EXHIBIT 10.27
EXECUTION COPY
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CREDIT AGREEMENT
among
CAMBRIDGE INDUSTRIES HOLDINGS, INC.,
CAMBRIDGE INDUSTRIES, INC.,
VARIOUS LENDING INSTITUTIONS,
and
BANKERS TRUST COMPANY,
AS AGENT
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Dated as of July 10, 1997
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$280,000,000
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TABLE OF CONTENTS
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SECTION 1. Amount and Terms of Credit...................................... 1
1.01 Commitments...................................................... 1
1.02 Minimum Borrowing Amounts, etc. ................................. 4
1.03 Notice of Borrowing.............................................. 4
1.04 Disbursement of Funds............................................ 5
1.05 Notes............................................................ 6
1.06 Conversions...................................................... 7
1.07 Pro Rata Borrowings.............................................. 8
1.08 Interest......................................................... 8
1.09 Interest Periods................................................. 9
1.10 Increased Costs, Illegality, etc. ............................... 10
1.11 Compensation..................................................... 12
1.12 Change of Lending Office......................................... 13
1.13 Replacement of Banks............................................. 13
SECTION 2. Letters of Credit............................................... 14
2.01 Letters of Credit................................................ 14
2.02 Letter of Credit Requests; Notices of Issuance................... 16
2.03 Agreement to Repay Letter of Credit Drawings..................... 16
2.04 Letter of Credit Participations.................................. 17
2.05 Increased Costs.................................................. 19
SECTION 3. Fees; Commitments............................................... 20
3.01 Fees............................................................. 20
3.02 Voluntary Termination or Reduction of Commitments................ 21
3.03 Mandatory Adjustments of Commitments, etc. ...................... 22
SECTION 4. Payments........................................................ 22
4.01 Voluntary Prepayments............................................ 22
4.02 Mandatory Prepayments............................................ 23
4.03 Method and Place of Payment...................................... 30
4.04 Net Payments..................................................... 30
SECTION 5. Conditions Precedent............................................ 32
5.01 Conditions Precedent to Loans on the Initial Borrowing Date...... 32
5.02 Conditions Precedent to all Credit Events........................ 41
(i)
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SECTION 6. Representations, Warranties and Agreements...................... 42
6.01 Corporate Status................................................. 42
6.02 Corporate Power and Authority.................................... 43
6.03 No Violation..................................................... 43
6.04 Litigation....................................................... 43
6.05 Use of Proceeds; Margin Regulations.............................. 44
6.06 Governmental Approvals........................................... 44
6.07 Investment Company Act........................................... 44
6.08 Public Utility Holding Company Act............................... 44
6.09 True and Complete Disclosure..................................... 44
6.10 Financial Condition; Financial Statements........................ 45
6.11 Security Interests............................................... 46
6.12 Representations and Warranties in Other Documents................ 46
6.13 Transaction...................................................... 47
6.14 Special Purpose Corporation...................................... 47
6.15 Compliance with ERISA............................................ 47
6.16 Capitalization................................................... 48
6.17 Subsidiaries..................................................... 49
6.18 Intellectual Property............................................ 49
6.19 Compliance with Statutes, etc. .................................. 50
6.20 Environmental Matters............................................ 50
6.21 Properties....................................................... 51
6.22 Labor Relations.................................................. 51
6.23 Tax Returns and Payments......................................... 51
6.24 Existing Indebtedness............................................ 52
6.25 Subordination.................................................... 52
SECTION 7. Affirmative Covenants........................................... 52
7.01 Information Covenants............................................ 52
7.02 Books, Records and Inspections................................... 55
7.03 Insurance........................................................ 56
7.04 Payment of Taxes................................................. 56
7.05 Corporate Franchises............................................. 56
7.06 Compliance with Statutes, etc. .................................. 56
7.07 Compliance with Environmental Laws............................... 57
7.08 ERISA............................................................ 58
7.09 Good Repair...................................................... 59
7.10 End of Fiscal Years; Fiscal Quarters............................. 59
7.11 Additional Security; Further Assurances.......................... 59
7.12 Register......................................................... 60
7.13 Contributions; Payments.......................................... 60
7.14 Foreign Subsidiaries Security.................................... 61
7.15 Interest Rate Protection......................................... 61
(ii)
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7.16 Maintenance of Corporate Separateness............................ 62
7.17 Permitted Holdings PIK Securities................................ 62
SECTION 8. Negative Covenants.............................................. 62
8.01 Changes in Business.............................................. 62
8.02 Consolidation, Merger, Sale or Purchase of Assets, etc. ......... 63
8.03 Liens............................................................ 67
8.04 Indebtedness..................................................... 69
8.05 Advances, Investments and Loans.................................. 71
8.06 Dividends, etc. ................................................. 75
8.07 Transactions with Affiliates..................................... 77
8.08 Capital Expenditures............................................. 77
8.09 Minimum Consolidated EBITDA...................................... 78
8.10 Interest Coverage Ratio.......................................... 80
8.11 Leverage Ratio................................................... 81
8.12 Designated Senior Debt........................................... 82
8.13 Limitation on Voluntary Payments and Modifications of
Indebtedness; Modifications of Certificate of Incorporation,
By-Laws and Certain Other Agreements; etc. .................... 83
8.14 Limitation on Certain Restrictions on Subsidiaries............... 84
8.15 Limitation on the Creation of Subsidiaries....................... 84
SECTION 9. Events of Default............................................... 85
9.01 Payments......................................................... 85
9.02 Representations, etc. ........................................... 85
9.03 Covenants........................................................ 85
9.04 Default Under Other Agreements................................... 85
9.05 Bankruptcy, etc. ................................................ 86
9.06 ERISA............................................................ 86
9.07 Security Documents............................................... 87
9.08 Guaranties....................................................... 87
9.09 Judgments........................................................ 87
9.10 Ownership........................................................ 87
SECTION 10. Definitions.................................................... 88
SECTION 11. The Agent...................................................... 118
11.01 Appointment..................................................... 118
11.02 Delegation of Duties............................................ 119
11.03 Exculpatory Provisions.......................................... 119
11.04 Reliance by Agent............................................... 119
11.05 Notice of Default............................................... 120
11.06 Non-Reliance on Agent, and Other Banks.......................... 120
(iii)
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11.07 Indemnification................................................. 121
11.08 Agent in its Individual Capacity................................ 121
11.09 Holders......................................................... 121
11.10 Resignation of the Agent; Successor Agent....................... 122
SECTION 12. Miscellaneous.................................................. 122
12.01 Payment of Expenses, etc. ...................................... 122
12.02 Right of Setoff................................................. 123
12.03 Notices......................................................... 123
12.04 Benefit of Agreement............................................ 123
12.05 No Waiver; Remedies Cumulative.................................. 125
12.06 Payments Pro Rata............................................... 126
12.07 Calculations; Computations...................................... 126
12.08 Governing Law; Submission to Jurisdiction; Venue................ 127
12.09 Counterparts.................................................... 127
12.10 Effectiveness................................................... 127
12.11 Headings Descriptive............................................ 128
12.12 Amendment or Waiver; etc. ...................................... 128
12.13 Survival........................................................ 129
12.14 Domicile of Loans............................................... 129
12.15 Confidentiality................................................. 129
12.16 Waiver of Jury Trial............................................ 130
SECTION 13. Holdings Guaranty.............................................. 130
13.01 The Guaranty.................................................... 130
13.02 Bankruptcy...................................................... 131
13.03 Nature of Liability............................................. 131
13.04 Independent Obligation.......................................... 131
13.05 Authorization................................................... 132
13.06 Reliance........................................................ 133
13.07 Subordination................................................... 133
13.08 Waiver.......................................................... 133
13.09 Nature of Liability............................................. 134
ANNEX I List of Banks
ANNEX II Bank Addresses
ANNEX III Real Properties
ANNEX IV Projections
ANNEX V Subsidiaries
ANNEX VI Insurance
ANNEX VII Existing Indebtedness
ANNEX VIII Existing Liens
(iv)
ANNEX IX Existing Investments
ANNEX X Existing Letters of Credit
ANNEX XI ERISA Matters
EXHIBIT A-1 - Form of Notice of Borrowing
EXHIBIT A-2 - Form of Letter of Credit Request
EXHIBIT B-1 - Form of A Term Note
EXHIBIT B-2 - Form of B Term Note
EXHIBIT B-3 - Form of Revolving Note
EXHIBIT B-4 - Form of Swingline Note
EXHIBIT C - Form of Section 4.04(b)(ii) Certificate
EXHIBIT D-1 - Form of Opinion of Jaffe, Raitt, Heuer & Xxxxx
EXHIBIT D-2 - Form of Opinion of Xxxxxxxx & Xxxxx
EXHIBIT E - Form of Officers' Certificate
EXHIBIT F - Form of Pledge Agreement
EXHIBIT G - Form of Security Agreement
EXHIBIT H - Form of Subsidiary Guaranty
EXHIBIT I - Form of Subordination Provisions
EXHIBIT J - Form of Assignment and Assumption Agreement
EXHIBIT K - Form of Intercompany Note
EXHIBIT L - Form of Shareholder Subordinated Note
(v)
CREDIT AGREEMENT, dated as of July 10, 1997, among CAMBRIDGE
INDUSTRIES HOLDINGS, INC., a Delaware corporation ("Holdings"), CAMBRIDGE
INDUSTRIES, INC., a Delaware corporation (the "Borrower"), the lenders from time
to time party hereto (each, a "Bank" and, collectively, the "Banks"), and
BANKERS TRUST COMPANY, as Agent (in such capacity, the "Agent"). Unless
otherwise defined herein, all capitalized terms used herein and defined in
Section 10 are used herein as so defined.
W I T N E S S E T H :
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WHEREAS, subject to and upon the terms and conditions set forth
herein, the Banks are willing to make available to the Borrower the credit
facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
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1.01 Commitments. (A) Subject to and upon the terms and conditions
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herein set forth, each Bank severally agrees to make a loan or loans to the
Borrower, which loans shall be drawn, to the extent such Bank has a commitment
under such Facility, under the A Term Loan Facility, the B Term Loan Facility
and the Revolving Loan Facility, as set forth below:
(a) Loans under the A Term Loan Facility (each, an "A Term Loan" and,
collectively, the "A Term Loans"), (i) shall be incurred by the Borrower
pursuant to up to two drawings, during the period commencing on the Initial
Borrowing Date and ending on the A Term Loan Availability Termination Date,
(ii) shall be denominated in U.S. Dollars, (iii) shall be made as Base Rate
Loans and may, at the option of the Borrower, be maintained as and/or
converted into Base Rate Loans or Eurodollar Loans, provided, that (x) all
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A Term Loans made by all Banks pursuant to the same Borrowing shall, unless
otherwise specifically provided herein, consist entirely of A Term Loans of
the same Type and (y) no conversions into A Term Loans maintained as
Eurodollar Loans may be effected prior to the earlier of (1) the 90th day
after the Initial Borrowing Date and (2) that date (the "Syndication Date")
upon which the Agent determines in its sole discretion (and notifies the
Borrower) that the primary syndication (and resultant additions of
institutions as Banks pursuant to Section 12.04) has been completed, and
(iv) shall not exceed for any Bank at the time of incurrence thereof that
aggregate principal amount which
equals the remaining A Term Loan Commitment, if any, of such Bank at such
time (before giving effect to any reductions on such date pursuant to
Section 3.03(b)(i)). Once repaid, A Term Loans may not be reborrowed.
(b) Each loan under the B Term Loan Facility (each, a "B Term Loan"
and, collectively, the "B Term Loans"), (i) shall be incurred by the
Borrower pursuant to a single drawing, which shall be on the Initial
Borrowing Date, (ii) shall be denominated in U.S. Dollars, (iii) shall be
made as Base Rate Loans and may, at the option of the Borrower, be
maintained as and/or converted into Base Rate Loans or Eurodollar Loans,
provided, that (x) all B Term Loans made by all Banks pursuant to the same
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Borrowing shall, unless otherwise specifically provided herein, consist
entirely of B Term Loans of the same Type and (y) no conversions into B
Term Loans maintained as Eurodollar Loans may be incurred prior to the
earlier of (1) the 90th day after the Initial Borrowing Date and (2) the
Syndication Date, and (iv) shall not exceed for any Bank at the time of
incurrence thereof on the Initial Borrowing Date that aggregate principal
amount which equals the B Term Loan Commitment, if any, of such Bank at
such time. Once repaid, B Term Loans may not be reborrowed.
(c) Loans under the Revolving Loan Facility (each, a "Revolving Loan"
and, collectively, the "Revolving Loans"), (i) may be incurred by the
Borrower at any time and from time to time after the Initial Borrowing Date
and prior to the Revolving Loan Maturity Date, (ii) shall be denominated in
U.S. Dollars, (iii) except as hereinafter provided may, at the option of
the Borrower, be incurred and maintained as and/or converted into Base Rate
Loans or Eurodollar Loans, provided, that (x) all Revolving Loans made as
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part of the same Borrowing shall, unless otherwise specifically provided
herein, consist of Revolving Loans of the same Type and (y) no incurrences
of, or conversions into, Revolving Loans maintained as Eurodollar Loans may
be effected prior to the earlier of (1) the 90th day after the Initial
Borrowing Date and (2) the Syndication Date, (iv) may be repaid and
reborrowed in accordance with the provisions hereof and (v) shall not
exceed for any Bank at any time outstanding that aggregate principal amount
which, when combined with (I) the aggregate principal amount of all other
then outstanding Revolving Loans made by such Bank and (II) such Bank's RL
Percentage, if any, of the Swingline Loans then outstanding and Letter of
Credit Outstandings (exclusive of Unpaid Drawings relating to Letters of
Credit which are repaid with the proceeds of, and simultaneously with the
incurrence of, Revolving Loans or Swingline Loans) at such time, equals the
Revolving Loan Commitment, if any, of such Bank at such time.
Notwithstanding anything to the contrary contained herein, the aggregate
amount of Revolving Loans incurred on the Initial Borrowing Date may not
exceed $2,500,000.
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(B) Subject to and upon the terms and conditions herein set forth,
BTCo in its individual capacity agrees to make at any time and from time to time
after the Initial Borrowing Date and prior to the Swingline Expiry Date, a loan
or loans to the Borrower (each, a "Swingline Loan" and, collectively, the
"Swingline Loans"), which Swingline Loans (i) shall be made and maintained as
Base Rate Loans, (ii) shall be denominated in U.S. Dollars, (iii) may be repaid
and reborrowed in accordance with the provisions hereof, (iv) shall not exceed
in aggregate principal amount at any time outstanding, when combined with the
aggregate principal amount of all Revolving Loans then outstanding and the
Letter of Credit Outstandings (exclusive of Unpaid Drawings relating to Letters
of Credit which are repaid with the proceeds of, and simultaneously with the
incurrence of, Revolving Loans or Swingline Loans) at such time, an amount equal
to the Total Revolving Loan Commitment then in effect and (v) shall not exceed
in aggregate principal amount at any time outstanding the Maximum Swingline
Amount. BTCo shall not be obligated to make any Swingline Loans at a time when
a Bank Default exists unless BTCo has entered into arrangements satisfactory to
it and the Borrower to eliminate BTCo's risk with respect to the Defaulting
Bank's or Banks' participation in such Swingline Loans, including by cash
collateralizing such Defaulting Bank's or Banks' RL Percentage of the
outstanding Swingline Loans. BTCo will not make a Swingline Loan after it has
received written notice from the Borrower or the Required Banks stating that a
Default or an Event of Default exists until such time as BTCo shall have
received a written notice of (i) rescission of such notice from the party or
parties originally delivering the same or (ii) a waiver of such Default or Event
of Default from the Required Banks (or all the Banks to the extent required by
Section 12.12), and any loan made by BTCo to the Borrower in contravention of
this sentence shall not constitute a Swingline Loan (including for purposes of
Section 1.01(C)).
(C) On any Business Day, BTCo may, in its sole discretion, give
notice to the XX Xxxxx that its outstanding Swingline Loans shall be funded with
a Borrowing of Revolving Loans (provided that each such notice shall be deemed
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to have been automatically given upon the occurrence of a Default or an Event of
Default under Section 9.05 or upon the exercise of any of the remedies provided
in the last paragraph of Section 9), in which case a Borrowing of Revolving
Loans constituting Base Rate Loans (each such Borrowing, a "Mandatory
Borrowing") shall be made on the immediately succeeding Business Day by all XX
Xxxxx pro rata based on each RL Bank's RL Percentage, and the proceeds thereof
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shall be applied directly to repay BTCo for such outstanding Swingline Loans.
Each RL Bank hereby irrevocably agrees to make Base Rate Loans upon one Business
Day's notice pursuant to each Mandatory Borrowing in the amount and in the
manner specified in the preceding sentence and on the date specified in writing
by BTCo notwithstanding (i) that the amount of the Mandatory Borrowing may not
comply with the Minimum Borrowing Amount otherwise required hereunder, (ii)
whether any conditions specified in Section 5 are then satisfied, (iii) whether
a Default or an Event of Default has occurred and is continuing, (iv) the date
of such Mandatory Borrowing and (v) any reduction in the Total Revolving Loan
Commitment after any such Swingline Loans were made.
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In the event that any Mandatory Borrowing cannot for any reason be made on the
date otherwise required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code in respect of the
Borrower), each RL Bank (other than BTCo) hereby agrees that it shall forthwith
purchase from BTCo (without recourse or warranty) such assignment of the
outstanding Swingline Loans as shall be necessary to cause the XX Xxxxx to share
in such Swingline Loans ratably based upon their respective RL Percentages,
provided that all interest payable on the Swingline Loans shall be for the
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account of BTCo until the date the respective assignment is purchased and, to
the extent attributable to the purchased assignment, shall be payable to the RL
Bank purchasing same from and after such date of purchase.
1.02 Minimum Borrowing Amounts, etc. The aggregate principal amount
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of each Borrowing under a Facility shall not be less than the Minimum Borrowing
Amount for such Facility. More than one Borrowing may be incurred on any day;
provided, that at no time shall there be outstanding more than twelve Borrowings
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of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever the Borrower desires to
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incur Loans under any Facility (excluding Borrowings of Swingline Loans and
Mandatory Borrowings), it shall give the Agent at its Notice Office, prior to
11:00 A.M. (New York time), at least three Business Days' prior written notice
(or telephonic notice promptly confirmed in writing) of each Borrowing of
Eurodollar Loans and at least one Business Day's prior written notice (or
telephonic notice promptly confirmed in writing) of each Borrowing of Base Rate
Loans to be made hereunder. Each such notice (each, a "Notice of Borrowing")
shall, except as provided in Section 1.10, be irrevocable, and, in the case of
each written notice and each confirmation of telephonic notice, shall be in the
form of Exhibit A-1, appropriately completed to specify (i) the Facility
pursuant to which such Borrowing is to be made, (ii) the aggregate principal
amount of the Loans to be made pursuant to such Borrowing, (iii) the date of
such Borrowing (which shall be a Business Day) and (iv) whether the respective
Borrowing shall consist of Base Rate Loans or, to the extent permitted
hereunder, Eurodollar Loans and, if Eurodollar Loans, the Interest Period to be
initially applicable thereto. The Agent shall promptly give each Bank written
notice (or telephonic notice promptly confirmed in writing) of each proposed
Borrowing, of such Bank's proportionate share thereof, if any, and of the other
matters covered by the Notice of Borrowing.
(b) (i) Whenever the Borrower desires to make a Borrowing of
Swingline Loans hereunder, it shall give BTCo not later than 12:00 Noon (New
York time) on the day such Swingline Loan is to be made, written notice (or
telephonic notice promptly confirmed in writing) of each Swingline Loan to be
made hereunder. Each such notice shall be irrevocable and shall specify in each
case (x) the date of such Borrowing (which shall be a Business Day) and (y) the
aggregate principal amount of the Swingline Loan to be made pursuant to such
Borrowing.
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(ii) Mandatory Borrowings shall be made upon the notice specified in
Section 1.01(C), with the Borrower irrevocably agreeing, by its incurrence of
any Swingline Loan, to the making of Mandatory Borrowings as set forth in such
Section.
(c) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice permitted to be given hereunder, the
Agent or BTCo (in the case of a Borrowing of Swingline Loans) or the respective
Letter of Credit Issuer (in the case of Letters of Credit), as the case may be,
may prior to receipt of written confirmation act without liability upon the
basis of such telephonic notice, believed by the Agent, BTCo or such Letter of
Credit Issuer, as the case may be, in good faith to be from an Authorized
Officer of the Borrower. In each such case, the Borrower hereby waives the
right to dispute the Agent's, BTCo's or such Letter of Credit Issuer's record of
the terms of such telephonic notice.
1.04 Disbursement of Funds. (a) No later than 1:00 P.M. (New York
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time) on the date specified in each Notice of Borrowing (or (x) in the case of
Swingline Loans, not later than 2:00 P.M. (New York time) on the date specified
in Section 1.03(b)(i) or (y) in the case of Mandatory Borrowings, not later than
12:00 Noon (New York time) on the date specified in Section 1.01(C)), each Bank
with a Commitment under the respective Facility will make available its pro rata
share, if any, of each Borrowing requested to be made on such date (or in the
case of Swingline Loans, BTCo shall make available the full amount thereof) in
the manner provided below. All amounts shall be made available to the Agent in
U.S. Dollars and immediately available funds at the Payment Office and the Agent
promptly will make available to the Borrower by depositing to its account at the
Payment Office the aggregate of the amounts so made available in the type of
funds received. Unless the Agent shall have been notified by any Bank prior to
the date of Borrowing that such Bank does not intend to make available to the
Agent its portion of the Borrowing or Borrowings to be made on such date, the
Agent may assume that such Bank has made such amount available to the Agent on
such date of Borrowing, and the Agent, in reliance upon such assumption, may (in
its sole discretion and without any obligation to do so) make available to the
Borrower a corresponding amount. If such corresponding amount is not in fact
made available to the Agent by such Bank and the Agent has made available same
to the Borrower, the Agent shall be entitled to recover such corresponding
amount from such Bank. If such Bank does not pay such corresponding amount
forthwith upon the Agent's demand therefor, the Agent shall promptly notify the
Borrower, and the Borrower shall immediately pay such corresponding amount to
the Agent. The Agent shall also be entitled to recover from the Bank or the
Borrower, as the case may be, interest on such corresponding amount in respect
of each day from the date such corresponding amount was made available by the
Agent to the Borrower to the date such corresponding amount is recovered by the
Agent, at a rate per annum equal to (x) if paid by such Bank, the overnight
Federal Funds rate or (y) if paid by the Borrower, the then applicable rate of
interest, calculated in accordance with Section 1.08, for the respective Loans.
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(b) Nothing herein shall be deemed to relieve any Bank from its
obligation to fulfill its commitments hereunder or to prejudice any rights which
the Borrower may have against any Bank as a result of any default by such Bank
hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the principal of,
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and interest on, all the Loans made to it by each Bank shall be evidenced (i) if
A Term Loans, by a promissory note substantially in the form of Exhibit B-1 with
blanks appropriately completed in conformity herewith (each, as amended from
time to time, an "A Term Note" and, collectively, the "A Term Notes"), (ii) if B
Term Loans, by a promissory note substantially in the form of Exhibit B-2 with
blanks appropriately completed in conformity herewith (each, as amended from
time to time, a "B Term Note" and, collectively, the "B Term Notes"), (iii) if
Revolving Loans, by a promissory note substantially in the form of Exhibit B-3
with blanks appropriately completed in conformity herewith (each, as amended
from time to time, a "Revolving Note" and, collectively, the "Revolving Notes")
and (iv) if Swingline Loans, by a promissory note substantially in the form of
Exhibit B-4 with blanks appropriately completed in conformity herewith (as
amended from time to time, the "Swingline Note").
(b) The A Term Note issued to each Bank shall (i) be executed by the
Borrower, (ii) be payable to the order of such Bank or its registered assigns
and be dated the Initial Borrowing Date, (iii) be in a stated principal amount
equal to the A Term Loan Commitment of such Bank on the Initial Borrowing Date
and be payable in the principal amount of the A Term Loans evidenced thereby,
(iv) mature on the A Term Loan Maturity Date, (v) bear interest as provided in
the appropriate clause of Section 1.08 in respect of the Base Rate Loans and
Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to
voluntary prepayment as provided in Section 4.01 and mandatory repayment as
provided in Section 4.02, and (vii) be entitled to the benefits of this
Agreement and the other Credit Documents.
(c) The B Term Note issued to each Bank shall (i) be executed by the
Borrower, (ii) be payable to the order of such Bank or its registered assigns
and be dated the Initial Borrowing Date, (iii) be in a stated principal amount
equal to the B Term Loans made by such Bank on the Initial Borrowing Date and be
payable in the principal amount of the B Term Loans evidenced thereby, (iv)
mature on the B Term Loan Maturity Date, (v) bear interest as provided in the
appropriate clause of Section 1.08 in respect of the Base Rate Loans and
Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to
voluntary prepayment as provided in Section 4.01 and mandatory repayment as
provided in Section 4.02, and (vii) be entitled to the benefits of this
Agreement and the other Credit Documents.
(d) The Revolving Note issued to each Bank shall (i) be executed by
the Borrower, (ii) be payable to the order of such Bank or its registered
assigns and be dated the Initial Borrowing Date, (iii) be in a stated principal
amount equal to the Revolving Loan
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Commitment of such Bank on the Initial Borrowing Date and be payable in the
principal amount of the Revolving Loans evidenced thereby, (iv) mature on the
Revolving Loan Maturity Date, (v) bear interest as provided in the appropriate
clause of Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans,
as the case may be, evidenced thereby, (vi) be subject to voluntary prepayment
as provided in Section 4.01 and mandatory repayment as provided in Section 4.02,
and (vii) be entitled to the benefits of this Agreement and the other Credit
Documents.
(e) The Swingline Note issued to BTCo shall (i) be executed by the
Borrower, (ii) be payable to the order of BTCo or its registered assigns and be
dated the Initial Borrowing Date, (iii) be in a stated principal amount equal to
the Maximum Swingline Amount and be payable in the principal amount of the
Swingline Loans evidenced thereby, (iv) mature on the Swingline Expiry Date, (v)
bear interest as provided in Section 1.08 in respect of the Base Rate Loans
evidenced thereby, (vi) be subject to voluntary prepayment as provided in
Section 4.01 and mandatory repayment as provided in Section 4.02, and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.
(f) Each Bank will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will prior to any
transfer of any of its Notes endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
shall not affect the Borrower's obligations in respect of such Loans.
1.06 Conversions. The Borrower shall have the option to convert on
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any Business Day occurring on or after the earlier of (x) the 90th day after the
Initial Borrowing Date and (y) the Syndication Date, all or a portion at least
equal to the applicable Minimum Borrowing Amount of the outstanding principal
amount of the Loans (other than Swingline Loans which at all times shall be
maintained as Base Rate Loans) owing by the Borrower pursuant to a single
Facility into a Borrowing or Borrowings of another Type of Loan under such
Facility; provided, that (i) except as otherwise provided in Section 1.10(b),
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Eurodollar Loans may be converted into Base Rate Loans only on the last day of
an Interest Period applicable thereto and no partial conversion of a Borrowing
of Eurodollar Loans shall reduce the outstanding principal amount of the
Eurodollar Loans made pursuant to such Borrowing to less than the Minimum
Borrowing Amount applicable thereto, (ii) Base Rate Loans may only be converted
into Eurodollar Loans if no Default or Event of Default is in existence on the
date of the conversion and (iii) Borrowings of Eurodollar Loans resulting from
this Section 1.06 shall be limited in number as provided in Section 1.02. Each
such conversion shall be effected by the Borrower by giving the Agent at its
Notice Office, prior to 11:00 A.M. (New York time), at least three Business
Days' (or one Business Day's in the case of a conversion into Base Rate Loans)
prior written notice (or telephonic notice promptly confirmed in writing) (each
a "Notice of Conversion") specifying the Loans to be so converted, the Type of
Loans to be converted into and, if to be converted into a Borrowing of
Eurodollar Loans, the Interest Period to be initially applicable thereto. The
-7-
Agent shall give each Bank prompt notice of any such proposed conversion
affecting any of its Loans.
1.07 Pro Rata Borrowings. All Borrowings of Loans (other than
-------------------
Swingline Loans) under this Agreement shall be made by the Banks pro rata on the
--- ----
basis of their A Term Loan Commitments, B Term Loan Commitments or Revolving
Loan Commitments, as the case may be. It is understood that no Bank shall be
responsible for any default by any other Bank of its obligation to make Loans
hereunder and that each Bank shall be obligated to make the Loans to be made by
it hereunder, regardless of the failure of any other Bank to fulfill its
commitments hereunder.
1.08 Interest. (a) The unpaid principal amount of each Base Rate
--------
Loan shall bear interest from the date of the Borrowing thereof until the
earlier of (i) the maturity (whether by acceleration or otherwise) of such Base
Rate Loan and (ii) the conversion of such Base Rate Loan to a Eurodollar Loan
pursuant to Section 1.06, at a rate per annum which shall at all times be the
Applicable Base Rate Margin plus the Base Rate in effect from time to time.
(b) The unpaid principal amount of each Eurodollar Loan shall bear
interest from the date of the Borrowing thereof until the earlier of (i) the
maturity (whether by acceleration or otherwise) of such Eurodollar Loan and (ii)
the conversion of such Eurodollar Loan to a Base Rate Loan pursuant to Section
1.06, 1.09 or 1.10(b), as applicable, at a rate per annum which shall at all
times be the Applicable Eurodollar Margin plus the relevant Eurodollar Rate.
(c) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan shall bear interest at a rate per annum equal
to the rate which is 2% in excess of the rate otherwise applicable to Base Rate
Loans of such Facility from time to time; provided that principal in respect of
--------
Eurodollar Loans shall bear interest after the same becomes due (whether by
acceleration or otherwise) until the end of the applicable Interest Period for
such Eurodollar Loan at a per annum rate equal to 2% in excess of the rate of
interest applicable on the due date therefor. Interest which accrues under this
Section 1.08(c) shall be payable on demand.
(d) Interest shall accrue from and including the date of any
Borrowing to but excluding the date of any repayment thereof and shall be
payable (i) in respect of each Base Rate Loan, quarterly in arrears on each
Quarterly Payment Date, (ii) in respect of each Eurodollar Loan, on (x) the date
of any prepayment or repayment thereof (on the amount prepaid or repaid), (y)
the date of any conversion into a Base Rate Loan pursuant to Section 1.06, 1.09
or 1.10(b), as applicable (on the amount converted) and (z) the last day of each
Interest Period applicable thereto and, in the case of an Interest Period in
excess of three months, on each date occurring at three month intervals after
the first day
-8-
of such Interest Period and (iii) in respect of each Loan, at maturity (whether
by acceleration or otherwise) and, after such maturity, on demand.
(e) All computations of interest hereunder shall be made in
accordance with Section 12.07(b).
(f) The Agent, upon determining the interest rate for any Borrowing
of Eurodollar Loans for any Interest Period, shall promptly notify the Borrower
and the Banks thereof.
1.09 Interest Periods. At the time the Borrower gives a Notice of
----------------
Borrowing or Notice of Conversion in respect of the making of, or conversion
into, a Borrowing of Eurodollar Loans (in the case of the initial Interest
Period applicable thereto) or prior to 12:00 Noon (New York time) on the third
Business Day prior to the expiration of an Interest Period applicable to a
Borrowing of Eurodollar Loans, it shall have the right to elect by giving the
Agent written notice (or telephonic notice promptly confirmed in writing) of the
Interest Period applicable to such Borrowing, which Interest Period shall, at
the option of the Borrower, be a one, two, three or six month period.
Notwithstanding anything to the contrary contained above:
(i) all Eurodollar Loans comprising a Borrowing shall have the same
Interest Period;
(ii) the initial Interest Period for any Borrowing of Eurodollar
Loans shall commence on the date of such Borrowing (including the date of
any conversion from a Borrowing of Base Rate Loans) and each Interest
Period occurring thereafter in respect of such Borrowing shall commence on
the day on which the next preceding Interest Period expires;
(iii) if any Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period, such Interest Period shall end on the last Business Day of
such calendar month;
(iv) if any Interest Period would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, provided, that if any Interest Period would
--------
otherwise expire on a day which is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(v) no Interest Period for a Borrowing under a Facility may be
elected if it would extend beyond the respective Maturity Date for such
Facility;
-9-
(vi) no Interest Period may be elected at any time when a Default or
an Event of Default is then in existence; and
(vii) no Interest Period with respect to any Borrowing of Term Loans
shall extend beyond any date upon which a mandatory prepayment of such Term
Loans is required to be made under Section 4.02(A)(b)(i) or (ii), as the
case may be, if, after giving effect to the selection of such Interest
Period, the aggregate principal amount of such Term Loans maintained as
Eurodollar Loans with Interest Periods ending after such date of mandatory
repayment would exceed the aggregate principal amount of such Term Loans
permitted to be outstanding after such mandatory prepayment.
If upon the expiration of any Interest Period, the Borrower has failed to elect,
or is not permitted to elect by virtue of the application of clause (vi) above,
a new Interest Period to be applicable to the respective Borrowing of Eurodollar
Loans as provided above, the Borrower shall be deemed to have elected to convert
such Borrowing into a Borrowing of Base Rate Loans effective as of the
expiration date of such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that (x) in
---------------------------------
the case of clause (i) below, the Agent or (y) in the case of clauses (ii) and
(iii) below, any Bank, shall have determined (which determination shall, absent
manifest error, be final and conclusive and binding upon all parties hereto):
(i) on any date for determining the Eurodollar Rate for any
Interest Period, that, by reason of any changes arising after the date of
this Agreement affecting the interbank Eurodollar market, adequate and fair
means do not exist for ascertaining the applicable interest rate on the
basis provided for in the definition of Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loans (other than any increased cost or reduction in the
amount received or receivable resulting from the imposition of or a change
in the rate of net income taxes or similar charges) because of (x) any
change since the date of this Agreement in any applicable law, governmental
rule, regulation, guideline, order or request (whether or not having the
force of law), or in the interpretation or administration thereof and
including the introduction of any new law or governmental rule, regulation,
guideline, order or request (such as, for example, but not limited to a
change in official reserve requirements, but, in all events, excluding
reserves required under Regulation D to the extent included in the
computation of the Eurodollar Rate) and/or (y) other circumstances
affecting such Bank, the interbank Eurodollar market or the position of
such Bank in such market; or
-10-
(iii) at any time since the date of this Agreement, that the
making or continuance of any Eurodollar Loan has become unlawful by
compliance by such Bank in good faith with any law, governmental rule,
regulation, guideline or order (or would conflict with any such
governmental rule, regulation, guideline or order not having the force of
law but with which such Bank customarily complies even though the failure
to comply therewith would not be unlawful), or has become impracticable as
a result of a contingency occurring after the date of this Agreement which
materially and adversely affects the interbank Eurodollar market;
then, and in any such event, such Bank (or the Agent in the case of clause (i)
above) shall (x) on such date and (y) within five Business Days of the date on
which such event no longer exists give notice (by telephone confirmed in
writing) to the Borrower and (except in the case of clause (i)) to the Agent of
such determination (which notice the Agent shall promptly transmit to each of
the other Banks). Thereafter (x) in the case of clause (i) above, Eurodollar
Loans shall no longer be available until such time as the Agent notifies the
Borrower and the Banks that the circumstances giving rise to such notice by the
Agent no longer exist, and any Notice of Borrowing or Notice of Conversion given
by the Borrower with respect to Eurodollar Loans which have not yet been
incurred shall be deemed rescinded by the Borrower, (y) in the case of clause
(ii) above, the Borrower agrees to pay to such Bank, upon written demand
therefor (accompanied by the written notice referred to below), such additional
amounts (in the form of an increased rate of, or a different method of
calculating, interest or otherwise as such Bank in its sole discretion shall
determine) as shall be required to compensate such Bank for such increased costs
or reductions in amounts received or receivable hereunder (a written notice as
to the additional amounts owed to such Bank, showing the basis for the
calculation thereof, submitted to the Borrower by such Bank shall, absent
manifest error, be final and conclusive and binding upon all parties hereto) and
(z) in the case of clause (iii) above, the Borrower shall take one of the
actions specified in Section 1.10(b) as promptly as possible and, in any event,
within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and,
in the case of a Eurodollar Loan affected pursuant to Section 1.10(a)(iii), the
Borrower shall) either (i) if the affected Eurodollar Loan is then being made
pursuant to a Borrowing, cancel said Borrowing by giving the Agent telephonic
notice (confirmed promptly in writing) thereof on the same date that the
Borrower was notified by a Bank pursuant to Section 1.10(a)(ii) or (iii)), or
(ii) if the affected Eurodollar Loan is then outstanding, upon at least three
Business Days' notice to the Agent, require the affected Bank to convert each
such Eurodollar Loan into a Base Rate Loan (which conversion, in the case of the
circumstances described in Section 1.10(a)(iii), shall occur no later than the
last day of the Interest Period then applicable to such Eurodollar Loan (or such
earlier date as shall be required by applicable law)); provided, that if more
--------
than one Bank is affected at any time, then all affected Banks must be treated
the same pursuant to this Section 1.10(b).
-11-
(c) If any Bank shall have determined that after the date hereof, the
adoption or effectiveness of any applicable law, rule or regulation regarding
capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by such Bank with any request or directive regarding capital adequacy (whether
or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on such Bank's capital or assets as a consequence of its commitments or
obligations hereunder to a level below that which such Bank could have achieved
but for such adoption, effectiveness, change or compliance (taking into
consideration such Bank's policies with respect to capital adequacy), then from
time to time, upon written demand by such Bank (with a copy to the Agent),
accompanied by the notice referred to in the last sentence of this clause (c),
the Borrower agrees to pay to such Bank such additional amount or amounts as
will compensate such Bank for such reduction. Each Bank, upon determining in
good faith that any additional amounts will be payable pursuant to this Section
1.10(c), will give prompt written notice thereof to the Borrower, which notice
shall set forth the basis of the calculation of such additional amounts,
although the failure to give any such notice shall not release or diminish the
Borrower's obligations to pay additional amounts pursuant to this Section
1.10(c) upon the subsequent receipt of such notice.
1.11 Compensation. The Borrower agrees to compensate each Bank, upon
------------
its written request (which request shall set forth the basis for requesting such
compensation), for all reasonable losses, expenses and liabilities (including,
without limitation, any loss, expense or liability incurred by reason of the
liquidation or reemployment of deposits or other funds required by such Bank to
fund its Eurodollar Loans but excluding loss of anticipated profit with respect
to any Loans) which such Bank may sustain: (i) if for any reason (other than a
default by such Bank or the Agent) a Borrowing of Eurodollar Loans does not
occur on a date specified therefor in a Notice of Borrowing or Notice of
Conversion (whether or not withdrawn by the Borrower or deemed withdrawn
pursuant to Section 1.10(a)); (ii) if any repayment (including any repayment
made pursuant to Section 4.01 or 4.02 or as a result of an acceleration of the
Loans pursuant to Section 9) or conversion of any Eurodollar Loans occurs on a
date which is not the last day of an Interest Period applicable thereto; (iii)
if any prepayment of any Eurodollar Loans is not made on any date specified in a
notice of prepayment given by the Borrower; or (iv) as a consequence of (x) any
other default by the Borrower to repay its Eurodollar Loans when required by the
terms of this Agreement or (y) an election made pursuant to Section 1.10(b).
Calculation of all amounts payable to a Bank under this Section 1.11 shall be
made as though that Bank had actually funded its relevant Eurodollar Loan
through the purchase of a Eurodollar deposit bearing interest at the Eurodollar
Rate in an amount equal to the amount of that Loan, having a maturity comparable
to the relevant Interest Period and through the transfer of such Eurodollar
deposit from an offshore office of that Bank to a domestic office of that Bank
in the United States of America; provided, however, that each Bank may fund each
-------- -------
of its Eurodollar Loans in any manner it sees fit and the foregoing assumption
shall be util-
-12-
ized only for the calculation of amounts payable under this Section 1.11. It is
further understood and agreed that if any repayment of Eurodollar Loans pursuant
to Section 4.01 or any conversion of Eurodollar Loans pursuant to Section 1.06
in either case occurs on a date which is not the last day of an Interest Period
applicable thereto, such repayment or conversion shall be accompanied by any
amounts owing to any Bank pursuant to this Section 1.11.
1.12 Change of Lending Office. Each Bank agrees that, upon the
------------------------
occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii), 1.10(c), 2.05 or 4.04 with respect to such Bank, it will, if requested by
the Borrower, use reasonable efforts (subject to overall policy considerations
of such Bank) to designate another lending office for any Loans or Letters of
Credit affected by such event; provided, that such designation is made on such
--------
terms that, in the sole judgment of such Bank, such Bank and its lending office
suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequences of the event giving rise to the operation of any such
Section. Nothing in this Section 1.12 shall affect or postpone any of the
obligations of the Borrower or the right of any Bank provided in Section 1.10,
2.05 or 4.04.
