawfully created, perfected,
protected or enforced or are entitled to any particular priority,
or to exercise at all or in any particular manner or under any
duty of care, disclosure or fidelity, or to continue exercising,
any of the rights, authorities and powers granted or available to
Agent in this subsection 8.2(H) or in any of the Loan Documents,
-----------------
it being understood and agreed that in respect of the property
covered by the Security Documents or any act, omission or event
related thereto, Agent may act in any manner it may deem
appropriate, in its discretion, given Agent's own interest in
property covered by the Security Documents as one of the Lenders
and that Agent shall have no duty or liability whatsoever to any
of the other Lenders, provided that Agent shall exercise the same
--------
care which it would in dealing with loans for its own account.
(I) Agency for Perfection. Agent and each Lender
---------------------
hereby appoint each other Lender as agent for the purpose of
perfecting Agent's security interest in assets which, in
accordance with Article 9 of the Uniform Commercial Code in any
---------
applicable jurisdiction, can be perfected only by possession.
Should any Lender (other than Agent) obtain possession of any
such Collateral, such Lender shall notify Agent thereof, and,
promptly upon Agent's request therefor, shall deliver such
Collateral to Agent or in accordance with Agent's instructions.
Each Lender agrees that it will not have any right individually
to enforce or seek to enforce any Security Document or to realize
upon any collateral security for the Loans, unless instructed to
do so by Agent, it being understood and agreed that such rights
and remedies may be exercised only by Agent.
(J) Dissemination of Information. Agent will use its
----------------------------
best efforts to provide Lenders with any information received by
Agent from any Loan Party which is required to be provided to a
Lender hereunder, provided that Agent shall not be liable to
--------
Lenders for any failure to do so, except to the extent that such
failure is attributable to Agent's gross negligence or willful
misconduct.
8.3 Amendments, Consents and Waivers for Certain
--------------------------------------------
Actions.
-------
(A) Except as otherwise provided in this subsection
----------
8.3, in subsection 9.2 or in any Assignment and Acceptance
--- --------------
Agreement and except as to matters set forth in other subsections
hereof or in any other Loan Document as requiring only Agent's
consent, the consent of Requisite Lenders and the Loan Parties
will be required to amend, modify, terminate, or waive any
provision of this Agreement or any of the other Loan Documents.
(B) In the event Agent requests the consent of a
Lender and does not receive a written consent or denial thereof
within ten (10) Business Days after such Lender's receipt of such
request, then such Lender will be deemed to have denied the
giving of such consent.
(C) If, in connection with any proposed amendment,
modification, termination or waiver of any of the provisions of
this Agreement as contemplated by clauses (a) through (i) of the
first proviso of subsection 9.2, the consent of Requisite Lenders
--------------
is obtained but the consent of one or more other Lenders whose
consent is required is not obtained, then Borrowers shall have
the right, so long as all non-consenting Lenders are treated as
described in clauses (A) or (B) below, to either (A) replace each
such non-consenting Lender with one or more Replacement Lenders
pursuant to subsection 1.10(A) so long as each such Replacement
------------------
Lender consents to the proposed amendment, modification,
termination or waiver or (B) terminate such non-consenting
Lender's Pro Rata Share of the Revolving Loan Commitment and
Acquisition Loan Commitment and prepay in full its Obligations to
such non-consenting Lender, in accordance with subsection
----------
1.10(B).
-------
8.4 Set Off and Sharing of Payments. In addition to
-------------------------------
any rights now or hereafter granted under applicable law and not
by way of limitation of any such rights, during the continuance
of any Event of Default, each Lender is hereby authorized by the
Loan Parties at any time or from time to time, with reasonably
prompt subsequent notice to Borrower Representative (any prior or
contemporaneous notice being hereby expressly waived) to set off
and to appropriate and to apply any and all (A) balances held by
such Lender at any of its offices for the account of any Loan
Party (regardless of whether such balances are then due to such
Loan Party or any of its Subsidiaries), and (B) other property at
any time held or owing by such Lender to or for the credit or for
the account of any Loan Party or any of its Subsidiaries, against
and on account of any of the Obligations; except that no Lender
shall exercise any such right without the prior written consent
of Agent. Any Lender exercising a right to set off shall, to the
extent the amount of any such set off exceeds its Pro Rata Share
of the amount set off, purchase for cash (and the other Lenders
shall sell) interests in each such other Lender's Pro Rata Share
of the Obligations as would be necessary to cause such Lender to
share such excess with each other Lender in accordance with their
respective Pro Rata Shares. Loan Parties agree, to the fullest
extent permitted by law, that any Lender may exercise its right
to set off with respect to amounts in excess of its Pro Rata
Share of the Obligations and upon doing so shall deliver such
excess to the Agent for the benefit of all Lenders in accordance
with their Pro Rata Shares.
8.5 Disbursement of Funds. Agent may, on behalf of
---------------------
Lenders, disburse funds to Borrowers for Loans requested. Each
Lender shall reimburse Agent on demand for all funds disbursed on
its behalf by Agent, or if Agent so requests, each Lender will
remit to Agent its Pro Rata Share of any Loan before Agent
disburses same to Borrowers. If Agent elects to require that
each Lender make funds available to Agent, prior to a
disbursement by Agent to Borrowers, Agent shall advise each
Lender by telephone or telecopy of the amount of such Lender's
Pro Rata Share of the Loan requested by any Borrower no later
than 1:00 p.m. Chicago, Illinois time on the Funding Date
applicable thereto, and each such Lender shall pay Agent such
Lender's Pro Rata Share of such requested Loan, in same day
funds, by wire transfer to Agent's account on such Funding Date.
If any Lender fails to pay the amount of its Pro Rata Share
within one (1) Business Day after Agent's demand, Agent shall
promptly notify Borrower Representative, and Borrowers shall
immediately repay such amount to Agent. Any repayment required
pursuant to this subsection 8.5 shall be without premium or
--------------
penalty. Nothing in this subsection 8.5 or elsewhere in this
--------------
Agreement or the other Loan Documents, including without
limitation the provisions of subsection 8.6, shall be deemed to
--------------
require Agent to advance funds on behalf of any Lender or to
relieve any Lender from its obligation to fulfill its commitments
hereunder or to prejudice any rights that Agent or Borrowers may
have against any Lender as a result of any default by such Lender
hereunder.
8.6 Disbursements of Advances; Payment.
----------------------------------
(A) Revolving Loan Advances, Payments and Settlements;
-------------------------------------------------
Interest and Fee Payments.
--------------------------
(1) The Revolving Loans balance may fluctuate
from day to day through Agent's disbursement of funds to, and
receipt of funds from, Borrowers. In order to minimize the
frequency of transfers of funds between Agent and each Lender
notwithstanding terms to the contrary set forth in Section 1 or
---------
subsection 8.5, Revolving Loan advances and payments will be
--------------
settled among Agent and Lenders according to the procedures
described in this subsection 8.6. Notwithstanding these
---------------
procedures, each Lender's obligation to fund its portion of any
advances made by Agent to Borrowers will commence on the date
such advances are made by Agent. Such payments will be made by
such Lender without set-off, counterclaim or reduction of any
kind.