1.13 Replacement of Banks. (x) If any Bank becomes a Defaulting
--------------------
Bank, (y) upon the occurrence of any event giving rise to the operation of
Section 1.10(a)(ii) or (iii), Section 1.10(c), Section 2.05 or Section 4.04 with
respect to any Bank which results in such Bank charging to the Borrower
increased costs in excess of those being generally charged by the other Banks or
(z) in the case of a refusal by a Bank to consent to a proposed change, waiver,
discharge or termination with respect to this Agreement which has been approved
by the Required Banks as provided in Section 12.12(b), the Borrower shall have
the right, if no Default or Event of Default then exists or, in the case of
clause (z) above, would exist after giving effect to such replacement, to
replace such Bank (the "Replaced Bank") with one or more other Eligible
Transferee or Transferees, none of whom shall constitute a Defaulting Bank at
the time of such replacement (collectively, the "Replacement Bank") reasonably
acceptable to the Agent, provided that (i) at the time of any replacement
--------
pursuant to this Section 1.13, the Replacement Bank shall enter into one or more
Assignment and Assumption Agreements pursuant to Section 12.04(b) (and with all
fees payable pursuant to said Section 12.04(b) to be paid by the Replacement
Bank) pursuant to which the Replacement Bank shall acquire all of the
Commitments and outstanding Loans of, and in each case participations in Letters
of Credit by, the Replaced Bank and, in connection therewith, shall pay to (x)
the Replaced Bank in respect thereof an amount equal to the sum of (A) an amount
equal to the principal of, and all accrued interest on, all outstanding Loans of
the Replaced Bank, (B) an amount equal to all Unpaid Drawings that have been
funded by (and not reimbursed to) such Replaced Bank, together with all then
unpaid interest with respect thereto at such time and (C) an amount equal to all
accrued, but theretofore unpaid, Fees owing to the Replaced Bank pursuant to
Section 3.01, (y) the respective Letter of Credit Issuer an amount equal to such
Replaced Bank's RL Percentage of any Unpaid Drawing (which at such time remains
an Unpaid Drawing)
-13-
with respect to a Letter of Credit issued by it to the extent such amount was
not theretofore funded by such Replaced Bank and (z) BTCo an amount equal to
such Replaced Bank's RL Percentage of any Mandatory Borrowing to the extent such
amount was not theretofore funded by such Replaced Bank, and (ii) all
obligations (including, without limitation, all such amounts, if any, owing
under Section 1.11) of the Borrower owing to the Replaced Bank (other than those
specifically described in clause (i) above in respect of which the assignment
purchase price has been, or is concurrently being, paid) shall be paid in full
to such Replaced Bank concurrently with such replacement. Upon the execution of
the respective Assignment and Assumption Agreements, the payment of amounts
referred to in clauses (i) and (ii) above, recordation of the assignment on the
Register by the Agent pursuant to Section 7.12 and, if so requested by the
Replacement Bank, delivery to the Replacement Bank of the appropriate Note or
Notes executed by the Borrower, the Replacement Bank shall become a Bank
hereunder and the Replaced Bank shall cease to constitute a Bank hereunder,
except with respect to indemnification provisions under this Agreement
(including, without limitation, Sections 1.10, 1.11, 2.05, 4.04, 12.01 and
12.06), which shall survive as to such Replaced Bank.
SECTION 2. Letters of Credit.
-----------------
2.01 Letters of Credit. (a) Subject to and upon the terms and
-----------------
conditions herein set forth, the Borrower may request a Letter of Credit Issuer
at any time and from time to time after the Initial Borrowing Date and prior to
the Business Day (or the 30th day in the case of trade Letters of Credit)
preceding the Revolving Loan Maturity Date to issue, for the account of the
Borrower and in support of, (A) trade obligations of the Borrower or any of its
Subsidiaries that arise in the ordinary course of business and are in respect of
general corporate purposes of the Borrower or its Subsidiaries, as the case may
be, and/or (B) on a standby basis, L/C Supportable Indebtedness, and subject to
and upon the terms and conditions herein set forth each Letter of Credit Issuer
agrees to issue from time to time, irrevocable letters of credit in such form as
may be approved by such Letter of Credit Issuer (each such letter of credit, a
"Letter of Credit" and, collectively, the "Letters of Credit"). Notwithstanding
the foregoing, no Letter of Credit Issuer shall be under any obligation to issue
any Letter of Credit if at the time of such issuance:
(i) any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain such Letter of
Credit Issuer from issuing such Letter of Credit or any requirement of law
applicable to such Letter of Credit Issuer or any request or directive
(whether or not having the force of law) from any governmental authority
with jurisdiction over such Letter of Credit Issuer shall prohibit, or
request that such Letter of Credit Issuer refrain from, the issuance of
letters of credit generally or such Letter of Credit in particular or shall
impose upon such Letter of Credit Issuer with respect to such Letter of
Credit any restriction or reserve or capital requirement (for which such
Letter of Credit Issuer
-14-
is not otherwise compensated) not in effect on the date hereof, or any
unreimbursed loss, cost or expense which was not applicable, in effect or
known to such Letter of Credit Issuer as of the date hereof and which such
Letter of Credit Issuer in good xxxxx xxxxx material to it; or
(ii) such Letter of Credit Issuer shall have received notice from
the Required Banks prior to the issuance of such Letter of Credit of the
type described in clause (vi) of Section 2.01(b).
(b) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings relating to Letters of Credit which
are repaid on the date of, and prior to the issuance of, the respective Letter
of Credit) at such time, would exceed either (x) $10,000,000 or (y) when added
to the aggregate principal amount of all Revolving Loans and Swingline Loans
then outstanding, the Total Revolving Loan Commitment at such time; (ii) (x)
each standby Letter of Credit shall have an expiry date occurring not later than
one year after such standby Letter of Credit's date of issuance, provided, that
--------
any standby Letter of Credit may be automatically renewable for periods of up to
one year so long as such standby Letter of Credit provides that the respective
Letter of Credit Issuer retains an option, satisfactory to such Letter of Credit
Issuer, to terminate such standby Letter of Credit within a specified period of
time prior to each scheduled renewal date and (y) each trade Letter of Credit
shall have an expiry date occurring not later than 180 days after such trade
Letter of Credit's date of issuance; (iii) (x) no standby Letter of Credit shall
have an expiry date occurring later than the Business Day next preceding the
Revolving Loan Maturity Date and (y) no trade Letter of Credit shall have an
expiry date occurring later than 30 days prior to the Revolving Loan Maturity
Date; (iv) each Letter of Credit shall be denominated in U.S. Dollars and be
payable on a sight basis; (v) the Stated Amount of each Letter of Credit shall
not be less than $100,000 or such lesser amount as is acceptable to the Letter
of Credit Issuer; and (vi) no Letter of Credit Issuer will issue any Letter of
Credit after it has received written notice from the Borrower or the Required
Banks stating that a Default or an Event of Default exists until such time as
such Letter of Credit Issuer shall have received a written notice of (i)
rescission of such notice from the party or parties originally delivering the
same or (ii) a waiver of such Default or Event of Default by the Required Banks
(or all the Banks to the extent required by Section 12.12), and any letter of
credit issued by a Letter of Credit Issuer in contravention of this clause (vi)
shall not constitute a Letter of Credit (including for purposes of Section
2.04).
(c) Notwithstanding the foregoing, in the event a Bank Default
exists, no Letter of Credit Issuer shall be required to issue any Letter of
Credit unless the respective Letter of Credit Issuer has entered into
arrangements satisfactory to it and the Borrower to eliminate such Letter of
Credit Issuer's risk with respect to the participation in Letters of Credit of
the Defaulting Bank or Banks, including by cash collateralizing such Defaulting
Bank's or Banks' RL Percentage of the Letter of Credit Outstandings.
-15-
(d) Annex X attached hereto contains a description of all letters of
credit issued or deemed issued and outstanding under the Existing Credit
Agreement on the Effective Date. Each such letter of credit, including any
extension thereof (each, an "Existing Letter of Credit") shall constitute a
"Letter of Credit" for all purposes of this Agreement, issued, for purposes of
Section 2.04(a), on the Effective Date.
2.02 Letter of Credit Requests; Notices of Issuance. (a) Whenever
----------------------------------------------
it desires that a Letter of Credit be issued, the Borrower shall give the Agent
and the respective Letter of Credit Issuer written notice thereof prior to 12:00
Noon (New York time) at least five Business Days (or such shorter period as may
be acceptable to such Letter of Credit Issuer) prior to the proposed date of
issuance (which shall be a Business Day) which written notice shall be in the
form of Exhibit A-2 (each, a "Letter of Credit Request"). Each Letter of Credit
Request shall include any other documents as the respective Letter of Credit
Issuer customarily requires in connection therewith.
(b) (i) In the case of standby Letters of Credit, each Letter of
Credit Issuer shall, on the date of each issuance of or amendment or
modification to a standby Letter of Credit by it, give the Agent and the
Borrower written notice of the issuance of or amendment or modification to such
Letter of Credit, accompanied by a copy to the Agent of the Letter of Credit or
Letters of Credit issued by it and each such amendment or modification thereto.
(ii) In the case of any trade Letters of Credit issued by a Letter
of Credit Issuer other than BTCo, the respective trade Letter of Credit Issuer
shall send to the Agent, on the first Business Day of each week, by telefax, its
outstanding trade Letter of Credit daily balances for the previous week. The
Agent shall deliver to each RL Bank by the end of each calendar month and upon
each Letter of Credit fee payment date a report setting forth for such period
the aggregate daily amount available to be drawn under trade Letters of Credit
issued by all Letter of Credit Issuers that were outstanding during such period.
2.03 Agreement to Repay Letter of Credit Drawings. (a) The Borrower
--------------------------------------------
hereby agrees to reimburse each respective Letter of Credit Issuer, by making
payment to the Agent in immediately available funds at the Payment Office, for
any payment or disbursement made by such Letter of Credit Issuer under any
Letter of Credit issued by it (each such amount so paid or disbursed until
reimbursed, an "Unpaid Drawing") no later than one Business Day following the
date of such payment or disbursement, with interest on the amount so paid or
disbursed by such Letter of Credit Issuer, to the extent not reimbursed prior to
1:00 P.M. (New York time) on the date of such payment or disbursement, from and
including the date paid or disbursed to but not including the date such Letter
of Credit Issuer is reimbursed therefor at a rate per annum which shall be the
Applicable Base Rate Margin plus the Base Rate as in effect from time to time
for Revolving Loans (plus an additional 2% per annum if not reimbursed by the
third Business
-16-
Day after the date of such payment or disbursement), such interest also to be
payable on demand. Each Letter of Credit Issuer shall provide the Borrower
prompt notice of any payment or disbursement made by it under any Letter of
Credit issued by it, although the failure of, or delay in, giving any such
notice shall not release or diminish the obligations of the Borrower under this
Section 2.03(a) or under any other Section of this Agreement.
(b) The Borrower's obligation under this Section 2.03 to reimburse
the respective Letter of Credit Issuer with respect to Unpaid Drawings
(including, in each case, interest thereon) shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which the Borrower may have or have had against such Letter
of Credit Issuer, the Agent or any Bank, including, without limitation, any
defense based upon the failure of any drawing under a Letter of Credit issued by
it to conform to the terms of the Letter of Credit or any non-application or
misapplication by the beneficiary of the proceeds of such drawing; provided,
--------
however, that the Borrower shall not be obligated to reimburse such Letter of
-------
Credit Issuer for any wrongful payment made by such Letter of Credit Issuer
under a Letter of Credit issued by it as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of such Letter
of Credit Issuer.
2.04 Letter of Credit Participations. (a) Immediately upon the
-------------------------------
issuance by a Letter of Credit Issuer of any Letter of Credit, such Letter of
Credit Issuer shall be deemed to have sold and transferred to each RL Bank, and
each such RL Bank (each, a "Participant") shall be deemed irrevocably and
unconditionally to have purchased and received from such Letter of Credit
Issuer, without recourse or warranty, an undivided interest and participation,
to the extent of such RL Bank's RL Percentage, in such Letter of Credit, each
substitute letter of credit, each drawing made thereunder and the obligations of
the Borrower under this Agreement with respect thereto (although Letter of
Credit Fees shall be payable directly to the Agent for the account of the XX
Xxxxx as provided in Section 3.01(b) and the Participants shall have no right to
receive any portion of any Facing Fees) and any security therefor or guaranty
pertaining thereto. Upon any change in the Revolving Loan Commitments of the XX
Xxxxx pursuant to Section 1.13 or 12.04(b), it is hereby agreed that, with
respect to all outstanding Letters of Credit and Unpaid Drawings relating to
Letters of Credit, there shall be an automatic adjustment to the participations
pursuant to this Section 2.04(a) to reflect the new RL Percentages of the
assigning and assignee Banks.
(b) In determining whether to pay under any Letter of Credit, the
respective Letter of Credit Issuer shall not have any obligation relative to the
Participants other than to determine that any documents required to be delivered
under such Letter of Credit have been delivered and that they appear to comply
on their face with the requirements of such Letter of Credit. Any action taken
or omitted to be taken by any Letter of Credit Issuer under or in connection
with any Letter of Credit issued by it if taken or omitted in the
-17-
absence of gross negligence or willful misconduct, shall not create for such
Letter of Credit Issuer any resulting liability.
(c) In the event that any Letter of Credit Issuer makes any payment
under any Letter of Credit issued by it and the Borrower shall not have
reimbursed such amount in full to such Letter of Credit Issuer pursuant to
Section 2.03(a), such Letter of Credit Issuer shall promptly notify the Agent,
and the Agent shall promptly notify each Participant of such failure, and each
such Participant shall promptly and unconditionally pay to the Agent for the
account of such Letter of Credit Issuer, the amount of such Participant's RL
Percentage of such payment in U.S. Dollars and in same day funds; provided,
--------
however, that no Participant shall be obligated to pay to the Agent its RL
-------
Percentage of such unreimbursed amount for any wrongful payment made by such
Letter of Credit Issuer under a Letter of Credit issued by it as a result of
acts or omissions constituting willful misconduct or gross negligence on the
part of such Letter of Credit Issuer. If the Agent so notifies any Participant
required to fund a payment under a Letter of Credit prior to 11:00 A.M. (New
York time) on any Business Day, such Participant shall make available to the
Agent for the account of the respective Letter of Credit Issuer such
Participant's RL Percentage of the amount of such payment on such Business Day
in same day funds. If and to the extent such Participant shall not have so made
its RL Percentage of the amount of such payment available to the Agent for the
account of the respective Letter of Credit Issuer, such Participant agrees to
pay to the Agent for the account of such Letter of Credit Issuer, forthwith on
demand such amount, together with interest thereon, for each day from such date
until the date such amount is paid to the Agent for the account of such Letter
of Credit Issuer at the overnight Federal Funds rate. The failure of any
Participant to make available to the Agent for the account of the respective
Letter of Credit Issuer its RL Percentage of any payment under any Letter of
Credit issued by it shall not relieve any other Participant of its obligation
hereunder to make available to the Agent for the account of such Letter of
Credit Issuer its RL Percentage of any payment under any such Letter of Credit
on the date required, as specified above, but no Participant shall be
responsible for the failure of any other Participant to make available to the
Agent for the account of such Letter of Credit Issuer such other Participant's
RL Percentage of any such payment.
(d) Whenever any Letter of Credit Issuer receives a payment of a
reimbursement obligation as to which the Agent has received for the account of
such Letter of Credit Issuer any payments from the Participants pursuant to
clause (c) above, such Letter of Credit Issuer shall pay to the Agent and the
Agent shall promptly pay to each Participant which has paid its RL Percentage
thereof, in U.S. Dollars and in same day funds, an amount equal to such
Participant's RL Percentage of the principal amount thereof and interest thereon
accruing after the purchase of the respective participations.
(e) The obligations of each respective Participant to make payments
to the Agent for the account of each respective Letter of Credit Issuer with
respect to Letters of Credit issued by it which such Participant has a
participation in shall be irrevocable and not
-18-
subject to counterclaim, set-off or other defense or any other qualification or
exception whatsoever and shall be made in accordance with the terms and
conditions of this Agreement under all circumstances, including, without
limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement or
any of the other Credit Documents;
(ii) the existence of any claim, set-off, defense or other right
which the Borrower may have at any time against a beneficiary named in a
Letter of Credit, any transferee of any Letter of Credit (or any Person for
whom any such transferee may be acting), the Agent, any Letter of Credit
Issuer, any Bank, any Participant or other Person, whether in connection
with this Agreement, any Letter of Credit, the transactions contemplated
herein (including the Transaction) or any unrelated transactions (including
any underlying transaction between the Borrower or any of its Subsidiaries
and the beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or other document presented under
the Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default.
2.05 Increased Costs. If after the date hereof, the adoption or
---------------
effectiveness of any applicable law, rule or regulation, or any change therein,
or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Letter of Credit
Issuer or any Participant with any request or directive (whether or not having
the force of law) by any such authority, central bank or comparable agency shall
either (i) impose, modify or make applicable any reserve, deposit, capital
adequacy or similar requirement against Letters of Credit issued by such Letter
of Credit Issuer or such Participant's participation therein, or (ii) impose on
any Letter of Credit Issuer or any Participant any other conditions affecting
this Agreement, any Letter of Credit or such Participant's participation
therein; and the result of any of the foregoing is to increase the cost to such
Letter of Credit Issuer or such Participant of issuing, maintaining or
participating in any Letter of Credit, or to reduce the amount of any sum
received or receivable by such Letter of Credit Issuer or such Participant
hereunder, then, upon written demand to the Borrower by such Letter of Credit
Issuer or such Participant (a copy of which notice shall be sent by such Letter
of Credit Issuer or such Participant to the Agent), accompanied by the
certificate described in the last sentence of this Section 2.05, the Borrower
shall pay to
-19-
such Letter of Credit Issuer or such Participant such additional amount or
amounts as will compensate such Letter of Credit Issuer or such Participant for
such increased cost or reduction. A certificate submitted to the Borrower by
such Letter of Credit Issuer or such Participant, as the case may be (a copy of
which certificate shall be sent by such Letter of Credit Issuer or such
Participant to the Agent), setting forth the basis for the determination of such
additional amount or amounts necessary to compensate such Letter of Credit
Issuer or such Participant as aforesaid shall be final and conclusive and
binding on the Borrower absent manifest error, although the failure to deliver
any such certificate shall not release or diminish the Borrower's obligations to
pay additional amounts pursuant to this Section 2.05 upon subsequent receipt of
such certificate.
SECTION 3. Fees; Commitments.
-----------------
3.01 Fees. (a) The Borrower shall pay to the Agent for distribution
----
to each Bank a commitment fee (the "Commitment Fee") for the period from the
Effective Date to and including the date the Total Commitment has been
terminated, computed at a rate equal to the Applicable Commitment Fee Percentage
on the daily Aggregate Unutilized Commitment of such Bank. Accrued Commitment
Fees shall be due and payable in arrears thereafter, in arrears on each
Quarterly Payment Date and the date upon which the Total Commitment is
terminated.
(b) The Borrower shall pay to the Agent for the account of the XX
Xxxxx pro rata on the basis of their RL Percentages, a fee in respect of each
--- ----
Letter of Credit (the "Letter of Credit Fee") computed at a rate per annum equal
to the Applicable Eurodollar Margin then in effect with respect to Revolving
Loans on the daily Stated Amount of such Letter of Credit. Accrued Letter of
Credit Fees shall be due and payable quarterly in arrears on each Quarterly
Payment Date and upon the first day after the termination of the Total Revolving
Loan Commitment upon which no Letters of Credit remain outstanding.
(c) The Borrower shall pay to the Agent for the account of the
respective Letter of Credit Issuer a fee in respect of each Letter of Credit
issued by such Letter of Credit Issuer (the "Facing Fee") computed at the rate
of 1/4 of 1% per annum on the daily Stated Amount of such Letter of Credit;
provided, that in no event shall the annual Facing Fee with respect to each
--------
Letter of Credit be less than $500; it being agreed that, on the date of
issuance of any Letter of Credit and on each anniversary thereof prior to the
termination of such Letter of Credit, if $500 will exceed the amount of Facing
Fees that will accrue with respect to such Letter of Credit for the immediately
succeeding 12-month period, the full $500 shall be payable on the date of
issuance of such Letter of Credit and on each such anniversary thereof prior to
the termination of such Letter of Credit. Except as provided in the immediately
preceding sentence, accrued Facing Fees shall be due and payable quarterly in
arrears on each Quarterly Payment Date and upon the first day after the
termination of the Total Commitment upon which no Letters of Credit remain
outstanding.
-20-
(d) The Borrower hereby agrees to pay directly to the respective
Letter of Credit Issuer upon each issuance of, drawing under, and/or amendment
of, a Letter of Credit issued by it such amount as shall at the time of such
issuance, drawing or amendment be the administrative charge which such Letter of
Credit Issuer is customarily charging for issuances of, drawings under or
amendments of, letters of credit issued by it.
(e) The Borrower shall pay to the Agent, for its own account, such
fees as may be agreed to from time to time between the Borrower and the Agent,
when and as due.
(f) All computations of Fees shall be made in accordance with
Section 12.07(b).
3.02 Voluntary Termination or Reduction of Commitments. (a) Upon at
-------------------------------------------------
least two Business Days' prior written notice (or telephonic notice promptly
confirmed in writing) to the Agent at its Notice Office (which notice the Agent
shall promptly transmit to each of the Banks), the Borrower shall have the
right, without premium or penalty, to terminate or partially reduce the
unutilized portion of the Total Unutilized Revolving Loan Commitment; provided
--------
that (x) any such termination or partial reduction shall apply to
proportionately and permanently reduce the Revolving Loan Commitment of each
Bank with a Revolving Loan Commitment and (y) any partial reduction pursuant to
this Section 3.02 shall be in the amount of at least $500,000.
(b) In the event of certain refusals by a Bank to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks as provided in Section
12.12(b), the Borrower shall have the right, upon five Business Days' prior
written notice to the Agent at its Notice Office (which notice the Agent shall
promptly transmit to each of the Banks), to terminate the entire Revolving Loan
Commitment of such Bank, so long as all Loans, together with accrued and unpaid
interest, Fees and all other amounts, owing to such Bank are repaid concurrently
with the effectiveness of such termination pursuant to Section 4.01(b), and the
Borrower shall pay to the Agent at such time an amount in cash and/or Cash
Equivalents equal to such Bank's RL Percentage of the outstanding Letters of
Credit which it has a participation in (which cash and/or Cash Equivalents shall
be held by the Agent as security for the obligations of the Borrower hereunder
in respect of such outstanding Letters of Credit pursuant to a cash collateral
agreement to be entered into in form and substance reasonably satisfactory to
the Agent, which shall permit certain investments in Cash Equivalents reasonably
satisfactory to the Agent until the proceeds are applied to the secured
obligations) (at which time Annex I shall be deemed modified to reflect such
changed amounts), and at such time, such Bank shall no longer constitute a
"Bank" for purposes of this Agreement, except with respect to indemnifications
under this Agreement (including, without limitation, Sections 1.10, 1.11, 2.05,
4.04, 12.01 and 12.06), which shall survive as to such repaid Bank.
-21-
3.03 Mandatory Adjustments of Commitments, etc. (a) The Total
------------------------------------------
Commitment (and the A Term Loan Commitment, B Term Loan Commitment and Revolving
Loan Commitment of each Bank) shall terminate on July 31, 1997 unless the
Initial Borrowing Date has occurred on or before such date.
(b) (i) The Total A Term Loan Commitment shall (x) be reduced on
each date on which A Term Loans are incurred (after giving effect to the
incurrence of A Term Loans on such date), in an amount equal to the aggregate
principal amount of A Term Loans incurred on such date, and (y) terminate in its
entirety on the A Term Loan Availability Termination Date after giving effect to
any incurrence of A Term Loans on such date.
(ii) The Total B Term Loan Commitment shall terminate on the Initial
Borrowing Date, after giving effect to the making of the B Term Loans on such
date.
(c) The Total Revolving Loan Commitment (and the Revolving Loan
Commitment of each Bank) shall terminate on the earlier of (i) the date on which
a Change of Control Event occurs and (ii) the Revolving Loan Maturity Date.
(d) Each reduction or adjustment of the Total A Term Loan
Commitment, the Total B Term Loan Commitment or the Total Revolving Loan
Commitment pursuant to this Section 3.03 (or pursuant to Section 4.02) shall
apply proportionately to the A Term Loan Commitment, the B Term Loan Commitment,
or the Revolving Loan Commitment, as the case may be, of each Bank.
SECTION 4. Payments.
--------
4.01 Voluntary Prepayments. (a) The Borrower shall have the right
---------------------
to prepay the Loans made to it, in whole or in part, without premium or penalty
except as otherwise provided in this Agreement, from time to time on the
following terms and conditions: (i) the Borrower shall give the Agent at its
Notice Office written notice (or telephonic notice promptly confirmed in
writing) of its intent to prepay such Loans, whether such Loans are A Term
Loans, B Term Loans, Revolving Loans or Swingline Loans, the amount of such
prepayment and (in the case of Eurodollar Loans) the specific Borrowing(s)
pursuant to which made, which notice shall be given by the Borrower prior to
11:00 A.M. (New York time) (x) at least one Business Day prior to the date of
such prepayment in the case of Term Loans or Revolving Loans maintained as Base
Rate Loans, (y) on the date of such prepayment in the case of Swingline Loans
and (z) at least three Business Days prior to the date of such prepayment in the
case of Eurodollar Loans, which notice shall, except in the case of Swingline
Loans, promptly be transmitted by the Agent to each of the Banks; (ii) each
prepayment shall be in an aggregate principal amount of at least $500,000 (or
$250,000 in the case of Swingline Loans); provided, that no partial prepayment
--------
of Euro-
-22-
dollar Loans made pursuant to a Borrowing shall reduce the aggregate principal
amount of the Loans outstanding pursuant to such Borrowing to an amount less
than the Minimum Borrowing Amount applicable thereto; (iii) Eurodollar Loans may
only be prepaid pursuant to this Section 4.01(a) on the last day of an Interest
Period applicable thereto, unless the Borrower pays all amounts owing under
Section 1.11 as a result of repaying such Eurodollar Loans on a day other than
the last day of the Interest Period applicable thereto; (iv) each prepayment in
respect of any Loans made pursuant to a Borrowing shall be applied pro rata
--- ----
among such Loans; provided, that at the Borrower's election in connection with
--------
any prepayment of Revolving Loans pursuant to this Section 4.01(a), such
prepayment shall not be applied to any Revolving Loans of a Defaulting Bank at
any time when the aggregate amount of Revolving Loans of any Non-Defaulting Bank
exceeds such Non-Defaulting Bank's RL Percentage of all Revolving Loans then
outstanding; (v) each prepayment of Term Loans pursuant to this Section 4.01(a)
must consist of a prepayment of A Term Loans (in an amount equal to the A TL
Percentage of such prepayment) and B Term Loans (in an amount equal to the B TL
Percentage of such prepayment); (vi) each prepayment of A Term Loans pursuant to
this Section 4.01(a) shall reduce the then remaining Scheduled A Repayments on a
pro rata basis (based upon the then remaining principal amount of each such
--- ----
Scheduled A Repayment); and (vii) each prepayment of B Term Loans pursuant to
this Section 4.01(a) shall reduce the then remaining Scheduled B Repayments on a
pro rata basis (based upon the then remaining principal amount of each such
--- ----
Scheduled B Repayment).
(b) In the event of certain refusals by a Bank to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks as provided in Section
12.12(b), the Borrower shall have the right, upon five Business Days' prior
written notice to the Agent at its Notice Office (which notice the Agent shall
promptly transmit to each of the Banks) to repay all Loans, together with
accrued and unpaid interest, Fees and all other amounts owing to such Bank in
accordance with said Section 12.12(b) so long as (A) in the case of the
repayment of Revolving Loans of any RL Bank pursuant to this clause (b) the
Revolving Loan Commitment of such RL Bank is terminated concurrently with such
repayment pursuant to Section 3.02(b) (at which time Annex I shall be deemed
modified to reflect the changed Revolving Loan Commitments), and (B) in the case
of the repayment of Loans of any Bank the consents required by Section 12.12(b)
in connection with the repayment pursuant to this clause (b) shall have been
obtained.
4.02 Mandatory Prepayments.
---------------------
(A) Requirements:
------------
(a) If on any date the sum of (i) the aggregate outstanding
principal amount of Revolving Loans and Swingline Loans (after giving effect to
all other repayments thereof on such date) plus (ii) the Letter of Credit
Outstandings on such date exceeds the Total
-23-
Revolving Loan Commitment as then in effect, the Borrower shall repay on such
date the principal of Swingline Loans, and if no Swingline Loans are or remain
outstanding, Revolving Loans, in an aggregate amount equal to such excess. If,
after giving effect to the prepayment of all outstanding Swingline Loans and
Revolving Loans, the aggregate amount of Letter of Credit Outstandings exceeds
the Total Revolving Loan Commitment as then in effect, the Borrower agrees to
pay to the Agent an amount in cash and/or Cash Equivalents equal to such excess
(up to the aggregate amount of Letter of Credit Outstandings at such time) and
the Agent shall hold such payment as security for the obligations of the
Borrower hereunder pursuant to a cash collateral agreement to be entered into in
form and substance satisfactory to the Agent (which shall permit certain
investments in Cash Equivalents satisfactory to the Agent until the proceeds are
applied to the secured obligations).
(b) (i) The Borrower shall be required to repay the principal amount
of A Term Loans on each date set forth below in the amount set forth opposite
such date below (each such repayment, as the same may be reduced as provided in
Sections 4.01 and 4.02(B), a "Scheduled A Repayment"):
Scheduled A Repayment Date Amount
---------------------------------
the last Business Day in March, 1998 $1,500,000
the last Business Day in June, 1998 $1,500,000
the last Business Day in September, 1998 $1,500,000
the last Business Day in December, 1998 $1,500,000
the last Business Day in March, 1999 $3,125,000
the last Business Day in June, 1999 $3,125,000
the last Business Day in September, 1999 $3,125,000
the last Business Day in December, 1999 $3,125,000
the last Business Day in March, 2000 $3,750,000
the last Business Day in June, 2000 $3,750,000
the last Business Day in September, 2000 $3,750,000
the last Business Day in December, 2000 $3,750,000
the last Business Day in March, 2001 $5,000,000
the last Business Day in June, 2001 $5,000,000
the last Business Day in September, 2001 $5,000,000
the last Business Day in December, 2001 $5,000,000
the last Business Day in March, 2002 $7,250,000
A Term Loan Maturity Date $9,250,000
-24-
; provided that in the event the aggregate principal amount of A Term Loans
--------
incurred at or prior to the time that the Total A Term Loan Commitment is
terminated in accordance with Section 3.03(b)(i)(y) is less than $70,000,000, an
amount equal to such deficiency shall be applied to reduce the Scheduled A
Repayments pro rata based on the then remaining Scheduled A Repayments.
--- ----
(ii) The Borrower shall be required to repay the principal amount of B
Term Loans on each date set forth below in the amount set forth opposite such
date below (each such repayment, as the same may be reduced as provided in
Sections 4.01 and 4.02(B), a "Scheduled B Repayment"):
Scheduled B Repayment Date Amount
-------------------------- ------
the last Business Day in March, 1998 $ 337,500
the last Business Day in June, 1998 $ 337,500
the last Business Day in September, 1998 $ 337,500
the last Business Day in December, 1998 $ 337,500
the last Business Day in March, 1999 $ 337,500
the last Business Day in June, 1999 $ 337,500
the last Business Day in September, 1999 $ 337,500
the last Business Day in December, 1999 $ 337,500
the last Business Day in March, 2000 $ 337,500
the last Business Day in June, 2000 $ 337,500
the last Business Day in September, 2000 $ 337,500
the last Business Day in December, 2000 $ 337,500
the last Business Day in March, 2001 $ 337,500
the last Business Day in June, 2001 $ 337,500
the last Business Day in September, 2001 $ 337,500
the last Business Day in December, 2001 $ 337,500
the last Business Day in March, 2002 $ 337,500
the last Business Day in June, 2002 $ 337,500
the last Business Day in September, 2002 $ 8,412,500
the last Business Day in December, 2002 $ 8,412,500
the last Business Day in March, 2003 $ 8,750,000
the last Business Day in June, 2003 $ 8,750,000
the last Business Day in September, 2003 $ 8,750,000
the last Business Day in December, 2003 $ 8,750,000
-25-
the last Business Day in March, 2004 $10,000,000
the last Business Day in June, 2004 $10,000,000
the last Business Day in September, 2004 $10,000,000
the last Business Day in December, 2004 $10,000,000
the last Business Day in March, 2005 $17,875,000
B Term Loan Maturity Date $19,225,000
(c) On the Business Day after the date of receipt thereof by Holdings
and/or any of its Subsidiaries of Proceeds from any Asset Sale, an amount equal
to 100% of the Net Proceeds from such Asset Sale shall be applied as a mandatory
repayment of principal of the Term Loans (with the A TL Percentage of such
amount to be applied as a repayment of the A Term Loans and the B TL Percentage
of such amount to be applied as a repayment of the B Term Loans), in each case
subject to modification of such application as set forth in Section 4.02(C)),
provided that with respect to no more than $2,500,000 in the aggregate of such
--------
Proceeds in any fiscal year of the Borrower, the Net Proceeds therefrom shall
not be required to be so applied on such date to the extent that no Default or
Event of Default then exists and the Borrower delivers a certificate to the
Agent on or prior to such date stating that such Net Proceeds shall be used to
purchase assets used or to be used in the businesses referred to in Section
8.01(a) (including, without limitation (but only to the extent permitted by
Section 8.02), capital stock of a corporation engaged in any such business)
within 180 days following the date of such Asset Sale (which certificate shall
set forth the estimates of the proceeds to be so expended), provided, that (1)
--------
if all or any portion of such Net Proceeds not so applied to the repayment of
Term Loans are not so used (or contractually committed to be used) within such
180 day period, such remaining portion shall be applied on the last day of such
period as a mandatory repayment of principal of outstanding Term Loans as
provided above in this Section 4.02(A)(c) and (2) if all or any portion of such
Net Proceeds are not required to be applied on the 180th day referred to in
clause (1) above because such amount is contractually committed to be used and
subsequent to such date such contract is terminated or expires without such
portion being so used, then such remaining portion shall be applied on the date
of such termination or expiration as a mandatory repayment of principal of
outstanding Term Loans as provided in this Section 4.02(A)(c).
(d) On the date of the receipt thereof by Holdings and/or any of its
Subsidiaries, an amount equal to 100% of the cash proceeds (net of underwriting
discounts and commissions and other reasonable costs associated therewith) of
the sale or issuance of preferred or common equity of (or cash capital
contributions to) Holdings or any of its Subsidiaries (other than (x) issuances
of Holdings Common Stock (including as a result of the exercise of any options
with regard thereto) to management of Holdings and its Subsidiaries, and (y)
equity contributions to any Subsidiary of the Borrower made by the Borrower or
any other Subsidiary of the Borrower) shall be applied as a mandatory re-
-26-
payment of principal of the Term Loans (with the A TL Percentage of such amount
to be applied as a repayment of the A Term Loans and the B TL Percentage of such
amount to be applied as a repayment of the B Term Loans, in each case subject to
modification of such application as set forth in Section 4.02(C)); provided that
--------
(i) $10,000,000 of cash equity contributions in the aggregate from Xxxx Capital,
senior management of the Borrower, and/or their respective Affiliates shall not
be required to be applied as provided above in this Section 4.02(A)(d) so long
as such equity contributions are substantially contemporaneously contributed to
the capital of the Borrower as an equity contribution (the cash contributions
made pursuant to this clause (i), the "Excess Equity Proceeds"), and (ii) only
75% of such proceeds resulting from the initial registered public offering of
Holdings Common Stock shall be applied as provided above in this Section
4.02(A)(d).
(e) On the date of the receipt thereof by Holdings and/or any of its
Subsidiaries, an amount equal to 100% of the proceeds (net of underwriting
discounts and commissions and other reasonable costs associated therewith) of
the incurrence of Indebtedness by Holdings and/or any of its Subsidiaries (other
than Indebtedness permitted to be incurred by Section 8.04 as in effect on the
Initial Borrowing Date) shall be applied as a mandatory repayment of principal
of the Term Loans (with the A TL Percentage of such amount to be applied as a
repayment of the A Term Loans and the B TL Percentage of such amount to be
applied as a repayment of the B Term Loans, in each case subject to modification
of such application as set forth in Section 4.02(C)).
(f) On each Excess Cash Payment Date, an amount equal to 75% of
Excess Cash Flow of the Borrower and its Subsidiaries for the most recent Excess
Cash Flow Period ending prior to such Excess Cash Payment Date (or 50% in the
case of the Excess Cash Flow Period ending on December 31, 1997) shall be
applied as a mandatory repayment of principal of the Term Loans (with the A TL
Percentage of such amount to be applied as a repayment of the A Term Loans and
the B TL Percentage of such amount to be applied as a repayment of the B Term
Loans, in each case subject to modification of such application as set forth in
Section 4.02(C)).
(g) Within 10 days following each date on which Holdings or any of
its Subsidiaries receives any proceeds from any Recovery Event, an amount equal
to 100% of the proceeds of such Recovery Event (net of reasonable costs and
taxes incurred in connection with such Recovery Event) shall be applied as a
mandatory repayment of principal of the Term Loans (with the A TL Percentage of
such amount to be applied as a repayment of the A Term Loans and the B TL
Percentage of such amount to be applied as a repayment of the B Term Loans, in
each case, subject to modification of such application as set forth in Section
4.02(C)), provided that so long as no Default or Event of Default then exists
--------
and such proceeds do not exceed $20,000,000, such proceeds shall not be required
to be so applied on such date to the extent that the Borrower has delivered a
certificate to the Agent on or prior to such date stating that such proceeds
shall be used to replace or restore any properties or assets in respect of which
such proceeds were paid within 360 days following
-27-
the date of the receipt of such proceeds (which certificate shall set forth the
estimates of the proceeds to be so expended), and provided further, that (i) if
----------------
the amount of such proceeds exceeds $20,000,000, then the entire amount and not
just the portion in excess of $20,000,000 shall be applied as a mandatory
repayment of Term Loans as provided above in this Section 4.02(A)(g), (ii) if
all or any portion of such proceeds not required to be applied to the repayment
of Term Loans pursuant to the preceding proviso are not so used (or
contractually committed to be used) within 360 days after the date of the
receipt of such proceeds, such remaining portion shall be applied on the last
day of such period as a mandatory repayment of principal of the Term Loans as
provided in this Section 4.02(A)(g) and (iii) if all or any portion of such
proceeds are not required to be applied on the 360th day referred to in clause
(ii) above because such amount is contractually committed to be used and
subsequent to such date such contract is terminated or expires without such
portion being so used, then such remaining portion shall be applied on the date
of such termination or expiration as a mandatory repayment of principal of
outstanding Term Loans as provided in this Section 4.02(A)(g).
(h) On the date of the receipt thereof by Holdings and/or any of its
Subsidiaries of a Pension Plan Refund, an amount equal to 100% of such Pension
Plan Refund shall be applied as a mandatory repayment of principal of Term Loans
(with the A TL Percentage of such amount to be applied as a repayment of the A
Term Loans and the B TL Percentage of such amount to be applied as a repayment
of the B Term Loans, in each case subject to modification of such application as
set forth in Section 4.02(C)).
(i) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, (i) all then outstanding Swingline Loans shall be repaid in full
on the Swingline Expiry Date and (ii) all other then outstanding Loans of the
respective Facility shall be repaid in full on the earlier of (x) the date on
which a Change of Control Event occurs and (y) the Maturity Date for such
Facility.
(B) Application:
-----------
(a) Any amount required to be applied to A Term Loans and B Term
Loans, as the case may be, shall apply to the repayment of the outstanding
principal amount of A Term Loans and B Term Loans, respectively of the
respective Facility.
(b) All repayments of A Term Loans and B Term Loans shall be applied,
if required pursuant to Section 4.02(A)(c),(d),(e),(f),(g) or (h), to reduce the
then remaining Scheduled Repayments of the respective Facility pro rata based on
--- ----
the then remaining Scheduled Repayments of the respective Facility.
(c) With respect to each repayment of Loans required by this Section
4.02, the Borrower may designate the Types of Loans which are to be repaid and
the specific Borrowing(s) under the affected Facility pursuant to which made;
provided, that (i) Eurodollar
--------
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Loans made pursuant to a specific Facility may be designated for repayment
pursuant to this Section 4.02 only on the last day of an Interest Period
applicable thereto unless all Eurodollar Loans made pursuant to such Facility
with Interest Periods ending on such date of required prepayment and all Base
Rate Loans made pursuant to such Facility have been paid in full; (ii) if any
repayment of Eurodollar Loans made pursuant to a single Borrowing shall reduce
the outstanding Loans made pursuant to such Borrowing to an amount less than the
Minimum Borrowing Amount, such Borrowing shall be immediately converted into
Base Rate Loans; and (iii) each repayment of any Loans made pursuant to a
Borrowing shall be applied pro rata among such Loans; provided, that no
--- ---- --------
repayment pursuant to Section 4.02(A) (a) shall be applied to any Revolving
Loans of a Defaulting Bank at any time when the aggregate amount of the
Revolving Loans of any Non-Defaulting Bank exceeds such Non-Defaulting Bank's RL
Percentage of Revolving Loans then outstanding. In the absence of a designation
by the Borrower as described in the preceding sentence, the Agent shall, subject
to the above, make such designation in its sole discretion with a view, but no
obligation, to minimize breakage costs owing under Section 1.11.