(2) On the second (2nd) Business Day of each
week, or more frequently (including daily), if Agent so elects
(each such day being a "Settlement Date"), Agent will advise each
Lender by telephone or telecopy of the amount of each such
Lender's Pro Rata Share of the Revolving Loans balance as of the
close of business of the second (2nd) Business Day immediately
preceding the Settlement Date. In the event that payments are
necessary to adjust the amount of such Lender's required Pro Rata
Share of the Revolving Loans balance to such Lender's actual Pro
Rata Share of the Revolving Loans balance as of any Settlement
Date, the party from which such payment is due will pay the
other, in same day funds, by wire transfer to the other's account
not later than 3:00 p.m. Chicago, Illinois time on the Business
Day following the Settlement Date.
(3) For purposes of this subsection 8.6(A)(3),
--------------------
the following terms and conditions will have the meanings
indicated:
(a) "Daily Loan Balance" means an amount calculated as
of the end of each calendar day by subtracting (i) the cumulative
principal amount paid by Agent to a Lender on a Loan from the
Closing Date through and including such calendar day, from (ii)
the cumulative principal amount on a Loan advanced by such Lender
to Agent on that Loan from the Closing Date through and including
such calendar day.
(b) "Daily Interest Rate" means an amount calculated
by dividing the interest rate payable to a Lender on a Loan (as
set forth in subsection 1.2) as of each calendar day by three
--------------
hundred sixty (360) days.
(c) "Daily Interest Amount" means an amount calculated
by multiplying the Daily Loan Balance of a Loan by the associated
Daily Interest Rate on that Loan.
(d) "Interest Ratio" means a number calculated by
dividing the total amount of the interest on a Loan received by
Agent with respect to the immediately preceding month by the
total amount of interest on that Loan due from Borrowers during
the immediately preceding month.
On the first (1st) Business Day of each month ("Interest
Settlement Date"), Agent will advise each Lender by telephone,
telex, or telecopy of the amount of such Lender's Pro Rata Share
of interest and fees on each of the Loans as of the end of the
last day of the immediately preceding month. Provided that such
Lender has made all payments required to be made by it under this
Agreement, Agent will pay to such Lender, by wire transfer to
such Lender's account (as specified by such Lender on the
signature page of this Agreement or the applicable Assignment and
Acceptance Agreement, as amended by such Lender from time to time
after the date hereof pursuant to the notice provisions contained
herein or in the applicable Assignment and Acceptance Agreement)
not later than 3:00 p.m. Chicago, Illinois time on the next
Business Day following the Interest Settlement Date, such
Lender's Pro Rata Share of interest and fees on each of the
Loans. Such Lender's Pro Rata Share of interest on each Loan
will be calculated for that Loan by adding together the Daily
Interest Amounts for each calendar day of the prior month for
that Loan and multiplying the total thereof by the Interest Ratio
for that Loan. Such Lender's Pro Rata Share of each of the
commitment fee described in subsection 1.2(B) and the Risk
-----------------
Participation Liability fee described in subsection 1.2(C) shall
-----------------
be paid and calculated in a manner consistent with the payment
and calculation of interest as described in this subsection
----------
8.6(A).
------
(B) Term Loans and Acquisition Loans Principal
------------------------------------------
Payments. Payments of principal of the Term Loans and the
--------
Acquisition Loans will be settled on date of receipt by Agent on
the first Business Day of a month and on the first Business Day
of the following month if received by agent after the first
Business Day of a month.
(C) Availability of Lender's Pro Rata Share.
---------------------------------------
(1) Unless Agent shall have received notice from
a Lender prior to a Funding Date that such Lender will not make
available its Pro Rata Share of a Loan requested by Borrower
Representative, Agent may assume that such Lender has made such
amount available to Agent on the Business Day following the next
Settlement Date. If a Lender has not in fact made its Pro Rata
Share available to the Agent on such date, then such Lender and
Borrowers severally agree to pay Agent forthwith on demand such
amount without set-off, counterclaim or deduction of any kind,
together with interest thereon, for each day from and including
the date such amount is made available to Agent by such Lender to
but excluding the date of payment to Agent, at (a) in the case of
such Lender, the greater of the Federal Funds Effective Rate and
a rate determined by Agent in accordance with banking industry
rules on interbank compensation or (b) in the case of Borrowers,
the interest rate applicable under this Agreement with respect to
such Loan. Until any such amount is paid to Agent, Agent shall
not be obligated to submit to such Lender any payment made by
Borrowers to Agent with respect to any Loan or any fees or other
payments with respect thereto.
(2) Nothing contained in this subsection 8.6(C)
-----------------
will be deemed to relieve a Lender of its obligation to fulfill
its commitments or to prejudice any rights Agent or Borrowers may
have against such Lender as a result of any default by such
Lender under this Agreement.
(3) Without limiting the generality of the
foregoing, each Lender shall be obligated to fund its Pro Rata
Share of any Revolving Loans or Acquisition Loans made after any
Event of Default or acceleration of the obligations with respect
to any draw on a Lender Letter of Credit or a Risk Participation
Agreement.
(D) Return of Payments
------------------
(1) If Agent pays an amount to a Lender under
this Agreement in the belief or expectation that a related
payment has been or will be received by Agent from Borrowers and
such related payment is not received by Agent, then Agent will be
entitled to recover such amount from such Lender without set-off,
counterclaim or deduction of any kind together with interest
thereon, for each day from and including the date such amount is
made available by Agent to such Lender to but excluding the date
of repayment to Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by Agent in accordance with
banking industry rules on interbank compensation.
(2) If Agent determines at any time that any
amount received by Agent under this Agreement must be returned to
Borrowers or paid to any other person pursuant to any requirement
of law, court order or otherwise, then, notwithstanding any other
term or condition of this Agreement, Agent will not be required
to distribute any portion thereof to any Lender. In addition,
each Lender will repay to Agent on demand any portion of such
amount that Agent has distributed to such Lender, together with
interest at such rate, if any, as Agent is required to pay to
Borrowers or such other Person, without set-off, counterclaim or
deduction of any kind.
SECTION 9
MISCELLANEOUS
9.1 Indemnities. Each Loan Party jointly and severally
-----------
agrees to indemnify, pay and hold Agent, each Lender and their
respective affiliates, officers, directors, employees, agents,
advisors and attorneys (each an "Indemnitee", and collectively,
"Indemnitees") from and against any and all claims, liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits and expenses (including, without limitation, reasonable
fees and expenses of counsel) whatsoever that may be imposed on,
incurred by, or asserted or awarded against any Indemnitee, in
each case, as a result of its being a party to this Agreement or
the transactions consummated pursuant to this Agreement or
arising out of or in connection with or by reason of, or in
connection with the preparation for a defense of, any
investigation, litigation or proceeding arising out of, related
to or in connection with (a) the Deflecta Acquisition or any
related transaction of any Loan Party or any of their respective
Subsidiaries or Affiliates, (b) any Permitted Acquisition or
proposed acquisition or similar business combination or proposed
business combination by Holdings, any Borrower or any of their
respective Subsidiaries or their Affiliates of all or any portion
of the shares of capital stock or all or substantially all of the
property and assets of any other Person, (c) any use made or
proposed to be made with the proceeds of the Loans or (d) the
actual or alleged presence of Hazardous Materials on any property
of any Loan Party or any of their respective Subsidiaries or any
Environmental Claims or proceedings relating in any way to any
Loan Party or any of their respective Subsidiaries or any of
their respective properties, in each case, whether or not such
investigations, litigation or proceeding is brought by Holdings,
any Borrower, any of their respective shareholders or creditors
or an Indemnitee or an Indemnitee is otherwise a party thereto
and whether or not the Deflecta Acquisition is consummated,
except to the extent such liability, obligation, loss, damage,
penalty, action, judgment, suit, claim or expense is found in a
final, nonappealable judgment by a court of competent
jurisdiction to have resulted from such Indemnitee gross
negligence or willful misconduct. Each Loan Party jointly and
severally further agrees that no Indemnitee shall have any
liability (whether direct or indirect, in contract or tort or
otherwise) to any Loan Party or any of their respective
Subsidiaries arising out of, related to or in connection with the
Deflecta Acquisition or any of the transactions contemplated
herein or in the Loan Documents, except for direct, as opposed to
consequential, damages determined in a final nonappealable
judgment by a court of competent jurisdiction to have resulted
form such Indemnitee's gross negligence or willful misconduct.
This subsection 9.1 and other indemnification provisions
--------------
contained within the Loan Documents shall survive the termination
of this Agreement.
9.2 Amendments and Waivers. Except as otherwise
----------------------
provided herein, no amendment, modification, termination or
waiver of any provision of this Agreement, the Notes or any of
the other Loan Documents, or consent to any departure by any Loan
Party therefrom, shall in any event be effective unless the same
shall be in writing and signed by Requisite Lenders (or Agent, if
expressly set forth herein, in any Note or in any other Loan
Document) and the applicable Loan Party; provided, that except to
--------
the extent permitted by the applicable Assignment and Acceptance
Agreement, no amendment, modification, termination or waiver
shall, unless in writing and signed by all Lenders, do any of the
following: (a) increase any Lender's Pro Rata Share of the
Revolving Loan Commitment or the Acquisition Loan Commitment; (b)
reduce the principal of, rate of interest on or fees payable with
respect to any Loan; (c) extend the Expiry Date, extend the date
on which any Scheduled Term Installment or Scheduled Acquisition
Installment is to be paid or extend any date fixed for any
payment of interest or fees; (d) change the percentage of Lenders
which shall be required for Lenders or any of them to take any
action hereunder; (e) release Collateral (except if the sale,
disposition or release of such Collateral is permitted under
subsection 3.7 or 8.2 or any other Loan Document); (f) amend or
-------------- ---
waive this subsection 9.2 or the definitions of the terms used in
--------------
this subsection 9.2 insofar as the definitions affect the
--------------
substance of this subsection 9.2; (g) consent to the assignment,
--------------
delegation or other transfer by any Loan Party of any of its
rights and obligations under any Loan Document; (h) change the
form in which interest is required to be paid; and (i) increase
the advance rates set forth in the Borrowing Base Certificate;
and provided, further, that no amendment, modification,
-------- -------
termination or waiver affecting the rights or duties of Agent
under any Loan Document shall in any event be effective, unless
in writing and signed by Agent, in addition to Lenders required
hereinabove to take such action. Each amendment, modification,
termination or waiver shall be effective only in the specific
instance and for the specific purpose for which it was given. No
amendment, modification, termination or waiver shall be required
for Agent to take additional Collateral pursuant to any Loan
Document. No amendment, modification, termination or waiver of
any provision of any Note shall be effective without the written
concurrence of the holder of that Note. No notice to or demand
on any Borrower or any other Loan Party in any case shall entitle
any other Loan Party to any other or further notice or demand in
similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this
subsection 9.2 shall be binding upon each holder of the Notes at
--------------
the time outstanding, each future holder of the Notes, and, if
signed by a Loan Party, on such Loan Party.
9.3 Notices. Any notice or other communication
-------
required shall be in writing addressed to the respective party as
set forth below and may be personally served, telecopied, sent by
overnight courier service or U.S. mail and shall be deemed to
have been given: (a) if delivered in person, when delivered; (b)
if delivered by telecopy, on the date of transmission if
transmitted on a Business Day before 4:00 p.m. Chicago, Illinois
time; (c) if delivered by overnight courier, two (2) days after
delivery to the courier properly addressed; or (d) if delivered
by U.S. mail, four (4) Business Days after deposit with postage
prepaid and properly addressed.
Notices shall be addressed as follows:
If to Holdings, Borrowers
and Active Subsidiaries: XXXX INTERNATIONAL HOLDINGS, INC.
000 Xxxx Xxxxxxxxx
Xxxxx, Xxxxxxxxx 00000
ATTN: President
Telephone.: (000) 000-0000
Telecopy: (000) 000-0000
With a copy to: Xxxx & Priest LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
ATTN: Xxxxxx X. Xxxxxxxxx, Esq.
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
If to Agent or Xxxxxx: XXXXXX FINANCIAL, INC.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
ATTN: Account Manager
Corporate Finance Group
Telecopy: (000) 000-0000
With a copy to: XXXXXX FINANCIAL, INC.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
ATTN: Legal Department
Corporate Finance Group
Telecopy: (000) 000-0000
If to Xxxxxxx Bank AG,
New York and Grand
Cayman Branches: DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
ATTN: Xxxxxxx X. Xxxxx and
Xxxxxxxx Xxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
With a copy to: Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
ATTN: Xxxxxx Xxxxxxx, Esq.
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
If to a Lender: To the address set forth on the
signature page hereto or in the
applicable Assignment and Acceptance
Agreement.
9.4 Failure or Indulgence Not Waiver; Remedies
------------------------------------------
Cumulative. No failure or delay on the part of Agent or any
-----------
Lender to exercise, nor any partial exercise of, any power, right
or privilege hereunder or under any other Loan Documents shall
impair such power, right, or privilege or be construed to be a
waiver of any Default or Event of Default. All rights and
remedies existing hereunder or under any other Loan Document are
cumulative to and not exclusive of any rights or remedies
otherwise available.
9.5 Marshalling; Payments Set Aside. Neither Agent
-------------------------------
nor any Lender shall be under any obligation to xxxxxxxx any
assets in payment of any or all of the Obligations. To the
extent that Borrowers make payments or Agent enforces its Liens
or Agent or any Lender exercises its right of set-off, and such
payment(s) or the proceeds of such enforcement or set-off is
subsequently invalidated, declared to be fraudulent or
preferential, set aside, or required to be repaid by anyone, then
to the extent of such recovery, the Obligations or part thereof
originally intended to be satisfied, and all Liens, rights and
remedies therefor, shall be revived and continued in full force
and effect as if such payment had not been made or such
enforcement or set-off had not occurred.
9.6 Severability. The invalidity, illegality, or
------------
unenforceability in any jurisdiction of any provision under the
Loan Documents shall not affect or impair the remaining
provisions in the Loan Documents.
9.7 Lenders' Obligations Several; Independent Nature
------------------------------------------------
of Lenders' Rights. The obligation of each Lender hereunder is
-------------------
several and not joint and no Lender shall be responsible for the
obligation or commitment of any other Lender hereunder. In the
event that any Lender at any time should fail to make a Loan as
herein provided, the Lenders, or any of them, at their sole
option, may make the Loan that was to have been made by the
Lender so failing to make such Loan. Nothing contained in any
Loan Document and no action taken by Agent or any Lender pursuant
hereto or thereto shall be deemed to constitute Lenders to be a
partnership, an association, a joint venture or any other kind of
entity. The amounts payable at any time hereunder to each Lender
shall be a separate and independent debt.