Notwithstanding the foregoing provisions of this Section 4.02(B)(c), if at any
time the mandatory prepayment of Loans pursuant to Section 4.02(A)(c), (d), (e),
(g) or (h) would result, after giving effect to the procedures set forth above
in this clause (c), in the Borrower incurring breakage costs under Section 1.11
as a result of Eurodollar Loans being repaid other than on the last day of an
Interest Period applicable thereto (the "Affected Eurodollar Loans"), then the
Borrower may in its sole discretion initially deposit a portion (up to 100%) of
the amounts that otherwise would have been paid in respect of the Affected
Eurodollar Loans with the Agent to be held as security for the obligations of
the Borrower hereunder pursuant to a cash collateral agreement to be entered
into in form and substance satisfactory to the Agent, with such cash collateral
to be released from such cash collateral account upon the first occurrence (or
occurrences) thereafter of the last day of an Interest Period applicable to the
relevant Loans that are Eurodollar Loans (or such earlier date or dates as shall
be requested by the Borrower), to repay an aggregate principal amount of such
Loans equal to the Affected Eurodollar Loans not initially repaid pursuant to
this sentence.
(C) Waiver of Certain Mandatory
Repayments by B Banks
----------------------------
Notwithstanding anything to the contrary contained in this Section
4.02 or elsewhere in this Agreement (including, without limitation, in Section
12.12), the Borrower shall have the option, in its sole discretion, to give the
Banks with outstanding B Terms Loans (the "B Banks") the option to waive a
mandatory repayment of such Loans pursuant to Section 4.02(A)(c), (d), (e), (f),
(g) and/or (h) (each such repayment, a "Waivable Mandatory Repayment") upon the
terms and provisions set forth in this Section 4.02(C). If the Borrower elects
to exercise the option referred to in the preceding sentence, the Borrower shall
give to the Agent written notice of its intention to give the B Banks the right
to waive a Waivable Mandatory Repayment at least five Business Days prior to
such repayment, which notice the Agent shall promptly forward to all B Banks
(indicating in
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such notice the amount of such repayment to be applied to each such Bank's
outstanding Term Loans under such Facilities). The Borrower's offer to permit
such B Banks to waive any such Waivable Mandatory Repayment may apply to all or
part of such repayment, provided that any offer to waive part of such repayment
--------
must be made ratably to such B Banks on the basis of their outstanding B Term
Loans. In the event any such B Bank desires to waive such B Bank's right to
receive any such Waivable Mandatory Repayment in whole or in part, such B Bank
shall so advise the Agent no later than the close of business two Business Days
after the date of such notice from the Agent, which notice shall also include
the amount such B Bank desires to receive in respect of such repayment. If any
B Bank does not reply to the Agent within the two Business Days, it will be
deemed not to have waived any part of such repayment. If any B Bank does not
specify an amount it wishes to receive, it will be deemed to have accepted 100%
of the total payment. In the event that any such B Bank waives all or part of
such right to receive any such Waivable Mandatory Repayment, the Agent shall
apply 100% of the amount so waived by such B Bank to the A Term Loans in
accordance with Section 4.02(B).
4.03 Method and Place of Payment. Except as otherwise specifically
---------------------------
provided herein, all payments under this Agreement shall be made to the Agent
for the ratable account of the Banks entitled thereto, not later than 12:00 Noon
(New York time) on the date when due and shall be made in immediately available
funds and in U.S. Dollars at the Payment Office, it being understood that
written, telex or facsimile transmission notice by the Borrower to the Agent to
make a payment from the funds in the Borrower's account at the Payment Office
shall constitute the making of such payment to the extent of such funds held in
such account. Any payments under this Agreement which are made later than 12:00
Noon (New York time) shall be deemed to have been made on the next succeeding
Business Day. Whenever any payment to be made hereunder shall be stated to be
due on a day which is not a Business Day, the due date thereof shall be extended
to the next succeeding Business Day and, with respect to payments of principal,
interest shall be payable during such extension at the applicable rate in effect
immediately prior to such extension.
4.04 Net Payments. (a) All payments made by the Borrower hereunder
------------
or under any Note will be made without setoff, counterclaim or other defense.
Except as provided in Section 4.04(b), all such payments will be made free and
clear of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments (but
excluding, except as provided in the second succeeding sentence, any tax imposed
on or measured by the net income or net profits of a Bank pursuant to the laws
of the jurisdiction in which it is organized or the jurisdiction in which the
principal office or applicable lending office of such Bank is located or any
subdivision thereof or therein) and all interest, penalties or similar
liabilities with respect thereto (all such non-excluded taxes, levies, imposts,
duties, fees, assessments or other charges being referred to collectively as
"Taxes"). If any Taxes are so levied or imposed, the Borrower agrees to pay the
-30-
full amount of such Taxes, and such additional amounts as may be necessary so
that every payment of all amounts due under this Agreement or under any Note,
after withholding or deduction for or on account of any Taxes, will not be less
than the amount provided for herein or in such Note. If any amounts are payable
in respect of Taxes pursuant to the preceding sentence, the Borrower agrees to
reimburse each Bank, upon the written request of such Bank, for taxes imposed on
or measured by the net income or net profits of such Bank pursuant to the laws
of the jurisdiction in which the principal office or applicable lending office
of such Bank is located or under the laws of any political subdivision or taxing
authority of any such jurisdiction in which the principal office or applicable
lending office of such Bank is located and for any withholding of taxes as such
Bank shall determine are payable by, or withheld from, such Bank in respect of
such amounts so paid to or on behalf of such Bank pursuant to the preceding
sentence and in respect of any amounts paid to or on behalf of such Bank
pursuant to this sentence. The Borrower will furnish to the Agent within 45
days after the date the payment of any Taxes is due pursuant to applicable law
certified copies of tax receipts evidencing such payment by the Borrower. The
Borrower agrees to indemnify and hold harmless each Bank, and reimburse such
Bank upon its written request, for the amount of any Taxes so levied or imposed
and paid by such Bank.
(b) Each Bank that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) agrees to deliver to the Borrower
and the Agent on or prior to the Effective Date, or in the case of a Bank that
is an assignee or transferee of an interest under this Agreement pursuant to
Section 1.13 or 12.04 (unless the respective Bank was already a Bank hereunder
immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Bank, (i) two accurate and complete original
signed copies of Internal Revenue Service Form 4224 or 1001 (or successor forms)
certifying to such Bank's entitlement to a complete exemption from United States
withholding tax with respect to payments to be made under this Agreement and
under any Note, or (ii) if the Bank is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue
Service Form 1001 or 4224 pursuant to clause (i) above, (x) a certificate
substantially in the form of Exhibit C (any such certificate, a "Section
4.04(b)(ii) Certificate") and (y) two accurate and complete original signed
copies of Internal Revenue Service Form W-8 (or successor form) certifying to
such Bank's entitlement to a complete exemption from United States withholding
tax with respect to payments of interest to be made under this Agreement and
under any Note. In addition, each Bank agrees that from time to time after the
Effective Date, when a lapse in time or change in circumstances renders the
previous certification obsolete or inaccurate in any material respect, it will
deliver to the Borrower and the Agent two new accurate and complete original
signed copies of Internal Revenue Service Form 4224 or 1001, or Form W-8 and a
Section 4.04(b)(ii) Certificate, as the case may be, and such other forms as may
be required in order to confirm or establish the entitlement of such Bank to a
continued exemption from or reduction in United States withholding tax with
respect to payments under this Agreement and any Note, or it shall immediately
notify the Borrower and the Agent of its inability to deliver any such Form or
Certificate, in which case such Bank shall not be
-31-
required to deliver any such Form or Certificate pursuant to this Section
4.04(b). Notwithstanding anything to the contrary contained in Section 4.04(a),
but subject to Section 12.04(b) and the immediately succeeding sentence, (x) the
Borrower shall be entitled, to the extent it is required to do so by law, to
deduct or withhold income or similar taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from interest,
fees or other amounts payable hereunder for the account of any Bank which is not
a United States person (as such term is defined in Section 7701(a)(30) of the
Code) for U.S. Federal income tax purposes to the extent that such Bank has not
provided to the Borrower U.S. Internal Revenue Service Forms that establish a
complete exemption from such deduction or withholding and (y) the Borrower shall
not be obligated pursuant to Section 4.04(a) hereof to gross-up payments to be
made to a Bank in respect of income or similar taxes imposed by the United
States if (I) such Bank has not provided to the Borrower the Internal Revenue
Service Forms required to be provided to the Borrower pursuant to this Section
4.04(b) or (II) in the case of a payment, other than interest, to a Bank
described in clause (ii) above, to the extent that such Forms do not establish a
complete exemption from withholding of such taxes. Notwithstanding anything to
the contrary contained in the preceding sentence or elsewhere in this Section
4.04 and except as set forth in Section 12.04(b), the Borrower agrees to pay
additional amounts and to indemnify each Bank in the manner set forth in Section
4.04(a) (without regard to the identity of the jurisdiction requiring the
deduction or withholding) in respect of any amounts deducted or withheld by it
as described in the immediately preceding sentence as a result of any changes
after the Effective Date in any applicable law, treaty, governmental rule,
regulation, guideline or order, or in the interpretation thereof, relating to
the deducting or withholding of income or similar Taxes.
SECTION 5. Conditions Precedent.
--------------------
5.01 Conditions Precedent to Loans on the Initial Borrowing Date.
-----------------------------------------------------------
The obligation of each Bank to make each Loan to the Borrower hereunder, and the
obligation of any Letter of Credit Issuer to issue each Letter of Credit
hereunder, on the Initial Borrowing Date is subject to the satisfaction of the
following conditions:
(a) Execution of Agreement; Notes. On or prior to the Initial
-----------------------------
Borrowing Date, (i) the Effective Date shall have occurred and (ii) there shall
have been delivered to the Agent for the account of each Bank the appropriate A
Term Note, B Term Note and Revolving Note, if any, and to BTCo the Swingline
Note, in each case executed by the Borrower and in the amount, maturity and as
otherwise provided herein.
(b) Officer's Certificate. On the Initial Borrowing Date, the Agent
---------------------
shall have received a certificate dated such date signed by an appropriate
officer of the Borrower stating that all of the applicable conditions set forth
in Sections 5.01(e), (f), (h) and (j) and 5.02(a) exist as of such date.
-32-
(c) Opinions of Counsel. On the Initial Borrowing Date, the Agent
-------------------
shall have received opinions, addressed to the Agent and each of the Banks and
dated the Initial Borrowing Date, from (i) Jaffe, Raitt, Heuer & Xxxxx, counsel
to the Credit Parties, which opinion shall cover the matters contained in
Exhibit D-1 and such other matters incident to the transactions contemplated
herein as the Agent may reasonably request, (ii) Xxxxxxxx & Xxxxx, counsel to
the Credit Parties, which opinion shall cover the matters contained in Exhibit
D-2 and such other matters incident to the transactions contemplated herein as
the Agent may reasonably request and (iii) local counsel to the Credit Parties
reasonably satisfactory to the Agent, which opinions shall cover such matters
incident to the transactions contemplated herein and in the other Credit
Documents as the Agent may reasonably request and shall be in form and substance
reasonably satisfactory to the Agent.
(d) Corporate Proceedings. (i) On the Initial Borrowing Date, the
---------------------
Agent shall have received from each Credit Party a certificate, dated the
Initial Borrowing Date, signed by the chairman, a vice chairman, the president,
chief financial officer or any vice-president of such Credit Party, and attested
to by the secretary or any assistant secretary of such Credit Party, in the form
of Exhibit E with appropriate insertions, together with copies of the
Certificate of Incorporation and By-Laws of such Credit Party and the
resolutions of such Credit Party referred to in such certificate and all of the
foregoing (including each such Certificate of Incorporation and By-Laws) shall
be satisfactory to the Agent.
(ii) On the Initial Borrowing Date, all corporate and legal
proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement and the other Documents shall
be reasonably satisfactory in form and substance to the Agent, and the
Agent shall have received all information and copies of all certificates,
documents and papers, including good standing certificates, bring-down
certificates and any other records of corporate proceedings and
governmental approvals, if any, which the Agent reasonably may have
requested in connection therewith, such documents and papers, where
appropriate, to be certified by proper corporate or governmental
authorities.
(iii) On the Initial Borrowing Date, the ownership and capital
structure (including, without limitation, the terms of any capital stock,
options, warrants or other securities issued by Holdings or any of its
Subsidiaries) and management of Holdings and its Subsidiaries shall be in
form and substance satisfactory to the Agent and the Required Banks.
(e) Adverse Change, etc. On or prior to the Initial Borrowing Date,
--------------------
nothing shall have occurred since December 31, 1996 (and neither the Banks nor
the Agent shall have become aware of any facts or conditions not previously
known) which the Required Banks or the Agent shall determine (a) has, or could
reasonably be expected to have, a material adverse effect on the rights or
remedies of the Banks or the Agent, or on
-33-
the ability of any Credit Party to perform its obligations to them hereunder or
under any other Credit Document or (b) has, or could reasonably be expected to
have, a Material Adverse Effect.
(f) Litigation. On the Initial Borrowing Date, there shall be no
----------
actions, suits or proceedings pending or threatened (a) with respect to this
Agreement or any other Document or (b) which the Agent or the Required Banks
shall determine could reasonably be expected to (i) have a Material Adverse
Effect or (ii) have a material adverse effect on the Transaction, the rights or
remedies of the Banks or the Agent hereunder or under any other Credit Document
or on the ability of any Credit Party to perform its respective obligations to
the Banks or the Agent hereunder or under any other Credit Document.
(g) Payment of Fees. On the Initial Borrowing Date, all costs, fees
---------------
and expenses, and all other compensation contemplated by this Agreement, due to
the Agent or the Banks (including, without limitation, legal fees and expenses)
shall have been paid to the extent due.
(h) Consummation of Certain Aspects of the Transaction. (i) On the
--------------------------------------------------
Initial Borrowing Date, (x) the Borrower shall have received gross cash proceeds
of at least $100,000,000 from the issuance of Senior Subordinated Notes (it
being understood that such cash proceeds shall include all amounts directly
applied to pay underwriting and placement commissions and discounts and related
fees) and (y) the Borrower shall have utilized the full amount of the net cash
proceeds from such issuance to make payments owing in connection with the
Transaction (including dividending to Holdings an amount equal to the
outstanding Holdings Senior Subordinated Debt and Holdings Junior Subordinated
Debt plus accrued interest thereon and prepayment penalties related thereto)
prior to utilizing any proceeds of the Term Loans for such purpose.
(ii) On the Initial Borrowing Date, Holdings and the Borrower shall
have repurchased, retired or redeemed all of the outstanding Existing
Subordinated Debt for cash, in accordance with its terms, or on such other
terms and conditions as may be satisfactory to the Agent and the Required
Banks, and all securities and note purchase agreements, purchase or sale
agreements or other agreements pursuant to which the Existing Subordinated
Debt was issued and all guaranties and security documents with respect
thereto shall have been terminated and be of no further force or effect.
(iii) On the Initial Borrowing Date, the total commitments in respect
of the Indebtedness to be Refinanced shall have been terminated, and all
loans and notes with respect thereto shall have been repaid in full,
together with interest thereon and fees payable in connection therewith,
all letters of credit issued thereunder shall have been terminated (or
incorporated hereunder as Existing Letters of Credit) and all other amounts
(including premiums) owing pursuant to the
-34-
Indebtedness to be Refinanced shall have been repaid in full and all
documents in respect of the Indebtedness to be Refinanced and all
guarantees with respect thereto shall have been terminated and be of no
further force and effect.
(iv) On the Initial Borrowing Date, the creditors in respect of the
Indebtedness to be Refinanced shall have terminated and released all
security interests and Liens on the assets owned by Holdings and its
Subsidiaries. The Agent shall have received such releases of security
interests in and Liens on the assets owned by Holdings and its Subsidiaries
as may have been requested by the Agent, which releases shall be in form
and substance reasonably satisfactory to the Agent. Without limiting the
foregoing, there shall have been delivered (i) proper termination
statements (Form UCC-3 or the appropriate equivalent) for filing under the
UCC of each jurisdiction where a financing statement (Form UCC-1 or the
appropriate equivalent) was filed with respect to Holdings or any of its
Subsidiaries in connection with the security interests created with respect
to the Indebtedness to be Refinanced and the documentation related thereto,
(ii) termination or reassignment of any security interest in, or Lien on,
any patents, trademarks, copyrights, or similar interests of Holdings or
any of its Subsidiaries on which filings have been made, (iii) terminations
of all mortgages, leasehold mortgages, deeds of trust and leasehold deeds
of trust created with respect to property of Holdings or any of its
Subsidiaries, in each case, to secure the obligations in respect of the
Indebtedness to be Refinanced, all of which shall be in form and substance
reasonably satisfactory to the Agent, and (iv) all collateral owned by
Holdings or any of its Subsidiaries in the possession of any of the
creditors in respect of the Indebtedness to be Refinanced or any collateral
agent or trustee under any related security document shall have been
returned to Holdings or such Subsidiary.
(v) On or prior to the Initial Borrowing Date, there shall have been
delivered to the Banks true and correct copies of all Documents entered
into in connection with the Transaction (including, without limitation, the
Refinancing Documents and the Senior Subordinated Notes Documents), and all
of the terms and conditions of such Documents (including, without
limitation, with respect to the Senior Subordinated Notes Documents,
amortization, maturities, interest rates, covenants, defaults, remedies,
sinking fund provisions, and subordination provisions), as well as the
structure of the Transaction, shall be in form and substance satisfactory
to the Agent and the Required Banks.
(vi) All conditions precedent to the consummation of the Transaction
as set forth in the documentation related thereto shall have been satisfied
(except as otherwise provided in this Section 5.01(h).
(i) Pro Forma Balance Sheets. On or prior to the Initial Borrowing
------------------------
Date, there shall have been delivered to the Agent, an unaudited pro forma
--- -----
consolidated
-35-
balance sheet of each of Holdings and its Subsidiaries and the Borrower and its
Subsidiaries after giving effect to the Transaction and prepared in accordance
with GAAP, together with a related funds flow statement, which pro forma balance
--- -----
sheets and funds flow statement shall be reasonably satisfactory in form and
substance to the Agent and the Required Banks.
(j) Approvals. On or prior to the Initial Borrowing Date, all
---------
necessary governmental (domestic and foreign) and third party approvals in
connection with the Transaction, the transactions contemplated by the Documents
and otherwise referred to herein or therein shall have been obtained and remain
in effect, and all applicable waiting periods shall have expired without any
action being taken by any competent authority which restrains, prevents or
imposes materially adverse conditions upon the consummation of the Transaction,
the transactions contemplated by the Documents and otherwise referred to herein
or therein. Additionally, there shall not exist any judgment, order, injunction
or other restraint issued or filed or a hearing seeking injunctive relief or
other restraint pending or notified prohibiting or imposing materially adverse
conditions upon the consummation of the Transaction or the making of Loans or
the issuance of Letters of Credit.
(k) Pledge Agreement. On the Initial Borrowing Date, each Credit
----------------
Party shall have duly authorized, executed and delivered a Pledge Agreement in
the form of Exhibit F, together with such changes (or with such other documents)
as may be requested by the Collateral Agent in connection with local law (as
modified, amended or supplemented from time to time in accordance with the terms
thereof and hereof, the "Pledge Agreement") and shall have delivered to the
Collateral Agent, as pledgee thereunder, all of the Pledged Securities referred
to therein, endorsed in blank in the case of promissory notes or accompanied by
executed and undated stock powers in the case of capital stock, and the Pledge
Agreement and such other documents shall be in full force and effect.
(l) Security Agreement. On the Initial Borrowing Date, each Credit
------------------
Party shall have duly authorized, executed and delivered a Security Agreement in
the form of Exhibit G, together with such changes (or with such other documents)
as may be requested by the Collateral Agent in connection with local law (as
modified, amended or supplemented from time to time in accordance with the terms
thereof and hereof, the "Security Agreement") covering all of the Security
Agreement Collateral, together with:
(A) executed copies of Financing Statements (Form UCC-1 and/or UCC-3)
or appropriate local equivalent in appropriate form for filing under the
UCC or appropriate local equivalent of each jurisdiction as may be
necessary to perfect the security interests purported to be created by the
Security Agreement;
(B) certified copies of Requests for Information or Copies (Form UCC-
11), or equivalent reports, each of a recent date listing all effective
financing statements that name Holdings, the Borrower or any of their
respective Subsidiaries or a division or operating unit of any such Person,
as debtor, and that are filed in the
-36-
jurisdictions referred to in clause (A) above, together with copies of such
financing statements (none of which shall cover the Collateral except (x)
those with respect to which appropriate termination statements executed by
the secured lender thereunder have been delivered to the Agent and (y) to
the extent evidencing Permitted Liens);
(C) evidence of the completion of all other recordings and filings
of, or with respect to, the Security Agreement as may be necessary or, in
the opinion of the Collateral Agent, desirable to perfect the security
interests intended to be created by the Security Agreement (it being
understood and agreed that UCC financing statements and termination
statements and assignments of security interests in intellectual property
shall be filed in the appropriate governmental office within three Business
Days after the Initial Borrowing Date); and
(D) evidence that all other actions necessary or, in the reasonable
opinion of the Collateral Agent, desirable to perfect the security
interests purported to be created by the Security Agreement have been
taken;
and the Security Agreement and such other documents shall be in full force and
effect.
(m) Mortgages; Title Insurance; Surveys, etc. (i) On the Initial
-----------------------------------------
Borrowing Date, the Collateral Agent shall have received fully executed
counterparts of deeds of trust, mortgages and similar documents in each case in
form and substance satisfactory to the Collateral Agent (as amended, modified or
supplemented from time to time in accordance with the terms hereof and thereof,
each a "Mortgage" and collectively, the "Mortgages") with respect to each of the
Mortgaged Properties located in the United States, and arrangements reasonably
satisfactory to the Collateral Agent shall be in place to provide that
counterparts of such Mortgages shall be recorded on the Initial Borrowing Date
in all places to the extent necessary or desirable, in the judgment of the
Collateral Agent, effectively to create a valid and enforceable first priority
Lien, subject only to Permitted Encumbrances, on each such Mortgaged Property in
favor of the Collateral Agent (or such other trustee as may be required or
desired under local law) for the benefit of the Secured Creditors.
(ii) On the Initial Borrowing Date, the Collateral Agent shall have
received mortgagee title insurance policies (or binding commitments to
issue such title insurance policies) issued by title insurers reasonably
satisfactory to the Collateral Agent (the "Mortgage Policies") in amounts
reasonably satisfactory to the Collateral Agent and assuring the Collateral
Agent that the Mortgages are valid and enforceable first priority mortgage
Liens on the respective Mortgaged Properties, free and clear of all defects
and encumbrances except Permitted Encumbrances. Such Mortgage Policies
shall be in form and substance reasonably satisfactory to the Collateral
Agent and (a) shall include an endorsement for future advances under this
Agreement, the Notes and the Mortgages and for any other matter that the
Col-
-37-
lateral Agent in its discretion may reasonably request (to the extent
available in the respective jurisdiction of each Mortgaged Property), (b)
shall not include an exception for mechanics' liens, (c) shall provide
extended coverage over general exceptions, and (d) shall provide for
affirmative insurance and such reinsurance (including direct access
agreements) as the Collateral Agent in its discretion may reasonably
request.
(iii) On the Initial Borrowing Date, the Collateral Agent shall have
also received (a) surveys in form and substance reasonably satisfactory to
the Collateral Agent of each Mortgaged Property designated as "owned" on
Annex III hereto, dated a recent date reasonably acceptable to the
Collateral Agent, certified in a manner reasonably satisfactory to the
Collateral Agent by a licensed professional surveyor reasonably
satisfactory to the Collateral Agent or in lieu of such surveys, an
affidavit from the Borrower to the effect that there have been no changes
in the Mortgaged Properties since the day of each survey previously
delivered to the Collateral Agent in 1995, such affidavit to be
satisfactory to the Collateral Agent and the title insurer providing the
Mortgage Policies, or (b) an affidavit of no change in survey for each
Mortgaged Property sufficient to issue a Mortgage Policy with respect to
such Mortgaged Property with full extended coverage endorsement over
matters that would be disclosed by a survey.
(n) Plans; Collective Bargaining Agreements; Existing Indebtedness
--------------------------------------------------------------
Agreements; Shareholders' Agreements; Management Agreements; Employment
-----------------------------------------------------------------------
Agreements; Non-Compete Agreements; Tax Allocation Agreements; Material
-----------------------------------------------------------------------
Contracts. On or prior to the Initial Borrowing Date, there shall have been
---------
delivered to the Banks copies, certified as true and correct by an appropriate
officer of the Borrower, of:
(i) all "employee benefit plans" (as defined in Section 3(3) of
ERISA); all pension, profit-sharing, stock option, employee stock purchase
or any other plan or arrangement providing for deferred or other
compensation; any severance agreements, programs, policies or arrangements
maintained for the benefit of current or former employees of Holdings or
any of its Subsidiaries (collectively, the "Employee Benefit Plans") and
the most recent annual reports on Internal Revenue Service Form 5500 for
any Employee Benefit Plans required to file such reports, and all
attachments thereto, which shall include, without limitation, for each Plan
(i) that is a "single-employer plan" (as defined in Section 4001(a)(15) of
ERISA), the most recently completed actuarial valuation prepared therefor
by such Plan's regular enrolled actuary and the Schedule B, "Actuarial
Information," to Form 5500 most recently filed with the Internal Revenue
Service and (ii) for each Plan that is a "multiemployer plan" (as defined
in Section 4001(a)(3) of ERISA), each of the documents referred to in
clause (i) either in the possession of Holdings, any Subsidiary of Holdings
or any ERISA Affiliate or reasonably available thereto from the sponsor or
trustees of such Plan;
-38-
(ii) any collective bargaining agreements or any other similar
agreement or arrangement covering the employees of Holdings or any of its
Subsidiaries (collectively, the "Collective Bargaining Agreements");
(iii) all agreements evidencing or relating to the Existing
Indebtedness that are to remain in effect after giving effect to the
consummation of the Transaction (collectively, the "Existing Indebtedness
Agreements");
(iv) (A) the Stockholders' Agreement, (B) the Registration
Rights Agreement and (C) all other agreements entered into by Holdings or
any of its Subsidiaries governing the terms and relative rights of its
capital stock, and any agreements entered into by shareholders relating to
any such entity with respect to their capital stock, in each case that are
to remain in effect after giving effect to the consummation of the
Transaction (collectively, the "Shareholders' Agreements");
(v) (A) the Consulting Agreement and (B) any other material
agreements (or the forms thereof) with members of, or with respect to, the
management of Holdings or any of its Subsidiaries that are to remain in
effect after giving effect to the consummation of the Transaction,
(collectively, the "Management Agreements");
(vi) any employment agreements entered into by Holdings or any
of its Subsidiaries (collectively, the "Employment Agreements");
(vii) any non-compete agreement entered into by Holdings or any
of its Subsidiaries (collectively, the "Non-Compete Agreements");
(viii) (A) the Holdings Tax Allocation Agreement and (B) any other
tax sharing or tax allocation agreements entered into by Holdings or any of
its Subsidiaries (collectively, the "Tax Allocation Agreements"); and
(ix) (A) the Holdings Services Agreement and (B) all other
material contracts and licenses of Holdings or any of its Subsidiaries
(including E.P. Plastics, Goodyear Composites and each of their
Subsidiaries) that are to remain in effect after giving effect to the
consummation of the Transaction (collectively, the "Material Contracts");
all of which Employee Benefit Plans, Collective Bargaining Agreements, Existing
Indebtedness Agreements, Shareholders' Agreements, Management Agreements,
Employment Agreements, Non-Compete Agreements, Tax Allocation Agreements and
Material Contracts shall be in form and substance reasonably satisfactory to the
Agent and shall be in full force and effect on the Initial Borrowing Date.
-39-
(o) Solvency Opinion; Environmental Analyses; Evidence of Insurance.
---------------------------------------------------------------
On the Initial Borrowing Date, the Agent shall have received:
(i) a solvency opinion from Valuation Research Corporation,
addressed to the Agent and each of the Banks and dated the Initial
Borrowing Date and supporting the conclusions, that, after giving effect to
the Transaction and the incurrence of all financings contemplated herein,
each of Holdings and the Borrower (each on a stand-alone basis) and each of
Holdings and its Subsidiaries and the Borrower and its Subsidiaries (each
on a consolidated basis) are not insolvent and will not be rendered
insolvent by the indebtedness incurred in connection herewith, will not be
left with unreasonably small capital with which to engage in their
respective businesses and will not have incurred debts beyond their ability
to pay such debts as they mature and become due;
(ii) Phase I and Phase II environmental assessments of the Real
Property of E.P. Plastics and Goodyear Composites acquired pursuant to the
Acquisitions, from Xxxxxxx Environmental Consultants, the results of which
shall be in form and substance satisfactory to the Agent and the Required
Banks; and
(iii) evidence of insurance complying with the requirements of
Section 7.03 for the business and properties of Holdings and its
Subsidiaries, in scope, form and substance reasonably satisfactory to the
Agent and the Required Banks and naming the Collateral Agent as an
additional insured, mortgagee and/or loss payee, and stating that such
insurance shall not be cancelled or revised without 30 days prior written
notice by the insurer to the Collateral Agent.
(p) Projections. On or prior to the Initial Borrowing Date, the Banks
-----------
shall have received the financial projections (the "Projections") set forth on
Annex IV hereto, for the ten fiscal years ended after the Initial Borrowing
Date.
(q) Existing Indebtedness. On the Initial Borrowing Date and after
---------------------
giving effect to the Transaction and the Loans incurred on the Initial Borrowing
Date, neither Holdings nor any of its Subsidiaries shall have any preferred
stock or Indebtedness outstanding except for the Loans, the Senior Subordinated
Notes, the Holdings Preferred Stock, the Voplex Canada Preferred Stock and the
Existing Indebtedness. On and as of the Initial Borrowing Date, all of the
Existing Indebtedness shall remain outstanding after giving effect to the
Transaction and the other transactions contemplated hereby without any default
or events of default existing thereunder or arising as a result of the
Transaction and the other transactions contemplated hereby (except to the extent
amended or waived by the parties thereto on terms and conditions satisfactory to
the Agent and the Required Banks), and there shall not be any amendments or
modifications to the Existing Indebtedness Agreements other than as requested or
approved by the Agent or the Required Banks (which approval may not be
unreasonably withheld). On and as of the Initial Borrowing Date, the
-40-
Agent and the Required Banks shall be satisfied with the amount of and the terms
and conditions of all Existing Indebtedness.
(r) Financial Statements. On or prior to the Initial Borrowing
--------------------
Date, the Agents shall have received unaudited financial statements for E.P.
Plastics and Goodyear Composites for the fiscal year ending December 31, 1996,
which shall be in form and substance satisfactory to the Agents and the Banks.
(s) Subsidiary Guaranty. On the Initial Borrowing Date, each
-------------------
Subsidiary Guarantor shall have duly authorized, executed and delivered a
Subsidiary Guaranty in the form of Exhibit H (as modified, amended or
supplemented from time to time in accordance with the terms hereof and thereof,
the "Subsidiary Guaranty"), and the Subsidiary Guaranty shall be in full force
and effect.
5.02 Conditions Precedent to all Credit Events. The obligation of
-----------------------------------------
each Bank to make each Loan to the Borrower hereunder (including, without
limitation, Loans to be made on the Initial Borrowing Date), and the obligation
of any Letter of Credit Issuer to issue each Letter of Credit hereunder
(including, without limitation, Letters of Credit to be issued on the Initial
Borrowing Date), is subject, at the time of each such Credit Event, to the
satisfaction of the following conditions:
(a) No Default; Representations and Warranties. At the time of each
------------------------------------------
Credit Event and also after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein or in the other Credit Documents in effect at such time shall
be true and correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of such
Credit Event, unless stated to relate to a specific earlier date, in which case
such representations and warranties shall be true and correct in all material
respects as of such earlier date.
(b) Notice of Borrowing; Letter of Credit Request. The Agent shall
---------------------------------------------
have received a Notice of Borrowing satisfying the requirements of Section 1.03
with respect to each incurrence of Loans, and the Agent and the respective
Letter of Credit Issuer shall have received a Letter of Credit Request
satisfying the requirements of Section 2.02 with respect to each issuance of a
Letter of Credit.
5.03 Conditions Precedent to A Term Loans. The obligation of each
------------------------------------
Bank to make each A Term Loan to the Borrower hereunder (including, without
limitation, A Term Loans, if any, to be made on the Initial Borrowing Date) is
subject, at the time of the incurrence of each such A Term Loan, to the
satisfaction of the following conditions:
-41-
(a) Acquisitions. (i) The Acquisition to be financed with the
------------
proceeds of such A Term Loans shall have been consummated (assuming the
application of the A Term Loans) in accordance with the respective Acquisition
Documents and all applicable laws, and each of the conditions precedent to the
consummation of such Acquisition (including, without limitation, the accuracy in
all material respects of the representations and warranties contained in the
respective Acquisition Agreement) shall have been satisfied and not waived
except with the consent of the Agent and the Required Banks to the satisfaction
of the Agent and the Required Banks; provided that (x) the proceeds of A Term
--------
Loans may only be used to finance the Acquisitions and related fees and
expenses, (y) in no event shall the aggregate principal amount of the A Term
Loans used to finance the Goodyear Composites Acquisition exceed $40,000,000,
and (z) in no event shall the aggregate principal amount of the A Term Loans
used to finance the E.P. Plastics Acquisition exceed $30,000,000.
(ii) On or prior to the date of each incurrence of A Term Loans,
there shall have been delivered to the Banks true and correct copies of the
respective Acquisition Documents, and all of the terms and conditions of
such Acquisition Documents shall be in form and substance satisfactory to
the Agent and the Required Banks.
The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by each Credit Party to each of the Banks that all
of the applicable conditions specified above in this Section 5 exist as of the
date of such Credit Event. All of the certificates, legal opinions and other
documents and papers referred to in this Section 5, unless otherwise specified,
shall be delivered to the Agent at its Notice Office for the account of each of
the Banks and, except for the Notes, in sufficient counterparts for each of the
Banks and shall be reasonably satisfactory in form and substance to the Agent
and the Required Banks.
SECTION 6. Representations, Warranties and Agreements. In order to
------------------------------------------
induce the Banks to enter into this Agreement and to make the Loans and issue
and/or participate in the Letters of Credit provided for herein, each of
Holdings and the Borrower makes the following representations, warranties and
agreements with the Banks in each case after giving effect to the Transaction,
all of which shall survive the execution and delivery of this Agreement, the
making of the Loans and the issuance of the Letters of Credit (with the
occurrence of each Credit Event being deemed to constitute a representation and
warranty that the matters specified in this Section 6 are true and correct in
all material respects on and as of the date of each such Credit Event, unless
stated to relate to a specific earlier date in which all representations and
warranties shall be true and correct in all material respects as of such earlier
date):
6.01 Corporate Status. Holdings and each of its Subsidiaries (i) is
----------------
a duly organized and validly existing corporation in good standing under the
laws of the jurisdic-
-42-
tion of its organization, (ii) has the corporate power and authority to own its
property and assets and to transact the business in which it is engaged and
presently proposes to engage and (iii) is duly qualified and is authorized to do
business and is in good standing in all jurisdictions where it is required to be
so qualified and where the failure to be so qualified would have a Material
Adverse Effect.
6.02 Corporate Power and Authority. Each Credit Party has the
-----------------------------
corporate power and authority to execute, deliver and carry out the terms and
provisions of the Documents to which it is a party and has taken all necessary
corporate action to authorize the execution, delivery and performance of the
Documents to which it is a party. Each Credit Party has duly executed and
delivered each Document to which it is a party and each such Document
constitutes the legal, valid and binding obligation of such Credit Party
enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws generally affecting creditors' rights
and by equitable principles (regardless of whether enforcement is sought in
equity or at law).
6.03 No Violation. Neither the execution, delivery or performance by
------------
any Credit Party of the Documents to which it is a party nor compliance by them
with the terms and provisions thereof, nor the consummation of the transactions
contemplated herein or therein, (i) will contravene any applicable provision of
any law, statute, rule or regulation, or any order, writ, injunction or decree
of any court or governmental instrumentality, (ii) will conflict or be
inconsistent with or result in any breach of, any of the terms, covenants,
conditions or provisions of, or constitute a default under, or (other than
pursuant to the Security Documents) result in the creation or imposition of (or
the obligation to create or impose) any Lien upon any of the property or assets
of Holdings or any of its Subsidiaries pursuant to the terms of any indenture,
mortgage, deed of trust, loan agreement, credit agreement or any other material
agreement or instrument to which Holdings or any of its Subsidiaries is a party
or by which it or any of its property or assets are bound or to which it may be
subject or (iii) will violate any provision of the Certificate of Incorporation
or By-Laws of Holdings or any of its Subsidiaries.
6.04 Litigation. There are no actions, suits or proceedings pending
----------
or, to the knowledge of Holdings or any of its Subsidiaries, threatened, with
respect to Holdings or any of its Subsidiaries (i) that are likely to have a
Material Adverse Effect or (ii) that could reasonably be expected to have a
material adverse effect on the rights or remedies of the Banks or on the ability
of any Credit Party to perform its respective obligations to the Banks hereunder
and under the other Credit Documents to which it is, or will be, a party.
Additionally, there does not exist any judgment, order or injunction prohibiting
or imposing material adverse conditions upon the occurrence of any Credit Event.
-43-
6.05 Use of Proceeds; Margin Regulations. (a) The proceeds of all
-----------------------------------
Term Loans incurred on the Initial Borrowing Date shall be utilized to finance
the Transaction and to pay fees and expenses incurred in connection therewith.
(b) The proceeds of Revolving Loans and Swingline Loans incurred on
and after the Initial Borrowing Date shall be utilized for the general corporate
and working capital purposes of the Borrower and its Subsidiaries; provided that
--------
no more than $2,500,000 of the proceeds of Revolving Loans and Swingline Loans
may be incurred on the Initial Borrowing Date and used to finance the
Transaction.
(c) Neither the making of any Loan hereunder, nor the use of the
proceeds thereof, will violate the provisions of Regulation G, T, U or X of the
Board of Governors of the Federal Reserve System and no part of the proceeds of
any Loan will be used to purchase or carry any Margin Stock or to extend credit
for the purpose of purchasing or carrying any Margin Stock.
6.06 Governmental Approvals. No order, consent, approval, license,
----------------------
authorization, or validation of, or filing, recording or registration with, or
exemption by, any foreign or domestic governmental or public body or authority,
or any subdivision thereof, is required to authorize or is required in
connection with (i) the execution, delivery and performance of any Document or
(ii) the legality, validity, binding effect or enforceability of any Document,
other than post-acquisition filings with the government of Korea in connection
with the E.P. Plastics Acquisition.
6.07 Investment Company Act. Neither Holdings nor any of its
----------------------
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
6.08 Public Utility Holding Company Act. Neither Holdings nor any of
----------------------------------
its Subsidiaries is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
6.09 True and Complete Disclosure. All factual information (taken as
----------------------------
a whole) heretofore or contemporaneously furnished by or on behalf of Holdings
or any of its Subsidiaries in writing to the Agent or any Bank (including,
without limitation, all factual information contained in the Documents and the
Confidential Memorandum dated June 1997, distributed to the Banks in connection
with this Agreement, except for projected and pro forma financial information
--- -----
included therein as to which the Borrower makes certain representations and
warranties in Sections 6.10(b) and (e)) for purposes of or in connection with
this Agreement or any transaction contemplated herein is, and all other such
factual information (taken as a whole) hereafter furnished by or on behalf of
any such Per-
-44-
sons in writing to the Agent or any Bank will be, true and accurate in all
material respects on the date as of which such information is dated or certified
and not incomplete by omitting to state any material fact necessary to make such
information (taken as a whole) not misleading at such time in light of the
circumstances under which such information was provided.
6.10 Financial Condition; Financial Statements. (a) On and as of
-----------------------------------------
the Initial Borrowing Date, on a pro forma basis after giving effect to the
--- -----
Transaction and to all Indebtedness incurred, and to be incurred (including,
without limitation, the Loans and the Senior Subordinated Notes), and Liens
created, and to be created, by each Credit Party in connection therewith, with
respect to each of Holdings and the Borrower (each on a stand-alone basis) and
each of Holdings and its Subsidiaries and of the Borrower and its Subsidiaries
(each on a consolidated basis), (x) the sum of the assets, at a fair valuation,
of each of Holdings and the Borrower (each on a stand-alone basis) and each of
Holdings and its Subsidiaries and of the Borrower and its Subsidiaries (each on
a consolidated basis), will exceed its debts, (y) it has not incurred nor
intended to, nor believes that it will, incur debts beyond its ability to pay
such debts as such debts mature and (z) it will have sufficient capital with
which to conduct its business. For purposes of this Section 6.10, "debt" means
any liability on a claim, and "claim" means (i) right to payment whether or not
such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured or (ii) right to an equitable remedy for breach of performance if
such breach gives rise to a payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured.
(b) (i) The pro forma (both immediately before and after giving
--- -----
effect to the Transaction, the related financing thereof (including the Loans,
the Senior Subordinated Notes) and the other transactions contemplated hereby
and thereby) consolidated balance sheets of each of Holdings and its
Subsidiaries and the Borrower and its Subsidiaries taken as a whole as at March
31, 1997 prepared on a basis consistent with the Projections and copies of which
have heretofore been delivered to each Bank, and (ii) the audited consolidated
balance sheet of the Borrower for the fiscal year ended in December, 1996, and
the unaudited consolidated balance sheet of the Borrower at March 31, 1997 and
the related combined statements of operations and cash flow of the Borrower for
the fiscal year or three-month period, as the case may be, ended as of said
dates, which annual financial statements have been examined by Deloitte & Touche
LLP, certified public accountants, who delivered an unqualified opinion with
respect thereto and copies of which have heretofore been delivered to each Bank,
present fairly in all material respects the financial position of the Borrower
and its Subsidiaries on a consolidated basis, at the dates of said statements
and the results of operations for the periods covered thereby (or, in the case
of the pro forma balance sheets, present a good faith estimate of the pro forma
--- ----- --- -----
financial condition of each of Holdings and its Subsidiaries and the Borrower
and its Subsidiaries on a consolidated basis (in each case both immediately
before and after giving effect to the
-45-
Transaction, and the related financing thereof (including the Loans and the
Senior Subordinated Notes), on a consolidated basis at the date thereof)). All
such financial statements have been prepared in accordance with GAAP
consistently applied except to the extent provided in the notes to said
financial statements and subject, in the case of the March 31, 1997 statements,
to normal year-end audit adjustments and the absence of footnotes.
(c) Since December 31, 1996, nothing has occurred that has had or
could reasonably be expected to have a Material Adverse Effect.
(d) Except as fully reflected in the financial statements described
in Section 6.10(b) and the Indebtedness incurred under this Agreement and the
Senior Subordinated Notes, there were as of the Initial Borrowing Date (and
after giving effect to any Loans made on such date), no liabilities or
obligations (excluding current obligations incurred in the ordinary course of
business) with respect to Holdings or any of its Subsidiaries of any nature
whatsoever (whether absolute, accrued, contingent or otherwise and whether or
not due), and neither Holdings nor the Borrower know of any basis for the
assertion against Holdings or any of its Subsidiaries of any such liability or
obligation which, either individually or in the aggregate, are or would be
reasonably likely to have, a Material Adverse Effect.
(e) The Projections are based on good faith estimates and assumptions
made by the management of the Borrower, and on the Initial Borrowing Date such
management believed that the Projections were reasonable and attainable, it
being recognized by the Banks, however, that projections as to future events are
not to be viewed as facts and that the actual results during the period or
periods covered by the Projections probably will differ from the projected
results and that the differences may be material. There is no fact known to
Holdings or any of its Subsidiaries which would have a Material Adverse Effect,
which has not been disclosed herein or in such other documents, certificates and
statements furnished to the Banks for use in connection with the transactions
contemplated hereby.
6.11 Security Interests. On and after the Initial Borrowing Date,
------------------
each of the Security Documents creates (or after the execution and delivery
thereof will create), as security for the Obligations, a valid and enforceable
perfected security interest in and Lien on all of the Collateral subject
thereto, superior to and prior to the rights of all third Persons and subject to
no other Liens (except that the Security Agreement Collateral, the Mortgaged
Properties and the collateral covered by the Additional Security Documents may
be subject to Permitted Liens relating thereto), in favor of the Collateral
Agent. No filings or recordings are required in order to perfect the security
interests created under any Security Document except for filings or recordings
required in connection with any such Security Document which shall have been
made as contemplated by Section 5.01(l) or (m) or on or prior to the execution
and delivery thereof as contemplated by Sections 7.11, 7.14 and 8.15.
-46-
6.12 Representations and Warranties in Other Documents. All
-------------------------------------------------
representations and warranties set forth in the other Documents were true and
correct in all material respects as of the time such representations and
warranties were made and shall be true and correct in all material respects as
of the Initial Borrowing Date as if such representations and warranties were
made on and as of such date, unless stated to relate to a specific earlier date,
in which case such representations and warranties shall be true and correct in
all material respects as of such earlier date.
6.13 Transaction. At the time of consummation thereof, the
-----------
Transaction shall have been consummated in accordance with the terms of the
respective Documents and all applicable laws. At the time of consummation
thereof, all consents and approvals of, and filings and registrations with, and
all other actions in respect of, all governmental agencies, authorities or
instrumentalities required in order to make or consummate the Transaction have
been obtained, given, filed or taken or waived and are or will be in full force
and effect (or effective judicial relief with respect thereto has been obtained)
except (i) for post-acquisition filings with the government of Korea in
connection with the E.P. Plastics Acquisition and (ii) where the failure to
obtain, give, file, or take would not reasonably be expected to have a Material
Adverse Effect. All applicable waiting periods with respect thereto have or,
prior to the time when required, will have, expired without, in all such cases,
any action being taken by any competent authority which restrains, prevents, or
imposes material adverse conditions upon the Transaction. Additionally, there
does not exist any judgment, order or injunction prohibiting or imposing
material adverse conditions upon the Transaction, or the performance by Holdings
and its Subsidiaries of their obligations under the Documents and all applicable
laws.
6.14 Special Purpose Corporation. Holdings has no significant assets
---------------------------
(other than the capital stock of the Borrower and immaterial assets used for the
performance of those activities permitted to be performed by Holdings pursuant
to Section 8.01(b)) or liabilities (other than under this Agreement and the
other Credit Documents and the other Documents to which it is a party, those
liabilities permitted to be incurred by Holdings pursuant to Section 8.01(b)
and, as and when issued from time to time in accordance with the terms of this
Agreement, Permitted Holdings PIK Securities and Shareholder Subordinated
Notes).
6.15 Compliance with ERISA. (a) Except as set forth on Annex XI,
---------------------
each Plan is in substantial compliance with ERISA and the Code; no Reportable
Event has occurred with respect to a Plan; no Plan is insolvent or in
reorganization; no Plan has an Unfunded Current Liability; no Plan has an
accumulated or waived funding deficiency, has permitted decreases in its funding
standard account or has applied for a waiver of the minimum funding standard or
an extension of any amortization period within the meaning of Section 412 of the
Code; all contributions required to be made with respect to a Plan and a Foreign
Pension Plan have been timely made; neither Holdings nor any Subsidiary of
Holdings nor any ERISA Affiliate has incurred any material liability to or on
account of
-47-
a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069,
4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971, 4975 or 4980 of the
Code or reasonably expects to incur any material liability (including any
indirect, contingent or secondary liability) under any of the foregoing Sections
with respect to any Plan (other than liabilities of any ERISA Affiliate which
could not, by operation of law or otherwise, become a liability of Holdings or
any of its Subsidiaries); no condition exists which presents a material risk to
Holdings or any Subsidiary of Holdings or any ERISA Affiliate of incurring a
liability to or on account of a Plan pursuant to the foregoing provisions of
ERISA and the Code; no proceedings have been instituted to terminate, or to
appoint a trustee to administer, any Plan; using actuarial assumptions and
computation methods consistent with subpart 1 of subtitle E of Title IV of
ERISA, the aggregate liabilities of Holdings and its Subsidiaries and its ERISA
Affiliates to all Plans which are multiemployer plans (as defined in Section
4001(a)(3) of ERISA) in the event of a complete withdrawal therefrom, as of the
close of the most recent fiscal year of each such Plan ended prior to the date
of the most recent Credit Event, would not result in a Material Adverse Effect;
no lien imposed under the Code or ERISA on the assets of Holdings or any
Subsidiary of Holdings or any ERISA Affiliate (other than Nortec Precision
Plastics, Inc.) exists or is likely to arise on account of any Plan; and
Holdings and its Subsidiaries do not maintain or contribute to any employee
welfare benefit plan (as defined in Section 3(1) of ERISA) which provides
benefits to retired employees or other former employees (other than as required
by Section 601 of ERISA) or any employee pension benefit plan (as defined in
Section 3(2) of ERISA) the obligations with respect to which could reasonably be
expected to have a Material Adverse Effect.
(b) Each Foreign Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all applicable
laws, statutes, rules, regulations and orders and has been maintained, where
required, in good standing with applicable regulatory authorities. Neither
Holdings nor any of its Subsidiaries has incurred any material obligation in
connection with the termination of or withdrawal from any Foreign Pension Plan.
The present value of the accrued benefit liabilities (whether or not vested)
under each Foreign Pension Plan which is funded, determined as of the end of the
most recently ended fiscal year of the Borrower on the basis of actuarial
assumptions, each of which is reasonable, did not exceed the current value of
the assets of such Foreign Pension Plan, and for each Foreign Pension Plan which
is not funded, the obligations of such Foreign Pension Plan are properly
accrued.
6.16 Capitalization. (a) On the Initial Borrowing Date and after
--------------
giving effect to the Transaction and the other transactions contemplated hereby,
the authorized capital stock of Holdings shall consist of (i) 200,000 shares of
Class A common stock, $0.01 par value per share (such authorized shares of Class
A common stock, together with any subsequently authorized shares of Class A
common stock of Holdings, the "Holdings Class A Common Stock"), of which 55,000
shares shall be issued and outstanding, (ii) 29,000 shares of Class L common
stock, $0.01 par value per share (such authorized shares
-48-
of Class L common stock, together with any subsequently authorized shares of
Class L common stock of Holdings, the "Holdings Class L Common Stock"), of which
25,000 shares shall be issued and outstanding, (iii) 45,000 shares of Class P
common stock, $0.01 par value per share (such authorized shares of Class P
common stock, together with any subsequently authorized shares of Class P common
stock of Holdings, the "Holdings Class P Common Stock"), of which 45,000 shares
shall be issued and outstanding and (iv) 1,000 shares of Holdings Preferred
Stock, no par value, of which 1,000 shares shall be issued and outstanding and
all of which shall be owned by Xxxxxxxx. All such outstanding shares have been
duly and validly issued, are fully paid and nonassessable. Holdings does not
have outstanding any securities convertible into or exchangeable for its capital
stock or outstanding any rights to subscribe for or to purchase, or any options
for the purchase of, or any agreement providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to,
its capital stock, except for options to purchase Holdings Common Stock granted
to Xxxxxxx X. Xxxxxxxx pursuant to the Option Agreement, warrants to purchase
Holdings Common Stock referred to in the Existing Credit Agreement granted in
connection with the Transaction (as defined in the Original Credit Agreement)
and warrants to purchase Holdings Common Stock granted in connection with the
Borrower Subordinated Debt and the Holdings Junior Subordinated Debt. Holdings
has approved (i) the issuance of additional Holdings Class A common stock and
Holdings Class L common stock and (ii) the grant of options for shares of
Holdings Class A common stock to certain key employees of the Borrower, to
consist of 661.16 shares of Class L common stock and 70,654.55 shares of Class A
common stock in the aggregate. Holdings has also approved the issuance of shares
of Holdings Class A common stock and Holdings Class L common stock to a former
officer and director of the Borrower.
(b) On the Initial Borrowing Date and after giving effect to the
Transaction and the other transactions contemplated hereby, the authorized
capital stock of the Borrower shall consist of 3,000 shares of common stock,
$0.01 par value per share, and all of the issued and outstanding shares are
owned by Holdings. All such outstanding shares have been duly and validly
issued, are fully paid and nonassessable. The Borrower does not have
outstanding any securities convertible into or exchangeable for its capital
stock or outstanding any rights to subscribe for or to purchase, or any options
for the purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to,
its capital stock.
6.17 Subsidiaries. On and as of the Initial Borrowing Date and after
------------
giving effect to the consummation of the Transaction, Holdings has no
Subsidiaries other than the Borrower and its Subsidiaries, and the Borrower has
no Subsidiaries other than those Subsidiaries listed on Annex V. Annex V
correctly sets forth, as of the Initial Borrowing Date and after giving effect
to the Transaction, the percentage ownership (direct and indirect) of Holdings
in each class of capital stock of each of its Subsidiaries and also identifies
the direct owner thereof.
-49-
6.18 Intellectual Property. Holdings and each of its Subsidiaries
---------------------
owns or holds a valid license to use all the material patents, trademarks,
permits, service marks, trade names, technology, know-how and formulas or other
rights with respect to the foregoing, free from restrictions that are materially
adverse to the use thereof, that are used in the operation of the business of
Holdings and each of its Subsidiaries as presently conducted.
6.19 Compliance with Statutes, etc. Holdings and each of its
------------------------------
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property (including compliance with all applicable Environmental Laws
with respect to any Real Property or governing its business and the requirements
of any permits issued under such Environmental Laws with respect to any such
Real Property or the operations of Holdings or any of its Subsidiaries), except
such non-compliance as is not likely to, individually or in the aggregate, have
a Material Adverse Effect.
6.20 Environmental Matters. (a) Each of Holdings and each of its
---------------------
Subsidiaries has complied with, and on the date of each Credit Event are in
compliance with, all applicable Environmental Laws and the requirements of any
permits issued under such Environmental Laws. There are no pending or, to the
best knowledge of Holdings and the Borrower, past or threatened Environmental
Claims against Holdings or any of its Subsidiaries or any Real Property owned or
operated by Holdings or any of its Subsidiaries. There are no facts,
circumstances, conditions or occurrences regarding the operations of Holdings or
any of its Subsidiaries or any Real Property owned or operated by Holdings or
any of its Subsidiaries or, to the best knowledge of Holdings and the Borrower,
on any property adjoining or in the vicinity of any such Real Property that
would reasonably be expected (i) to form the basis of an Environmental Claim
against Holdings or any of its Subsidiaries or any such Real Property or (ii) to
cause any such Real Property to be subject to any restrictions on the ownership,
occupancy, use or transferability of such Real Property by Holdings or any of
its Subsidiaries under any applicable Environmental Law.
(b) Hazardous Materials have not at any time been generated, used,
treated or stored on, or transported to or from, any Real Property owned or
operated by Holdings or any of its Subsidiaries where such generation, use,
treatment or storage has violated or would reasonably be expected to violate any
Environmental Law or to result in an Environmental Claim against Holdings or any
of its Subsidiaries. Hazardous Materials have not at any time been Released on
or from any Real Property owned or operated by Holdings or any of its
Subsidiaries. There are not now any underground storage tanks located on any
Real Property owned or operated by Holdings or any of its Subsidiaries.
(c) Notwithstanding anything to the contrary in this Section 6.20,
the representations made in this Section 6.20 shall only be untrue if the
aggregate effect of all conditions, failures, noncompliances, Environmental
Claims, Releases and presence of
-50-
underground storage tanks, in each case of the types described above, would
reasonably be expected to have a Material Adverse Effect.
6.21 Properties. All Real Property owned by Holdings or any of its
----------
Subsidiaries and all material Leaseholds leased by Holdings or any of its
Subsidiaries, in each case as of the Initial Borrowing Date and after giving
effect to the Transaction, and the nature of the interest therein, is correctly
set forth in Annex III. Holdings and each of its Subsidiaries has good and
marketable title to, or a validly subsisting leasehold interest in, all material
properties owned or leased by it, including all Real Property reflected in Annex
III or in the financial statements referred to in Section 6.10(b), free and
clear of all Liens, other than Permitted Liens.
6.22 Labor Relations. Neither Holdings nor any of its Subsidiaries
---------------
is engaged in any unfair labor practice that could reasonably be expected to
have a Material Adverse Effect. There is (i) no unfair labor practice complaint
pending against Holdings or any of its Subsidiaries or, to the best knowledge of
Holdings and the Borrower, threatened against any of them, before the National
Labor Relations Board, and no grievance or arbitration proceeding arising out of
or under any collective bargaining agreement is so pending against Holdings or
any of its Subsidiaries or, to the best knowledge of Holdings and the Borrower,
threatened against any of them, (ii) no strike, labor dispute, slowdown or
stoppage pending against Holdings or any of its Subsidiaries or, to the best
knowledge of Holdings and the Borrower, threatened against Holdings or any of
its Subsidiaries and (iii) to the best knowledge of Holdings and the Borrower,
no union representation question existing with respect to the employees of
Holdings or any of its Subsidiaries and, to the best knowledge of Holdings and
the Borrower, no union organizing activities are taking place, except (with
respect to any matter specified in clause (i), (ii) or (iii) above, either
individually or in the aggregate) such as is not reasonably likely to have a
Material Adverse Effect.
6.23 Tax Returns and Payments. All Federal, material state and other
------------------------
material returns, statements, forms and reports for taxes (the "Returns")
required to be filed by or with respect to the income, properties or operations
of Holdings and/or any of its Subsidiaries have been timely filed with the
appropriate taxing authority. The Returns accurately reflect all liability for
taxes of Holdings and its Subsidiaries for the periods covered thereby.
Holdings and each of its Subsidiaries have paid all taxes payable by them other
than immaterial taxes and other taxes which are not yet due and payable, and
other than those contested in good faith by appropriate proceedings and for
which adequate reserves have been established in accordance with GAAP. Except
as disclosed in the financial statements referred to in Section 6.10(b)
delivered to the Agent prior to the Initial Borrowing Date, there is no material
action, suit, proceeding, investigation, audit, or claim now pending or, to the
knowledge of Holdings and the Borrower, threatened by any authority regarding
any taxes relating to Holdings or any of its Subsidiaries. As of the Initial
Borrowing Date, neither Holdings nor any of its Subsidiaries has entered into an
agreement or waiver or been requested to enter into an agreement or waiver
extending any
-51-
statute of limitations relating to the payment or collection of taxes of
Holdings or any of its Subsidiaries, or is aware of any circumstances that would
cause the taxable years or other taxable periods of Holdings or any of its
Subsidiaries not to be subject to the normally applicable statute of
limitations. Neither Holdings nor any of its Subsidiaries has provided, with
respect to themselves or property held by them, any consent under Section 341 of
the Code. Neither Holdings nor any of its Subsidiaries has incurred, or will
incur, any material tax liability in connection with the Transaction and the
other transactions contemplated hereby.
6.24 Existing Indebtedness. Annex VII sets forth a true and complete
---------------------
list of all Indebtedness of Holdings and its Subsidiaries (other than
Indebtedness which in the aggregate does not exceed $500,000) as of the Initial
Borrowing Date and which is to remain outstanding after giving effect to the
Transaction and the incurrence of Loans on such date (excluding the Loans, the
Letters of Credit and the Senior Subordinated Notes) (all such Indebtedness set
forth on Annex VII, the "Existing Indebtedness"), in each case showing the
aggregate principal amount thereof and the name of the respective borrower and
any other entity which directly or indirectly guaranteed such debt.
6.25 Subordination. The subordination provisions contained in the
-------------
Senior Subordinated Notes Documents are enforceable against Borrower and the
holders thereof, and all Obligations are within the definition of "Senior Debt"
included in such subordination provisions.
SECTION 7. Affirmative Covenants. Holdings and the Borrower hereby
---------------------
covenant and agree that on the Effective Date and thereafter for so long as this
Agreement is in effect and until the Commitments have terminated, no Letters of
Credit or Notes are outstanding and the Loans and Unpaid Drawings, together with
interest, Fees and all other Obligations (other than any indemnities described
in Section 12.13 hereof which are not then due and payable) incurred hereunder,
are paid in full:
7.01 Information Covenants. Holdings will furnish to each Bank:
---------------------
(a) Monthly Reports. Within 30 days after the end of each fiscal
---------------
month of Holdings, the consolidated balance sheet of Holdings and its
Subsidiaries as at the end of such month and the related consolidated
statements of income and retained earnings and of cash flows for such month
and for the elapsed portion of the fiscal year ended with the last day of
such month, in each case setting forth comparative figures for the
corresponding month in the prior fiscal year, all of which shall be
certified by the chief financial officer or other Authorized Officer of
Holdings, subject to normal year-end audit adjustments and the absence of
footnotes.
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(b) Quarterly Financial Statements. Within 45 days after the close
------------------------------
of each quarterly accounting period in each fiscal year of Holdings, the
consolidated balance sheet of Holdings and its Subsidiaries as at the end
of such quarterly accounting period and the related consolidated statements
of income and retained earnings and of cash flows for such quarterly
accounting period and for the elapsed portion of the fiscal year ended with
the last day of such quarterly accounting period; all of which shall be in
reasonable detail and certified by the chief financial officer or other
Authorized Officer of Holdings that they fairly present the financial
condition of Holdings and its Subsidiaries as of the dates indicated and
the results of their operations and changes in their cash flows for the
periods indicated, subject to normal year-end audit adjustments and the
absence of footnotes.
(c) Annual Financial Statements. Within 90 days after the close of
---------------------------
each fiscal year of Holdings, the consolidated balance sheets of Holdings
and its Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income and retained earnings and of cash flows
for such fiscal year and setting forth comparative consolidated figures for
the preceding fiscal year and comparable budgeted figures for such fiscal
year and certified by Deloitte & Touche LLP or such other independent
certified public accountants of recognized national standing as shall be
reasonably acceptable to the Agent, in each case to the effect that such
statements fairly present in all material respects the financial condition
of Holdings and its Subsidiaries as of the dates indicated and the results
of their operations and changes, together with a certificate of such
accounting firm stating that in the course of its regular audit of the
business of Holdings and its Subsidiaries, which audit was conducted in
accordance with generally accepted auditing standards, no Default or Event
of Default which has occurred and is continuing has come to their attention
insofar as such Default or Event of Default relates to financial or
accounting matters or, if such a Default or Event of Default has come to
their attention a statement as to the nature thereof.
(d) Budgets, etc. Not more than 60 days after the commencement of
-------------
each fiscal year of Holdings, budgets of the Borrower and its Subsidiaries
in reasonable detail for each of the four fiscal quarters of such fiscal
year and for each of the four fiscal quarters of the immediately succeeding
fiscal year, in each case as customarily prepared by management for its
internal use setting forth, with appropriate discussion, the principal
assumptions upon which such budgets are based. Together with each delivery
of financial statements pursuant to Section 7.01(b) and (c), a comparison
of the current year to date financial results (other than in respect of the
balance sheets included therein) against the budgets required to be
submitted pursuant to this clause (d) shall be presented.
(e) Officer's Certificates. At the time of the delivery of the
----------------------
financial statements provided for in Section 7.01(b) and (c), a certificate
of the chief financial
-53-
officer or other Authorized Officer of Holdings to the effect that no
Default or Event of Default exists or, if any Default or Event of Default
does exist, specifying the nature and extent thereof, which certificate
shall set forth the calculations required to establish whether Holdings and
its Subsidiaries were in compliance with the provisions of Sections
8.02(r), 8.04, 8.06 and 8.08 through and including 8.12, as at the end of
such fiscal quarter or year, as the case may be. In addition, at the time
of the delivery of the financial statements provided for in Section
7.01(c), a certificate of the chief financial officer or other Authorized
Officer of Holdings setting forth (i) the amount of, and calculations
required to establish the amount of, Excess Cash Flow for the Excess Cash
Flow Period ending on the last day of the respective fiscal year and (ii)
the calculations required to establish whether Holdings and the Borrower
were in compliance with Section 4.02(A)(c) for the respective fiscal year.
(f) Notice of Default or Litigation. Promptly, and in any event
-------------------------------
within three Business Days (or 10 Business Days in the case of clause (y)
below) after any officer of Holdings or any of its Subsidiaries obtains
knowledge thereof, notice of (x) the occurrence of any event which
constitutes a Default or an Event of Default, which notice shall specify
the nature thereof, the period of existence thereof and what action
Holdings or the Borrower proposes to take with respect thereto and (y) the
commencement of, or threat of, or any significant development in, any
litigation or governmental proceeding pending against Holdings or any of
its Subsidiaries which is likely to have a Material Adverse Effect, or a
material adverse effect on the ability of any Credit Party to perform its
respective obligations hereunder or under any other Credit Document.
(g) Auditors' Reports. Promptly upon receipt thereof, a copy of each
-----------------
report or "management letter" submitted to Holdings or any of its
Subsidiaries by its independent accountants in connection with any annual,
interim or special audit made by them of the books of Holdings or any of
its Subsidiaries.
(h) Environmental Matters. Promptly after obtaining knowledge of any
---------------------
of the following, written notice of any of the following environmental
matters which could reasonably be expected to result in a remedial cost to
Holdings or any of its Subsidiaries in excess of $500,000:
(i) any pending or threatened material Environmental Claim
against Holdings or any of its Subsidiaries or any Real Property owned
or operated by Holdings or any of its Subsidiaries;
(ii) any condition or occurrence on any Real Property owned or
operated by Holdings or any of its Subsidiaries that (x) results in
material noncompliance by Holdings or any of its Subsidiaries with any
applicable
-54-
Environmental Law or (y) could reasonably be anticipated to form the
basis of a material Environmental Claim against Holdings or any of its
Subsidiaries or any such Real Property;
(iii) any condition or occurrence on any Real Property owned
or operated by Holdings or any of its Subsidiaries that could
reasonably be anticipated to cause such Real Property to be subject to
any material restrictions on the ownership, occupancy, use or
transferability by Holdings or its Subsidiary, as the case may be, of
its interest in such Real Property under any Environmental Law; and
(iv) the taking of any material removal or remedial action in
response to the actual or alleged presence of any Hazardous Material
on any Real Property owned or operated by Holdings or any of its
Subsidiaries.
All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or remedial action
and Holdings' or the Borrower's response thereto. In addition, Holdings
agrees to provide the Banks with copies of all material written
communications by Holdings or any of its Subsidiaries with any Person,
government or governmental agency relating to any of the matters set forth
in clauses (i)-(iv) above, and such detailed reports relating to any of the
matters set forth in clauses (i)-(iv) above as may reasonably be requested
by the Agent or the Required Banks.
(i) Other Information. Promptly upon transmission thereof, copies of
-----------------
any filings and registrations with, and reports to, the SEC by Holdings or
any of its Subsidiaries and copies of all financial statements, proxy
statements, notices and reports as Holdings or any of its Subsidiaries
shall generally send to analysts or the holders of their capital stock or
of Permitted Holdings PIK Securities or Senior Subordinated Notes in their
capacity as such holders (in each case to the extent not theretofore
delivered to the Banks pursuant to this Agreement) and, with reasonable
promptness, such other information or documents (financial or otherwise) as
the Agent on its own behalf or on behalf of any Bank may reasonably request
from time to time.
7.02 Books, Records and Inspections. Holdings will, and will cause
------------------------------
each of its Subsidiaries to, permit, upon notice to the chief financial officer
or other Authorized Officer of Holdings or the Borrower, (x) officers and
designated representatives of the Agent or any Bank to visit and inspect any of
the properties or assets of Holdings and any of its Subsidiaries in whomsoever's
possession, and to examine the books of account of Holdings and any of its
Subsidiaries and discuss the affairs, finances and accounts of Holdings and of
any of its Subsidiaries with, and be advised as to the same by, their officers
and independent accountants, all at such reasonable times and intervals and to
such rea-
-55-
sonable extent as the Agent or any Bank may desire and (y) the Agent, at the
request of the Required Banks, to conduct, at Holdings' and the Borrower's
expense, an audit of the accounts receivable and/or inventories of the Borrower
and its Subsidiaries at such times (but no more frequently than once a year
unless an Event of Default has occurred and is continuing) as the Required Banks
shall reasonably require.
7.03 Insurance. Holdings will, and will cause each of its
---------
Subsidiaries to, at all times from and after the Effective Date maintain in full
force and effect insurance with reputable and solvent insurance carriers in such
amounts, covering such risks and liabilities and with such deductibles or self-
insured retentions as are in accordance with normal industry practice. At any
time that insurance at the levels described in Annex VI is not being maintained
by Holdings and its Subsidiaries, Holdings will notify the Banks in writing
thereof and, if thereafter notified by the Agent to do so, Holdings will obtain
insurance at such levels to the extent then generally available (but in any
event within the deductible or self-insured retention limitations set forth in
the preceding sentence) or otherwise as are reasonably acceptable to the Agent.
Holdings will furnish to the Agent on the Initial Borrowing Date and on each
date on which financial statements are delivered pursuant to Section 7.01(c) a
summary of the insurance carried in respect of Holdings and its Subsidiaries and
the assets of Holdings and its Subsidiaries together with certificates of
insurance and other evidence of such insurance, if any, naming the Collateral
Agent as mortgagee with respect to real property, lenders loss payee with
respect to personal property, additional insured with respect to general
liability and umbrella liability coverage and certificate holder with respect to
workers' compensation insurance.
7.04 Payment of Taxes. Holdings will pay and discharge, and will
----------------
cause each of its Subsidiaries to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any properties belonging to it, prior to the date on which material
penalties attach thereto, and all lawful claims for sums that have become due
and payable which, if unpaid, might become a Lien not otherwise permitted under
Section 8.03(a) or charge upon any properties of Holdings or any of its
Subsidiaries; provided, that neither Holdings nor any of its Subsidiaries shall
--------
be required to pay any such tax, assessment, charge, levy or claim which is
being contested in good faith and by proper proceedings if it has maintained
adequate reserves with respect thereto in accordance with GAAP.
7.05 Corporate Franchises. Holdings will do, and will cause each of
--------------------
its Subsidiaries to do, or cause to be done, all things necessary to preserve
and keep in full force and effect its existence and its material rights,
franchises and authority to do business; provided, however, that any transaction
-------- -------
permitted by Section 8.02 will not constitute a breach of this Section 7.05.
7.06 Compliance with Statutes, etc. Holdings will, and will cause
------------------------------
each of its Subsidiaries to, comply with all applicable statutes, regulations
and orders of, and all
-56-
applicable restrictions imposed by, all governmental bodies, domestic or
foreign, in respect of the conduct of its business and the ownership of its
property (including applicable statutes, regulations, orders and restrictions
relating to environmental standards and controls) except for such non-compliance
as would not have a Material Adverse Effect or a material adverse effect on the
ability of any Credit Party to perform its obligations under any Credit Document
to which it is a party.
7.07 Compliance with Environmental Laws. (a) (i) Holdings will pay,
----------------------------------
and will cause each of its Subsidiaries to pay, all costs and expenses incurred
by it in keeping in compliance with all Environmental Laws, and will keep or
cause to be kept all Real Properties owned or operated by Holdings or any of its
Subsidiaries free and clear of any Liens imposed pursuant to such Environmental
Laws; and (ii) neither Holdings nor any of its Subsidiaries will generate, use,
treat, store, release or dispose of, or permit the generation, use, treatment,
storage, release or disposal of, Hazardous Materials on any Real Property owned
or operated by Holdings or any of its Subsidiaries, or transport or permit the
transportation of Hazardous Materials to or from any such Real Property, unless
the failure to comply with the requirements specified in clause (i) or (ii)
above, either individually or in the aggregate, would not reasonably be expected
to have a Material Adverse Effect. If Holdings or any of its Subsidiaries, or
any tenant or occupant of any Real Property owned or operated by Holdings or any
of its Subsidiaries, cause or permit any intentional or unintentional act or
omission resulting in the presence or Release of any Hazardous Material (except
in compliance with applicable Environmental Laws and which does not give rise to
an Environmental Claim), each of Holdings and the Borrower agrees to undertake,
and/or to cause any of its Subsidiaries, tenants or occupants to undertake, at
their sole expense, any clean up, removal, remedial or other action required
pursuant to Environmental Laws to remove and clean up any Hazardous Materials
from any Real Property, except where the failure to do so would not reasonably
be expected to have a Material Adverse Effect; provided, that neither Holdings
--------
nor any of its Subsidiaries shall be required to comply with any such order or
directive which is being contested in good faith and by proper proceedings so
long as it has maintained adequate reserves with respect to such compliance to
the extent required in accordance with GAAP.
(b) At the written request of the Agent or the Required Banks,
Holdings or any of its Subsidiaries will provide, at their sole cost and
expense, an environmental site assessment report concerning any of their Real
Properties, prepared by an environmental consulting firm approved by the Agent,
which approval shall not be unreasonably withheld, indicating the presence or
absence of Hazardous Materials and the potential cost of any removal or remedial
action in connection with any Hazardous Materials on such Real Property,
provided that such request shall be made only if either (i) there exists an
Event of Default under Section 9, or (ii) the Banks receive notice under Section
7.01(h) for any event for which notice is required to be delivered for any such
Real Property; provided further, however, that in the case of clause (ii) above
the environmental assessment shall be required only with respect to the Real
Property that is the subject of such required
-57-
notice. If Holdings or its Subsidiaries fails to provide the same within 90
days after such request was made, the Agent may order the same, and Holdings and
its Subsidiaries shall grant and hereby grant to the Agent and the Banks and
their agents access to such Property and specifically grants the Agent and the
Banks an irrevocable non-exclusive license, subject to the rights of tenants, to
undertake such an assessment, all at the Borrower's expense.
7.08 ERISA. As soon as possible and, in any event, within 10 days
-----
after Holdings or any Subsidiary of Holdings or any ERISA Affiliate knows or has
reason to know of the occurrence of any of the following events to the extent
that one or more of such events is reasonably likely to result in a material
liability to Holdings or any Subsidiary of Holdings, Holdings will deliver to
each of the Banks a certificate of the chief financial officer or other
Authorized Officer of Holdings setting forth details as to such occurrence and
the action, if any, which Holdings, such Subsidiary or such ERISA Affiliate is
required or proposes to take, together with any notices required or proposed to
be given to or filed with or by Holdings, such Subsidiary, such ERISA Affiliate,
the PBGC, a Plan participant or the Plan administrator with respect thereto:
that a Reportable Event has occurred, that an accumulated funding deficiency has
been incurred or an application may be or has been made to the Secretary of the
Treasury for a waiver or modification of the minimum funding standard (including
any required installment payments) or an extension of any amortization period
under Section 412 of the Code with respect to a Plan; that a contribution
required to be made to a Plan or Foreign Pension Plan has not been timely made;
that a Plan has been or may be terminated, reorganized, partitioned or declared
insolvent under Title IV of ERISA; that a Plan has an Unfunded Current Liability
giving rise to a lien under ERISA or the Code; that proceedings may be or have
been instituted to terminate or appoint a trustee to administer a Plan; that a
proceeding has been instituted pursuant to Section 515 of ERISA to collect a
delinquent contribution to a Plan; that Holdings, any Subsidiary of Holdings or
any ERISA Affiliate will or may incur any liability (including any contingent or
secondary liability) to or on account of the termination of or withdrawal from a
Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with
respect to a Plan under Section 401(a)(29), 4971, 4975 or 4980 of the Code or
Section 409, 502(i) or 502(l) of ERISA; or that Holdings or any Subsidiary of
Holdings has or may incur any liability under any employee welfare benefit plan
(within the meaning of Section 3(1) of ERISA) that provides benefits to retired
employees or other former employees (other than as required by Section 601 of
ERISA) or any employee pension benefit plan (as defined in Section 3(2) of
ERISA) in addition to the liability pursuant to any such welfare or pension plan
or plans existing on the Effective Date. At the request of any Bank, Holdings
will deliver to such Bank a complete copy of the annual report (Form 5500) of
each Plan required to be filed with the Internal Revenue Service. In addition
to any certificates or notices delivered to the Banks pursuant to the first
sentence hereof, copies of annual reports and any notices received by Holdings
or any Subsidiary of Holdings or any ERISA Affiliate with respect to any Plan or
Foreign Pension Plan shall be delivered to the Banks no later than 10 days after
the date such report has been filed with the Internal
-58-
Revenue Service or received by Holdings or the Subsidiary or the ERISA
Affiliate, as applicable.
7.09 Good Repair. Holdings will, and will cause each of its
-----------
Subsidiaries to, ensure that its material properties and equipment used in its
business are kept in good repair, working order and condition, normal wear and
tear excepted, and, subject to Section 8.08, that from time to time there are
made in such properties and equipment all needful and proper repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto, to
the extent and in the manner useful or customary for companies in similar
businesses.
7.10 End of Fiscal Years; Fiscal Quarters. Holdings will, for
------------------------------------
financial reporting purposes, cause (i) each of its, and each of its
Subsidiaries', fiscal years to end on December 31 of each year, and (ii) each of
its, and each of its Subsidiaries', fiscal quarters to end on March 31, June 30,
September 30 and December 31 of each year.
7.11 Additional Security; Further Assurances. (a) Holdings will,
---------------------------------------
and will cause each of its Domestic Subsidiaries (and subject to Section 7.14,
each of its Foreign Subsidiaries) to, grant to the Collateral Agent security
interests and mortgages in such assets and properties of Holdings and its
Subsidiaries as are not covered by the original Security Documents, and as may
be requested from time to time by the Agent or the Required Banks (collectively,
the "Additional Security Documents"). All such security interests and mortgages
shall be granted pursuant to documentation reasonably satisfactory in form and
substance to the Agent and shall constitute valid and enforceable perfected
security interests and mortgages superior to and prior to the rights of all
third Persons and subject to no other Liens except for Permitted Liens. The
Additional Security Documents or instruments related thereto shall have been
duly recorded or filed in such manner and in such places as are required by law
to establish, perfect, preserve and protect the Liens in favor of the Collateral
Agent required to be granted pursuant to the Additional Security Documents and
all taxes, fees and other charges payable in connection therewith shall have
been paid in full.
(b) Holdings will, and will cause each of its Subsidiaries to, at the
expense of Holdings and the Borrower, make, execute, endorse, acknowledge, file
and/or deliver to the Collateral Agent from time to time such vouchers,
invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, real
property surveys, reports and other assurances or instruments and take such
further steps relating to the collateral covered by any of the Security
Documents as the Collateral Agent may reasonably require. Furthermore, Holdings
shall cause to be delivered to the Collateral Agent such opinions of counsel,
title insurance and other related documents as may be reasonably requested by
the Agent to assure themselves that this Section 7.11 has been complied with.
-59-
(c) If the Agent or the Required Banks determine that they are
required by law or regulation to have appraisals prepared in respect of the Real
Property of Holdings and its Subsidiaries constituting Collateral, the Borrower
shall provide to the Agent appraisals which satisfy the applicable requirements
of the Real Estate Appraisal Reform Amendments of the Financial Institution
Reform, Recovery and Enforcement Act of 1989, as amended, and which shall be in
form and substance reasonably satisfactory to the Agent.
(d) Holdings and the Borrower agree that each action required above
by this Section 7.11 shall be completed as soon as possible, but in no event
later than 90 days after such action is either requested to be taken by the
Agent or the Required Banks or required to be taken by Holdings and its
Subsidiaries pursuant to the terms of this Section 7.11; provided that in no
--------
event shall Holdings or the Borrower be required to take any action, other than
using its reasonable efforts, to obtain consents from third parties with respect
to its compliance with this Section 7.11.
7.12 Register. The Borrower hereby designates the Agent to serve as
--------
the Borrower's agent, solely for purposes of this Section 7.12, to maintain a
register (the "Register") on which it will record the Commitments from time to
time of each of the Banks, the Loans made by each of the Banks and each
repayment in respect of the principal amount of the Loans of each Bank. Failure
to make any such recordation, or any error in such recordation shall not affect
the Borrower's obligations in respect of such Loans. With respect to any Bank,
the transfer of the Commitments of such Bank and the rights to the principal of,
and interest on, any Loan made pursuant to such Commitments shall not be
effective until such transfer is recorded on the Register maintained by the
Agent with respect to ownership of such Commitments and Loans and prior to such
recordation all amounts owing to the transferor with respect to such Commitments
and Loans shall remain owing to the transferor. The registration of assignment
or transfer of all or part of any Commitments and Loans shall be recorded by the
Agent on the Register only upon the acceptance by the Agent of a properly
executed and delivered Assignment and Assumption Agreement pursuant to Section
12.04(b). Coincident with the delivery of such an Assignment and Assumption
Agreement to the Agent for acceptance and registration of assignment or transfer
of all or part of a Loan, or as soon thereafter as practicable, the assigning or
transferor Bank shall surrender the Note evidencing such Loan, and thereupon one
or more new Notes in the same aggregate principal amount shall be issued to the
assigning or transferor Bank and/or the new Bank. The Borrower agrees to
indemnify the Agent from and against any and all losses, claims, damages and
liabilities of whatsoever nature which may be imposed on, asserted against or
incurred by the Agent in performing its duties under this Section 7.12.