9.8 Headings. Section and subsection headings are
--------
included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purposes or be
given substantive effect.
9.9 Applicable Law. THIS AGREEMENT SHALL BE GOVERNED
--------------
BY AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES.
9.10 Successors and Assigns. This Agreement shall be
----------------------
binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns except that no Loan Party
may assign its rights or obligations hereunder without the prior
written consent of all Lenders.
9.11 No Fiduciary Relationship. No provision in the
-------------------------
Loan Documents and no course of dealing between the parties shall
be deemed to create any fiduciary duty owing to any Loan Party by
Agent or any Lender.
9.12 Construction. Agent, each Lender and each Loan
------------
Party acknowledge that each of them has had the benefit of legal
counsel of its own choice and has been afforded an opportunity to
review the Loan Documents with its legal counsel and that the
Loan Documents shall be construed as if jointly drafted by Agent,
each Loan Party and each Lender.
9.13 Confidentiality. Agent and each Lender agree to
---------------
exercise their best efforts to keep any non-public information
delivered pursuant to the Loan Documents confidential from
Persons other than those employed by or engaged by Agent or such
Lender and those employed by or engaged by Agent's or such
Lender's assignees or participants, or potential assignees or
participants. This subsection shall not apply to disclosures
required to be made by Agent or any Lender to any regulatory or
governmental agency or pursuant to legal process.
9.14 CONSENT TO JURISDICTION. EACH LOAN PARTY HEREBY
-----------------------
CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED WITHIN THE COUNTY OF NEW YORK, STATE OF NEW YORK AND
IRREVOCABLY AGREES THAT, SUBJECT TO AGENT S ELECTION, ALL
ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS SHALL BE LITIGATED IN SUCH
COURTS. EACH LOAN PARTY EXPRESSLY SUBMITS AND CONSENTS TO THE
JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS. EACH LOAN PARTY HEREBY WAIVES PERSONAL
SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE
OF PROCESS MAY BE MADE UPON HOLDINGS BY CERTIFIED OR REGISTERED
MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO HOLDINGS, AT THE
ADDRESS SET FORTH IN THIS AGREEMENT AND SERVICE SO MADE SHALL BE
COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.
9.15 WAIVER OF JURY TRIAL. EACH LOAN PARTY, AGENT AND
--------------------
EACH LENDER HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS. EACH LOAN PARTY, AGENT AND EACH
LENDER ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO
ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE
WAIVER IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN
THEIR RELATED FUTURE DEALINGS. EACH LOAN PARTY, AGENT AND EACH
LENDER WARRANTS AND REPRESENTS THAT EACH HAS HAD THE OPPORTUNITY
OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.
9.16 Survival of Warranties and Certain Agreements.
---------------------------------------------
All agreements, representations and warranties made herein shall
survive the execution and delivery of this Agreement, the making
of the Loans and the execution and delivery of the Notes.
Notwithstanding anything in this Agreement or implied by law to
the contrary, the agreements of Borrowers set forth in
subsections 1.3(C), 1.8, 1.9 and 9.1 shall survive the payment of
---------------------------- ---
all of the Loans.
9.17 Entire Agreement. This Agreement, all of the
----------------
Notes and the other Loan Documents referred to herein embody the
entire agreement among the parties hereto and supersede all prior
commitments, agreements, representations, and understandings,
whether oral or written, relating to the subject matter hereof,
and may not be contradicted or varied by evidence of prior,
contemporaneous, or subsequent oral agreements or discussions of
the parties hereto.
9.18 Counterparts; Effectiveness. This Agreement and
---------------------------
any amendments, waivers, consents or supplements may be executed
in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all of which
counterparts together shall constitute but one in the same
instrument. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto.
SECTION 10
DEFINITIONS
10.1 Certain Defined Terms. The terms defined below
---------------------
are used in this Agreement as so defined. Terms defined in the
preamble and recitals to this Agreement are used in this
Agreement as so defined.
"Acquisition Costs" means the price, cost and expenses
payable in connection with a Permitted Acquisition, including all
transaction costs and all Indebtedness, liabilities and
contingent obligations incurred or assumed in connection
therewith, less any part of such price paid with the proceeds
----
from the issuance of equity securities.
"Acquisition Note" means each note of Borrowers in
substantially the form of Exhibit 10.1(A), as applicable, issued
--------------
pursuant to subsection 1.1(E)(iv).
---------------------
"Adjustment Date" shall mean each March 1, June 1,
September 1, or December 1 of each year during the term hereof.
"Affiliate" means any Person: (a) directly or
indirectly controlling, controlled by, or under common control
with, any Loan Party; (b) directly or indirectly owning or
holding five percent (5%) or more of any equity interest in any
Loan Party; or (c) five percent (5%) or more of whose voting
stock or other equity interest is directly or indirectly owned or
held by any Loan Party. For purposes of this definition,
"control" (including with correlative meanings, the terms
"controlling", "controlled by" and "under common control with")
means the possession directly or indirectly of the power to
direct or cause the direction of management and policies of a
Person, whether through the ownership of voting securities or by
contract or otherwise.
"Agent" means Xxxxxx in its capacity as agent for the
Lenders under this Agreement and each of the other Loan Documents
and any successor in such capacity appointed pursuant to
subsection 8.2.
---------------
"Agreement" means this Credit Agreement (including all
schedules and exhibits hereto), as the same may from time to time
be amended, supplemented or otherwise modified.
"Asset Disposition" means the disposition, whether by
sale, lease, transfer, loss, damage, destruction, condemnation or
otherwise, of any of the assets of any Loan Party or any of its
Subsidiaries other than (x) sales of inventory in the ordinary
course of business and (y) the sale or disposition of the
Indianola Property and the Corydon Property.
"Assignment and Acceptance Agreement" means an
agreement among Agent, a Lender and such Lender's assignee
regarding their respective rights and obligations with respect to
assignments of the Loans, the Commitments and other interests
under this Agreement and the other Loan Documents substantially
in the form of Exhibit 10.1(B).
---------------
"Bank Letter of Credit" means each letter of credit
issued by a bank acceptable to and approved by Agent for the
account of any Borrower and supported by a Risk Participation
Agreement.
"Bankruptcy Code" means Title 11 of the United States
Code entitled "Bankruptcy", as amended from time to time or any
applicable bankruptcy, insolvency or other similar law now or
hereafter in effect and all rules and regulations promulgated
thereunder.
"Borrower" or "Borrowers" shall have the meaning
ascribed to that term in the preamble of this Agreement.
"Business Day" means (a) for all purposes other than as
covered by clause (b) below, any day excluding Saturday, Sunday
and any day which is a legal holiday under the laws of the
Commonwealth of Pennsylvania or the State of Illinois, or is a
day on which banking institutions located in any such states are
closed, and (b) with respect to all notices, determinations,
fundings and payments in connection with Loans bearing interest
at the LIBOR, any day that is a Business Day described in clause
(a) above and that is also a day for trading by and between banks
in Dollar deposits in the applicable interbank LIBOR market.