7.13 Contributions; Payments. (a) Holdings will contribute as an
-----------------------
equity contribution to the capital of the Borrower upon its receipt thereof, any
cash proceeds received by Holdings from any sale or issuance of its preferred or
common equity or any cash capital contributions received by Holdings, other than
the portion of the proceeds of
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an initial public offering of Holdings Common Stock to be used by Holdings for
the purposes set forth in Section 8.13(i)(y).
(b) The Borrower will use the proceeds of all equity contributions
received by it from Holdings as provided in clause (a) above toward the
repayment of Term Loans to the extent required by Section 4.02(d).
7.14 Foreign Subsidiaries Security. If following a change in the
-----------------------------
relevant sections of the Code or the regulations, rules, rulings, notices or
other official pronouncements issued or promulgated thereunder, counsel for the
Borrower acceptable to the Agent and the Required Banks does not within 30 days
after a request from the Agent or the Required Banks deliver evidence, in form
and substance mutually satisfactory to the Agent and the Borrower, with respect
to any Foreign Subsidiary which has not already had all of its stock pledged
pursuant to the Pledge Agreement that (i) a pledge (x) of 66-2/3% or more of the
total combined voting power of all classes of capital stock of such Foreign
Subsidiary entitled to vote, and (y) of any promissory note issued by such
Foreign Subsidiary to Holdings or any of its Domestic Subsidiaries, (ii) the
entering into by such Foreign Subsidiary of a security agreement in
substantially the form of the Security Agreement and (iii) the entering into by
such Foreign Subsidiary of a guaranty in substantially the form of the
Subsidiary Guaranty, in any such case would cause the undistributed earnings of
such Foreign Subsidiary as determined for Federal income tax purposes to be
treated as a deemed dividend to such Foreign Subsidiary's United States parent
for Federal income tax purposes, then in the case of a failure to deliver the
evidence described in clause (i) above, that portion of such Foreign
Subsidiary's outstanding capital stock or any promissory notes so issued by such
Foreign Subsidiary, in each case not theretofore pledged pursuant to the Pledge
Agreement shall be pledged to the Collateral Agent for the benefit of the
Secured Creditors pursuant to the Pledge Agreement (or another pledge agreement
in substantially similar form, if needed), and in the case of a failure to
deliver the evidence described in clause (ii) above, such Foreign Subsidiary
shall execute and deliver the Security Agreement (or another security agreement
in substantially similar form, if needed), granting the Secured Creditors a
security interest in all of such Foreign Subsidiary's assets and securing the
Obligations of the Borrower under the Credit Documents and under any Interest
Rate Protection Agreement or Other Hedging Agreement and, in the event the
Subsidiary Guaranty shall have been executed by such Foreign Subsidiary, the
obligations of such Foreign Subsidiary thereunder, and in the case of a failure
to deliver the evidence described in clause (iii) above, such Foreign Subsidiary
shall execute and deliver the Subsidiary Guaranty (or another guaranty in
substantially similar form, if needed), guaranteeing the Obligations of the
Borrower under the Credit Documents and under any Interest Rate Protection
Agreement or Other Hedging Agreement, in each case to the extent that the
entering into such Security Agreement or Subsidiary Guaranty is permitted by the
laws of the respective foreign jurisdiction and with all documents delivered
pursuant to this Section 7.14 to be in form and substance reasonably
satisfactory to the Agent and the Required Banks.
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7.15 Interest Rate Protection. The Borrower shall no later than 90
------------------------
days following the Initial Borrowing Date enter into, and thereafter maintain,
Interest Rate Protection Agreements, satisfactory to the Agent, with a term of
at least three years, establishing a fixed or maximum interest rate acceptable
to the Agent in respect of an amount of the then outstanding Term Loans equal to
at least $50,000,000.
7.16 Maintenance of Corporate Separateness. Holdings will, and will
-------------------------------------
cause the Borrower and each of the Borrower's Subsidiaries to, satisfy customary
corporate formalities, including the maintenance of corporate and/or partnership
records. Neither the Borrower nor any Subsidiary of the Borrower shall make any
payment to a creditor of Holdings in respect of any liability of Holdings, and
no bank account of Holdings shall be commingled with any bank account of the
Borrower or any Subsidiary of the Borrower. Any financial statements
distributed to any creditors of Holdings shall, to the extent permitted by GAAP,
clearly establish the corporate separateness of Holdings from the Borrower and
each of the Borrower's Subsidiaries. Finally, neither Holdings nor any of its
Subsidiaries shall take any action, or conduct its affairs in a manner, which is
likely to result in the corporate existence of Holdings on the one hand and of
the Borrower or any Subsidiary of the Borrower on the other hand being ignored,
or in the assets and liabilities of the Borrower or any Subsidiary of the
Borrower being substantively consolidated with those of Holdings in a
bankruptcy, reorganization or other insolvency proceeding.
7.17 Permitted Holdings PIK Securities. Holdings shall pay all
---------------------------------------
dividends or interest, as the case may be, on the Permitted Holdings PIK
Securities through the issuance of additional Permitted Holdings PIK Securities
rather than in cash; provided that in lieu of issuing additional Permitted
--------
Holdings PIK Securities as dividend or interest payments, Holdings may increase
the liquidation preference or outstanding amount, as the case may be, of the
outstanding Permitted Holdings PIK Securities in respect of which such dividends
or interest have accrued.
SECTION 8. Negative Covenants. Holdings and the Borrower hereby
------------------
covenant and agree that as of the Effective Date and thereafter for so long as
this Agreement is in effect and until the Commitments have terminated, no
Letters of Credit (other than Letters of Credit, together with all Fees that
have accrued and will accrue thereon through the stated termination date of such
Letters of Credit, which have been supported in a manner satisfactory to the
respective Letter of Credit Issuer in its sole and absolute discretion) or Notes
are outstanding and the Loans and Unpaid Drawings, together with interest, Fees
and all other Obligations (other than any indemnities described in Section 12.13
hereof which are not then due and payable) incurred hereunder, are paid in full:
8.01 Changes in Business. (a) Holdings and its Subsidiaries will
-------------------
not engage in any business other than the business engaged in by the Borrower as
of the Effective Date and activities directly related thereto, and similar or
related businesses.
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(b) Holdings will engage in no business other than (i) its ownership
of the capital stock of the Borrower and those obligations of officers and
employees of Holdings and its Subsidiaries to the extent permitted by Section
8.05(e) and having those liabilities which it is responsible for under this
Agreement and the other Documents to which it is a party, (ii) the issuance of
the Permitted Holdings PIK Securities, the Shareholder Subordinated Notes,
shares of Holdings Common Stock and options and warrants to purchase Holdings
Common Stock to the extent permitted by Section 8.13(v) and (iii) activities
associated with expenses paid with dividends made by the Borrower pursuant to
Section 8.06(iv). Notwithstanding the foregoing, Holdings may engage in those
activities that are incidental to (a) the maintenance of its corporate existence
in compliance with applicable law, (b) legal, tax and accounting matters in
connection with any of the foregoing activities and (c) the entering into, and
performing its obligations under, this Agreement and the other Documents to
which it is a party.
8.02 Consolidation, Merger, Sale or Purchase of Assets, etc.
-------------------------------------------------------
Holdings will not, and will not permit any of its Subsidiaries to, wind up,
liquidate or dissolve its affairs or enter into any transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of (or agree to do
any of the foregoing at any future time) all or any part of its property or
assets (other than inventory in the ordinary course of business), or enter into
any partnerships, joint ventures or sale-leaseback transactions, or purchase or
otherwise acquire (in one or a series of related transactions) any part of the
property or assets (other than purchases or other acquisitions of inventory,
materials and equipment in the ordinary course of business) of any Person,
except that the following shall be permitted:
(a) the Transaction;
(b) the Borrower and its Subsidiaries may lease as lessee or license
as licensee real or personal property in the ordinary course of business
and otherwise in compliance with this Agreement;
(c) Capital Expenditures by the Borrower and its Subsidiaries to the
extent not in violation of Section 8.08;
(d) the advances, investments and loans permitted pursuant to Section
8.05;
(e) each of the Borrower and its Subsidiaries may sell assets,
provided that (w) each such sale shall be for an amount at least equal to
--------
the fair market value thereof (as determined in good faith by senior
management of the Borrower), (x) each such sale results in consideration at
least 80% of which (taking the amount of cash, the principal amount of any
promissory notes and the fair market value, as determined in good faith by
senior management of the Borrower, of any other consideration) shall be in
the form of cash, (y) the aggregate sale proceeds from all assets subject
to such sales pursuant to this clause (e) shall not exceed $2,500,000
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in any fiscal year of the Borrower and (z) the Net Proceeds therefrom are
either applied to repay Term Loans as provided in Section 4.02(A)(c) or
reinvested in replacement assets to the extent permitted by Section
4.02(A)(c);
(f) each of the Borrower and its Subsidiaries may sell assets,
provided that (w) each such sale shall be for an amount at least equal to
--------
the fair market value thereof (as determined in good faith by senior
management of the Borrower), (x) each such sale results in consideration at
least 80% of which (taking the amount of cash, the principal amount of any
promissory notes and the fair market value, as determined in good faith by
senior management of the Borrower, of any other consideration) shall be in
the form of cash, and (y) the aggregate sale proceeds from all assets
subject to such sales pursuant to this clause (f) shall not exceed $500,000
in any fiscal year of the Borrower;
(g) the Borrower and its Subsidiaries may sell or discount, in each
case without recourse, accounts receivables arising in the ordinary course
of business, but only in connection with the compromise or collection
thereof;
(h) the Borrower and its Subsidiaries may sell for cash or exchange
specific items of equipment, so long as the purpose of each such sale or
exchange is to acquire (and results within 180 days of such sale or
exchange in the acquisition of) replacement items of equipment which are
the functional equivalent of the item of equipment so sold or exchanged;
(i) the Borrower and its Subsidiaries may, in the ordinary course of
business, license patents, trademarks, copyrights and know-how to third
Persons and to one another, so long as each such license is permitted to be
assigned pursuant to the Security Agreement (to the extent that a security
interest in such patents, trademarks, copyrights and know-how is granted
thereunder) and does not otherwise prohibit the granting of a Lien by the
Borrower or any of its Subsidiaries pursuant to the Security Agreement in
the intellectual property covered by such license;
(j) any Foreign Subsidiary of the Borrower may be merged with and
into, or be voluntarily dissolved or liquidated into, or transfer any of
its assets to, any Wholly-Owned Foreign Subsidiary of the Borrower so long
as in each case at least 65% of the total combined voting power of all
classes of capital stock of all first-tier Foreign Subsidiaries of the
Borrower are pledged pursuant to the Pledge Agreement;
(k) the assets of any Foreign Subsidiary of the Borrower may be
transferred to the Borrower or any of its Wholly-Owned Domestic
Subsidiaries, and any Foreign Subsidiary of the Borrower may be merged with
and into, or be voluntarily dissolved or liquidated into, the Borrower or
any of its Wholly-Owned Domestic
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Subsidiaries so long as the Borrower or such Wholly-Owned Domestic
Subsidiary is the surviving corporation of any such merger, dissolution or
liquidation;
(l) the Borrower or any of its Wholly-Owned Domestic Subsidiaries may
transfer to one or more Wholly-Owned Foreign Subsidiaries of the Borrower
those assets theretofore transferred to the Borrower or such Wholly-Owned
Domestic Subsidiary by a Foreign Subsidiary (whether by merger,
liquidation, dissolution or otherwise) pursuant to clause (k) of this
Section 8.02;
(m) the Borrower and its Wholly-Owned Domestic Subsidiaries may sell
or otherwise transfer inventory between or among themselves in the ordinary
course of business for resale by the Borrower or such Wholly-Owned Domestic
Subsidiaries, as the case may be, so long as the security interest granted
to the Collateral Agent for the benefit of the Secured Creditors pursuant
to the Security Agreement in the inventory so transferred shall remain in
full force and effect and perfected (to at least the same extent as in
effect immediately prior to such transfer);
(n) the Borrower may lease as lessor equipment, machinery or its Real
Property to one or more Wholly-Owned Domestic Subsidiaries of the Borrower
so long as (x) such lease is for fair market value (determined in good
faith by the Board of Directors or senior management of the Borrower) and
(y) the security interests granted to the Collateral Agent for the benefit
of the Secured Creditors pursuant to the Security Documents in the assets
so leased shall remain in full force and effect and perfected (to at least
the same extent as in effect immediately prior to such transfer);
(o) any Domestic Subsidiary of the Borrower may transfer assets to
the Borrower or to any other Wholly-Owned Domestic Subsidiary of the
Borrower so long as the security interests granted to the Collateral Agent
for the benefit of the Secured Creditors pursuant to the Security Documents
in the assets so transferred shall remain in full force and effect and
perfected (to at least the same extent as in effect immediately prior to
such transfer);
(p) any Wholly-Owned Domestic Subsidiary of the Borrower may merge
with and into, or be voluntarily dissolved or liquidated into, the Borrower
so long as (i) the Borrower is the surviving corporation of such merger,
dissolution or liquidation and (ii) the security interests granted to the
Collateral Agent for the benefit of the Secured Creditors pursuant to the
Security Documents in the assets of such Wholly-Owned Domestic Subsidiary
so merged, dissolved or liquidated shall remain in full force and effect
and perfected (to at least the same extent as in effect immediately prior
to such merger, dissolution or liquidation);
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(q) any Wholly-Owned Domestic Subsidiary of the Borrower may merge
with and into, or be voluntarily dissolved or liquidated into, any other
Wholly-Owned Domestic Subsidiary of the Borrower so long as the security
interests granted to the Collateral Agent for the benefit of the Secured
Creditors pursuant to the Security Documents in the assets of such Domestic
Subsidiary so merged, dissolved or liquidated shall remain in full force
and effect and perfected (to at least the same extent as in effect
immediately prior to such merger, dissolution or liquidation); and
(r) so long as no Default or Event of Default then exists or would
result therefrom, the Borrower may acquire assets constituting all or
substantially all of a business, business unit, division or product line of
any Person not already a Subsidiary of the Borrower or the capital stock of
any such Person (any such acquisition permitted by this clause (r), a
"Permitted Acquisition"), provided, that (i) such Person (or the assets so
--------
acquired) was, immediately prior to such acquisition, engaged (or used)
primarily in the business permitted pursuant to Section 8.01(a), (ii) if
such acquisition is structured as a stock acquisition, then either (A) the
Person so acquired becomes a Wholly-Owned Domestic Subsidiary of the
Borrower or (B) such Person is merged with and into a Wholly-Owned Domestic
Subsidiary of the Borrower (with such Wholly-Owned Domestic Subsidiary
being the surviving corporation of such merger), and in any case, all of
the provisions of Section 8.15 have been complied with in respect of such
Person, (iii) any Liens or Indebtedness assumed or issued in connection
with such acquisition are otherwise permitted under Section 8.03 or 8.04,
as the case may be, (iv) the only consideration paid by the Borrower in
respect of any such Permitted Acquisition consists of cash (including
Excess Equity Proceeds), Holdings Common Stock and/or Permitted Holdings
PIK Securities permitted to be issued under Section 8.13 and/or
Indebtedness to the extent permitted by Section 8.04, (v) all
representations and warranties contained herein and in the other Credit
Documents shall be true and correct in all material respects with the same
effect as though such representations and warranties had been made on and
as of the date of such Permitted Acquisition (both before and after giving
effect thereto), unless stated to relate to a specific earlier date, in
which case such representations and warranties shall be true and correct in
all material respects as of such earlier date, (vi) after giving effect to
any Permitted Acquisition, the aggregate amount paid (including for this
purpose all cash consideration paid (including all Excess Equity Proceeds
used in connection therewith), the face amount of all Indebtedness
(including Permitted Holdings PIK Securities, if in the form of
Indebtedness) incurred in connection with such Permitted Acquisition, and
the fair market value (determined as of the proposed date of consummation
of such Permitted Acquisition in good faith by senior management of the
Borrower) of any Permitted Holdings PIK Securities (if in the form of
equity) or Holdings Common Stock, if any, issued as consideration in
connection with such Permitted Acquisition), in connection with such
Permitted Acquisition when added to the
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aggregate amount paid (including for this purpose all cash consideration
paid, the face amount of all Indebtedness (including Permitted Holdings PIK
Securities, if in the form of Indebtedness) incurred in connection with
each such Permitted Acquisition and the fair market value (determined as of
the date of consummation of each such Permitted Acquisition in good faith
by senior management of the Borrower) of any Permitted Holdings PIK
Securities (if in the form of equity) or Holdings Common Stock, if any,
issued as consideration in connection with each such Permitted Acquisition)
in connection with all other Permitted Acquisitions consummated prior to
such proposed Permitted Acquisition, shall not exceed $25,000,000 (or, if
the Pro Forma Leverage Ratio on the date of such proposed Permitted
Acquisition is less than 3.25:1.00, $50,000,000), and (viii) the aggregate
amount paid (including for this purpose all cash consideration paid
(including all Excess Equity Proceeds used in connection therewith), the
face amount of all Indebtedness (including Permitted Holdings PIK
Securities, if in the form of Indebtedness) incurred in connection with
such Permitted Acquisition, and the fair market value (determined as of the
proposed date of consummation of such Permitted Acquisition in good faith
by senior management of the Borrower) of any Permitted Holdings PIK
Securities (if in the form of equity) or Holdings Common Stock, if any,
issued as consideration in connection with such Permitted Acquisition), in
connection with any single Permitted Acquisition or series of related
Permitted Acquisitions, shall not exceed $12,500,000 (or, if the Pro Forma
Leverage Ratio on the date of such proposed Permitted Acquisition is less
than 3.25:1.00, $25,000,000).
To the extent the Required Banks waive the provisions of this Section 8.02 with
respect to the sale or other disposition of any Collateral, or any Collateral is
sold or otherwise disposed of as permitted by this Section 8.02, such Collateral
in each case shall be sold or otherwise disposed of free and clear of the Liens
created by the Security Documents and the Agent shall take such actions
(including, without limitation, directing the Collateral Agent to take such
actions) as are appropriate in connection therewith.
8.03 Liens. Holdings will not, and will not permit any of its
-----
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets of any kind (real or personal, tangible or
intangible) of Holdings or any of its Subsidiaries, whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
or assets (including sales of accounts receivable or notes with recourse to
Holdings or any of its Subsidiaries) or assign any right to receive income,
except for the following (collectively, the "Permitted Liens"):
(a) inchoate Liens for taxes, assessments or governmental charges or
levies not yet due or Liens for taxes, assessments or governmental charges
or levies being
-67-
contested in good faith by appropriate proceedings and for which adequate
reserves have been established in accordance with GAAP;
(b) Liens in respect of property or assets of the Borrower or any of
its Subsidiaries imposed by law which were incurred in the ordinary course
of business and which have not arisen to secure Indebtedness for borrowed
money, such as carriers', warehousemen's and mechanics' Liens, statutory
landlord's Liens, and other similar Liens arising in the ordinary course of
business, and which either (x) do not in the aggregate materially detract
from the value of such property or assets or materially impair the use
thereof in the operation of the business of the Borrower or any of its
Subsidiaries or (y) are being contested in good faith by appropriate
proceedings, which proceedings have the effect of preventing the forfeiture
or sale of the property or asset subject to such Lien;
(c) Liens created by or pursuant to this Agreement and the Security
Documents;
(d) Liens in existence on the Initial Borrowing Date which are
listed, and the property subject thereto described, in Annex VIII, without
giving effect to any extensions or renewals thereof;
(e) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section 9.09;
(f) Liens incurred or deposits made (x) 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 and appeal bonds, bids, government
contracts, performance and return-of-money bonds and other similar
obligations incurred in the ordinary course of business (exclusive of
obligations in respect of the payment for borrowed money); and (y) to
secure the performance of leases of Real Property, to the extent incurred
or made in the ordinary course of business consistent with past practices;
(g) licenses, leases or subleases granted to third Persons not
interfering in any material respect with the business of the Borrower or
any of its Subsidiaries;
(h) easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances not
interfering in any material respect with the ordinary conduct of the
business of the Borrower or any of its Subsidiaries;
(i) Liens arising from precautionary UCC financing statements
regarding operating leases permitted by this Agreement;
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(j) any interest or title of a licensor, lessor or sublessor under
any lease permitted by this Agreement;
(k) Liens created pursuant to Capital Leases permitted pursuant to
Section 8.04(d);
(l) Permitted Encumbrances;
(m) Liens arising pursuant to purchase money mortgages or security
interests securing Indebtedness representing the purchase price (or
financing of the purchase price within 90 days after the respective
purchase) of assets acquired after the Initial Borrowing Date, provided
--------
that (i) any such Liens attach only to the assets so purchased, (ii) the
Indebtedness secured by any such Lien does not exceed 100%, nor is less
than 80% of the lesser of the fair market value or the purchase price of
the property being purchased at the time of the incurrence of such
Indebtedness and (iii) the Indebtedness secured thereby is permitted to be
incurred pursuant to Section 8.04(d);
(n) Liens on property or assets acquired pursuant to a Permitted
Acquisition, or on property or assets of a Subsidiary of the Borrower in
existence at the time such Subsidiary is acquired pursuant to a Permitted
Acquisition, provided that (i) any Indebtedness that is secured by such
--------
Liens is permitted to exist under Section 8.04(j), and (ii) such Liens are
not incurred in connection with, or in contemplation or anticipation of,
such Permitted Acquisition and do not attach to any other asset of the
Borrower or any of its Subsidiaries; and
(o) additional Liens incurred by the Borrower and its Subsidiaries so
long as the value of the property subject to such Liens, and the
Indebtedness and other obligations secured thereby, do not exceed
2,000,000.
8.04 Indebtedness. Holdings will not, and will not permit any of its
------------
Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
(b) Existing Indebtedness outstanding on the Initial Borrowing Date
and listed on Annex VII, without giving effect to any subsequent extension,
renewal or refinancing thereof;
(c) Indebtedness under Interest Rate Protection Agreements entered
into to protect the Borrower against fluctuations in interest rates in
respect of the Obligations;
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(d) Capitalized Lease Obligations and Indebtedness of the Borrower and
its Subsidiaries incurred pursuant to purchase money Liens permitted under
Section 8.03(m); provided, that (x) all such Capitalized Lease Obligations
--------
are permitted under Section 8.08 and (y) the sum of (i) the aggregate
Capitalized Lease Obligations plus (ii) the aggregate outstanding principal
amount of such purchase money Indebtedness shall not exceed $7,500,000 at
any time;
(e) Indebtedness of the Borrower and its Domestic Subsidiaries
incurred under the Senior Subordinated Notes in an aggregate outstanding
principal amount not to exceed $100,000,000;
(f) Indebtedness constituting Intercompany Loans to the extent
permitted by Section 8.05(g);
(g) Indebtedness under Other Hedging Agreements providing protection
against fluctuations in currency values in connection with the Borrower's or
any of its Subsidiaries' operations so long as management of the Borrower or
such Subsidiary, as the case may be, has determined that the entering into
of such Other Hedging Agreements are bona fide hedging activities;
(h) Indebtedness of Foreign Subsidiaries to the Borrower or any of its
Domestic Subsidiaries as a result of any investment made pursuant to Section
8.05(n);
(i) Indebtedness consisting of guaranties (x) by the Borrower of
Indebtedness and leases permitted to be incurred by Wholly-Owned Domestic
Subsidiaries of the Borrower, (y) by Domestic Subsidiaries of the Borrower
of Indebtedness and leases permitted to be incurred by the Borrower or
other Wholly-Owned Domestic Subsidiaries of the Borrower and (z) by Foreign
Subsidiaries of Indebtedness and leases permitted to be incurred by other
Wholly-Owned Foreign Subsidiaries of the Borrower;
(j) Indebtedness of a Subsidiary acquired pursuant to a Permitted
Acquisition (or Indebtedness assumed at the time of a Permitted Acquisition
of an asset securing such Indebtedness), provided that (i) such
Indebtedness was not incurred in connection with, or in anticipation or
contemplation of, such Permitted Acquisition, (ii) such Indebtedness does
not constitute debt for borrowed money, it being understood and agreed that
Capitalized Lease Obligations and purchase money Indebtedness shall not
constitute debt for borrowed money for purposes of this clause (j), and
(iii) at the time of such Permitted Acquisition such Indebtedness does not
exceed 20% of the total value of the assets of the Subsidiary so acquired,
or of the assets so acquired, as the case may be;
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(k) Indebtedness of Holdings under the Shareholder Subordinated
Notes;
(l) Indebtedness of Holdings incurred under Permitted Holdings PIK
Securities issued in connection with Permitted Acquisitions (to the extent
permitted under Section 8.02(r)) plus the amount of interest on such
Permitted Holdings PIK Securities paid in kind or through accretion; and
(m) additional Indebtedness of the Borrower and its Domestic
Subsidiaries not otherwise permitted hereunder not exceeding $5,000,000 in
aggregate principal amount at any time outstanding.
8.05 Advances, Investments and Loans. Holdings will not, and will
-------------------------------
not permit any of its Subsidiaries to, lend money or credit or make advances to
any Person, or purchase or acquire any stock, obligations or securities of, or
any other interest in, or make any capital contribution to, any Person, or
purchase or own a futures contract or otherwise become liable for the purchase
or sale of currency or other commodities at a future date in the nature of a
futures contract, or hold any cash, Cash Equivalents or Foreign Cash
Equivalents, except:
(a) Holdings and its Subsidiaries may invest in cash and Cash
Equivalents;
(b) the Borrower and its Subsidiaries may acquire and hold
receivables owing to it, if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with customary trade
terms of the Borrower or such Subsidiary;
(c) the Borrower and its Subsidiaries may acquire and own investments
(including debt obligations) received in connection with the bankruptcy or
reorganization of suppliers and customers and in good faith settlement of
delinquent obligations of, and other disputes with, customers and suppliers
arising in the ordinary course of business;
(d) Interest Rate Protection Agreements entered into in compliance
with Section 8.04(c) shall be permitted;
(e) Holdings may acquire and hold obligations of one or more officers
or other employees of Holdings or its Subsidiaries in connection with such
officers' or employees' acquisition of shares of Holdings Common Stock so
long as no cash is paid by Holdings or any of its Subsidiaries in
connection with the acquisition of any such obligations;
(f) deposits made in the ordinary course of business consistent with
past practices to secure the performance of leases shall be permitted;
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(g) the Borrower may make intercompany loans and advances to any of
its Subsidiaries, any Subsidiary of the Borrower may make intercompany
loans and advances to the Borrower, and any Subsidiary of the Borrower may
make intercompany loans and advances to any other Subsidiary of the
Borrower (collectively, "Intercompany Loans"), provided, that (w) at no
--------
time shall the aggregate outstanding principal amount of all Intercompany
Loans made pursuant to this clause (g) by the Borrower and its Wholly-Owned
Domestic Subsidiaries to non-Wholly-Owned Domestic Subsidiaries and Foreign
Subsidiaries, when added to the amount of contributions, capitalizations
and forgiveness theretofore made pursuant to Section 8.05(m)(ii), exceed
$2,000,000 (determined without regard to any write-downs or write-offs of
such loans and advances), (x) each Intercompany Loan made by a Foreign
Subsidiary or a non-Wholly-Owned Domestic Subsidiary to the Borrower or a
Wholly-Owned Domestic Subsidiary of the Borrower shall contain the
subordination provisions set forth on Exhibit I, (y) each Intercompany Loan
shall be evidenced by an Intercompany Note and (z) each such Intercompany
Note (other than (1) Intercompany Notes issued by Foreign Subsidiaries of
the Borrower to the Borrower or any of its Domestic Subsidiaries and (2)
Intercompany Notes held by Foreign Subsidiaries of the Borrower, in each
case except to the extent provided in Section 7.14) shall be pledged to the
Collateral Agent pursuant to the Pledge Agreement;
(h) loans and advances by the Borrower and its Subsidiaries to
employees of Holdings and its Subsidiaries for moving and travel expenses
and other similar expenses, in each case incurred in the ordinary course of
business, in an aggregate outstanding principal amount not to exceed
$1,000,000 at any time (determined without regard to any write-downs or
write-offs of such loans and advances), shall be permitted;
(i) Holdings may make equity contributions to the capital of the
Borrower;
(j) Foreign Subsidiaries of the Borrower may invest in Foreign Cash
Equivalents;
(k) Other Hedging Agreements may be entered into in compliance with
Section 8.04(g);
(l) advances, loans and investments in existence on the Initial
Borrowing Date (other than any such loans, advances or investments
described in clause (w) hereof) and listed on Annex IX shall be permitted,
without giving effect to any additions thereto or replacements thereof;
(m) (i) the Borrower may contribute cash to one or more of its
Wholly-Owned Domestic Subsidiaries formed after the Initial Borrowing Date
in accordance
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with Section 8.15 and (ii) the Borrower and its Wholly-Owned Domestic
Subsidiaries may make cash capital contributions to non-Wholly-Owned
Domestic Subsidiaries and Foreign Subsidiaries of the Borrower, and may
capitalize or forgive any Indebtedness owed to them by a non-Wholly-Owned
Domestic Subsidiary or Foreign Subsidiary of the Borrower and outstanding
under clause (g) of this Section 8.05, provided that (x) the aggregate
amount of such contributions, capitalizations and forgiveness pursuant to
this sub-clause (ii), when added to the aggregate outstanding principal
amount of Intercompany Loans made to non-Wholly-Owned Domestic Subsidiaries
and Foreign Subsidiaries under such clause (g) (determined without regard
to any write-downs or write-offs thereof), shall not exceed an amount equal
to $2,000,000 and (y) the aggregate amount of such cash so contributed
under this clause (m) to all such Subsidiaries does not exceed $4,000,000;
(n) the Borrower and its Subsidiaries may make investments in their
respective Subsidiaries in connection with the transfers of those assets
permitted to be transferred pursuant to Sections 8.02(j), (k) and (l), it
being understood that the Borrower and its Subsidiaries may convert any
investment initially made as an equity investment to intercompany
Indebtedness held by the Borrower or such Subsidiary;
(o) the Borrower and its Domestic Subsidiaries may make and hold
investments in their respective Foreign Subsidiaries to the extent that
such investments arise from the sale of inventory in the ordinary course of
business by the Borrower or such Domestic Subsidiary to such Foreign
Subsidiaries for resale by such Foreign Subsidiaries (including any such
investments resulting from the extension of the payment terms with respect
to such sales);
(p) the Borrower and its Subsidiaries may hold additional investments
in their respective Subsidiaries to the extent that such investments
reflect an increase in the value of such Subsidiaries;
(q) the Borrower and its Subsidiaries may capitalize one or more
foreign sales corporations created in accordance with Section 8.15 with
cash contributions in an aggregate amount not to exceed $100,000 for all
such foreign sales corporations;
(r) the Borrower and its Subsidiaries may make transfers of assets to
their respective Subsidiaries in accordance with Section 8.02(m) and (o);
(s) Holdings, the Borrower and their respective Subsidiaries may
purchase or acquire their own stock and other securities and obligations as
and to the extent permitted by Sections 8.06 and 8.13;
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(t) Permitted Acquisitions shall be permitted in accordance with
Section 8.02(r);
(u) the Borrower and its Subsidiaries may acquire and hold debt
securities as partial consideration for a sale of assets pursuant to
Section 8.02(e) or (f) to the extent permitted by any such Section;
(v) the Borrower may continue to own and hold its investments in
existence on the Initial Borrowing Date in its Existing Joint Ventures,
without giving effect to any additions thereto or replacements thereof;
(w) so long as no Default or Event of Default then exists or would
result therefrom, the Borrower may make Joint Venture Investments in
Permitted Joint Ventures and/or Existing Joint Ventures, provided that the
--------
aggregate amount of all Joint Venture Investments in Permitted Joint
Ventures and Existing Joint Ventures made after the Initial Borrowing Date
pursuant to this clause (w) shall not exceed $7,500,000;
(x) so long as no Default or Event of Default then exists or would
result therefrom, the Borrower may make additional Joint Venture
Investments in Permitted Joint Ventures and/or Existing Joint Ventures,
provided that the aggregate amount of all such additional Joint Venture
--------
Investments in Permitted Joint Ventures and Existing Joint Ventures made
after the Initial Borrowing Date pursuant to this clause (x) shall not
exceed the lesser of (i) $7,500,000 and (ii) the Excess Amount at such
time; and
(y) in addition to investments permitted by clauses (a) through (x)
above, the Borrower and its Subsidiaries may make additional loans,
advances and investments to or in a Person (other than loans, advances or
investments, (x) in or to any Existing Joint Venture, (y) in or to any
Permitted Joint Venture or (z) of the type constituting a permitted
existing investment pursuant to clause (l) of this Section 8.05), so long
as the amount of any such loan, advance or investment (at the time of the
making thereof) does not exceed an amount equal to $5,000,000 less the
aggregate amount of such $5,000,000 previously used to make loans, advances
and investments pursuant to this clause (y) to the extent same are then
still outstanding (determined without regard to any write-downs or write-
offs thereof and net of cash repayments of principal in the case of loans
and cash equity returns (whether as a dividend or redemption) in the case
of equity investments) provided, that (1) no single loan, advance or
--------
investment (or series of related loans, advances or investments) in excess
of $5,000,000 may be made, and (2) neither the Borrower nor any of its
Subsidiaries may make or own any investment in Margin Stock.
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8.06 Dividends, etc. Holdings will not, and will not permit any of
---------------
its Subsidiaries to, declare or pay any dividends (other than dividends payable
solely in common stock of Holdings or any such Subsidiary, as the case may be)
or return any capital to, its stockholders or authorize or make any other
distribution, payment or delivery of property or cash to its stockholders as
such, or redeem, retire, purchase or otherwise acquire, directly or indirectly,
for a consideration, any shares of any class of its capital stock, now or
hereafter outstanding (or any warrants for or options or stock appreciation
rights in respect of any of such shares), or set aside any funds for any of the
foregoing purposes, and Holdings will not permit any of its Subsidiaries to
purchase or otherwise acquire for consideration any shares of any class of the
capital stock of Holdings or any other Subsidiary, as the case may be, now or
hereafter outstanding (or any options or warrants or stock appreciation rights
issued by such Person with respect to its capital stock) (all of the foregoing
"Dividends"), except that:
(i) any Subsidiary of the Borrower may pay Dividends to the
Borrower or any Wholly-Owned Subsidiary of the Borrower;
(ii) Holdings may redeem or purchase shares of Holdings Common
Stock or options to purchase Holdings Common Stock, respectively, held by
former employees of Holdings or any of its Subsidiaries following the
termination of their employment, provided that (w) the only consideration
paid by Holdings in respect of such redemptions and/or purchases shall be
cash and Shareholder Subordinated Notes, (x) the sum of (A) the aggregate
amount paid by Holdings in cash in respect of all such redemptions and/or
purchases plus (B) the aggregate amount of all principal and interest
payments made on Shareholder Subordinated Notes, shall not exceed
$1,000,000 in any fiscal year of Holdings, provided that such amount shall
be increased by an amount (not to exceed $5,000,000 for purposes of this
clause (ii)) equal to the proceeds received by Holdings after the Initial
Borrowing Date from the sale or issuance of Holdings Common Stock to
management of Holdings or any of its Subsidiaries and (y) at the time of
any cash payment permitted to be made pursuant to this Section 8.06(ii),
including any cash payment under a Shareholder Subordinated Note, no
Default or Event of Default shall then exist or result therefrom;
(iii) so long as no Default or Event of Default then exists or
would result therefrom, the Borrower may pay cash Dividends to Holdings so
long as Holdings promptly uses such proceeds for the purposes described in
clause (ii) of this Section 8.06;
(iv) the Borrower may (x) make cash payments to Holdings pursuant
to the Holdings Services Agreement and (y) pay cash Dividends to Holdings
so long as the proceeds thereof are promptly used by Holdings to pay
operating expenses in the ordinary course of business (including, without
limitation, professional fees
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and expenses) and other similar corporate overhead costs and expenses, or
to pay salaries or other compensation of employees who perform services for
Holdings and the Borrower, provided that the aggregate amount of cash
payments and cash Dividends paid pursuant to this clause (iv) shall not
during any fiscal year of the Borrower exceed $500,000;
(v) the Borrower may pay cash Dividends to Holdings, provided
that (x) the proceeds thereof are immediately used by Holdings to make the
payments referred to in Section 8.07(iii) or (iv) and (y) such cash
Dividends are only made at the times and up to the amounts permitted by
Section 8.07(iii) and (iv) and the last sentence of Section 8.07;
(vi) the Borrower may pay cash Dividends to Holdings in the
amounts and at the times of any payment by Holdings in respect of taxes,
provided that (x) the amount of cash Dividends paid pursuant to this clause
(vi) to enable Holdings to pay federal income taxes at any time shall not
exceed, when added to the amount of payments made pursuant to the Holdings
Tax Allocation Agreement for such purposes, the lesser of (A) the amount of
such federal income taxes owing by Holdings at such time for the respective
period and (B) the amount of such federal income taxes that would be owing
by the Borrower and its Subsidiaries on a consolidated basis for such
period if determined without regard to Holdings' ownership of the Borrower
and (y) any refunds shall promptly be returned by Holdings to the Borrower;
(vii) the liquidation preference of the Holdings Preferred Stock
may accrete in accordance with the terms of the Holdings Preferred Stock
Certificate;
(viii) in the event that Holdings consummates an initial
registered public offering of Holdings Common Stock, Holdings may redeem
shares of its outstanding Holdings Preferred Stock as and to the extent
permitted by Section 8.13(i)(y);
(ix) Holdings may pay regularly scheduled Dividends on the
Permitted Holdings PIK Securities (to the extent issued as preferred stock)
pursuant to the terms thereof solely through the issuance of additional
shares of such Permitted Holdings PIK Securities, provided that in lieu of
issuing additional shares of such Permitted Holdings PIK Securities as
Dividends, Holdings may increase the liquidation preference of the shares
of Permitted Holdings PIK Securities in respect of which such Dividends
have accrued; and
(x) the Borrower may pay cash Dividends to Holdings on the
Initial Borrowing Date in an aggregate amount not to exceed the amount
needed by Holdings to redeem in full the Holdings Senior Subordinated Debt
and the Holdings
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Junior Subordinated Debt in accordance with Section 5.01(h) provided that
the proceeds thereof are immediately used by Holdings to redeem the
Holdings Senior Subordinated Debt and the Holdings Junior Subordinated
Debt.
8.07 Transactions with Affiliates. Holdings will not, and will not
----------------------------
permit any of its Subsidiaries to, enter into any transaction or series of
transactions with any Affiliate other than in the ordinary course of business
and on terms and conditions substantially as favorable to Holdings or such
Subsidiary as would be obtainable by Holdings or such Subsidiary at the time in
a comparable arm's-length transaction with a Person other than an Affiliate;
provided, that the following shall in any event be permitted: (i) the
--------
Transaction; (ii) the payment on the Initial Borrowing Date of one time
consulting fees to Xxxx Capital and/or the Bain Affiliates in an aggregate
amount (for Xxxx Capital and all such Bain Affiliates taken together) not to
exceed $3,800,000 plus reasonable out-of-pocket expenses incurred by Xxxx
Capital and/or the Bain Affiliates in providing services to the Borrower; (iii)
the payment of management fees to Xxxx Capital and the Bain Affiliates in an
aggregate amount (for all such Persons taken together) not to exceed $950,000 in
any fiscal year of the Borrower; (iv) the reimbursement of Xxxx Capital and the
Bain Affiliates for their reasonable out-of-pocket expenses incurred by them in
connection with performing management services to the Borrower and its
Subsidiaries under the Consulting Agreement; and (v) Holdings and the Borrower
and its Domestic Subsidiaries may enter into the Holdings Tax Allocation
Agreement and the Holdings Services Agreement and may make any payments required
thereunder.
8.08 Capital Expenditures. (a) Holdings will not, and will not
--------------------
permit any of its Subsidiaries to, make any Capital Expenditures, except that,
subject to clause (b) below, (i) during the fiscal year ending December 31,
1997, the Borrower and its Subsidiaries may make Capital Expenditures so long as
the aggregate amount of such Capital Expenditures does not exceed $15,000,000;
and (ii) during any fiscal year thereafter, the Borrower and its Subsidiaries
may make Capital Expenditures so long as the aggregate amount of such Capital
Expenditures does not exceed $25,000,000 in any such fiscal year.
(b) Notwithstanding the foregoing, in the event that the amount of
Capital Expenditures permitted to be made by the Borrower and its Subsidiaries
pursuant to clause (a) above in any fiscal year (before giving effect to any
increase in such permitted expenditure amount pursuant to this clause (b)) is
greater than the amount of such Capital Expenditures made by the Borrower and
its Subsidiaries during such fiscal year, such excess (the "Rollover Amount")
may be carried forward and utilized to make Capital Expenditures in succeeding
fiscal years, provided that in no event shall the aggregate amount of Capital
Expenditures made by the Borrower and its Subsidiaries during any fiscal year
pursuant to Section 8.08(a)(ii) exceed 150% of the amount set forth in Section
8.08(a)(ii).
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(c) Notwithstanding the foregoing, the Borrower and its Subsidiaries
may make Capital Expenditures (which Capital Expenditures will not be included
in any determination under the foregoing clause (a)) with the insurance proceeds
received by the Borrower or any of its Subsidiaries from any Recovery Event so
long as such Capital Expenditures are to replace or restore any properties or
assets in respect of which such proceeds were paid within 360 days following the
date of the receipt of such insurance proceeds to the extent such insurance
proceeds are not required to be applied to repay Term Loans pursuant to Section
4.02(A)(g) and are not used by the Borrower to effect Permitted Acquisitions.
(d) Notwithstanding the foregoing, the Borrower and its Subsidiaries
may make Capital Expenditures (which Capital Expenditures will not be included
in any determination under the foregoing clause (a)) with the Net Proceeds of
Asset Sales, to the extent such Net Proceeds are not required to be applied to
repay Term Loans pursuant to Section 4.02(A)(c) and are not used by the Borrower
to effect Permitted Acquisitions.
(e) Notwithstanding the foregoing, the Borrower may make Capital
Expenditures (which Capital Expenditures will not be included in any
determination under the foregoing clause (a)) constituting Permitted
Acquisitions.
(f) Notwithstanding the foregoing, the Borrower and its Subsidiaries
may make Capital Expenditures at any time in an aggregate amount equal to the
Excess Amount at such time (which Capital Expenditures will not be included in
any determination under the foregoing clause (a)), and are not used by the
Borrower to effect Permitted Acquisitions; provided, however, that the aggregate
-------- -------
amount of Capital Expenditures made by the Borrower and its Subsidiaries
pursuant to this clause (f) and clause (a) of this Section 8.08 shall not exceed
$35,000,000 in any fiscal year of the Borrower.
8.09 Minimum Consolidated EBITDA. (a) The Borrower will not permit
---------------------------
Consolidated EBITDA for any Test Period ending on a date set forth below to be
less than the amount set forth opposite such date:
Minimum Consolidated
Date EBITDA
---- --------------------
September 30, 1997 $10,000,000
December 31, 1997 $20,000,000
March 31, 1998 $35,000,000
June 30, 1998 $42,500,000
September 30, 1998 $45,000,000
December 31, 1998 $48,200,000
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Minimum Consolidated
Date EBITDA
---- --------------------
March 31, 1999 $51,000,000
June 30, 1999 $54,000,000
September 30, 1999 $55,000,000
December 31, 1999 $57,000,000
March 31, 2000 $60,000,000
June 30, 2000 $63,000,000
September 30, 2000 $65,500,000
December 31, 2000 $69,000,000
March 31, 2001 $70,300,000
June 30, 2001 $70,300,000
September 30, 2001 $70,300,000
December 31, 2001 $71,600,000
March 31, 2002 $73,400,000
June 30, 2002 $73,400,000
September 30, 2002 $73,400,000
December 31, 2002 $75,100,000
March 31, 2003 $76,900,000
June 30, 2003 $76,900,000
September 30, 2003 $76,900,000
December 31, 2003 $78,700,000
March 31, 2004 $80,600,000
June 30, 2004 $80,600,000
September 30, 2004 $80,600,000
December 31, 2004 $82,500,000
March 31, 2005 $82,500,000
June 30, 2005 $82,500,000
(b) The Borrower will not permit Consolidated EBITDA for the period
beginning on July 1, 1997 and ending on a date set forth below to be less than
the amount set forth opposite such date:
Minimum Consolidated
Date EBITDA
---- --------------------
September 30, 1997 $ 10,000,000
December 31, 1997 $ 20,000,000
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Minimum Consolidated
Date EBITDA
---- --------------------
March 31, 1998 $ 35,000,000
June 30, 1998 $ 42,500,000
September 30, 1998 $ 60,000,000
December 31, 1998 $ 75,100,000
March 31, 1999 $ 92,600,000
June 30, 1999 $110,200,000
September 30, 1999 $127,700,000
December 31, 1999 $145,300,000
March 31, 2000 $165,000,000
June 30, 2000 $184,700,000
September 30, 2000 $204,400,000
December 31, 2000 $224,100,000
March 31, 2001 $244,500,000
June 30, 2001 $265,000,000
September 30, 2001 $285,400,000
December 31, 2001 $305,900,000
March 31, 2002 $327,400,000
June 30, 2002 $348,800,000
September 30, 2002 $370,300,000
December 31, 2002 $391,700,000
March 31, 2003 $414,200,000
June 30, 2003 $436,700,000
September 30, 2003 $459,200,000
December 31, 2003 $481,700,000
March 31, 2004 $505,200,000
June 30, 2004 $528,800,000
September 30, 2004 $552,400,000
December 31, 2004 $576,000,000
March 31, 2005 $600,000,000
June 30, 2005 $624,000,000
8.10 Interest Coverage Ratio. The Borrower will not permit the
-----------------------
Interest Coverage Ratio for any Test Period ending on a date set forth below to
be less than the ratio set forth opposite such date:
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Date Ratio
---- -----
September 30, 1997 1.7:1.0
December 31, 1997 1.7:1.0
March 31, 1998 1.7:1.0
June 30, 1998 1.7:1.0
September 30, 1998 1.7:1.0
December 31, 1998 1.7:1.0
March 31, 1999 1.8:1.0
June 30, 1999 1.9:1.0
September 30, 1999 1.9:1.0
December 31, 1999 2.0:1.0
March 31, 2000 2.1:1.0
June 30, 2000 2.3:1.0
September 30, 2000 2.4:1.0
December 31, 2000 2.5:1.0
March 31, 2001 2.8:1.0
June 30, 2001 2.9:1.0
September 30, 2001 3.0:1.0
December 31, 2001 3.0:1.0
March 31, 2002 3.1:1.0
June 30, 2002 3.3:1.0
September 30, 2002 3.3:1.0
December 31, 2002 3.5:1.0
March 31, 2003 3.7:1.0
June 30, 2003 4.0:1.0
September 30, 2003 4.1:1.0
December 31, 2003 4.2:1.0
and each fiscal quarter
ending thereafter
8.11 Leverage Ratio. The Borrower will not permit the Leverage Ratio
--------------
at any time during a fiscal quarter set forth below to be more than the ratio
set forth opposite such fiscal quarter:
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Fiscal Quarter Ending Ratio
--------------------- -----
September 30, 1997 6.0:1.0
December 31, 1997 6.0:1.0
March 31, 1998 6.0:1.0
June 30, 1998 6.0:1.0
September 30, 1998 6.0:1.0
December 31, 1998 6.0:1.0
March 31, 1999 5.7:1.0
June 30, 1999 5.4:1.0
September 30, 1999 5.1:1.0
December 31, 1999 4.9:1.0
March 31, 2000 4.6:1.0
June 30, 2000 4.4:1.0
September 30, 2000 4.0:1.0
December 31, 2000 3.9:1.0
March 31, 2001 3.6:1.0
June 30, 2001 3.5:1.0
September 30, 2001 3.1:1.0
December 31, 2001 3.2:1.0
March 31, 2002 3.1:1.0
June 30, 2002 3.0:1.0
September 30, 2002 2.8:1.0
December 31, 2002 2.6:1.0
March 31, 2003 2.4:1.0
June 30, 2003 2.3:1.0
September 30, 2003 2.2:1.0
December 31, 2003 2.0:1.0
and the last day of
each fiscal quarter
ending thereafter
8.12 Designated Senior Debt. Holdings will not, and will not permit
----------------------
any of its Subsidiaries to (i) designate any Indebtedness (other than the
Obligations) as "Designated Senior Debt" for purposes of, and as defined in, the
Senior Subordinated Notes Documents or (ii) designate any documents with respect
to any Indebtedness (other than this Agreement) as the "Credit Agreement" as
defined in the Senior Subordinated Notes
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Documents for purposes of the receipt of notices by the Agent, and delivery of
blockage notices pursuant to the subordination provisions of the Senior
Subordinated Notes Documents.
8.13 Limitation on Voluntary Payments and Modifications of
-----------------------------------------------------
Indebtedness; Modifications of Certificate of Incorporation, By-Laws and Certain
--------------------------------------------------------------------------------
Other Agreements; etc. Holdings will not, and will not permit any of its
----------------------
Subsidiaries to:
(i) make (or give any notice in respect of) any voluntary or
optional payment or prepayment on or redemption or acquisition for value of
(including, without limitation, by way of depositing with the trustee with
respect thereto or any other Person money or securities before due for the
purpose of paying when due) any Existing Indebtedness, any Shareholder
Subordinated Notes, any Permitted Holdings PIK Security, any Holdings
Preferred Stock or any Senior Subordinated Notes, provided that (x) the
--------
Series B Senior Subordinated Notes may be issued in exchange for the Series
A Senior Subordinated Notes in accordance with the terms of the Senior
Subordinated Note Indenture and (y) Holdings may redeem and/or repay up to
50% of the outstanding Holdings Preferred Stock with the portion of an
initial registered public offering of Holdings Common Stock not required to
be applied to repay the Term Loans under Section 4.02(A)(d);
(ii) make (or give any notice in respect of) any principal or
interest payment on, or any redemption or acquisition for value of, any
Shareholder Subordinated Note, except to the extent permitted by
Section 8.06(ii);
(iii) amend or modify, or permit the amendment or modification of,
any provision of any Existing Indebtedness, any Existing Indebtedness
Agreement, any Senior Subordinated Notes Document, any Holdings Preferred
Stock Document or any Shareholder Subordinated Note;
(iv) amend or modify, or permit the amendment or modification of, any
provision of any Permitted Holdings PIK Security in any manner inconsistent
with the definition of Permitted Holdings PIK Security;
(v) amend, modify or change in any way adverse to the interests of
the Banks, any Management Agreement (including, without limitation, the
Consulting Agreement), the Holdings Tax Allocation Agreement, the Holdings
Services Agreement, its Certificate of Incorporation (including, without
limitation, by filing or modification of any certificate of designation
(other than the Holdings Preferred Stock Certificate which shall be
governed by the preceding clause (iii)) or with respect to the Voplex
Canada Preferred Stock) or By-Laws, or any agreement entered into by it,
with respect to its capital stock (including any Shareholders' Agreement
(including, without limitation, the Stockholders' Agreement, the Option
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Agreements and the Registration Rights Agreement)), or enter into any new
agreement with respect to its capital stock which in any way could be
adverse to the interests of the Banks or enter into any Tax Allocation
Agreement other than the Holdings Tax Allocation Agreement and the Holdings
Services Agreement; and
(vi) issue any class of capital stock other than (x) in the case of
the Borrower and its Subsidiaries, non-redeemable common stock and (y) in
the case of Holdings, issuances of Holdings Common Stock or Permitted
Holdings PIK Securities where, after giving effect to such issuance, no
Event of Default will exist under Section 9.10 and to the extent the
proceeds thereof are applied in accordance with Sections 4.02(A)(d) and
7.13.
8.14 Limitation on Certain Restrictions on Subsidiaries. Holdings
--------------------------------------------------
will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such Subsidiary to (a) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by Holdings or any Subsidiary of
Holdings, or pay any Indebtedness owed to Holdings or a Subsidiary of Holdings,
(b) make loans or advances to Holdings or any of Holdings' Subsidiaries or (c)
transfer any of its properties or assets to Holdings or any of Holdings'
Subsidiaries, except for such encumbrances or restrictions existing under or by
reason of (i) applicable law, (ii) this Agreement and the other Credit
Documents, (iii) customary provisions restricting subletting or assignment of
any lease governing a leasehold interest of the Borrower or a Subsidiary of the
Borrower, (iv) customary provisions restricting assignment of any licensing
agreement entered into by the Borrower or a Subsidiary of the Borrower in the
ordinary course of business, (v) customary provisions restricting the transfer
of assets subject to Liens permitted under Sections 8.03(k) and (m) and (vi) the
Senior Subordinated Notes Documents.
8.15 Limitation on the Creation of Subsidiaries. Notwithstanding
------------------------------------------
anything to the contrary contained in this Agreement, Holdings will not, and
will not permit any of its Subsidiaries to, establish, create or acquire after
the Initial Borrowing Date any Subsidiary; provided that, the Borrower and its
--------
Wholly-Owned Subsidiaries shall be permitted to establish or create (x)
Subsidiaries as a result of investments made pursuant to Section 8.05(y); and
(y) Wholly-Owned Subsidiaries so long as (i) at least 30 days' prior written
notice thereof is given to the Agent, (ii) the capital stock of such new
Subsidiary is pledged pursuant to, and to the extent required by, the Pledge
Agreement and the certificates representing such stock, together with stock
powers duly executed in blank, are delivered to the Collateral Agent, (iii) such
new Subsidiary (other than a Foreign Subsidiary except to the extent otherwise
required pursuant to Section 7.14) executes a counterpart of the Subsidiary
Guaranty, the Pledge Agreement and the Security Agreement, (iv) such new
Subsidiary (if same is a Wholly-Owned Subsidiary or would otherwise be
consolidated with the Borrower for federal income tax purposes) executes a
counterpart of the Holdings Tax
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Allocation Agreement or enters into an amendment thereto in form satisfactory to
the Agent, and (v) to the extent requested by the Agent or the Required Banks,
takes all actions required pursuant to Section 7.11. In addition, each new
Wholly-Owned Subsidiary shall execute and deliver, or cause to be executed and
delivered, all other relevant documentation of the type described in Section 5
as such new Subsidiary would have had to deliver if such new Subsidiary were a
Credit Party on the Initial Borrowing Date.
SECTION 9. Events of Default. Upon the occurrence of any of the
-----------------
following specified events (each an "Event of Default"):
9.01 Payments. The Borrower shall (i) default in the payment when
--------
due of any principal of the Loans or (ii) default, and such default shall
continue for three or more days, in the payment when due of any Unpaid Drawing,
any interest on the Loans or any Fees or any other amounts owing hereunder or
under any other Credit Document;
9.02 Representations, etc. Any representation, warranty or statement
---------------------
made by Holdings, the Borrower or any other Credit Party herein or in any other
Credit Document or in any statement or certificate delivered pursuant hereto or
thereto shall prove to be untrue in any material respect on the date as of which
made or deemed made; or
9.03 Covenants. Any Credit Party shall (a) default in the due
---------
performance or observance by it of any term, covenant or agreement contained in
Sections 7.10, 7.11, 7.13, 7.17, or 8, or (b) default in the due performance or
observance by it of any term, covenant or agreement (other than those referred
to in Section 9.01, 9.02 or clause (a) of this Section 9.03) contained in this
Agreement and such default shall continue unremedied for a period of at least 30
days after notice to the defaulting party by the Agent or the Required Banks; or
9.04 Default Under Other Agreements. (a) Holdings or any of its
------------------------------
Subsidiaries shall (i) default in any payment with respect to any Indebtedness
(other than the Obligations) beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness was created or (ii)
default in the observance or performance of any agreement or condition relating
to any such Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition exist,
the effect of which default or other event or condition is to cause, or to
permit the holder or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders) to cause any such Indebtedness to become due
prior to its stated maturity; or (b) any Indebtedness (other than the
Obligations) of Holdings or any of its Subsidiaries shall be declared to be due
and payable, or shall be required to be prepaid other than by a regularly
scheduled required prepayment or as a mandatory prepayment (unless such required
prepayment or mandatory prepayment results from a default thereunder or an event
of the type that constitutes an Event of Default), prior to the stated maturity
thereof; pro-
----
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vided, that it shall not constitute an Event of Default pursuant to clause (a)
-----
or (b) of this Section 9.04 unless the principal amount of any one issue of such
Indebtedness, or the aggregate amount of all such Indebtedness referred to in
clauses (a) and (b) above, exceeds $5,000,000 at any one time; or
9.05 Bankruptcy, etc. Holdings or any of its Subsidiaries shall
----------------
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy," as now or hereafter in effect, or any successor
thereto (the "Bankruptcy Code"); or an involuntary case is commenced against
Holdings or any of its Subsidiaries and the petition is not controverted within
10 days, or is not dismissed within 60 days, after commencement of the case; or
a custodian (as defined in the Bankruptcy Code) is appointed for, or takes
charge of, all or substantially all of the property of Holdings or any of its
Subsidiaries; or Holdings or any of its Subsidiaries commences any other
proceeding under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to Holdings or any of
its Subsidiaries; or there is commenced against Holdings or any of its
Subsidiaries any such proceeding which remains undismissed for a period of 60
days; or Holdings or any of its Subsidiaries is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or Holdings or any of its Subsidiaries suffers any
appointment of any custodian or the like for it or any substantial part of its
property to continue undischarged or unstayed for a period of 60 days; or
Holdings or any of its Subsidiaries makes a general assignment for the benefit
of creditors; or any corporate action is taken by Holdings or any of its
Subsidiaries for the purpose of effecting any of the foregoing; or
9.06 ERISA. (a) Any Plan shall fail to satisfy the minimum funding
-----
standard required for any plan year or part thereof or a waiver of such standard
or extension of any amortization period is sought or granted under Section 412
of the Code, any Plan shall have had or is likely to have a trustee appointed to
administer such Plan, any Plan is, shall have been or is likely to be terminated
or the subject of termination proceedings under ERISA, any Plan shall have an
Unfunded Current Liability, a contribution required to be made to a Plan or a
Foreign Pension Plan has not been timely made, Holdings or any Subsidiary of
Holdings or any ERISA Affiliate has incurred or is likely to incur a liability
to or on account of a Plan under Section 409, 502(i), 502(l), 515, 4062, 4063,
4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971, 4975 or
4980 of the Code, or Holdings or any Subsidiary of Holdings has incurred or is
likely to incur liabilities pursuant to one or more employee welfare benefit
plans (as defined in Section 3(1) of ERISA) which provide benefits to retired
employees or other former employees (other than as required by Section 601 of
ERISA) or employee pension benefit plans (as defined in Section 3(2) of ERISA)
or Foreign Pension Plans; (b) there shall result from any such event or events
the imposition of a lien, the granting of a security interest, or a liability or
a material risk of incurring a liability; and (c) which lien, security interest
or liability which arises from such event or events will have a Material Adverse
Effect; or
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9.07 Security Documents. (a) Except in each case to the extent
------------------
resulting from the failure of the Collateral Agent to retain possession of the
applicable Pledged Securities, any Security Document shall cease to be in full
force and effect, or shall cease to give the Collateral Agent the Liens, rights,
powers and privileges purported to be created thereby in favor of the Collateral
Agent, or (b) any Credit Party shall default in the due performance or
observance of any term, covenant or agreement on its part to be performed or
observed pursuant to any such Security Document and such default shall continue
beyond any cure or grace period specifically applicable thereto pursuant to the
terms of such Security Document; or
9.08 Guaranties. The Guaranties or any provision thereof shall cease
----------
to be in full force and effect, or any Guarantor or any Person acting by or on
behalf of such Guarantor shall deny or disaffirm such Guarantor's obligations
under any Guaranty or any Guarantor shall default in the due performance or
observance of any material term, covenant or agreement on its part to be
performed or observed pursuant to any Guaranty; or
9.09 Judgments. One or more judgments or decrees shall be entered
---------
against Holdings or any of its Subsidiaries involving a liability (not paid or
not fully covered by insurance) in excess of $5,000,000 for all such judgments
and decrees and all such judgments or decrees shall not have been vacated,
discharged or stayed or bonded pending appeal within 60 days from the entry
thereof; or
9.10 Ownership. A Change of Control Event shall have occurred;
---------
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Agent shall, upon the written request of the
Required Banks, by written notice to the Borrower, take any or all of the
following actions, without prejudice to the rights of the Agent or any Bank to
enforce its claims against any Guarantor or the Borrower, except as otherwise
specifically provided for in this Agreement (provided, that if an Event of
--------
Default specified in Section 9.05 shall occur with respect to the Borrower, the
result which would occur upon the giving of written notice by the Agent as
specified in clauses (i) and (ii) below shall occur automatically without the
giving of any such notice): (i) declare the Total Commitment (or the unutilized
portion thereof) terminated, whereupon the Commitment of each Bank (or the
unutilized portion thereof) shall forthwith terminate immediately and any
Commitment Fees shall forthwith become due and payable without any other notice
of any kind; (ii) declare the principal of and any accrued interest in respect
of all Loans and all Obligations owing hereunder (including Unpaid Drawings) to
be, whereupon the same shall become, forthwith due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; (iii) enforce, as Collateral Agent (or direct the
Collateral Agent to enforce), any or all of the Liens and security interests
created pursuant to the Security Documents; (iv) terminate any Letter of Credit
which may be terminated in accordance with its terms; and (v) direct the
Borrower to pay (and the Borrower hereby agrees upon receipt of such notice, or
upon the
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occurrence of any Event of Default specified in Section 9.05, to pay) to the
Collateral Agent at the Payment Office such additional amounts of cash, to be
held as security for the Borrower's reimbursement obligations in respect of
Letters of Credit then outstanding, equal to the aggregate Stated Amount of all
Letters of Credit then outstanding.
SECTION 10. Definitions. As used herein, the following terms shall
-----------
have the meanings herein specified unless the context otherwise requires.
Defined terms in this Agreement shall include in the singular number the plural
and in the plural the singular:
"Acquisitions" shall mean the acquisition by the Borrower of all or
substantially all of the assets of (i) E.P. Plastics from Eagle-Picher and
(ii) Goodyear Composites from Goodyear.
"Acquisition Agreements" shall mean (i) the asset purchase agreement
(or similar agreement), between the Borrower and Eagle-Picher and (ii) the asset
purchase agreement between the Borrower and Goodyear, in each case to the extent
in effect at such time.
"Acquisition Documents" shall mean, at any time, the Acquisition
Agreements and all other agreements and documents relating to each of the
Acquisitions, in each case to the extent in effect at such time.
"A Term Loan" shall have the meaning provided in Section 1.01(A)(a).
"A Term Loan Availability Termination Date" shall mean
August 10, 1997.
"A Term Loan Commitment" shall mean, with respect to each Bank, the
amount set forth opposite such Bank's name in Annex I directly below the column
entitled "A Term Loan Commitment," as the same may be reduced or terminated
pursuant to Section 3.02, 3.03 and/or 9.
"A Term Loan Facility" shall mean the Facility evidenced by the Total
A Term Loan Commitment.
"A Term Loan Maturity Date" shall mean June 30, 2002.
"A Term Note" shall have the meaning provided in Section 1.05(a).
"A TL Percentage" shall mean, at any time, a fraction (expressed as a
percentage) the numerator of which is equal to the aggregate principal amount of
all A Term Loans outstanding at such time and the denominator of which is equal
to the aggregate principal amount of all Term Loans outstanding at such time.
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"Additional Security Documents" shall have the meaning provided in
Section 7.11.
"Adjusted Certificate of Deposit Rate" shall mean, on any day, the sum
(rounded to the nearest 1/100 of 1%) of (1) the rate obtained by dividing
(x) the most recent weekly average dealer offering rate for negotiable
certificates of deposit with a three-month maturity in the secondary market as
published in the most recent Federal Reserve System publication entitled "Select
Interest Rates," published weekly on Form H.15 as of the date hereof, or if such
publication or a substitute containing the foregoing rate information shall not
be published by the Federal Reserve System for any week, the weekly average
offering rate determined by the Agent on the basis of quotations for such
certificates received by it from three certificate of deposit dealers in New
York of recognized standing or, if such quotations are unavailable, then on the
basis of other sources reasonably selected by the Agent, by (y) a percentage
equal to 100% minus the stated maximum rate of all reserve requirements as
specified in Regulation D applicable on such day to a three-month certificate of
deposit of a member bank of the Federal Reserve System in excess of $100,000
(including, without limitation, any marginal, emergency, supplemental, special
or other reserves), plus (2) the then daily net annual assessment rate as
estimated by the Agent for determining the current annual assessment payable by
BTCo to the Federal Deposit Insurance Corporation for insuring three month
certificates of deposit.
"Affected Eurodollar Loans" shall have the meaning provided in
Section 4.02(B)(c).
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all directors
and officers of such Person), controlled by, or under direct or indirect common
control with such Person. A Person shall be deemed to control a corporation if
such Person possesses, directly or indirectly, the power (i) to vote 10% or more
of the securities having ordinary voting power for the election of directors of
such corporation or (ii) to direct or cause the direction of the management and
policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise.
"Agent" shall have the meaning provided in the first paragraph of this
Agreement and shall include any successor to the Agent appointed pursuant to
Section 11.10.
"Aggregate Unutilized Commitment" with respect to any Bank at any time
shall mean the sum of (a) such Bank's A Term Loan Commitment at such time, if
any, and (b) such Bank's Revolving Loan Commitment at such time less the sum of
(x) the aggregate outstanding principal amount of all Revolving Loans made by
such Bank and (y) such Bank's RL Percentage of the Letter of Credit Outstandings
at such time.
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"Agreement" shall mean this Credit Agreement, as the same may be from
time to time modified, amended and/or supplemented.
"Applicable Base Rate Margin" shall mean (i) in the case of A Term
Loans and Revolving Loans, 1.50% less the then applicable Interest Reduction
Discount, if any, and (ii) in the case of B Term Loans, 2.00% less the then
applicable Interest Reduction Discount, if any.
"Applicable Commitment Fee Percentage" shall mean (i) for the period
from the Effective Date through but not including the first Start Date, .500%
per annum and (ii) from and after any Start Date to and including the
corresponding End Date, the respective percentage per annum set forth in clause
(A), (B) or (C) below if, but only if, as of the Test Date for such Start Date
the applicable condition set forth in clause (A), (B) or (C) below, as the case
may be, is met:
(A) .500% if, but only if, the Leverage Ratio on such Test Date is
greater than or equal to 3.50:1.00;
(B) .375% if, but only if, the Leverage Ratio on such Test Date is
greater than or equal to 3.00:1.00 but less than 3.50:1.00; and
(C) .300% if, but only if, the Leverage Ratio on such Test Date is
less than 3:00:1.00.
Notwithstanding anything to the contrary contained above in the
definition, the Applicable Commitment Fee Percentage shall be .500% at any time
when (i) an Event of Default shall exist and/or (ii) financial statements have
not been delivered when required pursuant to Section 7.01(b) or (c), as the case
may be.
"Applicable Eurodollar Margin" shall mean (i) in the case of A Term
Loans and Revolving Loans, 2.50% less the then applicable Interest Reduction
Discount, if any, and (ii) in the case of B Term Loans, 3.00% less the then
applicable Interest Reduction Discount, if any.
"Asset Sale" shall mean any sale, transfer or other disposition by
Holdings or any of its Subsidiaries to any Person other than the Borrower or any
Wholly-Owned Subsidiary of the Borrower of any asset (including, without
limitation, any capital stock or other securities of another Person) of Holdings
or such Subsidiary other than (i) sales, transfers or other dispositions of
inventory made in the ordinary course of business and (ii) sales of assets
pursuant to Section 8.02(f), (g), (h) and (i).
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement substantially in the form of Exhibit J (appropriately
completed).
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"Authorized Officer" shall mean any senior officer of Holdings or the
Borrower designated as such in writing to the Agent by Holdings or the Borrower,
in each case to the extent reasonably acceptable to the Agent.
"B Banks" shall have the meaning provided in Section 4.02(C).
"B Term Loan" shall have the meaning provided in Section 1.01(A)(b).
"B Term Loan Commitment" shall mean, with respect to each Bank, the
amount set forth opposite such Bank's name in Annex I directly below the column
entitled "B Term Loan Commitment," as the same may be terminated pursuant to
Section 3.03 and/or 9.
"B Term Loan Facility" shall mean the Facility evidenced by the
Total B Term Loan Commitment.
"B Term Loan Maturity Date" shall mean June 30, 2005.
"B Term Note" shall have the meaning provided in Section 1.05(a).
"B TL Percentage" shall mean, at any time, a fraction (expressed as a
percentage) the numerator of which is equal to the aggregate principal amount of
all B Term Loans outstanding at such time and the denominator of which is equal
to the aggregate principal amount of Term Loans outstanding at such time.
"Bain Affiliates" shall mean any Affiliate of Xxxx Capital, provided
that for purposes of the definition of "Change of Control Event", the term Bain
Affiliate shall not include (x) any portfolio company of either Xxxx Capital or
any Affiliate of Xxxx Capital or (y) any officer or director of Holdings or any
of its Subsidiaries that is not also a partner or stockholder of Xxxx Capital on
the Initial Borrowing Date.
"Xxxx Capital" shall mean Xxxx Capital, Inc. a Delaware corporation.
"Bank" shall have the meaning provided in the first paragraph of this
Agreement.
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any Borrowing (including
any Mandatory Borrowing) or to fund its portion of any unreimbursed payment
under Section 2.04(c) or (ii) a Bank having notified the Agent and/or the
Borrower that it does not intend to comply with the obligations under Section
1.01(A), 1.01(C) or 2.04(c), in the case of either clause (i) or (ii) above as a
result of the appointment of a receiver or conservator with respect to such Bank
at the direction or request of any regulatory agency or authority.
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"Bankruptcy Code" shall have the meaning provided in Section 9.05.
"Base Rate" at any time shall mean the higher of (x) the rate which is
1/2 of 1% in excess of the Adjusted Certificate of Deposit Rate and (y) the
Prime Lending Rate.
"Base Rate Loan" shall mean each Loan bearing interest at the rates
provided in Section 1.08(a).
"Borrower" shall have the meaning provided in the first paragraph
hereof.
"Borrower Subordinated Debt" shall mean general unsecured and
unguaranteed subordinated Indebtedness of the Borrower incurred under the
Borrower Subordinated Debt Agreement.
"Borrower Subordinated Debt Agreement" shall mean the Senior
Subordinated Credit Agreement dated as of December 14, 1995, among the Borrower,
Xxxx Capital V Mezzanine Fund, L.P. and BCIP Trust Associates, L.P., thereto as
amended, modified or supplemented from time to time.
"Borrowing" shall mean the incurrence of one Type of Loan pursuant to
a single Facility by the Borrower from all of the Banks having Commitments with
respect to such Facility on a pro rata basis on a given date (or resulting from
--- ----
conversions on a given date), having in the case of Eurodollar Loans the same
Interest Period; provided, that Base Rate Loans incurred pursuant to Section
--------
1.10(b) shall be considered part of any related Borrowing of Eurodollar Loans.
"BTCo" shall mean Bankers Trust Company, in its individual capacity,
and any successor corporation thereto by merger, consolidation or otherwise.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day excluding Saturday, Sunday and any day which shall
be in the City of New York a legal holiday or a day on which banking
institutions are authorized by law or other governmental actions to close and
(ii) with respect to all notices and determinations in connection with, and
payments of principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (i) and which is also a day for trading by and
between banks in U.S. dollar deposits in the interbank Eurodollar market.
"Capital Expenditures" shall mean, with respect to any Person, all
expenditures by such Person which should be capitalized in accordance with GAAP,
including, without duplication, all such expenditures with respect to fixed or
capital assets (including, without limitation, expenditures for maintenance and
repairs which should be capitalized in accordance with GAAP), and the amount of
all Capitalized Lease Obligations incurred
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by such Person; provided that there shall be excluded from "Capital
Expenditures" all one-time expenditures incurred in connection with
consolidating (i) the operations of the Borrower and E.P. Plastics (not to
exceed $1,000,000), to the extent that such expenditures would otherwise
constitute Capital Expenditures and (ii) the operations of the Borrower and
Goodyear Composites (not to exceed $1,000,000) extent that such expenditures
would otherwise constitute Capital Expenditures.
"Capital Lease," as applied to any Person, shall mean any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"Capitalized Lease Obligations" shall mean all obligations under
Capital Leases of the Borrower or any of its Subsidiaries in each case taken at
the amount thereof accounted for as liabilities in accordance with GAAP.
"Cash Equivalents" shall mean (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided, that the full faith and credit of the United
--------
States of America is pledged in support thereof) having maturities of not more
than six months from the date of acquisition, (ii) U.S. dollar denominated time
deposits, certificates of deposit and bankers acceptances of (x) any Bank or (y)
any bank whose short-term commercial paper rating from S&P is at least A-1 or
the equivalent thereof or from Xxxxx'x is at least P-1 or the equivalent thereof
(any such bank or Bank, an "Approved Bank"), in each case with maturities of not
more than six months from the date of acquisition, (iii) commercial paper issued
by any Approved Bank or by the parent company of any Approved Bank and
commercial paper issued by, or guaranteed by, any industrial or financial
company with a short-term commercial paper rating of at least A-1 or the
equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody's,
or guaranteed by any industrial company with a long term unsecured debt rating
of at least A or A-2, or the equivalent of each thereof, from S&P or Moody's, as
the case may be, and in each case maturing within six months after the date of
acquisition, (iv) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof maturing within six months from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either S&P or Moody's and (v) investments in
money market funds substantially all the assets of which are comprised of
securities of the types described in clauses (i) through (iv) above.
"Change of Control Event" shall mean (a) Holdings shall cease to own
directly 100% on a fully diluted basis of the economic and voting interest in
the Borrower's capital stock or (b) Xxxx Capital and/or the Bain Affiliates and
Xxxxxxxx shall cease to own on a fully diluted basis in the aggregate at least
51% of the economic and voting interest in Holdings' capital stock or (c) Xxxx
Capital and/or the Bain Affiliates shall cease to own more than 50% of the
Voting Stock of Holdings owned by such Persons on the Initial
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Borrowing Date or (d) Xxxxxxxx shall cease to own more than 50% of the Voting
Stock of Holdings owned by Xxxxxxxx on the Initial Borrowing Date or (e) the
Board of Directors of Holdings shall cease to consist of the majority of
Continuing Directors or (f) any "Change of Control" as such term is defined in
the Senior Subordinated Notes Indenture, or any successor or similar provision,
shall occur.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement and any subsequent provisions of the Code amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all of the Collateral as defined in each of
the Security Documents.
"Collateral Agent" shall mean the Agent acting as collateral agent for
the Secured Creditors.
"Collective Bargaining Agreements" shall have the meaning provided in
Section 5.01(n)(ii).
"Commitment" shall mean, with respect to each Bank, such Bank's A Term
Loan Commitment, B Term Loan Commitment and Revolving Loan Commitment.
"Commitment Fee" shall have the meaning provided in Section 3.01(a).
"Consolidated Current Assets" shall mean, at any time, the current
assets of the Borrower and its Subsidiaries at such time determined on a
consolidated basis plus the Total Unutilized Revolving Loan Commitment at such
time.
"Consolidated Current Liabilities" shall mean, at any time, the
current liabilities of the Borrower and its Subsidiaries determined on a
consolidated basis, but excluding deferred income taxes and the current portion
of and accrued but unpaid interest on any Indebtedness under this Agreement and
any other long-term Indebtedness which would otherwise be included therein.
"Consolidated Debt" shall mean, at any time, all Indebtedness of
Borrower and its Subsidiaries determined on a consolidated basis.
"Consolidated EBIT" shall mean, for any period, Consolidated Net
Income, before total interest expense (inclusive of amortization of deferred
financing fees and as original issue discount) and interest income of the
Borrower and its Subsidiaries determined on a consolidated basis, and provisions
for taxes based on income and foreign withholding
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taxes, and determined (i) without giving effect to any extraordinary gains or
losses but with giving effect to gains or losses from sales of assets sold in
the ordinary course of business, (ii) without giving effect to any impact from
the LIFO method of inventory accounting, (iii) without giving effect to any
gains, income, losses or charges otherwise included in Consolidated Net Income
for such period and related to a Joint Venture Investment made by the Borrower
or any of its Subsidiaries and (iv) without giving effect to any one-time
expenditures incurred in connection with consolidating the operations of the
Borrower, E.P. Plastics and Goodyear Composites (not to exceed $1,000,000), to
the extent that such expenditures are otherwise deducted in determining
Consolidated Net Income for such period.
"Consolidated EBITDA" shall mean, for any period, Consolidated EBIT,
adjusted by adding thereto the amount of all depreciation expense and
amortization expense that were deducted in determining Consolidated EBIT for
such period.
"Consolidated Interest Expense" shall mean, for any period, total
interest expense (including that attributable to Capital Leases in accordance
with GAAP) of the Borrower and its Subsidiaries determined on a consolidated
basis with respect to all outstanding Indebtedness of the Borrower and its
Subsidiaries, including, without limitation, all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers'
acceptance financing and net costs or benefits under Interest Rate Protection
Agreements, but excluding, however, amortization of deferred financing costs and
any interest expense on deferred compensation arrangements to the extent
included in total interest expense.
"Consolidated Net Income" shall mean, for any period, the net income
(or loss), after provision for taxes, of the Borrower and its Subsidiaries on a
consolidated basis for such period taken as a single accounting period but
excluding any unrealized losses and gains for such period resulting from xxxx-
to-market of Other Hedging Agreements; provided, however, that (A) there shall
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be excluded (without duplication) (i) income (or loss) of any Person (other than
a consolidated Subsidiary of such Person) in which any other Person (other than
such Person or any of its consolidated Subsidiaries) has a joint interest,
except to the extent of the amount of dividends or other distributions actually
paid to such Person or (subject to subclause (iii) below) any of its
consolidated Subsidiaries by such other Person during such period, (ii) the
income (or loss) of any Person during such period accrued prior to the date it
becomes a consolidated Subsidiary of such Person or is merged into or
consolidated with such Person or any of its consolidated Subsidiaries, (iii) the
income of any consolidated Subsidiary of the Borrower to the extent attributable
to minority interests held therein by Persons other than the Borrower and its
Wholly-Owned Subsidiaries, and (iv) the income of any consolidated Subsidiary of
the Borrower during such period to the extent that the declaration or payment of
dividends or similar distributions by that consolidated Subsidiary of such
income is not at the time permitted by operation of the terms of its charter or
any agreement, instrument, judgment, decree, order,
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statute, rule or governmental regulation applicable to that Subsidiary or the
Borrower or any of its other Subsidiaries.
"Consulting Agreement" shall mean the Management Services Agreement,
dated as of November 17, 1995 by and among the Borrower and Xxxx Capital, as
amended, modified or supplemented from time to time, in accordance with the
terms hereof and thereof.
"Contingent Obligations" shall mean as to any Person any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(a) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (b) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (d) otherwise to assure or hold harmless the owner of
such primary obligation against loss in respect thereof; provided, however, that
-------- -------
the term Contingent Obligation shall not include endorsements of instruments for
deposit or collection or standard contractual indemnities entered into, in each
case in the ordinary course of business. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Contingent Obligation
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform
thereunder) as determined by such Person in good faith.
"Continuing Directors" shall mean the directors of Holdings on the
Effective Date and each other director if such director's nomination for the
election to the Board of Directors of Holdings is recommended by a majority of
the then Continuing Directors.
"Xxxxxxxx" shall mean Xxxxxxxx Investment Group, L.L.C., a Michigan
limited liability company.
"Credit Documents" shall mean this Agreement, the Notes, the
Guaranties and each Security Document.
"Credit Event" shall mean the making of a Loan (other than a Revolving
Loan made pursuant to a Mandatory Borrowing) or the issuance of a Letter of
Credit.
"Credit Party" shall mean Holdings, the Borrower and each Subsidiary
Guarantor.
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"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a Bank
Default is in effect.
"Dividends" shall have the meaning provided in Section 8.06.
"Documents" shall mean, at any time, (i) the Credit Documents, (ii)
the Senior Subordinated Notes Documents, (iii) the Refinancing Documents and
(iv) the Acquisition Documents for each Acquisition, to the extent that such
Acquisition is then being, or has theretofore been, consummated.
"Domestic Subsidiary" shall mean each Subsidiary of the Borrower which
is not a Foreign Subsidiary.
"Eagle-Picher" shall mean Eagle-Picher Industries, Inc., an Ohio
corporation.
"Effective Date" shall have the meaning provided in Section 12.10.
"Eligible Transferee" shall mean and include a commercial bank,
financial institution or other "accredited investor" (as defined in Regulation D
of the Securities Act).
"Employee Benefit Plans" shall have the meaning provided in Section
5.01(n)(i).
"Employment Agreements" shall have the meaning provided in Section
5.01(n)(vi).
"End Date" shall mean, for any Margin Reduction Period, the last day
of such Margin Reduction Period.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of non-compliance or violation, investigations or proceedings relating
in any way to any violation (or alleged violation) by Holdings or any of its
Subsidiaries under any Environmental Law or any permit issued to Holdings or any
of its subsidiaries under any such law (hereafter, "Claims"), including, without
limitation, (a) any and all Claims by governmental or regulatory authorities for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and (b) any and all Claims by any
third party seeking damages, contribution, indemnification, cost recovery,
compensation or
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injunctive relief resulting from Hazardous Materials or arising from alleged
injury or threat of injury to health, safety or the environment.
"Environmental Law" shall mean any federal, state or local statute,
law, rule, regulation, ordinance, code, policy or rule of common law now or
hereafter in effect and in each case as amended, and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent, decree or judgment (for purposes of this definition
(collectively, "Laws")), relating to the environment or Hazardous Materials or
health and safety (to the extent such health and safety issues arise under the
Occupational Safety and Health Act of 1970, as amended), or any such similar
Laws.