"Capital Leases" means any lease of any property
(whether real, personal or mixed) that, in conformity with GAAP,
should be accounted for as a capital lease.
"CERCLIS" means the Comprehensive Environmental
Response, Compensation and Liability Information System
maintained by the U.S. Environmental Protection Agency.
"Closing Date" means February 27, 1998.
"Collateral" means, collectively: (a) all capital stock
and other property pledged pursuant to the Security Documents;
(b) all "Collateral" as defined in the Security Documents;
(c) all real property mortgaged pursuant to the Security
Documents; and (d) any property or interest provided in addition
to or in substitution for any of the foregoing.
"Commitment" or "Commitments" means the commitment or
commitments of a Lender or Lenders to make Loans as set forth in
subsection 1.1(A), subsection 1.1(B), and/or 1.1(C).
---------------------------------------------------
"Consulting Agreement" means the Consulting Agreement
dated March 31, 1997 by and between Old World Industries, Inc.
("Old World") and LII, as amended, supplemented or otherwise
modified from time to time; provided, that any such amendment,
--------
supplement or modification relating to fees or commissions to be
paid by LII to Old World or expenses incurred by Old World shall
be approved by Agent in advance in writing.
"Corydon Property" means the real estate located at 000
Xxxx Xxxxxxxxx, Xxxxxxx, Xxxx 00000.
"Default" means a condition or event that, after notice
or lapse of time or both, would constitute an Event of Default if
that condition or event were not cured or removed within any
applicable grace or cure period.
"Deflecta Acquisition" means the acquisition by
Zephyros of Deflecta by means of the Tender Offer and the Merger
as provided and pursuant to the Deflecta Acquisition Documents.
"Deflecta Acquisition Documents" means the Tender Offer
Documents, the Merger Agreement, and all other documents and
information sent by Holdings, Zephyros or Deflecta to the
stockholders of Deflecta or filed with the SEC in connection with
the Deflecta Acquisition.
"Deflecta Subsidiaries" means each of Autotron, DFM,
BAC, Trailmaster and Delta.
"Employee Benefit Plan" means any employee benefit plan
within the meaning of Section 3(3) of ERISA which (a) is
------------
maintained for employees of any Loan Party or its Subsidiaries or
any ERISA Affiliate or (b) has at any time within the preceding
six (6) years been maintained for the employees of any Loan Party
or its Subsidiaries or any current or former ERISA Affiliate.
"Environmental Claims" means claims, liabilities,
investigations, litigation, administrative proceedings, judgments
or orders relating to Hazardous Materials.
"Environmental Indemnity Agreement" means the
environmental indemnity agreement to be executed and delivered by
each Loan Party, in form and substance reasonably acceptable to
Agent, as such agreement may hereafter be amended, restated,
supplemented or otherwise modified from time to time.
"Environmental Laws" means any present or future
international or transnational law, federal, state, local or
foreign statute, law, ordinance, rule, regulation, code, order,
writ, judgment, injunction decree or judicial or agency
interpretation, policy or guidance relating to pollution or
protection of human health or safety, plant life or animal life,
natural resources or the environment, including without
limitation, those relating to the use, handling, transportation,
treatment, storage, disposal, threatened release, release or
discharge or Hazardous Materials.
"Environmental Permit" means any permit, approval,
identification number, license or other authorization required
under any Environmental Law.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and any successor
statute and all rules and regulations promulgated thereunder.
"ERISA Affiliate", as applied to any Loan Party, means
any Person who is a member of a group which is under common
control with any Loan Party, who together with any Loan Party is
treated as a single employer within the meaning of Section 414(b)
--------------
and (c) of the IRC.
--------
"Expiry Date" means the earlier of (a) the acceleration
of the Obligations pursuant to subsection 6.3, (b)(i) December
--------------
31, 2002 for Revolving Loans and the Revolving Loan Commitment,
(ii) December 31, 2002 for the Term Loan A, (iii) December 31,
2004 for the Term Loan B, (iv) December 31, 2004 for the
Acquisition Loans, and (v) December 31, 2000 for the Acquisition
Loan Commitment, or (c) December 31, 2004.
"Federal Funds Effective Rate" means, for any day, the
weighted average (rounded upwards, if necessary, to the next
1/100th of 1%) of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the
average (rounded upwards, if necessary, to the next 1/100th of
1%) of the quotations for such day for such transactions received
by Agent from three Federal funds brokers of recognized standing
selected by it.
"Fiscal Quarter" has the meaning assigned to such term
in the definition of the term "Fiscal Year."
"Fiscal Year" means each twelve month period ending on
the last day of December in each year (with quarterly accounting
periods ending on March 31, June 30, September 30 and December 31
of each Fiscal Year (each a "Fiscal Quarter").
"GAAP" means generally accepted accounting principles
as set forth in statements from Auditing Standards No. 69
entitled "The Meaning of `Present Fairly in Conformance with
Generally Accepted Accounting Principles in the Independent
Auditors Reports'" issued by the Auditing Standards Board of
American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board
that are applicable to the circumstances as of the date of
determination.
"Harvest Partners" means Harvest Partners, Inc. and any
of its affiliates or associates, as such terms are defined in
Section 203 of the Delaware General Corporation Law, as in effect
on the date hereof, including without limitation, LIH Holdings.
LLC, a Delaware limited liability company, and LIH Holdings II,
LLC, a Delaware limited liability company.
"Hazardous Material" means all or any of the following
(a) substances that are defined or listed in, or otherwise
classified pursuant to, any Environmental Laws or regulations as
"hazardous substances", "hazardous materials", "hazardous
wastes", "toxic substances" or any other formulation intended to
define, list or classify substances by reason of deleterious
properties such as ignitability, corrosivity, reactivity,
carcinogenicity, or toxicity; (b) oil, petroleum or petroleum
derived substances, natural gas, natural gas liquids or synthetic
gas and drilling fluids, produced waters and other wastes
associated with the exploration, development or production of
crude oil, natural gas or geothermal resources; (c) any flammable
substances or explosives or any radioactive materials; and (d)
asbestos in any form or electrical equipment which contains any
oil or dielectric fluid containing polychlorinated biphenyls.
"IDRB" means the Industrial Development Revenue Bonds
issued pursuant to that
certain Indenture of Trust ("IDRB Trust") between City of Anoka,
Minnesota and First Trust National Association, Trustee, dated as
of September 1, 1994 Industrial Development Revenue Bonds (Xxxx
Industries Incorporated Projects) and the Mortgage and Security
Agreement and Fixture Financing Statement ("IDRB Mortgage") from
Xxxx Industries Incorporated, as Mortgagor, to the First Trust
National Association, as Mortgagee, dated as of September 1,
1994, which IDRB Mortgage secures the repayment of the
obligations of Xxxx Industries Incorporated under that certain
Loan Agreement ("IDRB Loan Agreement") between City of Anoka,
Minnesota and Xxxx Industries Incorporated, dated as of September
1, 1994, the payments under which have been assigned to First
Trust National Association, as Trustee, under such Indenture of
Trust.
"IDRB Documents" means all the documents executed in
connection with the IDRB,
including, without limitation, the IDRB Mortgage, the IDRB
Indenture and the IDRB Loan Agreement.
"IDRB Indenture" has the meaning assigned to that term
in the definition of the term "IDRB".
"IDRB Loan Agreement" has the meaning assigned to that
term in the definition of the term "IDRB".
"IDRB Mortgage" has the meaning assigned to that term
in the definition of the term "IDRB".
"IDRB Payment" has the meaning assigned to that term in
the definition of the term "IDRB Reserve".
"Indebtedness" as applied to any Person, means: (a) all
indebtedness for borrowed money; (b) that portion of obligations
with respect to capital leases that is properly classified as a
liability on a balance sheet in conformity with GAAP; (c) notes
payable and drafts accepted representing extensions of credit
whether or not representing obligations for borrowed money;
(d) any obligation owed for all or any part of the deferred
purchase price of property or services if the purchase price is
due more than six (6) months from the date the obligation is
incurred or is evidenced by a note or similar written instrument;
and (e) all indebtedness secured by any Lien on any property or
asset owned or held by that Person regardless of whether the
indebtedness secured thereby shall have been assumed by that
Person or is nonrecourse to the credit of that Person.
"Indianola Property" means the real estate located at
0000 X. 0xx Xxxxxx, Xxxxxxxxx, Xxxx.
"Intellectual Property" means all present and future
designs, patents, patent rights and applications therefor,
trademarks and registrations or applications therefor, trade
names, inventions, copyrights and all applications and
registrations therefor, software or computer programs, license
rights, trade secrets, methods, processes, know-how, drawings,
specifications, descriptions, and all memoranda, notes and
records with respect to any research and development, whether now
owned or hereafter acquired, all goodwill associated with any of
the foregoing, and proceeds of all of the foregoing, including,
without limitation, proceeds of insurance policies thereon.
"Intellectual Property Assignment" means the
intellectual property assignment to be executed and delivered by
each Loan Party, in a form reasonably acceptable to Agent, as
such agreement may hereafter be amended, restated, supplemented
or otherwise modified form time to time.
"IRC" means the Internal Revenue Code of 1986, as
amended from time to time and all rules and regulations
promulgated thereunder.
"Lender" or "Lenders" means Xxxxxx and each other
financial institution listed on the signature pages hereof
together with their successors and permitted assigns pursuant to
subsection 8.1.
--------------
"Liabilities" shall have the meaning given that term in
accordance with GAAP and shall include Indebtedness.
"Lien" means any lien, mortgage, pledge, security
interest, charge, encumbrance or governmental levy or assessment
of any kind, whether voluntary or involuntary (including any
conditional sale or other title retention agreement and any lease
in the nature thereof), and any agreement to give any lien,
mortgage, pledge, security interest, charge or encumbrance.
"Loan" or "Loans" means an advance or advances under
the Revolving Loan Commitment, the Acquisition Loan Commitment or
the Term Loans.
"Loan Documents" means this Agreement, all of the
Notes, the Security Documents, Environmental Indemnity Agreement
and all other instruments, documents and agreements executed by
or on behalf of any Loan Party and delivered concurrently
herewith or at any time hereafter to or for the benefit of Agent
or any Lender in connection with the Loans and other transactions
contemplated by this Agreement, all as amended, supplemented or
modified from time to time.
"Loan Party" means each of Holdings, Borrowers, their
respective Subsidiaries, Corporate Guarantors, and any other
Person (other than Agent and each Lender) which is or becomes a
party to any Loan Document (collectively, referred to as "Loan
Parties").
"Xxxx FSC" means Xxxx FSC, Inc., a wholly-owned
Subsidiary of Holdings.
"Xxxx Guaranty" means the guaranty of Xxxx to be
executed and delivered by Xxxx, in a form reasonably acceptable
to Agent, as such guaranty may hereafter be amended, restated,
supplemented or otherwise modified form time to time.
"Xxxx International FSC" means Xxxx International FSC,
a wholly-owned Subsidiary of Holdings.
"Xxxx Subsidiaries" means each of Zephyros, LII, LAC,
Xxxx FSC and Xxxx International FSC.
"Management Fees" means payment made in cash by Loan
Parties to Holdings in connection with Holdings providing to the
Loan Parties management and supervisory services, human resource
services, accounting and computer services and other similar
corporate services, in all such cases being reasonable in amount.
"Material Adverse Effect" means (a) a material adverse
effect upon the business, operations, performance, properties,
assets, prospects or condition (financial or otherwise) of the
Parties and their respective Subsidiaries, taken as a whole, or
(b) the impairment of the ability of any Loan Party to perform
its obligations under any Loan Document to which it is a party or
of Agent or any Lender to enforce any Loan Document or collect
any of the Obligations. In determining whether any individual
event would result in a Material Adverse Effect, notwithstanding
that such event does not of itself have such effect, a Material
Adverse Effect shall be deemed to have occurred if the cumulative
effect of such event and all other than existing events would
result in a Material Adverse Effect.
"Merger" means the merger of Zephyros with and into
Deflecta as contemplated in the Merger Agreement.
"Merger Agreement" means the Agreement and Plan of
Merger, dated as of November 25, 1997, by and among Zephyros,
Xxxx and Deflecta, including any exhibits, appendices and annexes
thereto, as amended, supplemented or otherwise modified.
"Merger Date" means the date on which the Merger is
consummated in accordance with the Merger Agreement and is
effective under the laws of the state of Delaware.
"Mortgage" means each of the mortgages, deeds of trust,
leasehold mortgages, leasehold deeds of trust, collateral
assignment of leases or other real estate security documents
delivered by a Loan Party or any of its Subsidiaries to Agent,
with respect to Mortgaged Property, and/or any other real
property acquired or leased by a Loan Party, each such documents
in form and substance satisfactory to Agent.
"Mortgaged Property" means all real property owned or
leased by a Loan Party or any of its Subsidiaries and described
on Schedule 5.12(A) and Schedule 5.12(B), respectively.
---------------- ----------------
"Net Proceeds" means cash proceeds received by any Loan
Party or any of their respective Subsidiaries from any Asset
Disposition (including insurance proceeds, awards of
condemnation, and payments under notes or other debt securities
received in connection with any Asset Disposition), net of (a)
the costs of such sale, lease, transfer or other disposition
(including taxes attributable to such sale, lease or transfer)
and (b) amounts (x) applied to repayment of Indebtedness (other
than the Obligations and the Indebtedness under the IDRB
Documents) or (y) to be applied to the repayment, defeasance or
retirement of the Indebtedness under the IDRB Documents if not
used in accordance with subsection 1.5(C) hereof, in each case in
-----------------
clause (x) and (y), secured by a Lien on the asset or property
disposed or that suffered condemnation or a casualty loss.
"Note" or "Notes" means one or more of the Revolving
Notes, Term A Notes, Term B Notes or Acquisition Notes, each
substantially in the form of Exhibit 10.1(A), as applicable,
---------------
issued pursuant to subsection 1.1(E).
-----------------
"NPL" means the National Priorities List under CERCLA.
"Obligations" means all obligations, liabilities and
indebtedness of every nature of each Loan Party from time to time
owed to Agent or any Lender under the Loan Documents including
the principal amount of all debts, claims and indebtedness,
accrued and unpaid interest and all fees, costs and expenses,
whether primary, secondary, direct, contingent, fixed or
otherwise, heretofore, now and/or from time to time hereafter
owing, due or payable whether before or after the filing of a
proceeding under the Bankruptcy Code by or against any Borrower,
Holdings, any other Loan Party or any of their respective
Subsidiaries.
"Offer to Purchase" means the Offer to Purchase dated
November 28, 1997 of Zephyros issued in connection with the
Deflecta Acquisition, as amended, supplemented or otherwise
modified.
"Old World" has the meaning assigned to that term in
the definition of the term "Consulting Agreement".
"Person" means and includes natural persons,
corporations, limited liability companies, limited partnerships,
limited liability partnerships, general partnerships, joint stock
companies, joint ventures, associations, companies, trusts,
banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments and
agencies and political subdivisions thereof and their respective
permitted successors and assigns (or in the case of a
governmental person, the successor functional equivalent of such
Person).
"Pro Forma" means the unaudited consolidated and
consolidating balance sheets of Holdings, Borrowers, the other
Loan Parties and their respective Subsidiaries prepared in
accordance with GAAP as of the Closing Date after giving effect
to the Related Transactions. The Pro Forma is annexed hereto as
Schedule 10.1(A).
----------------
"Pro Rata Share" means (a) with respect to a Lender's
obligation to lend a portion of the Term Loans and receive
payments of interest and principal with respect thereto, the
percentage obtained by dividing (i) such Lender's commitment to
make a portion of the Term Loans, as set forth on the signature
page of this Agreement opposite such Lender's signature or in the
most recent Assignment and Acceptance Agreement, if any, executed
by such Lender, by (ii) all such commitments of all Lenders to
make the Term Loans, (b) with respect to a Lender's obligation to
make Revolving Loans and receive payments of interest and
principal with respect thereto (and with respect to the related
commitment fee described in subsection 1.2(B) and with respect to
-----------------
a Lender's obligation to share in Risk Participation Liability
(and with respect to the Risk Participation Liability fee
described in subsection 1.2(C)), the percentage obtained by
-----------------
dividing (i) such Lender's commitment to make Revolving Loans, as
set forth on the signature page of this Agreement opposite such
Lender's signature or in the most recent Assignment and
Acceptance Agreement, if any, executed by such Lender, by (ii)
all such commitments of all Lenders to make Revolving Loans,
(c) with respect to a Lender's obligation to make Acquisition
Loans and receive payments of interest and principal with respect
thereto, the percentage obtained by dividing (i) such Lender's
commitment to make a portion of the Acquisition Loans, as set
forth on the signature page of this Agreement opposite such
Lender's signature or in the most recent Assignment and
Acceptance Agreement, if any, executed by such Lender, by
(ii) all such commitments of all Lenders to make Acquisition
Loans, and (d) with respect to all other matters (including
without limitation the indemnification obligations arising under
subsection 8.2(E), the percentage obtained by dividing (i) the
-----------------
sum of the then outstanding portion of the Term Loans which were
funded by such Lender, plus the commitment of such Lender to make
----
Acquisition Loans and Revolving Loans, as set forth on the
signature page of this Agreement opposite such Lender's signature
or in the most recent Assignment and Acceptance Agreement, if
any, executed by such Lender, by (ii) the sum of the then
outstanding Term Loans plus the aggregate Revolving Loan
----
Commitment and Acquisition Loan Commitment.
"Projections" means Holdings', Borrowers' and the other
Loan Parties' forecasted consolidated and consolidating: (a)
balance sheets; (b) profit and loss statements; (c) cash flow
statements; and (d) capitalization statements, all prepared on a
division by division and Subsidiary by Subsidiary basis on a
consistent basis with Holding's and such Borrowers' historical
financial statements together with appropriate supporting details
and a statement of underlying assumptions.
"Real Estate Documents" means each Mortgage and any
other documents, agreements and instruments executed by a Loan
Party, in each case in a form reasonably acceptable to Agent, as
each may hereafter be amended, restated, supplemented or
otherwise modified from time to time.
"Related Transactions" means the Deflecta Acquisition,
the Loan Documents, the funding of all Loans on the Closing Date,
the repayment of the Indebtedness identified on Schedule 10.1(B)
----------------
which is to be paid in full on the Closing Date, and the payment
of all fees, costs and expenses associated with all of the
foregoing.
"Related Transactions Documents" means the Loan
Documents, the Deflecta Acquisition Documents and all other
agreements, instruments and documents executed or delivered in
connection with the Related Transactions.
"Requisite Lenders" means Lenders having (a) sixty-six
and two-thirds percent (66-2/3%) or more of the sum of the
Revolving Loan Commitment, the Acquisition Loan Commitment (after
the third anniversary of the Closing Date, the outstanding
principal balance of the Acquisition Loans) and the outstanding
principal balance of the Term Loans or, (b) if the Revolving Loan
Commitment has been terminated, sixty-six and two-thirds percent
(66-2/3%) or more of the aggregate outstanding principal balance
of the Loans.
"Restricted Cash" means (x) at any time prior to the
occurrence of the IDRB Payment, an amount equal to the cash or
cash equivalents restricted and reserved pursuant to the IDRB
Documents and, (y) upon the occurrence of the IDRB Payment and
thereafter, an amount equal to the cash and/or cash equivalents
deposited with the Trustee (as defined in the IDRB Documents)
pursuant to the IDRB Document for the purpose of the IDRB
Payment..
"Revolving Note" means each note of Borrowers in
substantially the form of Exhibit 10.1(A), as applicable, issued
---------------
pursuant to subsection 1.1(E)(i).
--------------------
"Risk Participation Liability" means, as to each Lender
Letter of Credit and each Risk Participation Agreement, all
reimbursement obligations of Borrowers to the issuer of the
Lender Letter of Credit or to the issuer of the letter of credit
with respect to the transaction for which the Risk Participation
Agreement was executed and delivered, consisting of (a) the
amount available to be drawn or which may become available to be
drawn; (b) all amounts which have been paid and made available by
the issuing bank to the extent not reimbursed by Borrowers,
whether by the making of a Revolving Loan or otherwise; and
(c) all accrued and unpaid interest, fees and expenses with
respect thereto. For purposes of determining the outstanding
amount of Risk Participation Liability, the maximum amount
potentially owing under any Risk Participation Liability, the
maximum amount potentially owing under any Risk Participation
Agreement will be considered outstanding unless the bank which is
the beneficiary of such Risk Participation Agreement reports
daily activity to Agent showing actual outstanding letters of
credit subject to such Risk Participation Agreement in which
event the outstanding amount of Risk Participation Liability
shall be the amount of such actual outstanding letters of credit
from time to time.
"SEC" means the Securities and Exchange Commission.
"Security Agreement" means the security agreement to be
executed and delivered by each Loan Party, in a form reasonably
acceptable to Agent, as such agreement may hereafter be amended,
restated, supplemented or otherwise modified form time to time.
"Security Documents" means all instruments, documents
and agreements executed by or on behalf of any Person to guaranty
or provide collateral security with respect to the Obligations
including, without limitation, any security agreement, any pledge
agreement, any guaranty of the Obligations, any mortgage, any
leasehold mortgage, any deed of trust, any leasehold dead of
trust, and all instruments, documents and agreements, executed
pursuant to the terms of the foregoing, including, without
limitation, the Security Agreement, the Xxxx Guaranty, the
Subsidiary Guaranty, the Pledge Agreement, the Intellectual
Property Assignment, and the Real Estate Documents.
"Subordinated Indebtedness" means the Indebtedness of
any Loan Party which is subordinated to the Obligations in a
manner and pursuant to documentation satisfactory to Agent and
Lenders.
"Subsidiary" means, with respect to any Person, any
corporation, partnership, association or other business entity of
which more than fifty percent (50%) of the total voting power of
shares of stock (or equivalent ownership or controlling interest)
entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by
that Person or one or more of the other Subsidiaries of that
Person or a combination thereof.
"Subsidiary Guaranty" means the guaranty to be executed
and delivered by each of the Borrowers and the Active
Subsidiaries, in a form reasonably acceptable to Agent, as such
guaranty may hereafter be amended, restated, supplemented or
otherwise modified from time to time.
"Target" means, with respect to any Permitted
Acquisition, any Person whose assets and business, or capital
stock, is being acquired pursuant to such Permitted Acquisition.
"Tender Offer" means the tender offer made by Zephyros
to purchase, for cash, all of the outstanding shares of common
stock of Deflecta pursuant to the Offer to Purchase.
"Tender Offer Documents" means collectively, the Offer
to Purchase, Schedule 14D-1 dated November 28, 1997, filed by
Zephyros, Schedule 14D-9 dated November 28, 1997, filed by
Deflecta with respect to the Offer to Purchase, and all
amendments and exhibits thereto and related documents filed with
the SEC or distributed to the stockholders of Deflecta.
"Term A Note" means each note of Borrowers in
substantially the form of Exhibit 10.1(A), as applicable, issued
pursuant to subsection 1.1(E)(ii).
---------------------
"Term B Note" means each note of Borrowers in
substantially the form of Exhibit 10.1(A), as applicable, issued
pursuant to subsection 1.1(E)(iii).
----------------------
"Zephyros" means Zephyros Acquisition Corporation.
10.2 Other Definitional Provisions. References to
------------------------------
"Sections", "subsections", "Exhibits" and "Schedules" shall be to
Sections, subsections, Exhibits and Schedules, respectively, of
this Agreement unless otherwise specifically provided. Any of
the terms defined in subsection 10.1 may, unless the context
---------------
otherwise requires, be used in the singular or the plural
depending on the reference. In this Agreement, "hereof,"
"herein," "hereto," "hereunder" and the like mean and refer to
this Agreement as a whole and not merely to the specific section,
paragraph or clause in which the respective word appears; words
importing any gender include the other gender; references to
"writing" include printing, typing, lithography and other means
of reproducing words in a tangible visible form; the words
"including," "includes" and "include" shall be deemed to be
followed by the words "without limitation"; references to
agreements and other contractual instruments shall be deemed to
include subsequent amendments, assignments, and other
modifications thereto, but only to the extent such amendments,
assignments, and other modifications are not prohibited by the
terms of this Agreement or any other Loan Documents; references
to Persons include their respective permitted successors and
assigns or, in the case of governmental Persons, Persons
succeeding to the relevant functions of such Persons; and all
references to statutes and related regulations shall include any
amendments of same and any successor statutes and regulations.
IN WITNESS WHEREOF the due execution of this Credit
Agreement by the respective duly authorized officers of the
undersigned as of the date first written above.
XXXX INTERNATIONAL HOLDINGS, INC.
By: /s/ Xxx X. Xxxxxxxx
------------------------------------
Name: Xxx X. Xxxxxxxx
Title: Chairman of the Board of
Directors
XXXX INDUSTRIES, INCORPORATED
By: /s/ Xxx X. Xxxxxxxx
------------------------------------
Name: Xxx X. Xxxxxxxx
Title: Chairman of the Board of
Directors
DEFLECTA-SHIELD CORPORATION
By: /s/ Xxx X. Xxxxxxxx
------------------------------------
Name: Xxx X. Xxxxxxxx
Title: Chairman of the Board of
Directors
BELMOR AUTOTRON CORP.
By: /s/ Xxx X. Xxxxxxxx
------------------------------------
Name: Xxx X. Xxxxxxxx
Title: Chairman of the Board of
Directors
DFM CORP.
By: /s/ Xxx X. Xxxxxxxx
------------------------------------
Name: Xxx X. Xxxxxxxx
Title: Chairman of the Board of
Directors
[Signatures Continued on Following Page]
[Signature page to Credit Agreement]
XXXX ACQUISITION CORP.
By: /s/ Xxx X. Xxxxxxxx
------------------------------------
Name: Xxx X. Xxxxxxxx
Title: Chairman of the Board of
Directors
BAC ACQUISITION CO.
By: /s/ Xxx X. Xxxxxxxx
------------------------------------
Name: Xxx X. Xxxxxxxx
Title: Chairman of the Board of
Directors
TRAILMASTER PRODUCTS, INC.
By: /s/ Xxx X. Xxxxxxxx
------------------------------------
Name: Xxx X. Xxxxxxxx
Title: Chairman of the Board of
Directors
DELTA III, INC.
By: /s/ Xxx X. Xxxxxxxx
------------------------------------
Name: Xxx X. Xxxxxxxx
Title: Chairman of the Board of
Directors
[Signatures Continued on Following Page]
[Signature page to Credit Agreement]
Commitment to make XXXXXX FINANCIAL, INC.,
Revolving Loans: as Agent and a Lender
$17,931,034.50
Percentage of Revolving By:/s/ Xxxxxx X. Xxxxxxxxx
------------------------
Loan Commitment: Name: Xxxxxx X. Xxxxxxxxx
59.770115% Title: Senior Vice President
Commitment to make 000 Xxxx Xxxxxx Xxxxxx
Term Loan A: Xxxxxxx, Xxxxxxxx 00000
$11,954,023.00 ATTN.: Account Manager
Corporate Finance Group
Percentage of Term Loan A:
59.770115%
Commitment to make
Term Loan B:
$13,149,425.30
Percentage of Term Loan B:
59.770115%
Commitment to make
Acquisition Loans:
$8,965,517.25
Percentage of Acquisition
Loan Commitment:
59.770115%
[Signatures Continued on Following Page]
[Signature page to Credit Agreement]
Commitment to make
AND DRESDNER BANK AG, NEW YORK AND
Revolving Loans: GRAND CAYMAN BRANCHES,
$12,068,965.50 as a Lender
Percentage of Revolving
Loan Commitment: By:/s/ B. Xxxxx Xxxxxxxx
---------------------------
40.229885% Name: B. Xxxxx Xxxxxxxx
Title: Vice President
Commitment to make
Term Loan A:
$8,045,977.00
By: /s/ Xxxxxxx Xxxxx
--------------------------
Percentage of Term Loan A: Name: Xxxxxxx Xxxxx
40.229885% Title: Assistant Treasurer
Commitment to make 00 Xxxx Xxxxxx
Term Loan B: 25th Floor
$8,850,574.70 Xxx Xxxx, Xxx Xxxx 00000
ATTN: Account Manager
Percentage of Term Loan B: Corporate Finance Group
40.229885%
Commitment to make
Acquisition Loans:
$6,034,482.75
Percentage of Acquisition
Loan Commitment:
40.229885%
[Signature page to Credit Agreement]