"E.P. Plastics" shall mean the plastics division of Eagle-Picher.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and the
rulings issued thereunder. Section references to ERISA are to ERISA as in
effect at the date of this Agreement and any subsequent provisions of ERISA
amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with Holdings or any Subsidiary of Holdings would be
deemed to be a "single employer" within the meaning of Section 414(b), (c), (m)
or (o) of the Code.
"Eurodollar Loans" shall mean each Loan bearing interest at the rates
provided in Section 1.08(b).
"Eurodollar Rate" shall mean with respect to each Interest Period for
a Eurodollar Loan, (i) the arithmetic average (rounded to the nearest 1/100 of
1%) of the offered quotation to first-class banks in the interbank Eurodollar
market by the Agent for U.S. dollar deposits of amounts in same day funds
comparable to the outstanding principal amount of the Eurodollar Loan of the
Agent for which an interest rate is then being determined with maturities
comparable to the Interest Period to be applicable to such Eurodollar Loan,
determined as of 10:00 A.M. (New York time) on the date which is two Business
Days prior to the commencement of such Interest Period divided (and rounded
upward to the next whole multiple of 1/16 of 1%) by (ii) a percentage equal to
100% minus the then stated maximum rate of all reserve requirements (including,
without limitation, any marginal, emergency, supplemental, special or other
reserves) applicable to any member bank of the Federal Reserve System in respect
of Eurocurrency liabilities as defined in Regulation D (or any successor
category of liabilities under Regulation D).
"Event of Default" shall have the meaning provided in Section 9.
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"Excess Amount" shall initially be $0, which amount shall be (A)
increased on each date of delivery of the annual financial statements of the
---------
Borrower to the Banks pursuant to Section 7.01(c), commencing with the delivery
of the financial statements for the fiscal year ending December 31, 1997, if the
Consolidated EBITDA for the fiscal year for the financial statements then
delivered is more than the projected Consolidated EBITDA set forth on Annex X
for such fiscal year (the amount by which such actual Consolidated EBITDA for
such fiscal year exceeds such projected Consolidated EBITDA, the "Surplus"), by
an amount equal to the Surplus multiplied by 0.25 and (B) reduced (i) at the
-------
time any Capital Expenditure is made pursuant to Section 8.08(f), by the amount
thereof, and (ii) at the time any Joint Venture Investment is made pursuant to
Section 8.05(x), by the amount expended in connection therewith.
"Excess Cash Flow" shall mean, for any period (i) the sum of (A)
Consolidated Net Income for such period, plus (B) the amount of all non-cash
charges (including, without limitation or duplication, depreciation,
amortization and non-cash interest expense, but excluding those non-cash charges
included in determining Working Capital for such period) included in determining
Consolidated Net Income for such period plus (C) the decrease, if any, in
Working Capital from the first day to the last day of such period, minus (ii)
the sum (without duplication) of (A) any non-cash credits (including from sales
of assets) included in determining Consolidated Net Income for such period, (B)
gains from sales of assets (other than sales of inventory in the ordinary course
of business) included in determining Consolidated Net Income for such period,
(C) an amount equal to (1) all Capital Expenditures (excluding Capital
Expenditures made pursuant to Section 8.08(c), (d), (e) or (f) made during such
period that are not financed by Indebtedness (including Capitalized Lease
Obligations but excluding Loans hereunder) or with Excess Equity Proceeds plus
(or minus, if negative) (2) the Rollover Amount for such period to be carried
forward to the next period less the Rollover Amount (if any) for the preceding
period carried forward to the current period, (D) the amount expended in respect
of Permitted Acquisitions during such period, except to the extent constituting
Capital Expenditures or financed with Indebtedness or Excess Equity Proceeds,
(E) the aggregate principal amount of permanent principal payments of
Indebtedness for borrowed money of the Borrower and its Subsidiaries (other than
(1) repayments in respect of the Indebtedness to be Refinanced, (2) repayments
of Indebtedness with proceeds of issuance or other Indebtedness or equity or
equity contributions or with proceeds of assets sales, Recovery Events or
Pension Plan Refunds and (3) repayments of Loans or other Obligations, provided
that repayments of Loans shall be deducted in determining Excess Cash Flow if
such repayments were (x) required as a result of a Scheduled Repayment under
Section 4.02(A)(b) or (y) made as a voluntary prepayment with internally
generated funds (but in the case of a voluntary prepayment of Revolving Loans or
Swingline Loans, only to the extent accompanied by a voluntary reduction to the
Total Revolving Loan Commitment)) during such period, (F) non-cash charges added
back in a previous period pursuant to clause (i)(B) above to the extent any such
charge has become a cash item in the current period, (G) the increase, if any,
in Working Capital from the first day to the last day of
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such period, (H) costs incurred by Holdings during such period and paid for with
the proceeds of dividends paid by the Borrower pursuant to Section 8.07(iv) to
the extent not deducted in determining Consolidated Net Income for such period,
(I) any cash disbursements made against non-current liabilities to the extent
included in determining Consolidated Net Income for such period and (J) to the
extent not already deducted in the determination of Consolidated Net Income or
Excess Cash Flow, the aggregate amount of cash payments in respect of Joint
Venture Investments made during such period, except to the extent financed with
Indebtedness or Excess Equity Proceeds.
"Excess Cash Flow Period" shall mean with respect to the repayment
required on each Excess Cash Payment Date, the immediately preceding fiscal year
of the Borrower.
"Excess Cash Payment Date" shall mean the date occurring 90 days after
the last day of a fiscal year of the Borrower (beginning with its fiscal year
ending on December 31, 1997).
"Excess Equity Proceeds" shall have the meaning provided in Section
4.02(A)(d).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Existing Credit Agreement" shall mean the amended and restated credit
agreement dated March 1, 1996 among Holdings, the Borrower, the financial
institutions party thereto and the Agent (as amended, modified or supplemented
prior to the date hereof).
"Existing Indebtedness" shall have the meaning provided in Section
6.24.
"Existing Indebtedness Agreements" shall have the meaning provided
in Section 5.01(n)(iii).
"Existing Joint Ventures" shall mean and include each of (i)
Connection Systems Group, L.L.C., a Michigan limited liability company, (ii) the
existing venture between the Borrower and Xxxx Xxxx Eagle-Picher Limited, a
stock company organized under the laws of Korea, and (iii) the existing venture
between the Borrower and X.X. xxXxxx de Nemours and Company, a Delaware
corporation.
"Existing Letter of Credit" shall have the meaning provided in
Section 2.01(d).
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"Existing Subordinated Debt" shall mean collectively, the indebtedness
arising pursuant to (i) the Holdings Senior Subordinated Debt, (ii) the Holdings
Junior Subordinated Debt and (iii) the Borrower Subordinated Debt.
"Facility" shall mean any of the credit facilities established under
this Agreement, i.e., the A Term Loan Facility, the B Term Loan Facility or the
----
Revolving Loan Facility.
"Facing Fee" shall have the meaning provided in Section 3.01(c).
"Fees" shall mean all amounts payable pursuant to, or referred to
in, Section 3.01.
"Foreign Cash Equivalents" shall mean certificates of deposit or
bankers acceptances of any bank organized under the laws of Canada, Japan or any
country that is a member of the European Economic Community whose short-term
commercial paper rating from S&P is at least A-1 or the equivalent thereof or
from Xxxxx'x is at least P-1 or the equivalent thereof, in each case with
maturities of not more than six months from the date of acquisition.
"Foreign Pension Plan" shall mean any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States of America by Holdings or any one or more
of its Subsidiaries primarily for the benefit of employees of Holdings or such
Subsidiaries residing outside the United States of America, which plan, fund or
other similar program provides, or results in, retirement income, a deferral of
income in contemplation of retirement or payments to be made upon termination of
employment, and which plan is not subject to ERISA or the Code.
"Foreign Subsidiary" shall mean each Subsidiary of the Borrower that
is incorporated under the laws of any jurisdiction other than the United States
of America, any State thereof, or any territory thereof.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time; it being understood and
agreed that determinations in accordance with GAAP for purposes of Section 8,
including defined terms as used therein, are subject (to the extent provided
therein) to Section 12.07(a).
"Goodyear" shall mean Goodyear Tire and Rubber Company, an Ohio
corporation.
"Goodyear Composites" shall mean the engineered composites business
of Goodyear located in Jackson, Ohio.
-101
"Guaranteed Creditors" shall mean and include each of the Agent, the
Collateral Agent, the Banks and each party (other than any Credit Party) party
to an Interest Rate Protection Agreement or Other Hedging Agreement to the
extent such party constitutes a Secured Creditor under the Security Documents.
"Guaranteed Obligations" shall mean (i) the full and prompt payment
when due (whether at the stated maturity, by acceleration or otherwise) of the
principal and interest on each Note issued by the Borrower to each Bank, and
Loans made, under this Agreement and all reimbursement obligations and Unpaid
Drawings with respect to Letters of Credit, together with all the other
obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) and liabilities
(including, without limitation, indemnities, fees and interest thereon) of the
Borrower to such Bank now existing or hereafter incurred under, arising out of
or in connection with this Agreement or any other Credit Document and the due
performance and compliance with all the terms, conditions and agreements
contained in the Credit Documents by the Borrower and (ii) the full and prompt
payment when due (whether by acceleration or otherwise) of all obligations
(including obligations which, but for the automatic stay under Section 362(a) of
the Bankruptcy Code, would become due) of the Borrower owing under any such
Interest Rate Protection Agreement or Other Hedging Agreement entered into by
the Borrower or any of its Subsidiaries with any Bank or any affiliate thereof
(even if such Bank subsequently ceases to be a Bank under this Agreement for any
reason) so long as such Bank or affiliate participates in such Interest Rate
Protection Agreement or Other Hedging Agreement, and their subsequent assigns,
if any, whether now in existence or hereafter arising, and the due performance
and compliance with all terms, conditions and agreements contained therein.
"Guarantor" shall mean Holdings and each Subsidiary Guarantor.
"Guaranty" shall mean and include each of the Holdings Guaranty and
the Subsidiary Guaranty.
"Hazardous Materials" shall mean (a) any petrochemical or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls, and
radon gas; and (b) any chemicals, materials or substances defined as or included
in the definition of "hazardous substances," "hazardous wastes," "hazardous
materials," "restricted hazardous materials," "extremely hazardous wastes,"
"restrictive hazardous wastes," "toxic substances," "toxic pollutants,"
"contaminants" or "pollutants," or words of similar meaning and regulatory
effect.
"Holdings" shall have the meaning provided in the first paragraph of
this Agreement.
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"Holdings Class A Common Stock" shall have the meaning provided in
Section 6.16.
"Holdings Class L Common Stock" shall have the meaning provided in
Section 6.16.
"Holdings Class P Common Stock" shall have the meaning provided in
Section 6.16.
"Holdings Common Stock" shall mean, collectively, the Holdings Class A
Common Stock, the Holdings Class L Common Stock, and the Holdings Class P Common
Stock.
"Holdings Guaranty" shall mean the guaranty of Holdings pursuant to
Section 13.
"Holdings Junior Subordinated Debt" shall mean general unsecured and
unguaranteed subordinated Indebtedness of Holdings incurred under the Holdings
Junior Subordinated Debt Agreement.
"Holdings Junior Subordinated Debt Agreement" shall mean the Junior
Subordinated Credit Agreement dated as of March 1, 1996 among Holdings, Xxxx
Capital V Mezzanine Fund, L.P. and BCIP Trust Associates, L.P., as amended,
modified or supplemented from time to time.
"Holdings Preferred Stock" shall mean Preference Stock of Holdings,
liquidation preference of $18,150 per share, and all preferred shares thereof
subsequently issued in payment of dividends thereon.
"Holdings Preferred Stock Certificate" shall mean the Certificate of
Designation (or that part of the Certificate of Incorporation of Holdings
containing the terms of the Holdings Preferred Stock) authorizing and
establishing the terms of the Holdings Preferred Stock, as in effect on the
Initial Borrowing Date and as the same may be modified, supplemented or amended
from time to time pursuant to the terms thereof and hereof.
"Holdings Preferred Stock Documents" shall mean and include each of
the Holdings Preferred Stock Certificate and the other documents and agreements
entered into by Holdings relating to the issuance by Holdings of each issue of
Holdings Preferred Stock, as in effect on the Initial Borrowing Date and as the
same may be modified, supplemented or amended from time to time pursuant to the
terms hereof and thereof.
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"Holdings Senior Subordinated Debt" shall mean general unsecured and
unguaranteed subordinated Indebtedness of Holdings owing to GenCorp, Inc. under
the Holdings Senior Subordinated Debt Agreement.
"Holdings Senior Subordinated Debt Agreement" shall mean the Senior
Subordinated Credit Agreement dated as of March 1, 1996 among Holdings and
GenCorp, Inc., as amended, modified or supplemented from time to time.
"Holdings Services Agreement" shall mean the Holdings Services
Agreement, dated as of July 1, 1997 between Holdings and the Borrower, as in
effect on the Initial Borrowing Date and as amended, modified or supplemented
from time to time in accordance with the terms thereof and hereof.
"Holdings Tax Allocation Agreement" shall mean the Tax Sharing
Agreement, dated as of November 17, 1995 between Holdings and the Borrower, as
in effect on the Initial Borrowing Date and as amended, modified or supplemented
from time to time in accordance with the terms thereof and hereof.
"Indebtedness" of any Person shall mean without duplication (i) all
indebtedness of such Person for borrowed money, (ii) the deferred purchase price
of assets or services payable to the sellers thereof or any of such seller's
assignees which in accordance with GAAP would be shown on the liability side of
the balance sheet of such Person but excluding deferred rent as determined in
accordance with GAAP, (iii) the face amount of all letters of credit issued for
the account of such Person and, without duplication, all drafts drawn
thereunder, (iv) all Indebtedness of a second Person secured by any Lien on any
property owned by such first Person, whether or not such Indebtedness has been
assumed, (v) all Capitalized Lease Obligations of such Person, (vi) all
obligations of such Person to pay a specified purchase price for goods or
services whether or not delivered or accepted, i.e., take-or-pay and similar
----
obligations, (vii) all obligations under Interest Rate Protection Agreements and
Other Hedging Agreements and (viii) all Contingent Obligations of such Person,
provided, that Indebtedness shall not include trade payables and accrued
--------
expenses, in each case arising in the ordinary course of business.
"Indebtedness to be Refinanced" shall mean, collectively, the
indebtedness arising pursuant to (i) the Existing Credit Agreement and (ii) the
Existing Subordinated Debt.
"Initial Borrowing Date" shall mean the date upon which the initial
Term Loans are incurred hereunder.
"Intercompany Loan" shall have the meaning provided in Section
8.05(g).
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"Intercompany Notes" shall mean promissory notes, in the form of
Exhibit K, evidencing Intercompany Loans.
"Interest Coverage Ratio" shall mean, for any period, the ratio of
Consolidated EBITDA to Consolidated Interest Expense for such period.
"Interest Period," with respect to any Eurodollar Loan, shall mean the
interest period applicable thereto, as determined pursuant to Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement, interest
rate hedging agreement or other similar agreement or arrangement.
"Interest Reduction Discount" shall mean initially zero, provided that
--------
from and after any Start Date to and including the corresponding End Date, the
Interest Reduction Discount shall be the respective percentage per annum set
forth in clause (A), (B), (C) or (D) below if, but only if, as of the Test Date
for such Start Date the applicable condition set forth in clause (A), (B), (C)
or (D) below, as the case may be, is met:
(A) .250% if, but only if, the Leverage Ratio on such Test Date is
less than 4.50:1.00 but greater than or equal to 4:00:1.00; or
(B) .500% if, but only if, the Leverage Ratio on such Test Date is
less than 4.00:1.00 but greater than or equal to 3.50:1.00; or
(C) .750% if, but only if, the Leverage Ratio on such Test Date is
less than 3.50:1.00 but greater than or equal to 3:00:1.00; or
(D) 1.00% if, but only if, the Leverage Ratio on such Test Date is
less than 3.00:1.00.
Notwithstanding anything to the contrary contained above in this
definition, the Interest Reduction Discount shall be zero at any time when an
Event of Default shall exist.
"Joint Venture Investments" shall mean any investment, capital
contribution, advance, loan, or guaranty, or any other investment by the
Borrower or any of its Subsidiaries in a joint venture related to any business
permitted by Section 8.01(a).
"L/C Supportable Indebtedness" shall mean (i) obligations of the
Borrower or its Subsidiaries incurred in the ordinary course of business with
respect to insurance obligations and workers' compensation, surety bonds and
other similar statutory obligations and (ii) such other obligations of the
Borrower or any of its Subsidiaries as are reasonably
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acceptable to the Agent and the respective Letter of Credit Issuer and otherwise
permitted to exist pursuant to the terms of this Agreement.
"Leasehold" of any Person shall mean all of the right, title and
interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Letter of Credit Fee" shall have the meaning provided in Section
3.01(b).
"Letter of Credit Issuer" shall mean BTCo, and any Bank which at the
request of the Borrower and with the consent of the Agent agrees, in such Bank's
sole discretion, to become a Letter of Credit Issuer for the purpose of issuing
Letters of Credit pursuant to Section 2.
"Letter of Credit Outstandings" shall mean, at any time, the sum of,
without duplication, (i) the aggregate Stated Amount of all outstanding Letters
of Credit and (ii) the aggregate amount of all Unpaid Drawings in respect of all
Letters of Credit.
"Letter of Credit Request" shall have the meaning provided in
Section 2.02(a).
"Leverage Ratio" shall mean, at any time, the ratio of Consolidated
Debt at such time to Consolidated EBITDA for the Test Period then last ended;
provided that solely in determining the Leverage Ratio (1) for the Test Period
ended September 30, 1997, Consolidated EBITDA for such Test Period shall be
multiplied by 4, (ii) for the Test Period ended December 31, 1997, Consolidated
EBITDA for such Test Period shall be multiplied by 2 and (iii) for the Test
Period ended March 31, 1998, Consolidated EBITDA, for such period shall be
multiplied by 4/3.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the UCC or any similar
recording or notice statute, and any lease having substantially the same effect
as the foregoing).
"Loan" shall mean each and every Loan made by any Bank hereunder,
including A Term Loans, B Term Loans, Revolving Loans or Swingline Loans.
"Majority Banks" of any Facility shall mean those Non-Defaulting Banks
which would constitute the Required Banks under, and as defined in, this
Agreement if all
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outstanding Obligations of the other Facilities under this Agreement were repaid
in full and all Commitments with respect thereto were terminated.
"Management Agreements" shall have the meaning provided in Section
5.01(n)(v).
"Management Stockholders" shall mean and include Xxxxxxxx.
"Mandatory Borrowing" shall have the meaning provided in Section
1.01(C).
"Margin Reduction Period" shall mean each period which shall commence
on a date on which the financial statements are delivered pursuant to Section
7.01(b) or (c), as the case may be, and which shall end on the earlier of (i)
the date of actual delivery of the next financial statements pursuant to Section
7.01(b) or (c), as the case may be, and (ii) the latest date on which the next
financial statements are required to be delivered pursuant to Section 7.01(b) or
(c), as the case may be; provided that no Margin Reduction Period shall commence
--------
on a date occurring prior to the date of delivery of financial statements
pursuant to Section 7.01(b) in respect of the fiscal quarter ending September
30, 1997.
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean a material adverse effect on the
business, properties, assets, liabilities, condition (financial or otherwise) or
prospects of the Borrower, Holdings, Holdings and its Subsidiaries taken as a
whole or the Borrower and its Subsidiaries taken as a whole.
"Material Contracts" shall have the meaning provided in Section
5.01(n)(ix).
"Maturity Date" with respect to any Facility shall mean either the A
Term Loan Maturity Date, the B Term Loan Maturity Date or the Revolving Loan
Maturity Date, as the case may be.
"Maximum Swingline Amount" shall mean $10,000,000.
"Minimum Borrowing Amount" shall mean (i) for Base Rate Loans (other
than Swingline Loans), $1,000,000; (ii) for Eurodollar Loans, $2,000,000 and
(iii) for Swingline Loans, $500,000.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Mortgage" shall have the meaning provided in 5.01(m)(i).
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"Mortgage Policies" shall mean the Mortgage title insurance policies
issued in respect of each of the Mortgaged Properties.
"Mortgaged Properties" shall mean and include (i) all Real Properties
owned by Holdings and its Domestic Subsidiaries to the extent designated on
Annex III and (ii) each Real Property subjected to a mortgage in favor of the
Collateral Agent for the benefit of the Secured Creditors pursuant to Section
7.11.
"Net Proceeds" shall mean, with respect to any Asset Sale, the
Proceeds resulting therefrom net of (a) reasonable and customary cash expenses
of sale (including brokerage fees, if any, transfer taxes and payment of
principal, premium and interest of Indebtedness other than the Loans required to
be repaid as a result of such Asset Sale) and (b) incremental income taxes paid
or payable as a result thereof.
"Non-Compete Agreements" shall have the meaning provided in
Section 5.01(n)(vii).
"Non-Defaulting Bank" shall mean each Bank other than a Defaulting
Bank.
"Note" shall mean each A Term Note, each B Term Note, each Revolving
Note and the Swingline Note.
"Notice of Borrowing" shall have the meaning provided in Section 1.03.
"Notice of Conversion" shall have the meaning provided in
Section 1.06.
"Notice Office" shall mean the office of the Agent located at Xxx
Xxxxxxx Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or such other office as the Agent
may designate to Holdings, the Borrower and the Banks from time to time.
"Obligations" shall mean all amounts, direct or indirect, contingent
or absolute, of every type or description, and at any time existing, owing to
the Agent, the Collateral Agent or any Bank pursuant to the terms of this
Agreement or any other Credit Document.
"Option Agreement" shall mean the Option Agreement, dated as of
November 17, 1995 between Holdings and Xxxxxxx X. Xxxxxxxx, as in effect on the
Initial Borrowing Date and as the same may be amended, modified or supplemented
from time to time in accordance with the terms hereof and thereof.
"Other Hedging Agreements" shall mean any foreign exchange contracts,
currency swap agreements or other similar agreements or arrangements designed to
protect against fluctuations in currency values.
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"Participant" shall have the meaning provided in Section 2.04(a).
"Payment Office" shall mean the office of the Agent located at Xxx
Xxxxxxx Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or such other office as the Agent
may designate to Holdings, the Borrower and the Banks from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Pension Plan Refund" shall mean any cash payments (net of reasonable
costs associated therewith, including income, excise and other taxes payable
thereon) received by Holdings and/or of its Subsidiaries from any return of any
surplus assets from any single Plan or Foreign Pension Plan.
"Permitted Acquisition" shall have the meaning provided in
Section 8.02(r).
"Permitted Covenant" shall mean (i) any periodic reporting covenant,
(ii) any covenant restricting payments by Holdings with respect to any
securities of Holdings which are junior to the Permitted Holdings PIK
Securities, (iii) any covenant the default of which can only result in an
increase in the amount of any redemption price, repayment amount, dividend rate
or interest rate, (iv) any covenant the default of which gives rise only to
rights or remedies which are subject to subordination terms reasonably
acceptable to the Agent, (v) any covenant providing board observance rights with
respect to Holdings' board of directors and (vi) any other covenant that does
not adversely affect the interests of the Banks (as reasonably determined by the
Agent).
"Permitted Encumbrances" shall mean (i) those liens, encumbrances and
other matters affecting title to any Mortgaged Property listed in the Mortgage
Policies in respect thereof and found, on the date of delivery of such Mortgage
Policies to the Agent in accordance with the terms hereof, reasonably acceptable
by the Agent, (ii) as to any particular Mortgaged Property at any time, such
easements, encroachments, covenants, rights of way, minor defects,
irregularities or encumbrances on title which do not, in the reasonable opinion
of the Agent, materially impair such Mortgaged Property for the purpose for
which it is held by the mortgagor thereof, or the lien held by the Collateral
Agent, (iii) zoning and other municipal ordinances, which are not violated in
any material respect by the existing improvements and the present use made by
the mortgagor thereof of the Premises (as defined in the respective Mortgage),
(iv) general real estate taxes and assessments not yet delinquent, and (v) such
other items as the Agent may consent to (such consent not to be unreasonably
withheld).
"Permitted Holdings PIK Securities" shall mean any preferred stock or
subordinated promissory note of Holdings (or any security of Holdings that is
convertible or exchangeable into any preferred stock or subordinated promissory
note of Holdings), so
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long as the terms of any such preferred stock, subordinated promissory note or
security of Holdings (i) do not provide any collateral security, (ii) do not
provide any guaranty or other support by the Borrower or any Subsidiaries of the
Borrower, (iii) do not contain any mandatory put, redemption, repayment, sinking
fund or other similar provision occurring before the ninth anniversary of the
Initial Borrowing Date, (iv) do not require the cash payment of dividends or
interest before the ninth anniversary of the Initial Borrowing Date, (v) do not
contain any covenants other than any Permitted Covenant, (vi) do not grant the
holders thereof any voting rights except for (x) voting rights required to be
granted to such holders under applicable law and (y) limited customary voting
rights on fundamental matters such as mergers, consolidations, sales of
substantial assets, or liquidations involving Holdings, and (vii) are otherwise
reasonably satisfactory to the Agent.
"Permitted Joint Venture" shall mean any Person engaged in business of
the type described in Section 8.01(a) of which the Borrower shall own, directly
or indirectly, 25% or more but less than or equal to 50% of the equity and
voting interests and another Person (or group of Persons which acts together in
relation to such Permitted Joint Venture) owns the remaining equity and voting
interests.
"Permitted Liens" shall have the meaning provided in Section 8.03.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" shall mean any multiemployer or single-employer plan as defined
in Section 4001 of ERISA, which is maintained or contributed to by (or to which
there is an obligation to contribute of) Holdings, any of its Subsidiaries or
any ERISA Affiliate and each such plan for the five calendar year period
immediately following the latest date on which Holdings, any of its Subsidiaries
or any ERISA Affiliate maintained, contributed to or had an obligation to
contribute to such plan.
"Pledge Agreement" shall have the meaning provided in Section 5.01(k).
"Pledged Securities" shall mean all the Pledged Securities as defined
the Pledge Agreement.
"Prime Lending Rate" shall mean the rate which BTCo announces from
time to time as its prime lending rate, the Prime Lending Rate to change when
and as such prime lending rate changes. The Prime Lending Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. BTCo may make commercial loans or other loans at rates of
interest at, above or below the Prime Lending Rate.
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"Proceeds" shall mean with respect to any Asset Sale, the aggregate
cash payments (including any cash received by way of deferred payment pursuant
to a note receivable issued in connection with such Asset Sale, other than the
portion of such deferred payment constituting interest, but only as and when so
received) received by Holdings and/or any of its Subsidiaries from such Asset
Sale.
"Pro Forma Leverage Ratio" shall mean, at any time for the
determination thereof, the ratio of (x) Consolidated Debt at such time to
(y) Consolidated EBITDA for the Test Period then last ended, with such Pro Forma
Leverage Ratio to be determined on a pro forma basis as if the respective
--- -----
Permitted Acquisition (and the incurrence, assumption and/or repayment of any
Indebtedness in connection with such Permitted Acquisition), as the case may be,
had occurred on the first day of such Test Period (and such Indebtedness, if
any, had remained outstanding (or had not been outstanding, as the case may be)
throughout such Test Period). On the date of a Permitted Acquisition pursuant
to which the Pro Forma Leverage Ratio is to be calculated, the Borrower shall
deliver to the Agent a certificate of the Borrower's chief financial officer
setting forth in reasonable detail the pro forma calculations required to
--- -----
establish the Pro Forma Leverage Ratio (with such pro forma calculations to be
--- -----
made on a basis reasonably satisfactory to the Agent and to assume that the
interest expense attributable to any Indebtedness (whether existing or being
incurred) bearing a floating interest rate shall be computed as if the rate in
effect on the date of such Permitted Acquisition (taking into account any
Interest Rate Protection Agreement applicable to such Indebtedness if such
Interest Rate Protection Agreement has a remaining term in excess of 12 months)
had been the applicable rate for the entire period. In calculating the Pro
Forma Leverage Ratio in connection with any Permitted Acquisition, it is
understood that Consolidated EBITDA shall include the results of operations of
the Person or assets acquired pursuant to such Permitted Acquisition on a pro
---
forma basis as if such acquisition had occurred on the first day of the
-----
respective Test Period.
"Projections" shall have the meaning provided in Section 5.01(p).
"Quarterly Payment Date" shall mean the last Business Day of each
March, June, September and December.
"Real Property" of any Person shall mean all of the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Recovery Event" shall mean the receipt by Holdings or any of its
Subsidiaries of any insurance or condemnation proceeds payable (i) by reason of
any theft, physical destruction or damage or any other similar event with
respect to any properties or assets of Holdings or any of its Subsidiaries,
(ii) by reason any condemnation, taking, seizing or similar event with respect
to any properties or assets of Holdings or any of its Subsidiaries and
(iii) under any policy of insurance required to be maintained under
Section 7.03.
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"Refinancing" shall mean the refinancing and repayment in full of all
amounts outstanding under, and the termination in full of all commitments and
letters of credit in respect of the Indebtedness to be Refinanced.
"Refinancing Documents" shall mean each of the agreements, documents
and instruments entered into in connection with the Refinancing.
"Regal Plastics" shall mean Regal Plastics Company, a Michigan
corporation.
"Register" shall have the meaning provided in Section 7.12.
"Registration Rights Agreement" shall mean the Registration Agreement,
dated as of November 17, 1995, among Holdings, the Borrower, Xxxx Capital,
Xxxxxxxx and the other parties signatory thereto, as the same may be amended,
modified or supplemented from time to time, in accordance with the terms hereof
and thereof.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing margin requirements.
"Release" means disposing, discharging, injecting, spilling, pumping,
leaking, leaching, dumping, emitting, escaping, emptying, seeping, placing,
pouring and the like, into or upon any land or water or air, or otherwise
entering into the environment.
"Replaced Bank" shall have the meaning provided in Section 1.13.
"Replacement Bank" shall have the meaning provided in Section 1.13.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan other than those events as to which the 30-day
notice period is waived under subsection .22, .23, .25, .27 or .28 of PBGC
Regulation Section 4043.
"Required Banks" shall mean Non-Defaulting Banks the sum of whose
outstanding Term Loans and Revolving Loan Commitments (or, if after the Total
Revolving Loan Commitment has been terminated, outstanding Revolving Loans and
RL Percentages of outstanding Swingline Loans and Letter of Credit Outstandings)
constitute greater than 50% of the sum of (i) the total outstanding Term Loans
of Non-Defaulting Banks and (ii) the Total Revolving Loan Commitment less the
aggregate Revolving Loan Commitments
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of Defaulting Banks (or, if after the Total Revolving Loan Commitment has been
terminated, the total outstanding Revolving Loans of Non-Defaulting Banks and
the aggregate RL Percentages of all Non-Defaulting Banks of the total
outstanding Swingline Loans and Letter of Credit Outstandings at such time).
"Returns" shall have the meaning provided in Section 6.23.
"Revolving Loan" shall have the meaning provided in Section
1.01(A)(c).
"Revolving Loan Commitment" shall mean, with respect to each Bank, the
amount set forth opposite such Bank's name in Annex I directly below the column
entitled "Revolving Loan Commitment," as the same may be reduced from time to
time pursuant to Section 3.02, 3.03 and/or 9.
"Revolving Loan Facility" shall mean the Facility evidenced by the
Total Revolving Loan Commitment.
"Revolving Loan Maturity Date" shall mean June 30, 2002.
"Revolving Note" shall have the meaning provided in Section 1.05(a).
"RL Bank" shall mean at any time each Bank with a Revolving Loan
Commitment or with outstanding Revolving Loans.
"RL Percentage" shall mean at any time for each Bank, the percentage
obtained by dividing such Bank's Revolving Loan Commitment by the Total
Revolving Loan Commitment; provided, that if the Total Revolving Loan Commitment
--------
has been terminated, the RL Percentage of each Bank shall be determined by
dividing such Bank's Revolving Loan Commitment immediately prior to such
termination by the Total Revolving Loan Commitment immediately prior to such
termination.
"Rollover Amount" shall have the meaning provided in Section 8.08(b).
"S&P" shall mean Standard & Poor's Corporation.
"Scheduled A Repayment" shall have the meaning provided in Section
4.02(A)(b)(i).
"Scheduled B Repayment" shall have the meaning provided in Section
4.02(A)(b)(ii).
"Scheduled Repayment" shall mean any Scheduled A Repayment and
Scheduled B Repayment.
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"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
"Section 4.04(b)(ii) Certificate" shall have the meaning provided in
Section 4.04(b)(ii).
"Secured Creditors" shall have the meaning provided in the Security
Documents.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Security Agreement" shall have the meaning provided in
Section 5.01(l).
"Security Agreement Collateral" shall mean all "Collateral" as
defined in the Security Agreement.
"Security Documents" shall mean and include the Security Agreement,
the Pledge Agreement, each Mortgage, each Additional Security Document, if any
and each other document or instrument entered into pursuant to Sections 5.01(k),
5.01(l) and 7.14, if any, in each case as and when executed and delivered in
accordance with the terms of this Agreement.
"Senior Subordinated Notes" shall mean the Series A Senior
Subordinated Notes and any Series B Senior Subordinated Notes issued in exchange
therefor in accordance with the terms of the Senior Subordinated Note Indenture.
"Senior Subordinated Notes Documents" shall mean and include each of
the documents and other agreements entered into (including, without limitation,
the Senior Subordinated Notes Indenture) relating to the issuance by the
Borrower of the Senior Subordinated Notes, as in effect on the Initial Borrowing
Date (to the extent thereof) and as the same may be entered into, modified,
supplemented or amended from time to time pursuant to the terms hereof and
thereof.
"Senior Subordinated Notes Indenture" shall mean the Indenture entered
into by and between the Borrower and American Bank National Association, as
trustee thereunder, as in effect on the Initial Borrowing Date and as the same
may be modified, amended or supplemented from time to time in accordance with
the terms hereof and thereof.
"Series A Senior Subordinated Notes" shall mean the Borrower's 10-1/4%
Senior Subordinated Notes due 2007 as in effect on the Initial Borrowing Date
and as the same may be modified, supplemented or amended from time to time
pursuant to the terms hereof and thereof.
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"Series B Senior Subordinated Notes" shall mean the Borrower's 10-1/4%
Series B Senior Subordinated Notes due 2007 issued in exchange for Series A
Senior Subordinated Notes, in the form set forth in the Senior Subordinated Note
Indenture as in effect on the Initial Borrowing Date, and as such Series B
Senior Subordinated Notes may be modified, supplemented or amended from time to
time, pursuant to the terms hereof and thereof.
"Shareholder Subordinated Note" shall mean an unsecured junior
subordinated note issued by Holdings (and not guaranteed or supported in any way
by the Borrower or any of its Subsidiaries) in the form of Exhibit L.
"Shareholders' Agreements" shall have the meaning set forth in
Section 5.01(n)(iv).
"Start Date" shall mean, with respect to any Margin Reduction Period,
the first day of such Margin Reduction Period.
"Stated Amount" of each Letter of Credit shall mean at any time the
maximum amount available to be drawn thereunder (regardless of whether any
conditions for drawing could then be met).
"Stockholders' Agreement" shall mean the Stockholders' Agreement,
dated as of November 17, 1995, among Holdings, Xxxx Capital, Xxxxxxxx and the
other parties signatory thereto, as amended, modified or supplemented from time
to time, in accordance with the terms hereof and thereof.
"Subsidiary" of any Person shall mean and include (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly or
indirectly through Subsidiaries and (ii) any partnership, association, joint
venture or other entity in which such Person directly or indirectly through
Subsidiaries, has more than a 50% equity interest at the time.
"Subsidiary Guarantor" shall mean each Subsidiary of Holdings (other
than the Borrower) (other than a Foreign Subsidiary except to the extent
otherwise provided in Section 7.14) that is or becomes a party to the Subsidiary
Guaranty.
"Subsidiary Guaranty" shall have the meaning provided in
Section 5.01(s).
"Supermajority Banks" of any Facility shall mean those Non-Defaulting
Banks which would constitute the Required Banks under, and as defined in, this
Agreement
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if (x) all outstanding Obligations of the other Facilities under this Agreement
were repaid in full and all Commitments with respect thereto were terminated and
(y) the percentage "50%" contained therein were changed to "66-2/3%."
"Surplus" shall have the meaning provided in the definition of
"Excess Amount".
"Swingline Expiry Date" shall mean the date which is five Business
Days prior to the Revolving Loan Maturity Date.
"Swingline Loan" shall have the meaning provided in Section 1.01(B).
"Swingline Note" shall have the meaning provided in Section 1.05(a).
"Syndication Date" shall have the meaning provided in Section
1.01(A)(a).
"Tax Allocation Agreements" shall have the meaning provided in
Section 5.01(n)(viii).
"Taxes" shall have the meaning provided in Section 4.04.
"Term Loan" shall mean each A Term Loan and each B Term Loan.
"Term Loan Commitment" shall mean, with respect to each Bank at any
time, the sum of the A Term Loan Commitment and the B Term Loan Commitment of
such Bank at such time.
"Term Loan Facilities" shall mean the A Term Loan Facility and the B
Term Loan Facility.
"Test Date" shall mean with respect to any Start Date, the last day of
the most recent fiscal quarter of the Borrower ended immediately prior to such
Start Date.
"Test Period" shall mean (i) for any determination made on and prior
to June 30, 1998, the period from July 1, 1997 to the last day of the fiscal
quarter of the Borrower then last ended, and (ii) for any determination made
thereafter, the four consecutive fiscal quarters of the Borrower then last
ended.
"Total A Term Loan Commitment" shall mean the sum of the A Term Loan
Commitments of each of the Banks.
"Total B Term Loan Commitment" shall mean the sum of the B Term Loan
Commitments of each of the Banks.
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"Total Commitment" shall mean the sum of the Total Term Loan
Commitment and the Total Revolving Loan Commitment.
"Total Revolving Loan Commitment" shall mean the sum of the Revolving
Loan Commitments of each of the Banks.
"Total Term Loan Commitment" shall mean the sum of the Total A Term
Loan Commitment and the Total B Term Loan Commitment.
"Total Unutilized Revolving Loan Commitment" shall mean, at any time,
(i) the Total Revolving Loan Commitment at such time less (ii) the sum of the
aggregate principal amount of all Revolving Loans and Swingline Loans at such
time plus the Letter of Credit Outstandings at such time.
"Transaction" shall mean, at any time, collectively, (i) each
Acquisition (to the extent that such Acquisition is then being, or has
theretofore been, consummated), (ii) the issuance of the Senior Subordinated
Notes on the Initial Borrowing Date, (iii) the incurrence of the Loans hereunder
on the Initial Borrowing Date, (iv) the Refinancing and (v) the payment of fees
and expenses in connection with the foregoing.
"Type" shall mean any type of Loan determined with respect to the
interest option applicable thereto, i.e., a Base Rate Loan or a Eurodollar Loan.
----
"UCC" shall mean the Uniform Commercial Code as in effect from time
to time in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the actuarial present value of the accumulated plan benefits under
the Plan as of the close of its most recent plan year exceeds the fair market
value of the assets allocable thereto, each determined in accordance with
Statement of Financial Accounting Standards No. 87, based upon the actuarial
assumptions used by the Plan's actuary in the most recent annual valuation of
the Plan.
"Unpaid Drawing" shall have the meaning provided in Section 2.03(a).
"U.S. Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States of America.
"Voplex" shall mean Voplex Corporation, a Michigan corporation.
"Voplex Canada" shall mean Voplex of Canada, a New Brunswick, Canada
corporation.
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"Voplex Canada Preferred Stock" shall mean the 5,980 non-voting,
redeemable, preferred shares of Voplex Canada, par value $.01 per share, with a
liquidation preference of $1,000 per share, as amended, modified and
supplemented to the Initial Borrowing Date and as further amended, modified or
supplemented from time to time in accordance with the terms hereof and thereof.
"Voting Stock" shall mean, with respect to any corporation, the
outstanding stock of all classes (or equivalent interest) which ordinarily, in
the absence of contingencies, entitles holders thereof to vote for the election
of directors (or Persons performing similar functions) of such corporation, even
though the right so to vote has been suspended by the happening of such a
contingency.
"Waivable Mandatory Repayment" shall have the meaning provided in
Section 4.02(C).
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying shares
and/or other nominal amounts of shares required to be held other than by such
Person under applicable law) is at the time owned by such Person and/or one or
more Wholly-Owned Subsidiaries of such Person and (ii) any partnership,
association, joint venture or other entity in which such Person and/or one or
more Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such
time.
"Wolf" shall mean Wolf Engineering Corporation, a Michigan
corporation.
"Working Capital" shall mean the excess of Consolidated Current Assets
(but excluding therefrom all cash, Cash Equivalents, the Total Unutilized
Revolving Loan Commitment at such time and deferred income taxes to the extent
included in current assets) over Consolidated Current Liabilities.
"Written," "written" or "in writing" shall mean any form of written
communication or a communication by means of telex, facsimile device, telegraph
or cable.
SECTION 11. The Agent.
---------
11.01 Appointment. Each Bank hereby irrevocably designates and
-----------
appoints BTCo as Agent of such Bank (such term to include for purposes of this
Section 11, BTCo acting as Collateral Agent) to act as specified herein and in
the other Credit Documents, and each such Bank hereby irrevocably authorizes
BTCo as the Agent to take such action on its behalf under the provisions of this
Agreement and the other Credit Documents and to exercise such powers and perform
such duties as are expressly delegated to the Agent by the terms of this
Agreement and the other Credit Documents, together with such other
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powers as are reasonably incidental thereto. The Agent agrees to act as such
upon the express conditions contained in this Section 11. Notwithstanding any
provision to the contrary elsewhere in this Agreement or in any other Credit
Document, the Agent shall not have any duties or responsibilities, except those
expressly set forth herein or in the other Credit Documents, or any fiduciary
relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Agent. The provisions of this Section
11 are solely for the benefit of the Agent and the Banks, and neither Holdings
nor any of its Subsidiaries shall have any rights as a third party beneficiary
of any of the provisions hereof. In performing its functions and duties under
this Agreement, the Agent shall act solely as agent of the Banks and the Agent
does not assume and shall not be deemed to have assumed any obligation or
relationship of agency or trust with or for Holdings or any of its Subsidiaries.
11.02 Delegation of Duties. The Agent may execute any of its duties
--------------------
under this Agreement or any other Credit Document by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care except to the extent otherwise required by Section 11.03.
11.03 Exculpatory Provisions. Neither the Agent nor any of its
----------------------
officers, directors, employees, agents, attorneys-in-fact or affiliates shall be
(i) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement or the other Credit Documents
(except for its or such Person's own gross negligence or willful misconduct) or
(ii) responsible in any manner to any of the Banks for any recitals, statements,
representations or warranties made by Holdings, any of its Subsidiaries or any
of their respective officers contained in this Agreement or the other Credit
Documents, any other Document or in any certificate, report, statement or other
document referred to or provided for in, or received by the Agent under or in
connection with, this Agreement or any other Document or for any failure of
Holdings or any of its Subsidiaries or any of their respective officers to
perform its obligations hereunder or thereunder. The Agent shall not be under
any obligation to any Bank to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or the other Documents, or to inspect the properties, books or records
of Holdings or any of its Subsidiaries. The Agent shall not be responsible to
any Bank for the effectiveness, genuineness, validity, enforceability,
collectability or sufficiency of this Agreement or any other Document or for any
representations, warranties, recitals or statements made herein or therein or
made in any written or oral statement or in any financial or other statements,
instruments, reports, certificates or any other documents in connection herewith
or therewith furnished or made by the Agent to the Banks or by or on behalf of
Holdings or any of its Subsidiaries to the Agent or any Bank or be required to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions,
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covenants or agreements contained herein or therein or as to the use of the
proceeds of the Loans or of the existence or possible existence of any Default
or Event of Default.
11.04 Reliance by Agent. The Agent shall be entitled to rely, and
-----------------
shall be fully protected in relying, upon any note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, facsimile, telex
or teletype message, statement, order or other document or conversation believed
by it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to Holdings or any of its Subsidiaries),
independent accountants and other experts selected by the Agent. The Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Credit Document unless it shall first receive such advice
or concurrence of the Required Banks as it deems appropriate or it shall first
be indemnified to its satisfaction by the Banks against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and the other Credit
Documents in accordance with a request of the Required Banks, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Banks.
11.05 Notice of Default. The Agent shall not be deemed to have
-----------------
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has actually received notice from a Bank, Holdings or
the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default." In the event
that the Agent receives such a notice, the Agent shall give prompt notice
thereof to the Banks. The Agent shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by the Required
Banks; provided, that, unless and until the Agent shall have received such
--------
directions, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Banks.
11.06 Non-Reliance on Agent, and Other Banks. Each Bank expressly
--------------------------------------
acknowledges that neither the Agent nor any of its respective officers,
directors, employees, agents, attorneys-in-fact or affiliates have made any
representations or warranties to it and that no act by the Agent hereinafter
taken, including any review of the affairs of Holdings or any of its
Subsidiaries, shall be deemed to constitute any representation or warranty by
the Agent to any Bank. Each Bank represents to the Agent that it has,
independently and without reliance upon the Agent or any other Bank, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, assets, operations, property,
financial and other condition, prospects and creditworthiness of Holdings and
its Subsidiaries and made its own decision to make its Loans hereunder and enter
into this Agreement. Each Bank also represents that it will, independently and
without reliance upon the Agent or any other Bank, and based on such
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documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement, and to make such investigation as it deems
necessary to inform itself as to the business, assets, operations, property,
financial and other condition, prospects and creditworthiness of Holdings and
its Subsidiaries. The Agent shall not have any duty or responsibility to
provide any Bank with any credit or other information concerning the business,
operations, assets, property, financial and other condition, prospects or
creditworthiness of Holdings or any of its Subsidiaries which may come into the
possession of the Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.
11.07 Indemnification. The Banks agree to indemnify the Agent in its
---------------
capacity as such ratably according to their respective "percentages" as used in
determining the Required Banks at such time (determined as if there are no
Defaulting Banks), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, reasonable
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the
Obligations) be imposed on, incurred by or asserted against the Agent in its
capacity as such in any way relating to or arising out of this Agreement or any
other Credit Document, or any documents contemplated by or referred to herein or
the transactions contemplated hereby or any action taken or omitted to be taken
by the Agent under or in connection with any of the foregoing, but only to the
extent that any of the foregoing is not paid by Holdings or any of its
Subsidiaries; provided, that no Bank shall be liable to the Agent for the
--------
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
primarily from the gross negligence or willful misconduct of the Agent. To the
extent any Bank would be required to indemnify the Agent pursuant to the
immediately preceding sentence but for the fact that it is a Defaulting Bank,
such Defaulting Bank shall not be entitled to receive any portion of any payment
or other distribution hereunder until each other Bank shall have been reimbursed
for the excess, if any, of the aggregate amount paid by such Bank under this
Section 11.07 over the aggregate amount such Bank would have been obligated to
pay had such first Bank not been a Defaulting Bank. If any indemnity furnished
to the Agent for any purpose shall, in the opinion of the Agent be insufficient
or become impaired, the Agent may call for additional indemnity and cease, or
not commence, to do the acts indemnified against until such additional indemnity
is furnished. The agreements in this Section 11.07 shall survive the payment of
all Obligations.
11.08 Agent in its Individual Capacity. The Agent and its affiliates
--------------------------------
may make loans to, accept deposits from and generally engage in any kind of
business with Holdings and its Subsidiaries as though the Agent were not the
Agent hereunder. With respect to the Loans made by it and all Obligations owing
to it, the Agent shall have the same rights and powers under this Agreement as
any Bank and may exercise the same as though it were not the Agent and the terms
"Bank" and "Banks" shall include the Agent in its individual capacity.
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11.09 Holders. The Agent may deem and treat the payee of any Note as
-------
the owner thereof for all purposes hereof unless and until a written notice of
the assignment, transfer or endorsement thereof, as the case may be, shall have
been filed with the Agent. Any request, authority or consent of any Person or
entity who, at the time of making such request or giving such authority or
consent, is the holder of any Note shall be conclusive and binding on any
subsequent holder, transferee, assignee or indorsee, as the case may be, of such
Note or of any Note or Notes issued in exchange therefor.
11.10 Resignation of the Agent; Successor Agent. The Agent may
-----------------------------------------
resign as the Agent upon 20 days' notice to the Banks. Upon the resignation of
the Agent, the Required Banks shall appoint from among the Banks a successor
Agent which is a bank or a trust company for the Banks subject, to the extent
that no payment Default or Event of Default has occurred and is then continuing,
to prior approval by the Borrower (such approval not to be unreasonably withheld
or delayed), whereupon such successor agent shall succeed to the rights, powers
and duties of the Agent, and the term "Agent" shall include such successor agent
effective upon its appointment, and the resigning Agent's rights, powers and
duties as the Agent shall be terminated, without any other or further act or
deed on the part of such former Agent or any of the parties to this Agreement.
If a successor Agent shall not have been so appointed within such 20 day period
after the date such notice of resignation was given by the Agent, the Agent's
resignation shall become effective and the Banks shall thereafter perform all
duties of the Agent hereunder and/or under any other Credit Documents until such
time, if any, as the Required Banks appoint a successor Agent as provided above.
After the resignation of the Agent hereunder, the provisions of this Section 11
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent under this Agreement.
SECTION 12. Miscellaneous.
-------------
12.01 Payment of Expenses, etc. The Borrower hereby agrees to: (i)
-------------------------
whether or not the transactions herein contemplated are consummated, pay all
reasonable out-of-pocket costs and expenses of the Agent (including, without
limitation, the reasonable fees and disbursements of White & Case and local
counsel) in connection with the negotiation, preparation, execution and delivery
of the Credit Documents and the documents and instruments referred to therein
and any amendment, waiver or consent relating thereto and in connection with the
Agent's syndication efforts with respect to this Agreement; (ii) pay all
reasonable out-of-pocket costs and expenses of the Agent and each of the Banks
in connection with the enforcement of the Credit Documents and the documents and
instruments referred to therein and, after an Event of Default shall have
occurred and be continuing, the protection of the rights of the Agent and each
of the Banks thereunder (including, without limitation, the reasonable fees and
disbursements of counsel (including in-house counsel) for the Agent and for each
of the Banks); (iii) pay and hold each of the Banks harmless from and against
any and all present and future stamp and other similar
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taxes with respect to the foregoing matters and save each of the Banks harmless
from and against any and all liabilities with respect to or resulting from any
delay or omission (other than to the extent attributable to such Bank) to pay
such taxes; and (iv) indemnify the Agent, the Collateral Agent and each Bank,
its officers, directors, employees, representatives and agents from and hold
each of them harmless against any and all losses, liabilities, claims, damages
or expenses incurred by any of them as a result of, or arising out of, or in any
way related to, or by reason of, (a) any investigation, litigation or other
proceeding (whether or not the Agent, the Collateral Agent or any Bank is a
party thereto) related to the entering into and/or performance of this Agreement
or any other Document or the use of the proceeds of any Loans hereunder or the
Transaction or the consummation of any other transactions contemplated in any
Document (but excluding any such losses, liabilities, claims, damages or
expenses to the extent incurred by reason of the gross negligence or willful
misconduct of the Person to be indemnified), or (b) the actual or alleged
presence of Hazardous Materials in the air, surface water or groundwater or on
the surface or subsurface of any Real Property or any Environmental Claim, in
each case, including, without limitation, the reasonable fees and disbursements
of counsel and independent consultants incurred in connection with any such
investigation, litigation or other proceeding.
12.02 Right of Setoff. In addition to any rights now or hereafter
---------------
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default, each Bank is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to Holdings or any of its Subsidiaries or to
any other Person, any such notice being hereby expressly waived, to set off and
to appropriate and apply any and all deposits (general or special) and any other
Indebtedness at any time held or owing by such Bank (including, without
limitation, by branches and agencies of such Bank wherever located) to or for
the credit or the account of Holdings or any of its Subsidiaries against and on
account of the Obligations and liabilities of Holdings or any of its
Subsidiaries to such Bank under this Agreement or under any of the other Credit
Documents, including, without limitation, all interests in Obligations of
Holdings or any of its Subsidiaries purchased by such Bank pursuant to Section
12.06(b), and all other claims of any nature or description arising out of or
connected with this Agreement or any other Credit Document, irrespective of
whether or not such Bank shall have made any demand hereunder and although said
Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured.
12.03 Notices. Except as otherwise expressly provided herein, all
-------
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered, if to any Credit Party,
at the address specified opposite its signature below or in the other relevant
Credit Documents, as the case may be; if to any Bank, at its address specified
for such Bank on Annex II; or, at such other address as shall be designated by
any party in a written notice to the other parties hereto. All such notices and
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communications shall be mailed, telegraphed, telexed, telecopied or cabled or
sent by overnight courier, and shall be effective when received.
12.04 Benefit of Agreement. (a) This Agreement shall be binding
--------------------
upon and inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto; provided, however, no Credit Party may assign
-------- -------
or transfer any of its rights, obligations or interest hereunder or under any
other Credit Document without the prior written consent of all of the Banks and,
provided further, that, although any Bank may transfer, assign or grant
----------------
participations in its rights hereunder, such Bank shall remain a "Bank" for all
purposes hereunder (and may not transfer or assign all or any portion of its
Commitments hereunder except as provided in Section 12.04(b)) and the
transferee, assignee or participant, as the case may be, shall not constitute a
"Bank" hereunder and, provided further, that no Bank shall transfer or grant any
----------------
participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Credit Document except to
the extent such amendment or waiver would (i) extend the final scheduled
maturity of any Loan, Note or Letter of Credit (unless such Letter of Credit is
not extended beyond the Revolving Loan Maturity Date) in which such participant
is participating, or reduce the rate or extend the time of payment of interest
or Fees thereon (except in connection with a waiver of applicability of any
post-default increase in interest rates) or reduce the principal amount thereof,
or increase the amount of the participant's participation over the amount
thereof then in effect (it being understood that a waiver of any Default or
Event of Default or of a mandatory reduction in the Total Commitment shall not
constitute a change in the terms of such participation, and that an increase in
any Commitment or Loan shall be permitted without the consent of any participant
if the participant's participation is not increased as a result thereof), (ii)
consent to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement or (iii) release all or substantially all of
the Collateral under all of the Security Documents (except as expressly provided
in the Credit Documents) supporting the Loans hereunder in which such
participant is participating. In the case of any such participation, the
participant shall not have any rights under this Agreement or any of the other
Credit Documents (the participant's rights against such Bank in respect of such
participation to be those set forth in the agreement executed by such Bank in
favor of the participant relating thereto) and all amounts payable by the
Borrower hereunder shall be determined as if such Bank had not sold such
participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank together
with one or more other Banks) may (x) assign all or a portion of its Revolving
Loan Commitment (and related outstanding Obligations hereunder) and/or its
outstanding Term Loans (i) to its parent company and/or any affiliate of such
Bank which is at least 50% owned by such Bank or its parent company or to one or
more Banks or (ii) in the case of any Bank that is a fund that invests in loans,
any other fund that invests in bank loans and is advised by the same investment
advisor of such Bank or by an Affiliate of such investment advisor or (y) assign
all, or if less than all, a portion equal to at least
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$5,000,000 in the aggregate for the assigning Bank or assigning Banks, of such
Revolving Loan Commitments and/or outstanding principal amount of Term Loans
hereunder to one or more Eligible Transferees (treating any fund that invests in
loans and any other fund that invests in loans and is advised by the same
investment advisor of such fund or by an Affiliate of such investment advisor as
a single Eligible Transferee), each of which assignees shall become a party to
this Agreement as a Bank by execution of an Assignment and Assumption Agreement,
provided that (i) at such time Annex I shall be deemed modified to reflect the
--------
Commitments (and/or outstanding Term Loans, as the case may be) of such new Bank
and of the existing Banks, (ii) upon surrender of the old Notes, new Notes will
be issued, at the Borrower's expense, to such new Bank and to the assigning
Bank, such new Notes to be in conformity with the requirements of Section 1.05
(with appropriate modifications) to the extent needed to reflect the revised
Commitments (and/or outstanding Term Loans, as the case may be), (iii) the
consent of the Agent shall be required in connection with any such assignment
pursuant to clause (y) of this Section 12.04(b) (which consent shall not be
unreasonably withheld or delayed), (iv) the consent of each Letter of Credit
Issuer shall be required in connection with any such assignment of Revolving
Loan Commitments pursuant to clause (y) of this Section 12.04(b) (which consent
shall not be unreasonably withheld), and (v) the Agent shall receive at the time
of each such assignment, from the assigning or assignee Bank, the payment of a
non-refundable assignment fee of $3,500 and, provided further, that such
----------------
transfer or assignment will not be effective until recorded by the Agent on the
Register pursuant to Section 7.12 hereof. To the extent of any assignment
pursuant to this Section 12.04(b), the assigning Bank shall be relieved of its
obligations hereunder with respect to its assigned Commitments. At the time of
each assignment pursuant to this Section 12.04(b) to a Person which is not
already a Bank hereunder and which is not a United States person (as such term
is defined in Section 7701(a)(30) of the Code) for Federal income tax purposes,
the respective assignee Bank shall provide to the Borrower and the Agent the
appropriate Internal Revenue Service Forms (and, if applicable a Section
4.04(b)(ii) Certificate) described in Section 4.04(b). To the extent that an
assignment of all or any portion of a Bank's Commitments and related outstanding
Obligations pursuant to Section 1.13 or this Section 12.04(b) would, at the time
of such assignment, result in increased costs under Section 1.10, 1.11, 2.05 or
4.04 from those being charged by the respective assigning Bank prior to such
assignment, then the Borrower shall not be obligated to pay such increased costs
(although the Borrower shall be obligated to pay any other increased costs of
the type described above resulting from changes after the date of the respective
assignment).
(c) Nothing in this Agreement shall prevent or prohibit any Bank from
pledging its Loans and Notes hereunder to a Federal Reserve Bank in support of
borrowings made by such Bank from such Federal Reserve Bank.
12.05 No Waiver; Remedies Cumulative. No failure or delay on the
------------------------------
part of the Agent or any Bank in exercising any right, power or privilege
hereunder or under any other Credit Document and no course of dealing between
any Credit Party and the
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Agent or any Bank shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or under any other
Credit Document preclude any other or further exercise thereof or the exercise
of any other right, power or privilege hereunder or thereunder. The rights and
remedies herein expressly provided are cumulative and not exclusive of any
rights or remedies which the Agent or any Bank would otherwise have. No notice
to or demand on any Credit Party in any case shall entitle any Credit Party to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Agent or the Banks to any other or
further action in any circumstances without notice or demand.
12.06 Payments Pro Rata. (a) The Agent agrees that promptly after
-----------------
its receipt of each payment from or on behalf of any Credit Party in respect of
any Obligations of such Credit Party, it shall, except as otherwise provided in
this Agreement, distribute such payment to the Banks (other than any Bank that
has consented in writing to waive its pro rata share of such payment) pro rata
--- ---- --- ----
based upon their respective shares, if any, of the Obligations with respect to
which such payment was received.
(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings or Fees, of a sum which with respect to the
related sum or sums received by other Banks is in a greater proportion than the
total of such Obligation then owed and due to such Bank bears to the total of
such Obligation then owed and due to all of the Banks immediately prior to such
receipt, then such Bank receiving such excess payment shall purchase for cash
without recourse or warranty from the other Banks an interest in the Obligations
of the respective Credit Party to such Banks in such amount as shall result in a
proportional participation by all of the Banks in such amount; provided, that if
--------
all or any portion of such excess amount is thereafter recovered from such Bank,
such purchase shall be rescinded and the purchase price restored to the extent
of such recovery, but without interest.
12.07 Calculations; Computations. (a) The financial statements to
--------------------------
be furnished to the Banks pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by Holdings or the Borrower to the Banks); provided, that except as otherwise
--------
specifically provided herein (including in Section 12.07(c)), all computations
determining compliance with Sections 4.02 and 8, including definitions used
therein, shall utilize accounting principles and policies in effect at the time
of the preparation of, and in conformity with those used to prepare, the
December 31, 1996 financial statements delivered to the Banks pursuant to
Section 6.10(b).
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(b) All computations of interest and Fees hereunder shall be made on
the actual number of days elapsed over a year of 360 days.
(c) Computations determining compliance with Section 8, including
definitions used therein, shall be made as if the Transaction had occurred on
June 30, 1997, and shall utilize the same pro forma adjustments as those
described in the preliminary Offering Memorandum, dated June 19, 1997, relating
to the Senior Subordinated Notes.
12.08 Governing Law; Submission to Jurisdiction; Venue. (a) THIS
------------------------------------------------
AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK. Any legal action or proceeding
with respect to this Agreement or any other Credit Document may be brought in
the courts of the State of New York or of the United States for the Southern
District of New York, and, by execution and delivery of this Agreement, each
Credit Party hereby irrevocably accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of the aforesaid
courts. Each Credit Party hereby further irrevocably waives any claim that any
such courts lack jurisdiction over such Credit Party, and agrees not to plead or
claim, in any legal action or proceeding with respect to this Agreement or any
other Credit Document brought in any of the aforesaid courts, that any such
court lacks jurisdiction over such Credit Party. Each Credit Party irrevocably
consents to the service of process in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
such Credit Party, at its address for notices pursuant to Section 12.03, such
service to become effective 30 days after such mailing. Each Credit Party
hereby irrevocably waives any objection to such service of process and further
irrevocably waives and agrees not to plead or claim in any action or proceeding
commenced hereunder or under any other Credit Document that service of process
was in any way invalid or ineffective. Nothing herein shall affect the right of
the Agent, any Bank or the holder of any Note to serve process in any other
manner permitted by law or to commence legal proceedings or otherwise proceed
against any Credit Party in any other jurisdiction.
(b) Each Credit Party hereby irrevocably waives any objection which
it may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Agreement or
any other Credit Document brought in the courts referred to in clause (a) above
and hereby further irrevocably waives and agrees not to plead or claim in any
such court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
12.09 Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together
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constitute one and the same instrument. A complete set of counterparts executed
by all the parties hereto shall be lodged with Holdings, the Borrower and the
Agent.
12.10 Effectiveness. This Agreement shall become effective on the
-------------
date (the "Effective Date") on which Holdings, the Borrower and each of the
Banks shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered the same to the Agent at the Notice
Office or, in the case of the Banks, shall have given to the Agent telephonic
(confirmed in writing), written, telex or facsimile notice (actually received)
at such office that the same has been signed and mailed to it. The Agent will
give Holdings, the Borrower and each Bank prompt written notice of the
occurrence of the Effective Date.
12.11 Headings Descriptive. The headings of the several sections and
--------------------
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
12.12 Amendment or Waiver; etc. (a) Neither this Agreement nor any
-------------------------
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties party thereto and the
Required Banks, provided that no such change, waiver, discharge or termination
--------
shall, without the consent of each Bank (other than a Defaulting Bank) (with
Obligations being directly affected thereby in the case of following clause
(i)), (i) extend the final scheduled maturity of any Loan or Note or extend the
stated maturity of any Letter of Credit beyond the Revolving Loan Maturity Date,
or reduce the rate or extend the time of payment of interest or Fees thereon, or
reduce the principal amount thereof, (ii) release all or substantially all of
the Collateral (except as expressly provided in the Security Documents) under
all the Security Documents, (iii) amend, modify or waive any provision of this
Section 12.12, (iv) reduce the percentage specified in the definition of
Required Banks (it being understood that, with the consent of the Required
Banks, additional extensions of credit pursuant to this Agreement may be
included in the determination of the Required Banks on substantially the same
basis as the extensions of Term Loans and Revolving Loan Commitments are
included on the Effective Date) or (v) consent to the assignment or transfer by
the Borrower of any of its rights and obligations under this Agreement; provided
--------
further, that no such change, waiver, discharge or termination shall (1)
-------
increase the Commitments of any Bank over the amount thereof then in effect
without the consent of such Bank (it being understood that waivers or
modifications of conditions precedent, covenants, Defaults or Events of Default
or of a mandatory reduction in the Total Commitment shall not constitute an
increase of the Commitment of any Bank, and that an increase in the available
portion of any Commitment of any Bank shall not constitute an increase in the
Commitment of such Bank), (2) without the consent of BTCo, amend, modify or
waive any provision of Section 2 or alter its rights or obligations with respect
to Letters of Credit or Swingline Loans, (3) without the consent of the Agent,
amend, modify or waive any provision of Section 11 as same applies to the
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Agent or any other provision as same relates to the rights or obligations of the
Agent, (4) without the consent of the Collateral Agent, amend, modify or waive
any provision relating to the rights or obligations of the Collateral Agent, (5)
without the consent of the Majority Banks of each Facility which is being
allocated a lesser prepayment, repayment or commitment reduction as a result of
the actions described below (or without the consent of the Majority Banks of
each Facility in the case of an amendment to the definition of Majority Banks),
amend the definition of Majority Banks or alter the required application of any
prepayments or repayments (or commitment reduction), as between the various
Facilities pursuant to Section 4.01(a) or 4.02(B)(b) (although the Required
Banks may waive, in whole or in part, any such prepayment, repayment or
commitment reduction so long as the application, as amongst the various
Facilities, of any such prepayment, repayment or commitment reduction which is
still required to be made is not altered) or (6) without the consent of the
Supermajority Banks of the respective Facility, amend the definition of
Supermajority Banks or amend, modify or waive any Scheduled Repayment of such
affected Facility.
(b) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement as contemplated by clause
(a)(i) through (v), inclusive, of the first proviso to Section 12.12(a), the
consent of the Required Banks is obtained but the consent of one or more of such
other Banks whose consent is required is not obtained, then the Borrower shall
have the right, so long as all non-consenting Banks whose individual consent is
required are treated as described in either clause (A) or (B) below, to either
(A) replace each such non-consenting Bank or Banks with one or more Replacement
Banks pursuant to Section 1.13 so long as at the time of such replacement, each
such Replacement Bank consents to the proposed change, waiver, discharge or
termination or (B) terminate all of such non-consenting Bank's Commitments and
repay in full its outstanding Loans, in accordance with Sections 3.02(b) and/or
4.01(b), provided that, unless the Commitments terminated and Loans repaid
--------
pursuant to preceding clause (B) are immediately replaced in full at such time
through the addition of new Banks or the increase of the Commitments and/or
outstanding Loans of existing Banks (who in each case must specifically consent
thereto), then in the case of any action pursuant to preceding clause (B) the
Required Banks (determined before giving effect to the proposed action) shall
specifically consent thereto, provided further, that the Borrower shall not have
----------------
the right to replace a Bank solely as a result of the exercise of such Bank's
rights (and the withholding of any required consent by such Bank) pursuant to
the second proviso to Section 12.12(a).
12.13 Survival. All indemnities set forth herein including, without
--------
limitation, in Section 1.10, 1.11, 2.05, 4.04, 11.07 or 12.01, shall survive the
execution and delivery of this Agreement and the making and repayment of the
Loans.
12.14 Domicile of Loans. Each Bank may transfer and carry its Loans
-----------------
at, to or for the account of any branch office, subsidiary or affiliate of such
Bank; provided,
--------
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that the Borrower shall not be responsible for costs arising under Section 1.10,
1.11, 2.05 or 4.04 resulting from any such transfer (other than a transfer
pursuant to Section 1.12) to the extent such costs would not otherwise be
applicable to such Bank in the absence of such transfer.
12.15 Confidentiality. (a) Each of the Banks agrees that it will
---------------
use its best efforts not to disclose without the prior consent of the Borrower
(other than to its employees, auditors, counsel or other professional advisors,
to affiliates or to another Bank if the Bank or such Bank's holding or parent
company in its sole discretion determines that any such party should have access
to such information or as may be required pursuant to laws and regulations
applicable to any Bank's operations) any information with respect to Holdings,
the Borrower or any of its Subsidiaries which is furnished pursuant to this
Agreement; provided, that any Bank may disclose any such information (a) as has
--------
become generally available to the public or has become available to such Bank on
a non-confidential basis, (b) as may be required or appropriate in any report,
statement or testimony submitted to any municipal, state or Federal regulatory
body having or claiming to have jurisdiction over such Bank or to the Federal
Reserve Board or the Federal Deposit Insurance Corporation or similar
organizations (whether in the United States or elsewhere) or their successors,
(c) as may be required or appropriate in response to any summons or subpoena or
in connection with any litigation, (d) in order to comply with any law, order,
regulation or ruling applicable to such Bank, and (e) to any prospective
transferee in connection with any contemplated transfer of any of the Notes or
any interest therein by such Bank; provided, that such prospective transferee
--------
agrees, for the benefit of such Bank and the Borrower, to provisions
substantially identical to those contained in this Section.
(b) Each of Holdings and the Borrower hereby acknowledges and agrees
that each Bank may share with any of its affiliates any information related to
Holdings or any of its Subsidiaries (including, without limitation, any
nonpublic customer information regarding the creditworthiness of Holdings and
its Subsidiaries, provided that such Persons shall be subject to the provisions
of this Section 12.15 to the same extent as such Bank).
12.16 Waiver of Jury Trial. EACH OF THE PARTIES TO THIS AGREEMENT
--------------------
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
SECTION 13. Holdings Guaranty.
-----------------
13.01 The Guaranty. In order to induce the Banks to enter into this
------------
Agreement and to extend credit hereunder and in recognition of the direct
benefits to be received by Holdings from the proceeds of the Loans and the
issuance of the Letters of
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Credit, Holdings hereby agrees with the Banks as follows: Holdings hereby
unconditionally and irrevocably guarantees as primary obligor and not merely as
surety the full and prompt payment when due, whether upon maturity, acceleration
or otherwise, of any and all of the Guaranteed Obligations of the Borrower to
the Guaranteed Creditors. If any or all of the Guaranteed Obligations of the
Borrower to the Guaranteed Creditors becomes due and payable hereunder, Holdings
unconditionally promises to pay such indebtedness to the Agent and/or the Banks,
or order, on demand, together with any and all expenses which may be incurred by
the Agent or the Banks in collecting any of the Guaranteed Obligations. If
claim is ever made upon any Guaranteed Creditor for repayment or recovery of any
amount or amounts received in payment or on account of any of the Guaranteed
Obligations and any of the aforesaid payees repays all or part of said amount by
reason of (i) any judgment, decree or order of any court or administrative body
having jurisdiction over such payee or any of its property or (ii) any
settlement or compromise of any such claim effected by such payee with any such
claimant (including the Borrower), then and in such event Holdings agrees that
any such judgment, decree, order, settlement or compromise shall be binding upon
Holdings, notwithstanding any revocation of this Guaranty other instrument
evidencing any liability of the Borrower, and Holdings shall be and remain
liable to the aforesaid payees hereunder for the amount so repaid or recovered
to the same extent as if such amount had never originally been received by any
such payee.
13.02 Bankruptcy. Additionally, Holdings unconditionally and
----------
irrevocably guarantees the payment of any and all of the Guaranteed Obligations
of the Borrower to the Guaranteed Creditors whether or not due or payable by the
Borrower upon the occurrence of any of the events specified in Section 9.05, and
unconditionally, jointly and severally, promises to pay such indebtedness to the
Guaranteed Creditors, or order, on demand, in lawful money of the United States.
13.03 Nature of Liability. The liability of Holdings hereunder is
-------------------
exclusive and independent of any security for or other guaranty of the
Guaranteed Obligations of the Borrower whether executed by Holdings, any other
guarantor or by any other party, and the liability of Holdings hereunder is not
affected or impaired by (a) any direction as to application of payment by the
Borrower or by any other party, or (b) any other continuing or other guaranty,
undertaking or maximum liability of a guarantor or of any other party as to the
Guaranteed Obligations of the Borrower, or (c) any payment on or in reduction of
any such other guaranty or undertaking, or (d) any dissolution, termination or
increase, decrease or change in personnel by the Borrower, or (e) any payment
made to any Guaranteed Creditor on the Guaranteed Obligations which any such
Guaranteed Creditor repays to the Borrower pursuant to court order in any
bankruptcy, reorganization, arrangement, moratorium or other debtor relief
proceeding, and Holdings waives any right to the deferral or modification of its
obligations hereunder by reason of any such proceeding.
13.04 Independent Obligation. The obligations of Holdings hereunder
----------------------
are independent of the obligations of any other guarantor, any other party or
the Borrower, and
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a separate action or actions may be brought and prosecuted against Holdings
whether or not action is brought against any other guarantor, any other party or
the Borrower and whether or not any other guarantor, any other party or the
Borrower be joined in any such action or actions. Holdings waives, to the full
extent permitted by law, the benefit of any statute of limitations affecting its
liability hereunder or the enforcement thereof. Any payment by the Borrower or
other circumstance which operates to toll any statute of limitations as to the
Borrower shall operate to toll the statute of limitations as to any Guarantor.
13.05 Authorization. Holdings authorizes the Guaranteed Creditors
-------------
without notice or demand (except as shall be required by applicable statute and
cannot be waived), and without affecting or impairing its liability hereunder,
from time to time to:
(a) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew, increase, accelerate or alter, any of
the Guaranteed Obligations (including any increase or decrease in the rate
of interest thereon), any security therefor, or any liability incurred
directly or indirectly in respect thereof, and the Guaranty herein made
shall apply to the Guaranteed Obligations as so changed, extended, renewed
or altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any of
those hereunder) incurred directly or indirectly in respect thereof or
hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors, the
Borrower or other obligors;
(e) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Borrower to its creditors other than
the Guaranteed Creditors;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Guaranteed Creditors
regardless of what liability or liabilities of Holdings or the Borrower
remain unpaid;
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(g) consent to or waive any breach of, or any act, omission or
default under, this Agreement or any of the instruments or agreements
referred to herein, or otherwise amend, modify or supplement this Agreement
or any of such other instruments or agreements; and/or
(h) take any other action which would, under otherwise applicable
principles of common law, give rise to a legal or equitable discharge of
Holdings from its liabilities under this Guaranty.
13.06 Reliance. It is not necessary for any Guaranteed Creditor to
--------
inquire into the capacity or powers of the Borrower or the officers, directors,
partners or agents acting or purporting to act on their behalf, and any
Guaranteed Obligations made or created in reliance upon the professed exercise
of such powers shall be guaranteed hereunder.
13.07 Subordination. Any of the indebtedness of the Borrower
-------------
relating to the Guaranteed Obligations now or hereafter owing to Holdings is
hereby subordinated to the Guaranteed Obligations of the Borrower owing to the
Guaranteed Creditors; and if the Agent so requests at a time when an Event of
Default exists, all such indebtedness relating to the Guaranteed Obligations of
the Borrower to Holdings shall be collected, enforced and received by Holdings
for the benefit of the Guaranteed Creditors and be paid over to the Agent on
behalf of the Guaranteed Creditors on account of the Guaranteed Obligations of
the Borrower to the Guaranteed Creditors, but without affecting or impairing in
any manner the liability of Holdings under the other provisions of this
Guaranty. Prior to the transfer by Holdings of any note or negotiable
instrument evidencing any of the indebtedness relating to the Guaranteed
Obligations of the Borrower to Holdings, Holdings shall xxxx such note or
negotiable instrument with a legend that the same is subject to this
subordination. Without limiting the generality of the foregoing, Holdings
hereby agrees with the Guaranteed Creditors that it will not exercise any right
of subrogation which it may at any time otherwise have as a result of this
Guaranty (whether contractual, under Section 509 of the Bankruptcy Code or
otherwise) until all Guaranteed Obligations have been irrevocably paid in full
in cash.
13.08 Waiver. (a) Holdings waives any right (except as shall be
------
required by applicable statute and cannot be waived) to require any Guaranteed
Creditor to (i) proceed against the Borrower, any other guarantor or any other
party, (ii) proceed against or exhaust any security held from the Borrower, any
other guarantor or any other party or (iii) pursue any other remedy in any
Guaranteed Creditor's power whatsoever. Holdings waives any defense based on or
arising out of any defense of the Borrower, any other guarantor or any other
party, other than payment in full of the Guaranteed Obligations, based on or
arising out of the disability of the Borrower, any other guarantor or any other
party, or the validity, legality or unenforceability of the Guaranteed
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of the Borrower other than payment in full of the Guaranteed
Obligations. The Guaranteed Creditors may, at their elec-
-133-
tion, foreclose on any security held by the Agent, the Collateral Agent or any
other Guaranteed Creditor by one or more judicial or nonjudicial sales, whether
or not every aspect of any such sale is commercially reasonable (to the extent
such sale is permitted by applicable law), or exercise any other right or remedy
the Guaranteed Creditors may have against the Borrower or any other party, or
any security, without affecting or impairing in any way the liability of
Holdings hereunder except to the extent the Guaranteed Obligations have been
paid. Holdings waives any defense arising out of any such election by the
Guaranteed Creditors, even though such election operates to impair or extinguish
any right of reimbursement or subrogation or other right or remedy of Holdings
against the Borrower or any other party or any security.
(b) Holdings waives all presentments, demands for performance,
protests and notices, including without limitation notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation or incurring of new or additional
Guaranteed Obligations. Holdings assumes all responsibility for being and
keeping itself informed of the Borrower's financial condition and assets, and of
all other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks which Holdings assumes
and incurs hereunder, and agrees that the Agent and the Banks shall have no duty
to advise Holdings of information known to them regarding such circumstances or
risks.
13.09 Nature of Liability. It is the desire and intent of Holdings
-------------------
and the Secured Creditors that this Guaranty shall be enforced against Holdings
to the fullest extent permissible under the laws and public policies applied in
each jurisdiction in which enforcement is sought. If, however, and to the
extent that, the obligations of Holdings under this Guaranty shall be
adjudicated to be invalid or unenforceable for any reason (including, without
limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers), then the amount of the Guaranteed
Obligations of Holdings shall be deemed to be reduced and Holdings shall pay the
maximum amount of the Guaranteed Obligations which would be permissible under
applicable law.
* * *
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
-------
c/o Cambridge Industries, Inc. CAMBRIDGE INDUSTRIES
000 Xxxxxx Xxxxx Xxxxx HOLDINGS, INC.
Xxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000 By /signature appears here/
Telecopy: (000) 000-0000 -------------------------
Title:
000 Xxxxxx Xxxxx Xxxxx XXXXXXXXX INDUSTRIES, INC.
Xxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000 By /signature appears here/
Telecopy: (000) 000-0000 -------------------------
Title:
BANKERS TRUST COMPANY,
Individually and as Agent
By /signature appears here/
-------------------------
Title:
THOROUGHBRED LIMITED
PARTNERSHIP I
By: Appaloosa Management L.P., Its
Partner
By: Appaloosa Partners Inc.
By /signature appears here/
-------------------------
Title:
BANKBOSTON, N.A.
By /signature appears here/
-------------------------
Title:
CITY NATIONAL BANK
By /signature appears here/
-------------------------
Title:
COMERICA BANK
By /signature appears here/
-------------------------
Title:
CREDIT LYONNAIS CHICAGO BRANCH
By /signature appears here/
-------------------------
Title:
CYPRESS TREE INVESTMENT
MANAGEMENT COMPANY, INC.
As: Attorney-in-Fact and on Behalf
of First Allmerica Financial Life Insurance
Company
By /signature appears here/
-------------------------
Title:
DRESDNER BANK AG, NEW YORK
AND GRAND CAYMAN BRANCHES
By /signature appears here/
-------------------------
Title:
By /signature appears here/
-------------------------
Title:
DEEPROCK & COMPANY
By: Xxxxx Xxxxx Management, as
Investment Advisor
By /signature appears here/
-------------------------
Title:
FLEET NATIONAL BANK
By /signature appears here/
-------------------------
Title:
XXXXXX FINANCIAL, INC.
By /signature appears here/
-------------------------
Title:
INDOSUEZ CAPITAL FUNDING III,
LIMITED
By: Indosuez Capital Luxembourg, as
Collateral Manager
By /signature appears here/
-------------------------
Title:
PILGRIM AMERICA PRIME RATE TRUST
By /signature appears here/
-------------------------
Title:
ROYALTON COMPANY, BY PACIFIC
INVESTMENT MANAGEMENT
COMPANY, AS ITS INVESTMENT
ADVISOR
By /signature appears here/
-------------------------
Title:
SANWA BUSINESS CREDIT
CORPORATION
By /signature appears here/
-------------------------
Title:
TRANSAMERICA BUSINESS CREDIT
CORPORATION
By /signature appears here/
-------------------------
Title:
XXX XXXXXX AMERICAN CAPITAL
PRIME RATE INCOME TRUST
By /signature appears here/
-------------------------
Title:
THE LONG-TERM CREDIT BANK OF
JAPAN, LIMITED
By /signature appears here/
-------------------------
Title:
COMPAGNIE FINANCIERE DE CIC ET
DE L'UNION EUROPEENNE
By /signature appears here/
-------------------------
Title:
GENERAL ELECTRIC CAPITAL
CORPORATION
By /signature appears here/
-------------------------
Title:
CORESTATES BANK, N.A.
By /signature appears here/
-------------------------
Title:
OCTAGON CREDIT INVESTORS LOAN
PORTFOLIO (A Unit of The Chase
Manhattan Bank)
By /signature appears here/
-------------------------
Title:
BANK POLSKA KASA OPIEKI S.A.,
PEKAO S.A. GROUP, NEW YORK BRANCH
By /signature appears here/
-------------------------
Title:
CORESTATES BANK, N.A.
By /signature appears here/
-------------------------
Title:
DLJ CAPITAL FUNDING, INC.
By /signature appears here/
-------------------------
Title:
