CREDIT AGREEMENT
Dated as of December 22, 1995
Among
XXXXXXX & XXXXXX PRODUCTS CO.,
as Borrower,
XXXXXXX & XXXXXX CORPORATION,
as Guarantor,
THE LENDERS NAMED HEREIN,
And
CHEMICAL BANK,
as Administrative Agent
TABLE OF CONTENTS
Article Section Page
I.
DEFINITIONS
SECTION 1.01. Defined Terms....................................................................... 1
SECTION 1.02. Terms Generally..................................................................... 16
II.
THE CREDITS
SECTION 2.01. Commitments......................................................................... 16
SECTION 2.02. Loans............................................................................... 16
SECTION 2.03. Notice of Borrowings................................................................ 17
SECTION 2.04. Notes; Repayment of Loans........................................................... 17
SECTION 2.05. Fees................................................................................ 18
SECTION 2.06. Interest on Loans................................................................... 18
SECTION 2.07. Default Interest.................................................................... 18
SECTION 2.08. Alternate Rate of Interest.......................................................... 18
SECTION 2.09. Termination and Reduction of Commitments............................................ 19
SECTION 2.10. Conversion and Continuation of Borrowings........................................... 19
SECTION 2.11. Repayment of Borrowings............................................................. 20
SECTION 2.12. Prepayment.......................................................................... 20
SECTION 2.13. Reserve Requirements; Change in Circumstances....................................... 21
SECTION 2.14. Change in Legality.................................................................. 22
SECTION 2.15. Indemnity........................................................................... 22
SECTION 2.16. Pro Rata Treatment.................................................................. 23
SECTION 2.17. Payments............................................................................ 23
SECTION 2.18. Taxes............................................................................... 23
III.
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Organization, Corporate Powers...................................................... 25
SECTION 3.02. Authorization....................................................................... 26
SECTION 3.03. Enforceability...................................................................... 26
SECTION 3.04. Larizza Acquisition................................................................. 26
SECTION 3.05. Use of Proceeds..................................................................... 26
SECTION 3.06. Federal Reserve Regulations......................................................... 26
SECTION 3.07. Pledge Agreement.................................................................... 26
SECTION 3.08. Financial Statements................................................................ 27
SECTION 3.09. No Material Adverse Change.......................................................... 27
SECTION 3.10. Title to Properties; Possession Under Leases........................................ 27
SECTION 3.11. Subsidiaries........................................................................ 28
SECTION 3.12. Litigation; Compliance with Laws.................................................... 28
SECTION 3.13. Agreements.......................................................................... 28
SECTION 3.14. Investment Company Act.............................................................. 28
SECTION 3.15. Public Utility Holding Company Act.................................................. 28
SECTION 3.16. Tax Returns......................................................................... 28
SECTION 3.17. No Material Misstatements........................................................... 29
SECTION 3.18. Employee Benefit Plans.............................................................. 29
i
Article Section Page
SECTION 3.19. Labor Matters....................................................................... 29
SECTION 3.20. Environmental Matters............................................................... 30
SECTION 3.21. Solvency............................................................................ 31
SECTION 3.22. Absence of Certain Restrictions..................................................... 31
SECTION 3.23. No Foreign Assets Control Regulation Violation...................................... 31
SECTION 3.24. Insurance........................................................................... 31
SECTION 3.25. Certain Other Representations....................................................... 31
SECTION 3.26. Permitted Acquisition Indebtedness.................................................. 31
IV.
CONDITIONS
SECTION 4.01. .................................................................................... 32
V.
AFFIRMATIVE COVENANTS
SECTION 5.01. Existence; Businesses and Properties................................................ 34
SECTION 5.02. Insurance........................................................................... 35
SECTION 5.03. Taxes............................................................................... 35
SECTION 5.04. Financial Statements, Reports, Amendments, etc...................................... 35
SECTION 5.05. Litigation and Other Notices........................................................ 37
SECTION 5.06. ERISA............................................................................... 37
SECTION 5.07. Maintaining Records; Access to Properties and Inspections........................... 38
SECTION 5.08. Use of Proceeds..................................................................... 38
SECTION 5.09. Further Assurances.................................................................. 38
SECTION 5.10. Change in Ownership................................................................. 38
SECTION 5.11. Fiscal Year; Accounting............................................................. 38
SECTION 5.12. Dividends........................................................................... 38
SECTION 5.13. Rate Protection Agreements.......................................................... 39
SECTION 5.14. Corporate Separateness.............................................................. 39
SECTION 5.15. Business of Restricted Subsidiaries................................................. 39
VI.
NEGATIVE COVENANTS
SECTION 6.01. Indebtedness........................................................................ 39
SECTION 6.02. Dividends and Distributions......................................................... 41
SECTION 6.03. Capital Expenditures................................................................ 42
SECTION 6.04. Liens............................................................................... 43
SECTION 6.05. Priority of Loan Payments........................................................... 44
SECTION 6.06. Sale and Lease-Back Transactions.................................................... 45
SECTION 6.07. Investments, Loans and Advances..................................................... 45
SECTION 6.08. Mergers, Consolidations, Sales of Assets and Acquisitions........................... 46
SECTION 6.09. Transactions with Affiliates and Stockholders....................................... 48
SECTION 6.10. Subordinated Indebtedness........................................................... 48
SECTION 6.11. Amendment of Constitutive Documents; Change in Corporate
Structure; Amendment of Merger Documents...................................................... 48
SECTION 6.12. Business of Holdings and Restricted Subsidiaries.................................... 48
SECTION 6.13. Restrictive Agreements.............................................................. 48
SECTION 6.14. Interest Coverage Ratio............................................................. 48
SECTION 6.15. EBITDA.............................................................................. 49
SECTION 6.16. Leverage Ratio...................................................................... 49
ii
Article Section Page
SECTION 6.17. Current Ratio....................................................................... 49
SECTION 6.18. Tax Sharing......................................................................... 49
SECTION 6.19. Significant Subsidiaries............................................................ 49
SECTION 6.20. Inactive Subsidiaries............................................................... 49
VII.
EVENTS OF DEFAULT
VIII.
THE ADMINISTRATIVE AGENT
IX.
MISCELLANEOUS
SECTION 9.01. Notices............................................................................. 54
SECTION 9.02. Survival of Agreement............................................................... 54
SECTION 9.03. Binding Effect...................................................................... 54
SECTION 9.04. Successors and Assigns.............................................................. 55
SECTION 9.05. Expenses; Indemnity................................................................. 57
SECTION 9.06. Right of Setoff; Sharing............................................................ 58
SECTION 9.07. Applicable Law...................................................................... 59
SECTION 9.08. Waivers; Amendment.................................................................. 59
SECTION 9.09. Interest Rate Limitation............................................................ 59
SECTION 9.10. Entire Agreement.................................................................... 59
SECTION 9.11. Waiver of Jury Trial................................................................ 60
SECTION 9.12. Severability........................................................................ 60
SECTION 9.13. Counterparts........................................................................ 60
SECTION 9.14. Headings............................................................................ 60
SECTION 9.15. Jurisdiction; Consent to Service of Process......................................... 60
SECTION 9.16. Confidentiality..................................................................... 60
iii
Exhibits
Exhibit A Note
Exhibit B Assignment and Acceptance
Exhibit C Administrative Questionnaire
Exhibit D Form of Opinion of Cravath, Swaine & Xxxxx,
Xxxxxxxxx X. Xxxxxxx, Esq.
Exhibit E Form of Compliance Certificate
Schedules
1.01(A) Additional Designated Persons
1.01(B) Subordination Terms
2.01 Commitments
2.11(a) Term Loan Amortization Schedule
3.11(a) Subsidiaries of Holdings
3.11(b) Outstanding Commitments Relating to Capital Stock
3.16 Tax Matters
6.01 Existing Indebtedness
6.04 Existing Liens
6.07 Existing Investments
iv
CREDIT AGREEMENT dated as of December 22, 1995, among XXXXXXX
& XXXXXX PRODUCTS CO., a Delaware corporation (the "Borrower"),
XXXXXXX & XXXXXX CORPORATION, a Delaware corporation ("Holdings"),
the financial institutions listed in Schedule 2.01 hereto (the
"Lenders"), and CHEMICAL BANK, a New York banking corporation
("Chemical"), as administrative agent for the Lenders (in such
capacity, the "Administrative Agent").
The Borrower has requested the Lenders to extend credit in order to
enable the Borrower, subject to the terms and conditions of this Agreement, to
borrow on a term basis, on the Closing Date (as defined herein), an aggregate
principal amount not in excess of $197,000,000. The proceeds of such borrowings
are to be used as described herein. The Lenders are willing to extend such
credit to the Borrower on the terms and subject to the conditions set forth
herein.
Accordingly, the Borrower, Holdings, the Lenders and the Administrative
Agent agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.01. Defined Terms. In addition to the terms defined above,
as used in this Agreement the following terms shall have the meanings specified
below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with
the provisions of Article II.
"Acknowledgement" shall mean the Acknowledgement substantially in
the form of Exhibit A to the Intercreditor Agreement to be executed by
the Administrative Agent, the effect of which is to entitle the 1995
Credit Agreement Creditors to the benefits of the Intercreditor
Agreement, the Guarantee Agreement and the Pledge Agreement on the
terms set forth therein.
"Adjusted LIBO Rate" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the product of
(a) the LIBO Rate in effect for such Interest Period and (b) Statutory
Reserves. For purposes hereof, (a) if at least two offered rates for
deposits in dollars for a period comparable to the applicable Interest
Period appear on page 3750 (or any successor page) of the Dow Xxxxx
Telerate Screen as of 11:00 a.m., London time, on the day that is two
Business Days prior to the first day of such Interest Period, the term
"LIBO Rate" shall mean the arithmetic mean of all such offered rates
and (b) if fewer than two such offered rates so appear on page 3750 (or
any successor page) of the Dow Xxxxx Telerate Screen, the term "LIBO
Rate" shall mean the rate (rounded upwards, if necessary, to the next
1/16 of 1%) at which dollar deposits approximately equal in principal
amount to Chemical's portion (or, if Chemical shall not have any
portion, the portion of the Lender having the largest applicable Type
of Loan) of the applicable Eurodollar Borrowing and for a period
comparable to the applicable Interest Period are offered to Chemical's
office in which its eurodollar operations in respect of eurodollar
loans are being conducted in immediately available funds in the
eurodollar market at approximately 11:00 a.m., New York time, on the
day that is two Business Days prior to the first day of such Interest
Period.
"Administrative Questionnaire" shall mean an Administrative
Questionnaire substantially in the form of Exhibit C.
"Affiliate" shall mean, when used with respect to a specified
person, another person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control
with the person specified.
2
"Agency Fees" shall have the meaning assigned to such term in
Section 2.05(b).
"Alternate Base Rate" shall mean, for any day, a rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Base CD
Rate in effect on such day plus 1% and (c) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1%. For purposes hereof, "Prime
Rate" shall mean the rate of interest per annum publicly announced from
time to time by Chemical as its prime rate in effect at its principal
office in New York City; each change in the Prime Rate shall be
effective on the date such change is publicly announced as being
effective. "Base CD Rate" shall mean the sum of (a) the product of (i)
the Three-Month Secondary CD Rate and (ii) Statutory Reserves and (b)
the Assessment Rate. "Three-Month Secondary CD Rate" shall mean, for
any day, the secondary market rate for three-month certificates of
deposit reported as being in effect on such day (or, if such day shall
not be a Business Day, the next preceding Business Day) by the Board
through the public information telephone line of the Federal Reserve
Bank of New York (which rate will, under the current practices of the
Board, be published in Federal Reserve Statistical Release H.15(519)
during the week following such day), or, if such rate shall not be so
reported on such day or such next preceding Business Day, the average
of the secondary market quotations for three-month certificates of
deposit of major money center banks in New York City received at
approximately 10:00 a.m., New York City time, on such day (or, if such
day shall not be a Business Day, on the next preceding Business Day) by
the Administrative Agent from three New York City negotiable
certificate of deposit dealers of recognized standing selected by it.
"Federal Funds Effective Rate" shall mean, for any day, the weighted
average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds
brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for
the day of such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by it. If
for any reason the Administrative Agent shall have determined (which
determination shall be conclusive absent manifest error) that it is
unable to ascertain the Base CD Rate or the Federal Funds Effective
Rate or both for any reason, including the inability or failure of the
Administrative Agent to obtain sufficient quotations in accordance with
the terms thereof, the Alternate Base Rate shall be determined without
regard to clause (b) or (c), or both, of the first sentence of this
definition, as appropriate, until the circumstances giving rise to such
inability no longer exist. Any change in the Alternate Base Rate due to
a change in the Prime Rate, the Base CD Rate or the Federal Funds
Effective Rate shall be effective on the effective date of such change
in the Prime Rate, the Base CD Rate or the Federal Funds Effective
Rate, respectively.
"Applicable Margin" means (a) with respect to Eurodollar Loans,
2-1/4%, and (b) with respect to ABR Loans, 1-1/4%.
"Assessment Rate" shall mean for any date the annual rate (rounded
upwards, if necessary, to the next 1/100 of 1%) most recently estimated
by the Administrative Agent as the then current net annual assessment
rate that will be employed in determining amounts payable by Chemical
to the Federal Deposit Insurance Corporation (or any successor) for
insurance by such Corporation (or such successor) of time deposits made
in dollars at Chemical's domestic offices.
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Lender and an assignee, and accepted by
the Administrative Agent, substantially in the form of Exhibit B or
such other form as shall be approved by the Administrative Agent.
"Blackstone" shall mean Blackstone Capital Partners L.P., a
Delaware limited partnership.
"Blackstone Entities" shall mean Blackstone, Blackstone Group,
Blackstone Management Partners, L.P., Blackstone Management
Associates, L.P. or any of their Affiliates.
"Blackstone Group" shall mean The Blackstone Group L.P., a
Delaware limited partnership.
3
"Board" shall mean the Board of Governors of the Federal Reserve
System of the United States (or any successor).
"Borrower Common Stock" shall have the meaning assigned to that
term in Section 3.07(a).
"Borrowing" shall mean a group of Loans of a single Type made as
to which a single Interest Period is in effect.
"Business Day" shall mean any day (other than a day which is a
Saturday, Sunday or legal holiday in the State of New York) on which
banks are open for business in New York City; provided, however, that,
when used in connection with a Eurodollar Loan, the term "Business Day"
shall also exclude any day on which banks are not open for dealings in
dollar deposits in the London interbank market.
"C&A Canada" shall mean Xxxxxxx & Xxxxxx Canada Inc., a Canadian
corporation.
"Capital Expenditures" shall mean, for any person in any period,
the aggregate amount of all capital expenditures of such person during
such period (but not including Permitted Business Acquisitions or
Investments permitted pursuant to subsection 6.07(l)). For the purposes
hereof, the amount of any Capital Expenditure shall not include (i) an
amount equal to that portion of the proceeds received upon any sale,
transfer or other disposition of assets or properties pursuant to
Section 6.08(a), (g) or (i) which is applied to the purchase of
replacement assets or properties within 12 months of the receipt
thereof, (ii) expenditures that are accounted for as capital
expenditures of such person and that actually are paid for by a third
party (excluding Holdings or any subsidiary thereof) and for which
neither Holdings nor any subsidiary thereof has provided or is required
to provide, directly or indirectly, any consideration to such third
party or any other person (whether before, during or after such
period), (iii) the book value of any asset owned by such person prior
to or during such period to the extent that such book value is included
as a capital expenditure during such period as a result of such person
reusing or beginning to reuse such asset during such period without a
corresponding expenditure actually having been made in such period,
provided that any expenditure necessary in order to permit such asset
to be reused shall be included as a Capital Expenditure during the
period that such expenditure actually is made or (iv) expenditures of
insurance proceeds or condemnation awards received in connection with
the loss, damage, destruction or condemnation of property of Holdings
or its subsidiaries.
"Capital Lease Obligations" of any person shall mean the
obligations of such person to pay rent or other amounts under any lease
of (or other arrangement conveying the right to use) real or personal
property, or a combination thereof, which obligations are required to
be classified and accounted for as capital leases on a balance sheet of
such person under GAAP and, for the purposes hereof, the amount of such
obligations at any time shall be the capitalized amount thereof at such
time determined in accordance with GAAP.
"Cash Interest Expense" shall mean Interest Expense paid or
required to be paid in cash (but excluding any amortization of debt
discounts and fees included in the calculation of Interest Expense).
A "Change in Control" shall be deemed to have occurred if (a)
Holdings shall cease to directly own, beneficially and of record, free
and clear of any and all Liens (other than Liens in favor of the
Collateral Agent pursuant to the Pledge Agreement), 100% of the issued
and outstanding capital stock of the Borrower; (b) any person or group
(within the meaning of Rule 13d-5 of the Securities and Exchange
Commission as in effect on the date hereof) (other than (i) any
Designated Person or (ii) any combination of Designated Persons) shall
own beneficially, directly or indirectly, shares representing more than
25% of the aggregate ordinary voting power represented by the issued
and outstanding capital stock of Holdings at a time when Designated
Persons or any combination of Designated Persons do not beneficially
own shares representing at least 50% of the aggregate ordinary voting
power represented by the issued and outstanding capital stock of
Holdings; or (c) the Continuing Directors shall cease to occupy a
majority of the seats (excluding vacant seats) on the Board of
Directors of Holdings. For purposes of clause (b) of this definition,
the term
4
"Designated Person" shall be deemed to include any other holder or
holders of shares of Holdings having ordinary voting power if any
Blackstone Entity or WP Entity shall hold the irrevocable general proxy
of each such holder in respect of the shares held by such holder.
"Charges" shall have the meaning assigned to that term in Section
9.09.
"Closing Date" shall mean January 3, 1996 or such later date as
the Borrower may specify in the notice of Borrowing delivered under
Section 4.01(a).
"Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
"Collateral Agent" shall mean Chemical, as Collateral Agent under
the Pledge Agreement and the Guarantee Agreement.
"Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to make Loans on the Closing Date hereunder
as set forth in Schedule 2.01, as the same may be reduced from time to
time pursuant to Section 2.09.
"Commitment Fee" shall have the meaning assigned to such term in
Section 2.05(a).
"Compliance Certificate" shall have the meaning assigned to such
term in Section 5.04(c).
"Contaminants" means those substances which are regulated by or
form the basis of liability under any Environmental Law, including
asbestos, polychlorinated biphenyls, Hazardous Materials, pollutants or
solid wastes.
"Continuing Directors" shall mean the collective reference to (i)
all members of the Board of Directors of Holdings who have held office
continuously since the 1994 Closing Date and (ii) all members of the
Board of Directors of Holdings who assumed office after the 1994
Closing Date and whose election and nomination for election by
Holdings' shareholders was approved by a vote of a majority of the then
Continuing Directors.
"Control" shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of the management or
policies of a person, whether through the ownership of voting
securities, by contract or otherwise, and "Controlling" and
"Controlled" shall have meanings correlative thereto.
"Current Assets" shall mean, with respect to any person at any
date, the consolidated aggregate amount of all assets of such person
which would be classified as current assets at such date, other than
cash and cash equivalents.
"Current Liabilities" shall mean, with respect to any person at
any date, the consolidated aggregate amount of all liabilities of such
person (including tax and other proper accruals) which would be
classified as current liabilities at such date, other than (without
duplication) (i) the current portion of long-term debt, (ii) accruals
of Interest Expense (excluding Interest Expense which is due and
unpaid) and losses or expenses on the sale of receivables to the
Finance Subsidiary, (iii) revolving loans under the 1994 Credit
Agreement classified as current, (iv) accruals of transaction costs
resulting from the Recapitalization Transactions and (v) accruals of
any costs or expenses related to severance or termination of employees
accrued prior to the date hereof.
"Current Ratio" shall mean, with respect to Holdings on any date,
the ratio of (a) Current Assets plus (without duplication) the accounts
receivable owned by any Finance Subsidiary or related trust to (b)
Current Liabilities.
5
"Default" shall mean any event or condition which upon notice,
lapse of time or both would constitute an Event of Default.
"Designated Persons" shall mean any one or more of the Blackstone
Entities, the WP Entities and the persons listed on Schedule 1.01(A).
"Dividend Condition" shall mean that the Interest Coverage Ratio
is greater than or equal to 4.00:1.00 and the Leverage Ratio is less
than or equal to 2.75:1.00 and the outstanding principal amount of the
1994 Term Loans and 1994 Canadian Term Loans is less than $350,000,000.
"dollars" or "$" shall mean lawful money of the United States of
America. All Loans and Letters of Credit shall be denominated in
dollars and all payment obligations of the Borrower under the Loan
Documents shall be in dollars.
"Domestic Restricted Subsidiary" means any Restricted Subsidiary
incorporated or organized under the laws of the United States of
America or any state thereof at least 90% of the capital stock of which
is owned directly or indirectly by the Borrower.
"EBITDA" shall mean, without duplication, for any fiscal period,
the sum of the amounts for such fiscal period of (i) Net Income, (ii)
provision for taxes based on income, (iii) depreciation expense, (iv)
total interest expense (whether shown as interest expense or as loss
and expenses on sales of receivables), (v) amortization expense and
(vi) other non-cash items reducing Net Income, all as determined on a
consolidated basis for Holdings and its Restricted Subsidiaries in
conformity with GAAP.
"Environmental Claim" means any written accusation, allegation,
notice of violation, claim, demand, order, directive, cost recovery
action or proceeding by any Governmental Authority or, if any
Responsible Officer of Holdings has knowledge of it, by any person for
damages, injunctive or equitable relief, personal injury (including
sickness, disease or death), remedial action costs, tangible or
intangible property damage, damage to the environment or natural
resources, nuisance, pollution, contamination or other adverse effects
on the environment, or for fines, penalties or restrictions, resulting
from or based upon (i) the existence, or the continuation of the
existence, of a Release (including sudden or non-sudden, accidental or
non-accidental Releases) of, or exposure to, any Contaminant or odor,
(ii) the presence, use, handling, transportation, storage, treatment or
the disposal of Contaminants in connection with the operation of the
facilities to which such Release relates or (iii) the violation or
alleged violation of any Environmental Law.
"Environmental Law" means any and all applicable treaties, laws,
regulations, enforceable requirements, binding determinations, orders,
decrees, judgments, injunctions, permits, approvals, authorizations,
licenses, variances, permissions, notices or binding agreements issued,
promulgated or entered by any Governmental Authority, relating to the
environment, preservation or reclamation of natural resources or to the
management, Release or threatened Release of Contaminants or noxious
odor, including the Hazardous Materials Transportation Act, 49 U.S.C.
xx.xx. 1801 et seq., Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C. xx.xx. 9601 et seq., Solid Waste
Disposal Act, as amended by the Resource Conservation and Recovery Act
of 1976 and Hazardous and Solid Waste Amendments of 1984, 42 U.S.C.
xx.xx. 6901, et seq., Federal Water Pollution Control Act, as amended
by the Clean Water Act of 1977, 33 U.S.C. xx.xx. 1251 et seq., Clean
Air Act of 1970, as amended 42. U.S.C. xx.xx. 7401 et seq., Toxic
Substances Control Act of 1976, 15 U.S.C. xx.xx. 2601 et seq.,
Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C.
xx.xx. 11001 et seq., National Environmental Policy Act of 1975, 42
U.S.C. xx.xx. 4321 et seq., Safe Drinking Water Act of 1974, as
amended, 42 U.S.C. xx.xx. 300(f) et seq., and any similar or
implementing state or foreign law, and all amendments or regulations
promulgated thereunder.
"Environmental Permit" means any permit, approval, authorization,
license, variance, or permission required from any Governmental
Authority pursuant to any applicable Environmental Law.
6
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as the same may be amended from time to time.
"ERISA Affiliate" with respect to any person shall mean any trade
or business (whether or not incorporated) that is a member of a group
of which such person is a member and which is treated as a single
employer under Section 414 of the Code.
"ESOP" shall mean any employee stock ownership plan to be
established by the Borrower or a subsidiary Guarantor thereof to make
the ESOP Investment.
"ESOP Investment" shall mean the issuance and sale of shares of
Holdings Common Stock to, or the purchase of shares of Holdings Common
Stock in open market or privately negotiated transactions by, the ESOP
from time to time.
"ESOP Loans" shall mean a loan or loans to be made from time to
time by the Borrower to the ESOP in an aggregate amount not to exceed
$25,000,000, solely to enable the ESOP to effect the ESOP Investment.
"Eurodollar Borrowing" shall mean a Borrowing comprised of
Eurodollar Loans.
"Eurodollar Loan" shall mean any Loan bearing interest at a rate
determined by reference to the Adjusted LIBO Rate in accordance with
the provisions of Article II.
"Event of Default" shall have the meaning assigned to such term in
Article VII.
"Executive Officer" of any corporation shall mean the president,
any senior vice president or any vice president of such person.
"Existing Larizza Credit Agreements" shall mean (a) the Credit
Agreement dated as of May 6, 1994 among Larizza, the Banks parties
thereto and Continental Bank, N.A., as agent and (b) the Credit
Agreement dated as of May 6, 1994, among Manchester Plastics, Ltd., a
wholly-owned subsidiary of Larizza, the Banks parties thereto and
Continental Bank, N.A., as agent.
"Fees" shall mean the Agency Fees and the Commitment Fee.
"Finance Subsidiary" shall mean Carcorp, Inc. and any other
wholly-owned subsidiary of the Borrower that is formed for the sole
purpose of engaging in Permitted Receivables Financings.
"Financial Officer" of any corporation shall mean the chief
financial officer, Senior Vice President-Finance and Accounting, Vice
President-Finance, Controller, or Treasurer of such corporation.
"Funded Debt" shall mean, as applied to any person, all
Indebtedness for borrowed money (including, without limitation, Capital
Lease Obligations and unreimbursed drawings under letters of credit) or
evidenced by a note, bond, debenture or similar instrument of that
person (it being understood that all Loans shall at all times
constitute "Funded Debt" for all purposes hereunder).
"GAAP" shall mean United States generally accepted accounting
principles.
"Governmental Authority" shall mean any international, Federal,
state, regional, local or foreign court or governmental agency,
authority, instrumentality or regulatory body.
"Guarantee" of or by any person shall mean (i) any obligation,
contingent or otherwise, of such person guaranteeing or having the
economic effect of guaranteeing any Indebtedness of any other person
(the "primary obligor") in any manner, whether directly or indirectly,
and including any obligation of such
7
person, direct or indirect, (a) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Indebtedness (whether
arising by virtue of partnership arrangements, by agreement to keep
well, to purchase assets, goods, securities or services, to take-or-pay
or otherwise) or to purchase (or to advance or supply funds for the
purchase of) any security for the payment of such Indebtedness, (b) to
purchase property, securities or services for the purpose of assuring
the owner of such Indebtedness of the payment of such Indebtedness, (c)
to maintain working capital, equity capital or other financial
statement conditions or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or (d) entered into
for the purpose of assuring in any other manner the holders of such
Indebtedness of the payment thereof or to protect such holders against
loss in respect thereof (in whole or in part), or (ii) any Lien on any
assets of such person securing any Indebtedness of any other person,
whether or not such Indebtedness is assumed by such person; provided,
however, that the term Guarantee shall not include endorsements for
collection or deposit, in either case in the ordinary course of
business.
"Guarantee Agreement" shall mean the Guarantee Agreement dated as
of July 13, 1994 made by Holdings, the Borrower and each other
Guarantor in favor of the Collateral Agent, as amended and in effect
from time to time.
"Guarantors" shall mean Holdings and each Restricted Subsidiary
(other than Inactive Subsidiaries) incorporated or organized under the
laws of the United States or any State thereof.
"Hazardous Materials" means all explosive or regulated radioactive
materials or substances, hazardous or toxic wastes or substances,
petroleum (including crude oil or any fraction thereof) or petroleum
distillates, asbestos or material containing asbestos and all materials
regulated pursuant to any Environmental Law, including materials listed
in 49 C.F.R. Section 172.101 and materials defined as hazardous
pursuant to Section 101(14) of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended.
"Holdings Common Stock" shall mean the Common Stock, par value
$.01 per Share, of Holdings.
"Inactive Subsidiary" shall mean the Restricted Subsidiaries
listed as Inactive Subsidiaries on Schedule 3.12(a) and which
Restricted Subsidiaries (i) individually and in the aggregate have no
material net assets and (ii) do not engage in any operating activity
(other than payroll or the leasing of immaterial property).
"Indebtedness" of any person shall mean, without duplication, (a)
all indebtedness of such person for borrowed money or for the deferred
purchase price of property or services (other than current trade
liabilities incurred in the ordinary course of business), (b) any other
indebtedness of such person which is evidenced by a note, bond,
debenture or similar instrument, (c) all Capital Lease Obligations of
such person, (d) all obligations of such person in respect of bankers'
acceptances issued or created for the account of such person, (e) all
Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on any property owned or acquired by such person
even though such person has not assumed or otherwise become liable for
the payment thereof, (f) all obligations of such person in respect of
Interest Rate Agreements which, in accordance with the definition of
Interest Rate Agreement, constitute (or would upon early termination
constitute) Indebtedness and (g) all Guarantees by such person of
Indebtedness of others. The Indebtedness of any person shall include
the Indebtedness of any partnership in which such person is a general
partner; provided that, if the sole asset of such person is its general
partnership interest in such partnership, the amount of such
Indebtedness shall be deemed equal to the value of such general
partnership interest and the amount of any Indebtedness in respect of
any Guarantee of such partnership Indebtedness shall be limited to the
same extent as such Guarantee may be limited.
"Indemnitee" shall have the meaning assigned to that term in
Section 9.05(b).
8
"Intercompany Note" shall mean an intercompany note evidencing
Indebtedness owed by the Borrower or any of its wholly-owned
subsidiaries to the Borrower or any of its wholly-owned subsidiaries
and pledged pursuant to the Pledge Agreement in accordance with Section
6.01(d), in substantially the form of Exhibit A-6 to the 1994 Credit
Agreement.
"Intercreditor Agreement" shall mean the Master Collateral and
Intercreditor Agreement dated as of July 13, 1994 among the Guarantors,
the 1994 Agent and the Collateral Agent, as amended and in effect from
time to time.
"Interest Coverage Ratio" shall mean, for any period of four
consecutive fiscal quarters, the ratio of (a) EBITDA on a consolidated
basis for such period to (b) the sum of Cash Interest Expense of
Holdings and the Restricted Subsidiaries on a consolidated basis for
such period and losses or expenses on the sale of receivables to the
Finance Subsidiary.
"Interest Expense" shall mean, with respect to any person for any
period, the gross interest expense of such person for such period
determined on a consolidated basis in accordance with GAAP consistently
applied, including (a) the amortization of debt discounts, (b) the
amortization of all fees (including fees with respect to interest rate
protection agreements) payable in connection with the incurrence of
Indebtedness to the extent included in interest expense and (c) the
portion of any payments or accruals with respect to Capital Lease
Obligations allocable to interest expense, net of all interest income
for such period (except for purposes of the definition of Cash Interest
Expense, in which case only interest income paid or required to be paid
in cash shall be netted against cash interest expense). For purposes of
the foregoing, gross interest expense shall be determined after giving
effect to any net payments made or received by such person with respect
to interest rate protection agreements entered into as a hedge against
interest rate exposure.
"Interest Payment Date" shall mean, (a)(i) with respect to any
Eurodollar Loan, the last day of the Interest Period applicable to the
Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months' duration,
each day that would have been an Interest Payment Date had successive
Interest Periods of three months' duration been applicable to such
Borrowing, and, in addition, the date of any prepayment, refinancing or
conversion of such Borrowing with or to a Borrowing of a different Type
and (ii) with respect to any ABR Loan, the last day of each March,
June, September and December, commencing March 31, 1996 and (b) the
Loan Maturity Date.
"Interest Period" shall mean (a) as to any Eurodollar Borrowing,
the period commencing on the date of such Borrowing or on the last day
of the immediately preceding Interest Period applicable to such
Borrowing, as the case may be, and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on
the last day) in the calendar month that is 1, 2, 3 or 6 months
thereafter, as the Borrower may elect and (b) as to any ABR Borrowing,
the period commencing on the date of such Borrowing or Loan or on the
last day of the immediately preceding Interest Period applicable to
such Borrowing or Loan, as the case may be, and ending on the earliest
of (i) the next succeeding March 31, June 30, September 30 or December
31, (ii) the Loan Maturity Date, and (iii) the date such Borrowing is
converted to a Borrowing of a different Type in accordance with Section
2.10 or repaid or prepaid in accordance with Section 2.11 or 2.12;
provided, however, that if any Interest Period would end on a day other
than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless, in the case of a Eurodollar Borrowing
only, such next succeeding Business Day would fall in the next calendar
month, in which case such Interest Period shall end on the next
preceding Business Day. Interest shall accrue from and including the
first day of an Interest Period to but excluding the last day of such
Interest Period.
"Interest Rate Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement,
currency hedge agreement or other similar agreement or arrangement
designed to protect the Borrower or any of its Restricted Subsidiaries
against fluctuations in interest rates or currency exchange rates;
provided that the calculation of payments for early termination shall
be made on a
9
reasonable basis in accordance with customary industry practices;
provided further that all obligations to make such payments for early
termination (guaranteed or unguaranteed) shall, to the extent matured,
constitute Indebtedness.
"Larizza" shall mean Larizza Industries, Inc., an Ohio
corporation, which will immediately after the Larizza Acquisition be
reincorporated in Delaware under the name Manchester Plastics, Inc.
"Larizza Acquisition" shall mean (i) the merger of LRI
Acquisition, Corp., a wholly-owned subsidiary of the Borrower, with and
into Larizza with Larizza being the surviving corporation, (ii) the
cancellation of the Larizza common stock and conversion thereof into
the right to receive merger consideration in the amount of $6.50 per
share of Larizza common stock, (iii) the conversion of the common stock
of LRI Acquisition, Corp. into common stock of Larizza and (iv) the
financing thereof pursuant to this Agreement. As a result of the
Larizza Acquisition, Larizza will become a wholly-owned subsidiary of
the Borrower.
"Leverage Ratio" shall mean, with respect to Holdings and the
Restricted Subsidiaries on any date, the ratio of (a) Funded Debt of
Holdings and the Restricted Subsidiaries as of such date to (b) EBITDA
for the period of twelve consecutive fiscal months then ended.
"Lien" shall mean, with respect to any asset, (a) any mortgage,
deed of trust, lien, pledge, encumbrance, charge or security interest
in or on such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement
relating to such asset and (c) in the case of securities, any purchase
option, call or similar right of a third party with respect to such
securities.
"Loan Documents" shall mean this Agreement and the Notes, the
Pledge Agreement, the Guarantee Agreement and the Intercreditor
Agreement.
"Loan Maturity Date" shall mean December 31, 2002.
"Loan Repayment Date" shall have the meaning assigned to such term
in Section 2.11.
"Loans" shall mean the loans made to the Borrower pursuant to
Section 2.01. Each Loan shall be a Eurodollar Loan or an ABR Loan.
"Margin Stock" shall have the meaning assigned to such term under
Regulations G and U.
"Material Adverse Effect" shall mean (a) a materially adverse
effect on the business, assets, properties, operations or financial
condition of Holdings and the Restricted Subsidiaries, taken as a
whole, (b) a material impairment of the ability of Holdings or any
Subsidiary of Holdings to perform any of its material obligations under
any Loan Document to which it is or will be a party or to consummate
the Larizza Acquisition or (c) an impairment of the validity or
enforceability of, or material impairment of the rights, remedies or
benefits available to the 1995 Credit Agreement Creditors under, any
Loan Document.
"Maximum Rate" shall have the meaning assigned to such term in
Section 9.09.
"Merger Agreement" shall mean the Agreement and Plan of Merger
dated as of September 26, 1995 among Larizza, LRI Acquisition, Corp., a
Delaware corporation, and the Borrower, as amended and in effect from
time to time.
"Merger Documents" shall mean the Merger Agreement and all other
documents entered into or delivered by or on behalf of any party to the
Merger Agreement.
"Multiemployer Plan" with respect to any person shall mean a
multiemployer plan as defined in Section 4001(a)(3) of ERISA to which
such person or any ERISA Affiliate of such person (other than one
considered an ERISA Affiliate only pursuant to subsection (m) or (o) of
Section 414 of the Code) is making
10
or accruing an obligation to make contributions, or has within any of
the preceding five plan years made or accrued an obligation to make
contributions.
"Net Income" shall mean, for any fiscal period, the net income (or
loss) of Holdings and its Restricted Subsidiaries and the Finance
Subsidiary on a consolidated basis for such fiscal period taken as a
single accounting period determined in conformity with GAAP; provided
that there shall be excluded (i) the income (or loss) of any
Unrestricted Subsidiary (other than the Finance Subsidiary) or any
person (other than a Restricted Subsidiary) in which any other person
(other than Holdings or any of the Restricted Subsidiaries) has a joint
interest, but shall include the amount of dividends or other
distributions (including return of capital or any other cash receipt in
respect of ownership or beneficial interest) actually paid to Holdings
or any of the Restricted Subsidiaries by such Unrestricted Subsidiary
or such person during such period, (ii) the income (or loss) of any
person (other than any person acquired in connection with a Permitted
Business Acquisition solely for the purpose of calculating the Leverage
Ratio under Section 6.16) accrued prior to the date it becomes a
Restricted Subsidiary of Holdings or is merged into or consolidated
with Holdings or any of the Restricted Subsidiaries or that person's
assets are acquired by Holdings or any of the Restricted Subsidiaries
and (iii) the income of any Restricted Subsidiary of Holdings to the
extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that income is not at
the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation after tax gains or losses attributable to
Specified Asset Sales; provided further, that, solely for the purposes
of determining EBITDA, there shall be excluded any charges, losses,
fees or expenses to Net Income incurred in connection with the
consummation of the Recapitalization Transactions.
"Net Proceeds" shall mean with respect to any sale, transfer or
other disposition (including by casualty, loss or condemnation) of any
assets or properties or any other Prepayment Event (a "Proceeds
Transaction") (i) the gross amount of any cash paid to or received by
Holdings or any of the Restricted Subsidiaries in respect of such
Proceeds Transaction (including insurance proceeds, condemnation awards
and payments from time to time in respect of installment obligations,
if applicable), less (ii) the amount, if any, of (a) Holdings' good
faith best estimate of all taxes attributable to such Proceeds
Transaction which it in good faith expects to be paid in the taxable
year in which such Proceeds Transaction shall occur or in the next
taxable year, (b) reasonable and customary fees, discounts,
commissions, costs and other expenses (other than those payable to
Holdings or any Affiliate of Holdings, except that Blackstone and WP
and their respective Affiliates may receive customary fees on terms no
less favorable to Holdings or any of the Restricted Subsidiaries than
would be obtained in a comparable arm's-length transaction for acting
as financial advisor in connection with such Proceeds Transaction)
which are incurred in connection with such Proceeds Transaction and are
payable by Holdings or any of the Restricted Subsidiaries and (c) in
the case of a Proceeds Transaction that is a sale, transfer or other
disposition of assets or properties, proceeds required to discharge
Liens in respect of such assets or properties permitted by Section
6.04; provided, however, that Net Proceeds shall not include (1) any
amount that otherwise would constitute Net Proceeds to the extent such
amount is excluded from the definition of the term "Capital
Expenditures" pursuant to clause (i) or (iv) of the second sentence
thereof; or (2) any amount being reserved for application as
contemplated in clause (i) or (iv) of such second sentence, except that
in the event any amount so reserved is not in fact so applied or
contractually committed to be applied within the permitted 12-month
period, such amount shall be deemed for all purposes (including the
definition of Excess Cash Flow and Section 2.12(f)) to be Net Proceeds
of a Proceeds Transaction received upon such Proceeds Transaction.
"1994 Agent" shall mean Chemical Bank in its capacity as
administrative agent under the 1994 Credit Agreement.
"1994 Canadian Term Loans" shall mean Canadian Term Loans under
and as defined in the 1994 Credit Agreement.
"1994 Closing Date" shall mean July 13, 1994.
11
"1994 Credit Agreement" shall mean the Credit Agreement dated as
of June 22, 1994, among Holdings, the Borrower, C&A Canada and the
financial institutions named therein, as amended and in effect from
time to time.
"1994 Delayed Draw Term Loans" shall mean Delayed Draw Term Loans
under and as defined in the 1994 Credit Agreement.
"1994 Loans" shall mean the 1994 Canadian Term Loans, the 1994
Delayed Draw Term Loans, the 1994 Revolving Loans and the 1994 Term
Loans.
"1994 Revolving Loans" shall mean Revolving Loans under and as
defined in the 1994 Credit Agreement.
"1994 Term Loans" shall mean Term Loans under and as defined in
the 1994 Credit Agreement.
"1995 Credit Agreement Creditors" shall mean the Administrative
Agent and the Lenders.
"Note" shall mean a promissory note of the Borrower, substantially
in the form of Exhibit A, evidencing Loans.
"Obligations" shall mean all obligations defined as "Guaranteed
Obligations" in the Guarantee Agreement and "Secured Obligations" in
the Pledge Agreement in each case owing by the Borrower and the other
Guarantors, or any of them, as the context may require, to any 1995
Credit Agreement Creditor.
"Operating Lease" shall mean a lease which is not required to be
accounted for or classified as a capital lease under GAAP. The "amount"
of any Operating Lease shall be the amount that, if such Operating
Lease were accounted for as a Capital Lease Obligation, would be
recorded as a liability in accordance with GAAP.
"Other Taxes" shall have the meaning assigned to such term in
Section 2.18.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
referred to and defined in ERISA (or any such successor).
"Permitted Acquisition Indebtedness" shall mean Indebtedness of
the Borrower permitted by Section 6.01(l).
"Permitted Business Acquisitions" shall mean acquisitions of all
or substantially all of the assets of, or shares or other equity
interests in, a person or division or line of business of a person
engaged in the same business as Holdings and the Restricted
Subsidiaries or in a related business if immediately after giving
effect thereto: (i) no Default or Event of Default shall have occurred
and be continuing, (ii) all transactions related thereto shall be
consummated in accordance with applicable laws, (iii) at least 90% of
the outstanding capital stock or other ownership interests of any
acquired or newly formed corporation or other entity must be owned
directly by the Borrower or a Domestic Restricted Subsidiary and such
corporation or entity shall become a Restricted Subsidiary and a
Guarantor and execute a counterpart to the Guarantee Agreement, and all
capital stock or other equity interest created or acquired in
connection with such acquisition shall be duly and validly pledged to
the Collateral Agent for the ratable benefit of the Lenders, and (iv)
(A) Holdings shall be in compliance, on a pro forma basis, with the
covenants contained in Sections 6.14, 6.16 and 6.17 recomputed as at
the last day of the most recently ended fiscal quarter of Holdings, and
the Borrower shall have delivered to the Administrative Agent an
officers' certificate to such effect, together with all relevant
financial information for such acquired corporation, entity or assets,
and (B) the acquired corporation or entity shall not be liable for any
Indebtedness (except for Indebtedness permitted by Section 6.01 and the
Guarantee Agreement); provided that, in the case of the Larizza
Acquisition, Holdings shall be deemed to be in compliance with the
covenants contained in Sections 6.14,
12
6.16 and 6.17 for the purposes of this definition only if, on a pro
forma basis recomputed as at the last day of the most recently ended
fiscal quarter of Holdings, (x) the Interest Coverage Ratio is greater
than 3.25 to 1.00, (y) the Leverage Ratio is equal to or less than 3.50
to 1.00 and (z) the Current Ratio is greater than or equal to
1.25:1.00. For purposes of Section 6, any Restricted Subsidiary
satisfying the requirements of clause (iii) above shall be deemed to be
a "wholly owned subsidiary". The Larizza Acquisition is a Permitted
Business Acquisition.
"Permitted Investments" shall mean:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America),
in each case maturing within one year from the date of acquisition
thereof;
(b) marketable general 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 generally obtainable from either
Standard & Poor's Ratings Group or Xxxxx'x Investors Service, Inc.;
(c) investments in commercial paper maturing no more than six
months from the date of acquisition thereof and having, at such date of
acquisition, a credit rating of A-1 or higher from Standard & Poor's
Ratings Group or P-1 or higher from Xxxxx'x Investors Service, Inc.;
(d) investments in domestic and Eurodollar certificates of
deposit, banker's acceptances and time deposits maturing within six
months from the date of acquisition thereof issued or guaranteed by or
placed with, and money market deposit accounts issued or offered by (w)
any domestic office of any commercial bank organized or licensed under
the laws of the United States of America or any State thereof which has
a combined capital and surplus and undivided profits of not less than
$500,000,000, (x) any Lender, (y) any branch of any Lender or any
commercial bank organized under the laws of the United Kingdom, Canada,
France or Japan having combined capital, surplus and undivided profits
(less any undivided losses) of not less than $500,000,000 or (z) other
than in the case of banker's acceptances, any domestic commercial bank
whose deposits are guaranteed by the Federal Deposit Insurance
Corporation (or any successor) and with whom deposits maintained by
Holdings or any of its subsidiaries do not exceed the amount so
guaranteed; and
(e) investments in money market funds or other mutual funds that
invest in the types of Permitted Investments described in clauses (a)
through (d) above.
"Permitted Receivables Financing" shall mean any sale by the
Borrower or a Restricted Subsidiary of accounts receivable to a Finance
Subsidiary intended to be (and which shall be treated for the purposes
hereof as) a true sale transaction with customary limited recourse
based upon the collectibility of the receivables sold and the
corresponding sale or pledge of such accounts receivable (or an
interest therein) by the Finance Subsidiary, in each case without any
Guarantee by Holdings or any other subsidiary thereof, including,
without limitation, the transactions contemplated by the Amended and
Restated Receivables Sales Agreement dated as of March 30, 1995 among
the Borrower, as master servicer, the Sellers parties thereto and
Carcorp, Inc., as amended, and the documents executed in connection
therewith; provided, however, that the terms, conditions and structure
(including the legal and organizational structure of the Finance
Subsidiary and the restrictions imposed on its activities) of and the
documentation incident to any such transactions entered into after the
date hereof must be reasonably acceptable to the Administrative Agent.
"Permitted Subordinated Indebtedness" shall mean unsecured
subordinated indebtedness of the Borrower or Holdings having no
amortization of principal and a scheduled final maturity no earlier
than December 31, 2003 and having subordination terms at least as
favorable to the Lenders as set forth on
13
Schedule 1.01(D) and other terms and conditions (including, covenants,
events of default, interest rate) as shall be reasonably satisfactory
to the Required Lenders in the exercise of their sole discretion.
"Permitted Tax Payment" means for any taxable year of the Borrower
in which it joins in filing a consolidated federal income tax return
with Holdings, a payment by the Borrower to Holdings in an amount not
in excess of the amount required to be paid by the Borrower under the
Tax Sharing Agreement, dated as of November 1, 1989, between Holdings
and the Borrower, as in effect on the date hereof, as amended solely to
reflect the mergers described in clause (iii) of the definition of
Recapitalization Transactions in the 1994 Credit Agreement; provided
that within 20 days of receipt of such payment Holdings applies the
amount thereof to satisfy such tax liability or its obligations under
the Tax Sharing Agreement.
"person" shall mean any natural person, corporation, business
trust, joint venture, association, company, partnership or government,
or any agency or political subdivision thereof.
"Plan" with respect to any person shall mean any pension plan
(other than a Multiemployer Plan) subject to the provisions of Title IV
of ERISA or Section 412 of the Code which is maintained for employees
of such person or any ERISA Affiliate of such person.
"Pledge Agreement" shall mean the Pledge Agreement dated as of
July 13, 1994 made by Holdings, the Borrower and each other Pledgor
named therein in favor of the Collateral Agent, as amended and in
effect from time to time.
"Pledged Securities" shall have the meaning assigned to such term
in the Pledge Agreement.
"Prepayment Event" shall mean (i) any Specified Asset Sale, (ii)
any Sale and Lease-Back Transaction deemed to be a Prepayment Event
pursuant to Section 6.06, and (iii) the incurrence by Holdings or any
Restricted Subsidiary of any Indebtedness (other than Indebtedness
permitted by Section 6.01), provided, however, that for purposes of
Section 2.12(c) (a) a Prepayment Event shall not be deemed to occur
until the aggregate Net Proceeds from Prepayment Events not yet applied
pursuant to Section 2.12(e) of the 1994 Credit Agreement by reason of
the corresponding proviso of the 1994 Credit Agreement equals or
exceeds $5,000,000, at which time a Prepayment Event shall, except as
set forth in clause (b) below, be deemed to occur having Net Proceeds
equal to the aggregate Net Proceeds from Prepayment Events not yet so
applied and (b) with respect to Specified Asset Sales, a Prepayment
Event shall be deemed to occur only with respect to that portion of the
Net Proceeds thereof required to be repaid pursuant to Section 6.08(i).
"Purchase Money Indebtedness" shall mean Indebtedness incurred for
capital expenditures, which may be secured in compliance with Section
6.04(i).
"Recapitalization Transactions" shall have the meaning set forth
in the 1994 Credit Agreement.
"Register" shall have the meaning given such term in Section
9.04(d).
Regulation D" shall mean Regulation D of the Board as from time to
time in effect and all official rulings and interpretations thereunder
or thereof.
"Regulation G" shall mean Regulation G of the Board as from time
to time in effect and all official rulings and interpretations
thereunder or thereof.
"Regulation T" shall mean Regulation T of the Board as from time
to time in effect and all official rulings and interpretations
thereunder or thereof.
"Regulation U" shall mean Regulation U of the Board as from time
to time in effect and all official rulings and interpretations
thereunder or thereof.
14
"Regulation X" shall mean Regulation X of the Board as from time
to time in effect and all official rulings and interpretations
thereunder or thereof.
"Release" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching, emanation
or migration in, into, onto or through the environment (including
ambient air, surface water, ground water, land surface, subsurface
strata or workplace), including the movement of any Contaminant through
or in the air, soil, surface water or ground water.
"Remedial Action" means (i) "remedial action" as such term is
defined in 42 U.S.C. Section 9601(24) and (ii) all other actions
required or voluntarily undertaken to (x) clean up, remove, treat,
xxxxx or in any other way address any Contaminant in the environment or
workplace, (y) prevent the Release or threat of Release, or minimize
the further Release of any Contaminant so it does not migrate or
endanger or threaten to endanger public health or welfare of the
environment or workplace, or (z) perform studies and investigations in
connection with (x) or (y) above.
"Reportable Event" shall mean any reportable event as defined in
Section 4043(b) of ERISA or the regulations issued thereunder with
respect to a Plan (other than a Plan maintained by an ERISA Affiliate
which is considered an ERISA Affiliate only pursuant to subsection (m)
or (o) of Section 414 of the Code).
"Required Lenders" shall mean, at any time, Lenders with Loans and
unused Commitments representing at least a majority of the sum of the
aggregate principal amount of the Loans outstanding and unused
Commitments at such time.
"Responsible Officer" of any corporation shall mean any Executive
Officer or Financial Officer of such corporation and any other officer
or similar official thereof responsible for the administration of the
obligations of such corporation in respect of this Agreement. Unless
the context otherwise requires, Responsible Officer shall mean a
Responsible Officer of Holdings.
"Restricted Subsidiary" shall mean each Subsidiary in existence as
of the Closing Date and any direct or indirect Subsidiary formed or
acquired after the Closing Date, in each case, other than Unrestricted
Subsidiaries.
"Sale and Lease-Back Transaction" shall have the meaning assigned
to that term in Section 6.06.
"Secured Parties" shall mean the 1995 Credit Agreement Creditors,
any holders, if any, of any other Permitted Acquisition Indebtedness
which have executed and delivered to the Collateral Agent an
Acknowledgement to the Intercreditor Agreement in the form of Exhibit A
thereto and the Credit Agreement Creditors (as defined in the 1994
Credit Agreement).
"Significant Subsidiary" shall mean the Borrower, C&A Canada and
any subsidiary of Holdings that at the date of any determination (i)
accounts for 5% or more of the consolidated assets of Holdings, (ii)
has accounted for 5% or more of the consolidated EBITDA of Holdings for
each of the two consecutive periods of four fiscal quarters immediately
preceding the date of determination or (iii) has been designated by the
Borrower in writing to the Administrative Agent as a Significant
Subsidiary.
"Specified Asset Sale" shall mean any sale, lease, transfer,
assignment or other disposition of assets, business units or property
of Holdings or any of its subsidiaries for Net Proceeds in excess of
$100,000 in any transaction or series of related transactions described
in paragraph (i) of Section 6.08.
"Statutory Reserves" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator
of which is the number one minus the aggregate of the maximum reserve
percentages (including any marginal, special, emergency or supplemental
reserves) expressed as a decimal established by the Board and any other
banking authority to which the Administrative Agent is subject (a) with
respect to the Base CD Rate (as such term is used in the definition of
"Alternate Base Rate"), for new
15
negotiable nonpersonal time deposits in dollars of over $100,000 with
maturities approximately equal to three months, and (b) with respect to
the Adjusted LIBO Rate, for Eurocurrency Liabilities (as defined in
Regulation D of the Board). Such reserve percentages shall include
those imposed pursuant to such Regulation D. Eurodollar Loans shall be
deemed to constitute Eurocurrency Liabilities and to be subject to such
reserve requirements without benefit of or credit for proration,
exemptions or offsets which may be available from time to time to any
Lender under such Regulation D. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in any
reserve percentage.
"subsidiary" shall mean, with respect to any person (herein
referred to as the "parent"), any corporation, partnership, association
or other business entity (a) of which securities or other ownership
interests representing more than 50% of the equity or more than 50% of
the ordinary voting power or more than 50% of the general partnership
interests are, at the time any determination is being made, owned,
controlled or held, or (b) which is, at the time any determination is
made, otherwise Controlled, by the parent or one or more subsidiaries
of the parent or by the parent and one or more subsidiaries of the
parent.
"Subsidiary" shall mean any subsidiary of Holdings.
"Taxes" shall have the meaning assigned to such term in Section
2.18.
"Total Indebtedness" shall mean, without duplication, all
outstanding Indebtedness of Holdings and its subsidiaries, on a
consolidated basis.
"Transactions" shall have the meanings assigned to such term in
Section 3.02.
"Type", when used in respect of any Loan or Borrowing, shall refer
to the Rate by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined. For purposes hereof, "Rate"
shall include the Adjusted LIBO Rate and the Alternate Base Rate.
"UCC" shall mean the Uniform Commercial Code of New York.
"Unrestricted Subsidiary" shall mean (i) each Finance Subsidiary
and Xxxxxxx & Xxxxxx de Mexico, S.A. de C.V., (ii) any Subsidiary of
Holdings (other than the Borrower) none of the Capital Stock or other
ownership interest of which is owned by the Borrower or any of its
Subsidiaries, provided that Holdings has notified the Administrative
Agent of its acquisition or creation of such Subsidiary and its
ownership interest therein concurrently with such acquisition or
creation and the intended purposes of such Subsidiary and (iii) any
Subsidiary of an Unrestricted Subsidiary. Each Unrestricted Subsidiary,
other than a non-U.S. Unrestricted Subsidiary, shall have entered into
the existing Tax Sharing Agreement with Holdings and the Borrower (or
another tax sharing agreement containing terms which, in the reasonable
judgment of the Administrative Agent, are customary in similar
circumstances to provide an appropriate allocation of tax liabilities
and benefits).
The Unrestricted Subsidiaries shall be capitalized solely
from the following sources: (a) any Investment in such Unrestricted
Subsidiary by any Person other than Holdings and the Restricted
Subsidiaries; (b) Indebtedness issued by such Unrestricted Subsidiary,
or proceeds thereof; (c) capital stock of any Unrestricted Subsidiary,
or proceeds thereof; (d) capital stock of Holdings issued by Holdings
after the 1994 Closing Date, or proceeds thereof; and (e) Investments
permitted to be made in Unrestricted Subsidiaries pursuant to Section
6.07(l).
"Withdrawal Liability" shall mean liability to a Multiemployer
Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan, as such terms are defined in Part I of Subtitle E
of Title IV of ERISA.
"WP" shall mean Xxxxxxxxxxx Xxxxxxx Partners, L.P.
16
"WP Entities" shall mean WP, WPMP or any of their Affiliates.
"WPMP" shall mean Xxxxxxxxxxx Xxxxxxx Management Partners, Inc.
SECTION 1.02. Terms Generally. The definitions in Section 1.01 shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
All references herein to Articles, Sections, Exhibits and Schedules shall be
deemed references to Articles and Sections of, and Exhibits and Schedules to,
this Agreement unless the context shall otherwise require. For all purposes of
this Agreement (other than preparation of the financial statements to be
delivered pursuant to Section 5.04), all terms of an accounting or financial
nature shall be construed in accordance with GAAP, as in effect on the date of
this Agreement applied on a basis consistent with the application used in
preparing Holdings' audited financial statements for its fiscal year ended
January 29, 1994 referred to in Section 3.09.
ARTICLE II.
THE CREDITS
SECTION 2.01. Commitments. Subject to the terms and conditions and
relying upon the representations and warranties set forth herein, each Lender
agrees, severally and not jointly, to make a Loan or Loans to the Borrower on
the Closing Date in a principal amount not to exceed its Commitment set forth
opposite its name in Schedule 2.01, as the same may be reduced from time to time
pursuant to Section 2.09. Amounts paid or prepaid in respect of Loans may not be
reborrowed.
SECTION 2.02. Loans. (a) Each Loan shall be made as part of a Borrowing
consisting of Loans made by the Lenders ratably in accordance with their
respective Commitments; provided, however, that the failure of any Lender to
make any Loan shall not in itself relieve any other Lender of its obligation to
lend hereunder (it being understood, however, that no Lender shall be
responsible for the failure of any other Lender to make any Loan required to be
made by such other Lender). The Loans comprising each ABR Borrowing shall be in
an aggregate principal amount which is an integral multiple of $1,000,000 and
not less than $5,000,000; provided that the aggregate amount of any Loans
comprising a Eurodollar Borrowing shall be subject to a minimum principal amount
of $5,000,000 and shall be an integral multiple of $1,000,000.
(b) Each Borrowing shall be comprised of ABR Loans or Eurodollar Loans,
as the Borrower may request pursuant to Section 2.03. Each Lender may at its
option fulfill its Commitment with respect to any Eurodollar Loan by causing any
domestic or foreign branch or Affiliate of such Lender to make such Loan;
provided that any exercise of such option shall not affect the obligation of the
Borrower to repay such Loan in accordance with the terms of this Agreement and
the Note payable to such Lender. Borrowings of more than one Type may be
outstanding at the same time; provided, however, that the Borrower shall not be
entitled to request any Borrowing which, if made, would result in an aggregate
of more than 12 separate Loans of any Lender being outstanding hereunder at any
one time. For purposes of the foregoing, Loans having different Interest
Periods, regardless of whether they commence on the same date, shall be
considered separate Loans.
(c) Each Lender shall make a Loan in the amount of its pro rata
portion, as determined under Section 2.16, of each Borrowing hereunder on the
Closing Date by wire transfer of immediately available funds to the
Administrative Agent in New York, New York, not later than 11:00 a.m., New York
City time, and the Administrative Agent shall credit the amounts so received to
the general deposit account of the Borrower with the Administrative Agent or, if
a Borrowing shall not occur on such date because any condition precedent herein
specified shall not have been met, return the amounts so received to the
respective Lenders. Unless the Administrative Agent shall have received notice
from a Lender prior to the date of the proposed Borrowing that such Lender will
not make available to the Administrative Agent such Lender's portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent
17
on the date of such Borrowing in accordance with this paragraph (c) and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If and to the extent that such
Lender shall not have made such portion available to the Administrative Agent,
such Lender and the Borrower severally agree to repay to the Administrative
Agent forthwith on demand such corresponding amount together with interest
thereon, for each day from the date such amount is made available to the
Borrower until the date such amount is repaid by the Borrower or such Lender to
the Administrative Agent at (i) in the case of the Borrower, the interest rate
applicable at the time to the Loans comprising such Borrowing and (ii) in the
case of such Lender, the Federal Funds Effective Rate. If such Lender shall
repay to the Administrative Agent such corresponding amount together with the
applicable interest thereon, such amount shall constitute such Lender's Loan as
part of such Borrowing for purposes of this Agreement and the Borrower's
obligations under the preceding sentence shall terminate. If the Borrower shall
repay to the Administrative Agent such corresponding amount together with the
applicable interest thereon, then such amount shall not constitute a Loan
hereunder and the Borrower shall have no further obligations hereunder in
respect thereof.
SECTION 2.03. Notice of Borrowings. The Borrower shall give the
Administrative Agent written notice (or telephone notice promptly confirmed in
writing) (a) in the case of a Eurodollar Borrowing, not later than 12:00 noon,
New York City time, three Business Days before the proposed Borrowing and (b) in
the case of an ABR Borrowing, not later than 12:00 noon, New York City time, one
Business Day before the proposed Borrowing. Such notice shall be irrevocable and
shall in each case refer to this Agreement and specify (i) whether such
Borrowing is to be a Eurodollar Borrowing or an ABR Borrowing; (ii) the date of
such Borrowing (which shall be a Business Day) and the amount thereof; and (iii)
if such Borrowing is to be a Eurodollar Borrowing, the Interest Period with
respect thereto. If no election as to the Type of Borrowing is specified in any
such notice, then the requested Borrowing shall be an ABR Borrowing. If no
Interest Period with respect to any Eurodollar Borrowing is specified in any
such notice, then the Borrower shall be deemed to have selected an Interest
Period of one month's duration. The Administrative Agent shall promptly advise
the Lenders of any notice given pursuant to this Section 2.03 and of each
Lender's portion of the requested Borrowing.
SECTION 2.04. Notes; Repayment of Loans. (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
each Lender the principal amount of the Loan of such Lender, in 28 consecutive
quarterly installments, payable on each March 31, June 30, September 30 and
December 31 in accordance with Section 2.11 (or the then unpaid principal amount
of such Loan, on the date that the Loans become due and payable pursuant to
Article VII). The Borrower hereby further agrees to pay interest on the unpaid
principal amount of the Loans made to it from time to time outstanding from the
date hereof until payment in full thereof at the rates per annum, and on the
dates, set forth in Section 2.06.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrower to such
Lender resulting from each Loan of such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
(c) The Administrative Agent shall maintain the Register pursuant
to Section 9.04(d), and a subaccount therein for each Lender, in which shall be
recorded (i) the amount of each Loan made hereunder, the Type thereof and each
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) both the amount of any sum received by the Administrative
Agent hereunder from the Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to Section 2.04(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made to
the Borrower by such Lender in accordance with the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will execute and deliver to
such Lender a Note with appropriate insertions as to date and principal amount.
18
SECTION 2.05. Fees. (a) The Borrower agrees to pay to each Lender,
through the Administrative Agent, on the Closing Date, or, if earlier, on the
date on which the Commitment of such Lender shall be terminated as provided
herein, a commitment fee (a "Commitment Fee") of 1/2 of 1% per annum on the
average daily unused amount of the Commitment of such Lender, in each case
during the period ending with the Closing Date or, if earlier, the date on which
the Commitment of such Lender shall be terminated. All Commitment Fees shall be
computed on the basis of the actual number of days elapsed in a year of 365 or
366 days. The Commitment Fee due to each Lender shall commence on the date
hereof, or, if later, the date such entity becomes a Lender pursuant to Section
9.04, and shall cease to accrue on the date on which the Commitment of such
Lender shall be terminated as provided herein.
(b) The Borrower agrees to pay to the Administrative Agent, for its own
account, on the Closing Date and thereafter at the times previously agreed, the
fees (the "Agency Fees") in the amounts previously agreed to be payable to the
Administrative Agent for its own account in accordance with the fee letter
between Chemical and Holdings. Agency Fees payable by the Borrower to Chemical
pursuant to the Fee Letter dated September 15, 1995 shall be reduced by the
Commitment Fees paid hereunder on the Closing Date.
(c) All Fees shall be paid on the dates due, in immediately available
funds, to the Administrative Agent for distribution, if and as appropriate,
among the Lenders. Once paid, none of the Fees shall be refundable under any
circumstances.
SECTION 2.06. Interest on Loans. (a) Subject to the provisions of
Section 2.07, the Loans comprising each ABR Borrowing shall bear interest
(computed on the basis of the actual number of days elapsed over a year of 365
or 366 days, as the case may be, when determined by reference to the Prime Rate
and over a year of 360 days at all other times) at a rate per annum equal to the
Alternate Base Rate plus the Applicable Margin.
(b) Subject to the provisions of Section 2.07, the Loans comprising
each Eurodollar Borrowing shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 360 days) at a rate per annum equal
to the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing
plus the Applicable Margin.
(c) Interest on each Loan shall be payable on the Interest Payment
Dates applicable to such Loan and as otherwise provided in this Agreement. The
applicable Alternate Base Rate and Adjusted LIBO Rate for each Interest Period
or day within an Interest Period, as the case may be, shall be determined by the
Administrative Agent, and such determination shall be conclusive absent manifest
error.
SECTION 2.07. Default Interest. If the Borrower shall default in the
payment of the principal of or interest on any Loan or any other amount becoming
due hereunder, by acceleration or otherwise, the Borrower shall on demand from
time to time pay interest, to the extent permitted by law, on such defaulted
amount up to (but not including) the date of actual payment (after as well as
before judgment) at a rate per annum (computed on the basis of the actual number
of days elapsed over a year of 365 or 366 days, as the case may be, when
determined by reference to the Prime Rate and over a year of 360 days at all
other times) equal to the Alternate Base Rate plus the Applicable Margin plus 2%
per annum.
SECTION 2.08. Alternate Rate of Interest. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Borrowing the Administrative Agent shall have
determined that dollar deposits in the principal amounts of the Loans comprising
such Borrowing are not generally available in the interbank eurodollar market,
or that the rates at which such dollar deposits are being offered will not
adequately and fairly reflect the cost to any Lender of making or maintaining
its Eurodollar Loan during such Interest Period, or that reasonable means do not
exist for ascertaining the Adjusted LIBO Rate, the Administrative Agent shall,
as soon as practicable thereafter, give written or telex or telecopy notice of
such determination to the Borrower and the Lenders. In the event of any such
determination, any request by the Borrower for a Eurodollar Borrowing pursuant
to Section 2.03 or 2.10 shall, until the Administrative Agent shall have advised
the Borrower and the Lenders that the circumstances giving rise to such notice
no longer exist, be deemed to be a request for an ABR Borrowing. Each
determination by the Administrative Agent hereunder shall be conclusive absent
manifest error.
19
SECTION 2.09. Termination and Reduction of Commitments. (a) All
Commitments shall automatically terminate at 5:00 p.m., New York City time, on
January 31, 1996, unless the Closing Date occurs on or prior to such date. The
Commitments shall be automatically terminated at 5:00 p.m., New York City time,
on the Closing Date.
(b) Upon at least three Business Days' prior irrevocable written notice
to the Administrative Agent, the Borrower may at any time in whole permanently
terminate, or from time to time in part permanently reduce, the Commitments;
provided, however, that each partial reduction of any such Commitments shall be
in an integral multiple of $1,000,000.
(c) Each reduction in the Commitments hereunder shall be made ratably
among the applicable Lenders in accordance with their respective applicable
Commitments. The Borrower shall pay to the Administrative Agent for the account
of the applicable Lenders, on the date of each termination or reduction, the
Commitment Fees on the amount of the Commitments so terminated or reduced
accrued through the date of such termination or reduction.
SECTION 2.10. Conversion and Continuation of Borrowings. The Borrower
shall have the right at any time upon prior irrevocable notice to the
Administrative Agent (i) not later than 12:00 (noon), New York City time, one
Business Day prior to conversion, to convert any Eurodollar Borrowing into an
ABR Borrowing, (ii) not later than 10:00 a.m., New York City time, three
Business Days prior to conversion or continuation, to convert any ABR Borrowing
into a Eurodollar Borrowing, or to continue any Eurodollar Borrowing as a
Eurodollar Borrowing for an additional Interest Period and (iii) not later than
10:00 a.m., New York City time, three Business Days prior to conversion, to
convert the Interest Period with respect to any Eurodollar Borrowing to another
permissible Interest Period, subject to the following conditions:
(a) each conversion or continuation shall be made pro rata among
the applicable Lenders in accordance with the respective principal
amounts of the Loans comprising the converted or continued Borrowing;
(b) if less than all the outstanding principal amount of any
Borrowing shall be converted or continued, the aggregate principal
amount of such Borrowing converted or continued shall be not less than
$1,000,000; provided that the aggregate principal amount of each
Eurodollar Borrowing resulting from any such conversion or continuation
shall not be less than $1,000,000;
(c) each conversion shall be effected by each applicable Lender by
such Lender converting its applicable Loan (or portion thereof), and
accrued interest on a Loan (or portion thereof) being converted shall
be paid by the Borrower at the time of conversion;
(d) if any Eurodollar Borrowing is converted at a time other than
the end of the Interest Period applicable thereto, the Borrower shall
pay, upon demand, any amounts due to the applicable Lenders pursuant to
Section 2.15;
(e) any portion of a Borrowing maturing or required to be repaid
in less than one month may not be converted into or continued as a
Eurodollar Borrowing;
(f) any portion of a Eurodollar Borrowing which cannot be
converted into or continued as a Eurodollar Borrowing by reason of
clause (e) above shall be automatically converted at the end of the
Interest Period in effect for such Borrowing into an ABR Borrowing;
(g) no Interest Period may be selected for any Eurodollar
Borrowing that would end later than a Loan Repayment Date occurring on
or after the first day of such Interest Period if, after giving effect
to such selection, the aggregate outstanding amount of (i) the
Eurodollar Borrowings, with Interest Periods ending on or prior to such
Loan Repayment Date, and (ii) the ABR Borrowings, would not be at least
equal to the principal amount of Borrowings to be paid on such Loan
Repayment Date; and
20
(h) a Borrowing may not be converted into or continued as a
Eurodollar Borrowing if a Default or an Event of Default has occurred
and is continuing and the Required Lenders have determined such
conversion or continuation is not appropriate.
Each notice pursuant to this Section 2.10 shall be irrevocable and
shall refer to this Agreement and specify (i) the identity and amount of the
Borrowing that the Borrower requests be converted or continued, (ii) whether
such Borrowing is to be converted to or continued as a Eurodollar Borrowing or
an ABR Borrowing, (iii) if such notice requests a conversion, the date of such
conversion (which shall be a Business Day) and (iv) if such Borrowing is to be
converted to or continued as a Eurodollar Borrowing, the Interest Period with
respect thereto. If no Interest Period is specified in any such notice with
respect to any conversion to or continuation as a Eurodollar Borrowing, the
Borrower shall be deemed to have selected an Interest Period of one month's
duration. The Administrative Agent shall promptly advise the other Lenders of
any notice given pursuant to this Section 2.10 and of each Lender's portion of
any converted or continued Borrowing. If the Borrower shall not have given
notice in accordance with this Section 2.10 to continue any Borrowing into a
subsequent Interest Period (and shall not otherwise have given notice in
accordance with this Section 2.10 to convert such Borrowing), such Borrowing
shall, at the end of the Interest Period applicable thereto (unless repaid
pursuant to the terms hereof), automatically be continued into a new Interest
Period as an ABR Borrowing.
SECTION 2.11. Repayment of Borrowings. (a) The Borrowings shall be
payable as to principal in such number of consecutive installments, payable on
such dates (each a "Loan Repayment Date") and in such amounts as set forth on
Schedule 2.11(a), based upon the aggregate principal amount of Loans advanced on
the Closing Date.
(b) To the extent not previously paid, all Borrowings shall be due and
payable on the Loan Maturity Date. Each payment of Eurodollar Borrowings repaid
pursuant to this Section 2.11 shall be accompanied by accrued interest on the
principal amount paid to but excluding the date of payment.
SECTION 2.12. Prepayment. (a) The Borrower shall have the right at any
time and from time to time to prepay any Borrowing, in whole or in part, upon,
in the case of Eurodollar Borrowings, at least three Business Days', and in the
case of ABR Borrowings, at least one Business Day's, prior written notice (or
telephone notice promptly confirmed by written notice) to the Administrative
Agent; provided, however, that each partial prepayment of ABR Loans shall be in
a minimum principal amount of $5,000,000 or an integral multiple of $1,000,000
in excess thereof and of Eurodollar Loans shall be in a minimum principal amount
of $5,000,000 or an integral multiple of $1,000,000 in excess thereof.
(b) Each notice of prepayment shall specify the prepayment date and the
principal amount of each Borrowing (or portion thereof) to be prepaid, shall be
irrevocable and shall commit the Borrower to prepay such Borrowing by the amount
stated therein on the date stated therein. All prepayments under this Section
2.12 shall be subject to Section 2.15 but otherwise without premium or penalty.
All prepayments under this Section 2.12 shall be accompanied by accrued interest
on the principal amount being prepaid to the date of payment.
(c) Substantially simultaneously with (and in any event not later than
the Business Day next following) the occurrence of a Prepayment Event, the
Borrower shall pay to the Administrative Agent (for application to the
prepayment of Loans in accordance with Section 2.12(d)) an amount equal to 25%
of the Net Proceeds from such Prepayment Event.
(d) Each prepayment of principal of the Borrowings shall be applied to
reduce scheduled payments of principal due under Section 2.11 after the date of
such prepayment (i) in the chronological order of maturity in the case of
prepayments made pursuant to Section 2.12(a) and (ii) pro rata in accordance
with the remaining scheduled amount of each such payment in the case of
prepayments made pursuant to Section 2.12(c).
(e) In the event the amount of any prepayment required to be made above
shall exceed the aggregate principal amount of the applicable outstanding ABR
Loans (the amount of any such excess being called the "Excess Amount"), the
Borrower shall have the right, in lieu of making such prepayment in full, to
prepay all the outstanding applicable ABR Loans and to deposit an amount equal
to the Excess Amount with the Collateral Agent in a cash
21
collateral account maintained (pursuant to documentation satisfactory to the
Administrative Agent) by and in the sole dominion and control of the Collateral
Agent. Any amounts so deposited shall be held by the Collateral Agent as
collateral for the Obligations and applied to the prepayment of the applicable
Eurodollar Loans at the end of the current Interest Periods applicable thereto.
On any Business Day on which (x) collected amounts remain on deposit in or to
the credit of such cash collateral account after giving effect to the payments
made on such day pursuant to this Section 2.12(e) and (y) the Borrower shall
have delivered to the Collateral Agent a written request or a telephonic request
(which shall be promptly confirmed in writing) that such remaining collected
amounts be invested in the Permitted Investments specified in such request, the
Collateral Agent shall use its reasonable efforts to invest such remaining
collected amounts in such Permitted Investments; provided, however, that the
Collateral Agent shall have continuous dominion and full control over any such
investments (and over any interest that accrues thereon) to the same extent that
it has dominion and control over such cash collateral account and no Permitted
Investment shall mature after the end of the Interest Period for which it is to
be applied. The Borrower shall not have the right to withdraw any amount from
such cash collateral account until the applicable Eurodollar Loans and accrued
interest thereon are paid in full or if a Default or Event of Default then
exists or would result.
SECTION 2.13. Reserve Requirements; Change in Circumstances. (a)
Notwithstanding any other provision herein, if after the date of this Agreement
any change in applicable law or regulation or in the interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall change the basis of taxation of payments to any Lender of the
principal of or interest on any Eurodollar Loan made by such Lender or any Fees
or other amounts payable hereunder (other than changes in respect of (i) taxes
imposed on the overall net income of such Lender by the jurisdiction in which
such Lender has its principal office or by any political subdivision or taxing
authority therein and (ii) any Taxes described in Section 2.18), or shall
impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets or deposits with or for the account of or credit
extended by such Lender (except any such reserve requirement which is reflected
in the Adjusted LIBO Rate) or shall impose on such Lender or the interbank
eurodollar market any other condition affecting this Agreement or Eurodollar
Loans made by such Lender, and the result of any of the foregoing shall be to
increase the cost to such Lender of making or maintaining any Eurodollar Loan or
to reduce the amount of any sum received or receivable by such Lender hereunder
or under the Notes (whether of principal, interest or otherwise) by an amount
deemed by such Lender to be material, then the Borrower will pay to such Lender
upon demand such additional amount or amounts as will compensate such Lender for
such additional costs incurred or reduction suffered.
(b) If any Lender shall have determined that the adoption after the
date hereof of any law, rule, regulation or guideline regarding capital
adequacy, or any change after the date hereof in any of the foregoing or in the
interpretation or administration of any of the foregoing by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or any lending office of
such Lender) or any Lender's holding company with any request or directive
regarding capital adequacy (whether or not having the force of law) made or
issued after the date hereof by any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on such
Lender's capital or on the capital of such Lender's holding company, if any, as
a consequence of this Agreement or its obligations pursuant hereto to a level
below that which such Lender or such Lender's holding company would have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's policies and the policies of such Lender's holding company with
respect to capital adequacy) by an amount deemed by such Lender to be material,
then from time to time the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender or such Lender's holding
company for any such reduction suffered.
(c) A certificate of each Lender setting forth such amount or amounts
as shall be necessary to compensate such Lender or its holding company as
specified in paragraph (a) or (b) above, as the case may be, shall be delivered
to the Borrower through the Administrative Agent and shall be conclusive absent
manifest error. The Borrower shall pay each Lender the amount shown as due on
any such certificate delivered by it within 10 days after its receipt of the
same.
(d) In the event any Lender delivers a notice pursuant to paragraph (e)
below, the Borrower may require, at the Borrower's expense and subject to
Section 2.15, such Lender to assign, at par plus accrued interest and fees,
22
without recourse (in accordance with Section 9.04) all its interests, rights and
obligations hereunder (including, in the case of a Lender, all of its Commitment
and the Loans at the time owing to it and its Notes held by it) to a financial
institution specified by the Borrower provided that (i) such assignment shall
not conflict with or violate any law, rule or regulation or order of any court
or other Governmental Authority, (ii) the Borrower shall have received the
written consent of the Administrative Agent, which consent shall not
unreasonably be withheld, to such assignment, and (iii) the Borrower shall have
paid to the assigning Lender all monies accrued and owing hereunder to it
(including pursuant to this Section).
(e) Promptly after any Lender has determined, in its sole judgment,
that it will make a request for increased compensation pursuant to this Section,
such Lender will notify the Borrower thereof. Failure on the part of any Lender
so to notify the Borrower or to demand compensation for any increased costs or
reduction in amounts received or receivable or reduction in return on capital
with respect to any period shall not constitute a waiver of such Lender's right
to demand compensation with respect to such period or any other period; provided
that the Borrower shall not be under any obligation to compensate any Lender
under Section 2.13(b) with respect to increased costs or reductions with respect
to any period prior to the date that is six months prior to such request if such
Lender knew or could reasonably have been expected to be aware of the
circumstances giving rise to such increased costs or reductions and of the fact
that such circumstances would in fact result in such increased costs or
reduction; provided, further, that, the foregoing limitation shall not apply to
any increased costs or reductions arising out of the retroactive application of
any law, regulation, rule, guideline or directive as aforesaid within such six
month period. The protection of this Section shall be available to each Lender
regardless of any possible contention of the invalidity or inapplicability of
the law, rule, regulation, guideline or other change or condition which shall
have occurred or been imposed.
SECTION 2.14. Change in Legality. (a) Notwithstanding any other
provision herein, if the adoption of or any change in any law or regulation or
in the interpretation thereof by any Governmental Authority charged with the
administration or interpretation thereof shall make it unlawful for any Lender
to make or maintain any Eurodollar Loan or to give effect to its obligations as
contemplated hereby with respect to any Eurodollar Loan, then, by written notice
to the Borrower and to the Administrative Agent, such Lender may:
(i) declare that Eurodollar Loans will not thereafter be made by
such Lender hereunder, whereupon any request by the Borrower for a
Eurodollar Borrowing shall, as to such Lender only, be deemed a request
for an ABR Loan unless such declaration shall be subsequently
withdrawn; and
(ii) require that all outstanding Eurodollar Loans made by it be
converted to ABR Loans, in which event all such Eurodollar Loans shall
be automatically converted to ABR Loans as of the effective date of
such notice as provided in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal which would otherwise have been applied to
repay the Eurodollar Loans that would have been made by such Lender or the
converted Eurodollar Loans of such Lender shall instead be applied to repay the
ABR Loans made by such Lender in lieu of, or resulting from the conversion of,
such Eurodollar Loans.
(b) For purposes of this Section 2.14, a notice to the Borrower by any
Lender shall be effective as to each Eurodollar Loan, if lawful, on the last day
of the Interest Period currently applicable to such Eurodollar Loan; in all
other cases such notice shall be effective on the date of receipt by the
Borrower.
SECTION 2.15. Indemnity. The Borrower shall indemnify each Lender
against any loss or expense (other than taxes) which such Lender may sustain or
incur as a consequence of (a) any failure by the Borrower to fulfill on the date
of the proposed Borrowing hereunder the applicable conditions set forth in
Article IV, (b) any failure by the Borrower to borrow or to refinance, convert
or continue any Loan hereunder after irrevocable notice of such Borrowing,
refinancing, conversion or continuation has been given pursuant to Section 2.03
or 2.10, (c) any payment, prepayment or conversion of a Eurodollar Loan required
by any other provision of this Agreement or otherwise made or deemed made on a
date other than the last day of the Interest Period applicable thereto, (d) any
default in payment or prepayment of the principal amount of any Loan or any part
thereof or interest accrued thereon, as and when due
23
and payable (at the due date thereof, whether by scheduled maturity,
acceleration, irrevocable notice of prepayment or otherwise) or (e) the
occurrence of any Event of Default, including, in each such case, any loss or
reasonable expense sustained or incurred or to be sustained or incurred in
liquidating or employing deposits from third parties acquired to effect or
maintain such Loan or any part thereof as a Eurodollar Loan. Such loss or
reasonable expense shall exclude loss of margin hereunder but shall include an
amount equal to the excess, if any, as reasonably determined by such Lender, of
(i) its cost of obtaining the funds for the Loan being paid, prepaid, converted
or not borrowed, converted or continued (assumed to be the Adjusted LIBO Rate
applicable thereto) for the period from the date of such payment, prepayment,
conversion or failure to borrow, convert or continue to the last day of the
Interest Period for such Loan (or, in the case of a failure to borrow, convert
or continue, the Interest Period for such Loan which would have commenced on the
date of such failure) over (ii) the amount of interest (as reasonably determined
by such Lender) that would be realized by such Lender in reemploying the funds
so paid, prepaid, converted or not borrowed, converted or continued for such
period or Interest Period, as the case may be. A certificate of any Lender
setting forth any amount or amounts which such Lender is entitled to receive
pursuant to this Section (and the reasons therefor) shall be delivered to the
Borrower through the Administrative Agent and shall be conclusive absent
manifest error.
SECTION 2.16. Pro Rata Treatment. Except as required under Section
2.14, each Borrowing, each payment or prepayment of principal of any Borrowing,
each payment of interest on the Loans, each payment of the Commitment Fees, each
reduction of the Commitments and each refinancing of any Borrowing with,
conversion of any Borrowing to or continuation of any Borrowing as a Borrowing
of any Type shall be allocated pro rata among the Lenders in accordance with
their respective applicable Commitments (or, if such Commitments shall have
expired or been terminated, in accordance with the respective principal amounts
of their applicable outstanding Loans). Each Lender agrees that in computing
such Lender's portion of any Borrowing to be made hereunder, the Administrative
Agent may, in its discretion, round each Lender's percentage of such Borrowing,
computed in accordance with Section 2.01, to the next higher or lower whole
dollar amount.
SECTION 2.17. Payments. (a) The Borrower shall make each payment
without set-off or counterclaim (including principal of or interest on any
Borrowing or any Fees or other amounts) required to be made by it hereunder and
under any other Loan Document not later than 12:00 noon, New York City time, on
the date when due in dollars to the Administrative Agent at its offices at 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, Attention of Wholesale Loan Services, in
immediately available funds, for credit to Chemical Bank, ABA Number 000000000,
Account Number 000-0-00000.
(b) Whenever any payment (including principal of or interest on any
Borrowing or any Fees or other amounts) hereunder or under any other Loan
Document shall become due, or otherwise would occur, on a day that is not a
Business Day, such payment may be made on the next succeeding Business Day
(except in the case of payment of principal of a Eurodollar Borrowing if the
effect of such extension would be to extend such payment into the next
succeeding month, in which event such payment shall be due on the immediately
preceding Business Day), and such extension of time shall in such case be
included in the computation of interest or Fees, if applicable.
SECTION 2.18. Taxes. (a) Any and all payments by the Borrower to the
Administrative Agent or the Lenders hereunder or under the other Loan Documents
shall be made, in accordance with Section 2.17 free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding (i)
in the case of each Lender and the Administrative Agent, taxes that would not be
imposed but for a connection between such Lender or the Administrative Agent (as
the case may be) and the jurisdiction imposing such tax, other than a connection
arising solely by virtue of the activities of such Lender or the Administrative
Agent (as the case may be) pursuant to or in respect of this Agreement or under
any other Loan Document, including, without limitation, entering into, lending
money or extending credit pursuant to, receiving payments under, or enforcing,
this Agreement or any other Loan Document, and (ii) in the case of each Lender
and the Administrative Agent, any United States withholding taxes payable with
respect to payments hereunder or under the other Loan Documents under laws
(including, without limitation, any statute, treaty, ruling, determination or
regulation) in effect on the Initial Date (as hereinafter defined) for such
Lender or the Administrative Agent, as the case may be, but not excluding any
United States withholding taxes payable solely as a result of any change in such
laws occurring after the Initial Date (all such non-excluded taxes, levies,
imposts,
24
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). For purposes of this Section 2.18, the term "Initial Date" shall
mean (i) in the case of the Administrative Agent or any Lender, the date on
which such person became a party to this Agreement and (ii) in the case of any
assignment including any assignment by a Lender to a new lending office, the
date of such assignment. If any Taxes shall be required by law to be deducted
from or in respect of any sum payable hereunder or under any other Loan Document
to any Lender or the Administrative Agent (i) the sum payable by the Borrower
shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.18) such Lender or the Administrative Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law. The Borrower shall not,
however, be required to pay any amounts pursuant to clause (i) of the preceding
sentence to any Lender or the Administrative Agent (in the case of payments to
be made by the Borrower) not organized under the laws of the United States of
America or a state thereof if such Lender or the Administrative Agent fails to
comply with the requirements of paragraphs (f) or (g), as the case may be, and
paragraph (h) of this Section 2.18.
(b) In addition, the Borrower agrees to pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies which arise from the execution, delivery or registration of, or otherwise
with respect to, this Agreement or any other Loan Document (hereinafter referred
to as "Other Taxes").
(c) The Borrower will indemnify each Lender and the Administrative
Agent for the full amount of Taxes and Other Taxes (including any Taxes or Other
Taxes imposed by any jurisdiction on amounts payable under this Section 2.18)
paid by such Lender or the Administrative Agent, as the case may be, and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto whether or not such Taxes or Other Taxes were correctly or
legally asserted. Such indemnification shall be made within 10 days after the
date any Lender or the Administrative Agent, as the case may be, makes written
demand therefor. If a Lender or the Administrative Agent shall become aware that
it is entitled to receive a refund or is reasonably requested by the Borrower to
pursue a claim for a refund in respect of Taxes or Other Taxes, it shall
promptly notify the Borrower of the availability of such refund (unless
instructed to pursue a claim by the Borrower) and shall, within 30 days after
receipt of a request by the Borrower, pursue or timely claim such refund at the
Borrower's expense; provided that such Lender shall not be required to pursue or
claim such refund if such Lender reasonably determines that the pursuit or claim
of such refund will have a disadvantageous impact upon such Lender. If any
Lender or the Administrative Agent receives a refund in respect of any Taxes or
Other Taxes for which such Lender or the Administrative Agent has received
payment from the Borrower hereunder, it shall promptly notify the Borrower of
such refund and shall, within 30 days after receipt of a request by the Borrower
(or promptly upon receipt, if the Borrower has requested application for such
refund pursuant hereto), repay such refund (plus any interest received) to the
Borrower, provided that the Borrower, upon the request of such Lender or the
Administrative Agent, agrees to return such refund (plus any penalties, interest
or other charges required to be paid) to such Lender or the Administrative Agent
in the event such Lender or the Administrative Agent is required to repay such
refund.
(d) Within 30 days after the date of any payment of Taxes or Other
Taxes withheld by the Borrower in respect of any payment to any Lender or the
Administrative Agent, the Borrower will furnish to the Administrative Agent, at
its address referred to in Schedule 2.01, the original or a certified copy of a
receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement contained
herein, the agreements and obligations contained in this Section 2.18 shall
survive the payment in full of principal and interest hereunder and the
termination of the Commitments.
(f) Each of each Lender and the Administrative Agent that is not
organized under the laws of the United States of America or a state thereof
agrees that at least 10 days prior to the first Interest Payment Date following
the Initial Date in respect of such Lender, it will deliver to the Borrower and
the Administrative Agent (if appropriate) two duly completed copies of either
(i) United States Internal Revenue Service Form 1001 or 4224 or successor
applicable form, as the case may be, certifying in each case that such Lender or
the Administrative Agent,
25
as the case may be, is entitled to receive payments under this Agreement and the
Notes payable to it without deduction or withholding of any United States
federal income taxes and backup withholding taxes or is entitled to receive such
payments at a reduced rate pursuant to a treaty provision or (ii) in the case of
a Lender that is not a "bank" within the meaning of Section 881(c)(3) of the
Code, United States Internal Revenue Service Form W-8 or successor applicable
form and a statement from such Lender certifying to the fact that interest
payable to it hereunder (A) will not be described in Section 871(h)(3)(A) or
Section 881(c)(3)(A), (B) or (C) of the Code and (B) will not be effectively
connected with a trade or business carried on in the United States by such
Lender. Each of each Lender and the Administrative Agent required to deliver to
the Borrower and the Administrative Agent a Form 1001, 4224 or W-8 pursuant to
the preceding sentence further undertakes to deliver to the Borrower and the
Administrative Agent (if appropriate) two further copies of Form 1001, 4224 or
W-8, or successor forms, or other similar manner of certification and such
extensions or renewals thereof as may reasonably be requested by the Borrower
and, in the case where a Form W-8 has been delivered, a further statement
certifying to the fact set forth in clause (B) of the preceding sentence (i) at
the times reasonably requested by the Borrower, (ii) after the occurrence of an
event requiring a change in the most recent form or statement previously
delivered by it to the Borrower or (iii) in the case of Form 1001, 4224 or W-8,
on or before the date that any such form expires or becomes obsolete, and, in
the case of Form 1001 or 4224, certifying that such Lender is entitled to
receive payments under this Agreement without deduction or withholding of any
United States federal income taxes and backup withholding taxes or is entitled
to receive such payments at a reduced rate pursuant to a treaty provision,
unless such Lender advises the Borrower that it is unable lawfully to provide
such forms and other certifications and notifies the Borrower to such effect.
Unless the Borrower and the Administrative Agent have received forms,
certificates and other documents satisfactory to them indicating that payments
hereunder or under or in respect of the Notes to or for any Lender not
incorporated under the laws of the United States or a state thereof are not
subject to United States withholding tax or are subject to such tax at a rate
reduced by an applicable tax treaty, the Borrower or the Administrative Agent
shall withhold such taxes from such payments at the applicable statutory rate.
(g) Any Lender claiming any additional amounts payable pursuant to this
Section 2.18 shall use reasonable efforts (consistent with legal and regulatory
restrictions) to file any certificate or document requested by the Borrower to
change the jurisdiction of its applicable lending office if the making of such a
filing or change would avoid the need for or reduce the amount of any such
additional amounts which may thereafter accrue and would not, in the sole
determination of such Lender, be otherwise disadvantageous to such Lender.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
Each of Holdings and the Borrower represents and warrants to each of
the Lenders that (it being agreed that as used in this Article III (other than
Sections 3.08(a) and 3.16) and in the term Material Adverse Effect as used
herein references to subsidiaries, Subsidiaries and Restricted Subsidiaries
shall include Larizza and its subsidiaries to the extent they would have been
included had the Larizza Acquisition been consummated prior to the date hereof;
provided, however, that any representation or warranty with respect to Larizza
and its subsidiaries is made by Holdings and the Borrower to their knowledge
based on information they have received from Larizza):
SECTION 3.01. Organization, Corporate Powers. Each of Holdings and each
Restricted Subsidiary (i) is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction in which it is incorporated,
(ii) has all requisite corporate power and authority, and all material licenses,
permits, franchises, consents and approvals, to own or lease its property and
assets and to carry on its business as now conducted and as proposed to be
conducted, (iii) is qualified and in good standing as a foreign corporation to
do business in every jurisdiction where such qualification is necessary, except
where the failure so to qualify would not have a Material Adverse Effect and
(iv) has the corporate power and authority to execute, deliver and perform each
of the Loan Documents and each agreement or instrument contemplated hereby or
thereby to which it is or will be a party. None of Holdings or any Restricted
Subsidiary of Holdings has any assets or business, or is a party to any material
contract within the meaning of Item 6.01(b)(10) of Regulation S-K of the
Securities and Exchange Commission, other than as disclosed or referred to in
(a) Holdings' Annual Report on Form 10-K for the fiscal year ended January 28,
1995
26
and its Reports on Form 10-Q for the fiscal quarters ending April 29, 1995, July
29, 1995 and October 28, 1995 and (b) Larizza's Annual Report on Form 10-K for
the fiscal year ended December 31, 1994 and its Reports on Form 10-Q for the
quarters ended March 31, 1995, June 30, 1995 and September 30, 1995 or as
contemplated hereby and thereby.
SECTION 3.02. Authorization. The execution, delivery and performance of
each of the Loan Documents, the borrowings hereunder and the consummation of the
Larizza Acquisition and the other transactions contemplated by any of the
foregoing (collectively, the "Transactions") (i) have been duly authorized by
all requisite corporate and, if required, stockholder action and (ii) will not
(x) violate (A) any provision of law, statute, rule or regulation (including,
without limitation, Regulations G, T, U and X) or the certificate of
incorporation or by-laws (or similar governing documents) of any of Holdings and
the Restricted Subsidiaries, (B) any applicable order of any court or any rule,
regulation or order of any Governmental Authority or (C) any indenture,
certificate of designation for preferred stock, agreement or other instrument to
which any of Holdings or any Restricted Subsidiary is a party or by which any of
them or any of their property is bound, (y) be in conflict with, result in a
breach of or constitute (with notice or lapse of time or both) a default under
any such indenture, agreement or other instrument where any such conflict,
violation, breach or default referred to in clause (ii)(x) or (ii)(y) of this
Section, individually or in the aggregate, would have a Material Adverse Effect
or (z) result in the creation or imposition of any Lien upon any property or
assets of Holdings or any subsidiary of Holdings, except for Liens created by
the Pledge Agreement.
SECTION 3.03. Enforceability. This Agreement has been duly executed and
delivered by each of Holdings and the Borrower and constitutes, and each other
Loan Document when executed and delivered by any of Holdings, the Borrower or
the Subsidiary Guarantors that is or is to be a party thereto will constitute, a
legal, valid and binding obligation of such party enforceable against such party
in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, moratorium, reorganization or other similar laws
affecting creditors' rights generally and except as enforceability may be
limited by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
SECTION 3.04. Larizza Acquisition. On the Closing Date, the Larizza
Acquisition will be consummated by the Borrower in accordance with the terms and
conditions of the Merger Documents and this Agreement. On the Closing Date, all
consents and approvals of, filings and registrations with, and other actions in
respect of, all Governmental Authorities required in order to make or consummate
the Larizza Acquisition will have been obtained, given, filed or taken and will
be in full force and effect, other than any such consents, approvals, filings or
other actions, the failure to obtain or make which could not reasonably be
expected to result in a Material Adverse Effect. On the Closing Date, all
applicable waiting periods with respect thereto will have expired or been
terminated without, in all such cases, any action being taken by any competent
authority which restrains, prevents, or imposes material adverse conditions upon
the consummation of the Larizza Acquisition. On the Closing Date, there will not
exist any judgment, order, or injunction prohibiting or imposing material
adverse conditions upon the Larizza Acquisition or the performance by any Credit
Party of their respective obligations under the Loan Documents and the Merger
Documents.
SECTION 3.05. Use of Proceeds. The Borrower will use the proceeds of
the Loans only for the purposes set forth in Section 5.08.
SECTION 3.06. Federal Reserve Regulations. (a) None of Holdings or
any subsidiary of Holdings is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing
or carrying Margin Stock.
(b) The making of the Loans hereunder and the use of the proceeds
thereof as contemplated hereby and the other Transactions will not violate or be
inconsistent with the provisions of the Regulations of the Board, including
Regulations G, T, U and X.
SECTION 3.07. Pledge Agreement. Upon delivery of the duly completed
Acknowledgment to the Collateral Agreement, the security interests created in
favor of the Collateral Agent, for the benefit of the Lenders, under the Pledge
Agreement will at all times constitute first-priority, perfected security
interests in the Pledged
27
Securities, and such Pledged Securities will be subject to no Liens or security
interests of any other person. No filings or recordings are or will be required
in order to perfect the security interests in the Pledged Securities created
under the Pledge Agreement.
SECTION 3.08. Financial Statements. (a) (i) Holdings has heretofore
furnished to each of the Lenders consolidated balance sheets and consolidated
statements of income and cash flow of Holdings and its consolidated subsidiaries
as of and for the fiscal years ended January 28, 1995 and January 29, 1994,
certified by Xxxxxx Xxxxxxxx & Co., independent public accountants for Holdings
and (ii) Holdings has heretofore furnished to each of the Lenders unaudited
consolidated balance sheets and consolidated statements of income and cash flow
of Holdings and its consolidated subsidiaries as of and for the thirty nine
weeks ended October 28, 1995. Such balance sheets and statements of income and
cash flows present fairly the financial condition and results of operations of
Holdings and its consolidated subsidiaries on a consolidated basis as of the
dates and for the periods indicated. Except as disclosed in Holdings' Annual
Report on Form 10-K for the fiscal year ended January 28, 1995 and its Reports
on Form 10-Q for the fiscal quarters ending April 29, 1995, July 29, 1995 and
October 28, 1995, neither Holdings nor any of its Subsidiaries had, at the date
of the most recent balance sheet referred to above, any material Guarantee,
contingent liability or liability for taxes, or any long-term lease or unusual
forward or long-term commitment, including, without limitation, any interest
rate or foreign currency swap or exchange transaction, which is not reflected in
the foregoing statements or in the notes thereto. The financial statements
referred to in this Section 3.08(a) have been prepared in accordance with GAAP
applied on a consistent basis.
(b) The pro forma consolidating balance sheet of Holdings (showing
Holdings, Larizza and acquisition adjustments) as of September 30, 1995 (in the
case of Larizza) and October 28, 1995 (in the case of Holdings) previously
delivered to the Lenders is the unaudited consolidating balance sheet of
Holdings as of such date, adjusted to give effect (as if such events had
occurred on such date) to the Larizza Acquisition and other identified pro forma
adjustments set forth therein, including the payment of all fees and expenses
expected to be incurred in connection therewith (as estimated at the time of the
preparation of such balance sheet), based upon the assumptions specified
therein. Such pro forma consolidating balance sheet presents fairly, on a pro
forma basis, the consolidated financial position of Holdings as of such dates
assuming that the events specified in the preceding sentence had actually
occurred or are true, as the case may be, on such date and has been prepared
based upon reasonable assumptions and in accordance with GAAP applied on a
consistent basis.
SECTION 3.09. No Material Adverse Change. There has been no material
adverse change in the business, properties, assets, operations or financial
condition of Holdings and its Restricted Subsidiaries, taken as a whole, since
October 28, 1995.
SECTION 3.10. Title to Properties; Possession Under Leases. (a) Each of
Holdings, the Borrower and the Significant Subsidiaries has good and marketable
title to, or valid leasehold interests in, or easements on or other limited
property interests in, all their respective material properties and assets,
except for minor defects in title and limitations on property interests that do
not interfere with their respective ability to conduct their respective business
as currently conducted or to utilize such properties and assets for their
intended purposes. All such material properties and assets are free and clear of
Liens, other than Liens expressly permitted by Section 6.04.
(b) Each of Holdings, the Borrower and the Significant Subsidiaries has
complied with all obligations under all material leases to which it is a party,
except where the failure to comply would not have a Material Adverse Effect, and
all such leases are in full force and effect, except leases in respect of which
the failure to be in full force and effect would not have a Material Adverse
Effect. Each of Holdings, the Borrower and the Significant Subsidiaries enjoys
peaceful and undisturbed possession under all such material leases.
(c) Each of Holdings, the Borrower and the Significant Subsidiaries
owns or possesses, or could obtain ownership or possession of, on terms not
materially adverse to it, all patents, trademarks, service marks, trade names,
copyrights, licenses and rights with respect thereto necessary for the present
conduct of its business, without any known conflict with the rights of others,
and free from any burdensome restrictions, except where such conflicts and
restrictions would not, individually or in the aggregate, have a Material
Adverse Effect.
28
SECTION 3.11. Subsidiaries. (a) Schedule 3.11(a) sets forth as of
the Closing Date a list of all Subsidiaries of Holdings and the percentage
ownership interest of Holdings therein and whether such Subsidiaries are
Significant Subsidiaries.
(b) There are no outstanding subscriptions, options, warrants, calls,
rights or other agreements or commitments (other than stock options granted to
employees, consultants or directors and directors' qualifying shares) of any
nature relating to any capital stock of any subsidiary of Holdings, except for
the Pledge Agreement, the Merger Documents or as provided in Schedule 3.11(b).
SECTION 3.12. Litigation; Compliance with Laws. (a) Except as described
in Holdings' Annual Report on Form 10-K for the fiscal year ended January 28,
1995 and its Reports on Form 10-Q for the fiscal quarters ending April 29, 1995,
July 29, 1995 and October 28, 1995, there are not any actions, suits or
proceedings at law or in equity or by or before any court or Governmental
Authority now pending or, to the knowledge of Holdings or the Borrower,
threatened against or affecting Holdings or any of its subsidiaries or any
property or rights of Holdings or any of its subsidiaries as to which there is a
reasonable possibility of an adverse determination and which (i) if adversely
determined, could individually or in the aggregate result in a Material Adverse
Effect or (ii) involve the Loan Documents or (iii) if adversely determined could
materially adversely affect the Larizza Acquisition.
(b) None of Holdings or any of its Subsidiaries is in default with
respect to any law, order, judgment, writ, injunction, decree, rule or
regulation of any Governmental Authority where such default could have a
Material Adverse Effect. The Borrowings hereunder, the use of the proceeds
thereof as described in Section 5.08 and the Larizza Acquisition will not
violate any applicable law or regulation or violate or be prohibited by any
judgment, writ, injunction, decree or order of any court or Governmental
Authority or subject Holdings or any of its subsidiaries to any civil or
criminal penalty or fine.
SECTION 3.13. Agreements. (a) None of Holdings or any of its
Subsidiaries is a party to any agreement or instrument or subject to any
corporate restriction that has resulted or could reasonably be expected to
result in a Material Adverse Effect.
(b) None of Holdings or any of its Subsidiaries is in default in any
manner under any provision of any indenture or other agreement or instrument
evidencing Indebtedness or any other material agreement or instrument to which
it is a party or by which it or any of its properties or assets are or may be
bound, in either case where such default could result in a Material Adverse
Effect. After giving effect to the Larizza Acquisition, no Default or Event of
Default shall have occurred and be continuing.
SECTION 3.14. Investment Company Act. None of Holdings or 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.
SECTION 3.15. Public Utility Holding Company Act. None of Holdings or
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.
SECTION 3.16. Tax Returns. Each of Holdings and its Subsidiaries has
filed or caused to be filed all Federal, and all material state and local, tax
returns required to have been filed by it and has paid or caused to be paid all
taxes shown thereon to be due and payable, and any assessments in excess of
$2,000,000 in the aggregate received by it, except taxes that are being
contested in accordance with Section 5.03 and taxes, assessments, charges,
levies or claims in respect of property taxes for property that Holdings or one
of its Subsidiaries has determined to abandon where the sole recourse for such
tax, assessment, charge, levy or claim is to such property. Each of Holdings and
its Subsidiaries has paid in full or made adequate provision (in accordance with
GAAP) for the payment of all taxes due with respect to the periods ending on or
before January 28, 1995, which taxes, if not paid or adequately provided for,
would have a Material Adverse Effect. The tax returns of Holdings and its
Subsidiaries have been examined by relevant Federal tax authorities for all
periods through January 25, 1992, and all deficiencies
29
asserted as a result of such examinations have been paid. Except as set forth on
Schedule 3.16, as of the Closing Date, with respect to each of Holdings and its
Subsidiaries, (i) no material claims are being asserted in writing with respect
to any taxes, (ii) no presently effective waivers or extensions of statutes of
limitation with respect to taxes have been given or requested, (iii) no tax
returns are being examined by, and no written notification of intention to
examine has been received from, the Internal Revenue Service or any other taxing
authority and (iv) no currently pending issues have been raised in writing by
the Internal Revenue Service or any other taxing authority. For purposes hereof,
"taxes" shall mean any present or future tax, levy, impost, duty, charge,
assessment or fee of any nature (including interest, penalties and additions
thereto) that is imposed by any Governmental Authority.
SECTION 3.17. No Material Misstatements. (a) The information, reports,
financial statements, exhibits and schedules furnished by or on behalf of
Holdings or any of its Subsidiaries or Affiliates to the Administrative Agent or
any Lender in connection with the negotiation of any Loan Document or included
therein or delivered pursuant thereto (including the Merger Documents), when
taken as a whole, did not contain, and as they may be amended, supplemented or
modified from time to time, will not contain, as of the Closing Date any
material misstatement of fact and did not omit, and as they may be amended,
supplemented or modified from time to time, will not omit, to state as of the
Closing Date any material fact necessary to make the statements therein, in the
light of the circumstances under which they were, are or will be made, not
materially misleading in their presentation of the Larizza Acquisition or of
Holdings and its Subsidiaries taken as a whole.
(b) All financial projections concerning Holdings and its Subsidiaries
that are or have been made available to the Administrative Agent or any Lender
by Holdings or any of its Subsidiaries or Affiliates, unless otherwise
disclosed, have been or will be prepared in good faith based upon assumptions
believed by Holdings and the Borrower to be reasonable.
SECTION 3.18. Employee Benefit Plans. Each of Holdings and the
Restricted Subsidiaries and each of their ERISA Affiliates is in compliance in
all material respects with the applicable provisions of ERISA and the
regulations and published interpretations thereunder except for such
noncompliance which would not be expected to result in a Material Adverse
Effect. No Reportable Event has occurred as to which Holdings or any of the
Restricted Subsidiaries or any of their ERISA Affiliates was required to file a
report with the PBGC, other than reports for which the 30 day notice requirement
is waived, reports that have been filed and reports the failure of which to file
would not result in a Material Adverse Effect and as of the Closing Date, the
present value of all benefit liabilities under each Plan of Holdings and the
Restricted Subsidiaries or any of their ERISA Affiliates (on a termination basis
and based on those assumptions used to fund such Plan) did not, as of the last
annual valuation report applicable thereto, exceed by more than $15,000,000 the
value of the assets of such Plan on a termination basis. None of Holdings or any
of the Restricted Subsidiaries or any of their ERISA Affiliates has incurred or
could reasonably be expected to incur any Withdrawal Liability that could result
in a Material Adverse Effect. None of Holdings or any of the Restricted
Subsidiaries or any of their ERISA Affiliates has received any notification that
any Multiemployer Plan is in reorganization or has been terminated within the
meaning of Title IV of ERISA, and no Multiemployer Plan is reasonably expected
to be in reorganization or to be terminated where such reorganization or
termination has resulted or could reasonably be expected to result, through
increases in the contributions required to be made to such Plan or otherwise, in
a Material Adverse Effect.
SECTION 3.19. Labor Matters. There are no strikes against Holdings or
any of its Subsidiaries pending, other than any strikes which, individually or
in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect. The hours worked and payment made to employees of Holdings and
each of its Subsidiaries have not been in violation in any material respect of
the Fair Labor Standards Act or any other applicable law dealing with such
matters. All material payments due from Holdings or any of its Subsidiaries, or
for which any claim may be made against Holdings or any of its Subsidiaries, on
account of wages and employee health and welfare insurance and other benefits
have been paid or accrued as a liability on the books of Holdings or such
subsidiary to the extent required by GAAP. The consummation of the Larizza
Acquisition will not give rise to a right of termination or right of
renegotiation on the part of any union under any collective bargaining agreement
to which Holdings or any of its Subsidiaries (or any predecessor) is a party or
by which Holdings or any of its subsidiaries (or any predecessor) is bound,
other than collective bargaining agreements which, individually or in the
aggregate, are not material to Holdings and its Subsidiaries taken as a whole.
30
SECTION 3.20. Environmental Matters. (a) Except as disclosed in writing
to the Administrative Agent and each Lender prior to the date of this Agreement,
which disclosed matters individually and in the aggregate are not reasonably
expected by Holdings or the Borrower to have a Material Adverse Effect, (i)
Holdings and each of its Subsidiaries has complied in all respects with all
applicable Federal, state, local and other statutes, ordinances, orders,
judgments, rulings and regulations relating to environmental pollution or to
environmental regulation or control, except to the extent of any failure so to
comply which alone and together with other such failures is not reasonably
expected to result in a Material Adverse Effect; (ii) none of Holdings or any
Subsidiary of Holdings has received notice of any failure so to comply which
alone or together with other such failures is reasonably expected to result in a
Material Adverse Effect; and (iii) none of Holdings or any of its Subsidiaries
manages, transports or stores any hazardous wastes, hazardous substances,
hazardous materials, toxic substances or toxic pollutants, as those terms are
used in the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response Compensation and Liability Act, the Hazardous Materials
Transportation Act, the Toxic Substance Control Act, the Clean Air Act or the
Clean Water Act, in violation of any applicable regulations promulgated pursuant
thereto or of any other applicable law where such violation is reasonably likely
to result, individually or together with other violations, in a Material Adverse
Effect.
(b) Except with respect to matters that, individually and in the
aggregate, Holdings and the Borrower reasonably believe would not have a
Material Adverse Effect, as of the Closing Date: (i) the operations of Holdings
and each of its Subsidiaries comply in all respects with all Environmental Laws
and, to the knowledge of Holdings or the Borrower after inquiry, no conditions
exist (including at properties leased or subleased to third persons) which would
subject Holdings or its Subsidiaries to damages, liabilities, penalties,
injunctive relief or clean-up costs under any Environmental Law or which require
or are reasonably likely to require any Remedial Action under any Environmental
Law; (ii) each of Holdings and its Subsidiaries has obtained all Environmental
Permits necessary for its operation or required by any Environmental Law, and
all such Environmental Permits are in good standing, and none of Holdings or its
Subsidiaries has been cited by a Governmental Authority for violating any terms
or conditions of such Environmental Permits within the five-year period prior to
the Closing Date; (iii) none of Holdings or its Subsidiaries is subject or a
party to any Environmental Claim; (iv) with respect to present facilities and
operations, none of Holdings or its Subsidiaries, or, to the knowledge of
Holdings or the Borrower, any predecessor of such persons, is subject to any
outstanding written order or agreement with any Governmental Authority or
private party respecting (A) any Environmental Law, (B) any Remedial Action
under any Environmental Law, or (C) any Environmental Claim; (v) to the
knowledge of Holdings or the Borrower, none of the operations of any of Holdings
or its Subsidiaries is the subject of any investigation by a Governmental
Authority evaluating whether any Remedial Action under any Environmental Law is
needed; (vi) none of Holdings or its Subsidiaries or, to the knowledge of
Holdings or the Borrower, any predecessor of such persons has filed any notice
under any Environmental Law indicating past or present treatment, storage or
disposal of a hazardous waste as defined under 40 C.F.R. Parts 260 through 270
(in effect as of the Closing Date) or any state equivalent, or reporting a
Release of a Contaminant; (vii) to the knowledge of Holdings or the Borrower
except as permitted under any Environmental Law, none of Holdings or its
Subsidiaries has experienced a Release of any Contaminant, and there has been no
voluntary disposal, use, storage, recycling or treatment on, under or at any
property of such person (or in tanks or other facilities thereon) of any
Contaminant which, if known to be present on such property, or present in soils
or groundwater, would require Remedial Action under any Environmental Law; and
(viii) no Lien in favor of any Governmental Authority for (A) any liability
under any Environmental Law or (B) damages arising from or costs incurred by
such Governmental Authority in response to a Release of a Contaminant into the
environment has been recorded with respect to any property of Holdings or any of
its Subsidiaries. For purposes of this Section 3.20(b), "knowledge" means the
actual knowledge of any Responsible Officer of Holdings or any Restricted
Subsidiary, any officer of Holdings or any Restricted Subsidiary with
responsibility for environmental compliance, or any plant or facilities manager
with responsibility for overall management of such plant or facility of Holdings
or any of its Subsidiaries.
(c) Each of Holdings and its Subsidiaries reasonably believes that
Holdings and its Subsidiaries on a consolidated basis have made adequate
provision (in accordance with GAAP) for all damages, liabilities, penalties or
costs that they reasonably expect to incur in connection with any Environmental
Claim or any Remedial Action existing or, to the knowledge of Holdings or the
Borrower, reasonably anticipated as of the date of this Agreement.
31
SECTION 3.21. Solvency. (a) The fair salable value of the assets of the
Borrower exceeds the amount that will be required to be paid on or in respect of
the existing debts and other liabilities (including contingent liabilities) of
the Borrower as they mature. The assets of the Borrower do not constitute
unreasonably small capital to carry out its business as conducted or as proposed
to be conducted. The Borrower does not intend to, and does not believe that it
will, incur debts beyond its ability to pay such debts as they mature (taking
into account the Larizza Acquisition).
(b) Upon consummation of the Larizza Acquisition, the fair salable
value of the assets of the Borrower and its subsidiaries taken as a whole will
exceed the amount that will be required to be paid on or in respect of the
existing debts and other liabilities (including contingent liabilities) of the
Borrower and its subsidiaries.
(c) The assets of the Borrower and its subsidiaries taken as a
whole do not, and upon consummation of the Larizza Acquisition will not,
constitute unreasonably small capital for the Borrower and its subsidiaries, to
carry out their respective businesses as now conducted and as proposed to be
conducted including the capital needs of the Borrower and its subsidiaries
taking into account the particular capital requirements of the business
conducted by the Borrower and each of its subsidiaries, and projected capital
requirements and capital availability thereof.
(d) The Borrower does not intend to, and does not intend to permit
any of its subsidiaries to, incur debts beyond their respective ability to pay
such debts as they mature, taking into account the timing and amounts of cash to
be received by the Borrower and each of such subsidiaries, and of amounts to be
payable on or in respect of debt of the Borrower and each of such subsidiaries.
SECTION 3.22. Absence of Certain Restrictions. No indenture,
certificate of designation for preferred stock, agreement or other instrument to
which Holdings or any Restricted Subsidiary is a party will prohibit or
materially restrain, or have the effect of prohibiting or materially
restraining, or imposing materially adverse conditions upon, the incurrence of
Indebtedness, the granting of Liens, the provision of Guarantees or the payment
of dividends by subsidiaries of Holdings except for restrictions (a) on the
granting of Liens on assets that are encumbered by Liens permitted under clause
(a), (b), (i), (k), (l) or (r) of Section 6.04, to the extent that such
restrictions apply only to the assets so encumbered and are imposed by the
agreements under which such Liens were granted or (b) contained in agreements
relating to Indebtedness not in excess of $10,000,000 in the aggregate.
SECTION 3.23. No Foreign Assets Control Regulation Violation. The
Larizza Acquisition will not result in a violation of any of the foreign assets
control regulations of the United States Treasury Department, 31 C.F.R.,
Subtitle B, Chapter V, as amended (including the Foreign Assets Control
Regulations, the Transaction Control Regulations, the Cuban Assets Control
Regulations, the Foreign Funds Control Regulations, the Iranian Assets Control
Regulations, the Nicaraguan Trade Control Regulations, the South African
Transactions Regulations, the Libyan Sanctions Regulations, the Soviet Gold Coin
Regulations, the Panamanian Transactions Regulations, the Kuwaiti Assets Control
Regulations and the Iraqi Sanctions Regulations contained in said Chapter V), or
any ruling issued thereunder or any enabling legislation or Presidential
Executive Order granting authority therefor, nor will the proceeds of the Loans
be used by the Borrower in a manner that would violate any thereof.
SECTION 3.24. Insurance. Each of Holdings and the Restricted
Subsidiaries carries and maintains with respect to its insurable properties
insurance (including self insurance) with financially sound and reputable
insurers of the types, to such extent and against such risks as is customary
with companies in the same or similar businesses, including fire and other risks
insured against by extended coverage and public liability insurance against
claims for personal injury or death or property damages occurring upon, in,
about or in connection with the use of any properties owned, occupied or
controlled by it.
SECTION 3.25. Certain Other Representations. All representations and
warranties contained in any other Loan Document and made by any of Holdings or
any of its Subsidiaries are true and correct as of the date made or deemed to
have been made.
SECTION 3.26. Permitted Acquisition Indebtedness. Indebtedness under
this Agreement constitutes Permitted Acquisition Indebtedness under this
Agreement and under the 1994 Credit Agreement. This Agreement
32
constitutes a Permitted Acquisition Indebtedness Agreement under the Guarantee
Agreement and the Intercreditor Agreement. The Larizza Acquisition constitutes
a Permitted Business Acquisition under this Agreement and under the 1994
Credit Agreement.
ARTICLE IV.
CONDITIONS
SECTION 4.01. The obligations of the Lenders to make Loans hereunder
are subject to the satisfaction of the following conditions on the Closing Date:
(a) The Administrative Agent shall have received a notice of
Borrowing as required by Section 2.03.
(b) The representations and warranties set forth in each Loan
Document shall be true and correct in all material respects on and as
of the Closing Date with the same effect as though made on and as of
such date, except to the extent such representations and warranties
expressly relate to an earlier date.
(c) At the time of and immediately after the Borrowing on the
Closing Date, no Event of Default or Default shall have occurred and be
continuing.
(d) Each Lender, if it so requests in accordance with subsection
2.04(e), shall have received a duly executed Note complying with the
provisions of Section 2.04.
(e) The Administrative Agent shall have received all Fees and
other amounts due and payable on or prior to the Closing Date,
including reimbursement of any out-of-pocket expenses referred to in
Section 9.05 (to the extent that notice thereof is given to the
Borrower prior to the Closing Date).
(f) The Administrative Agent shall have received the favorable
written opinions of (i) Cravath, Swaine & Xxxxx, special counsel for
Holdings and its subsidiaries, and (ii) Xxxxxxxxx X. Xxxxxxx, Esq.,
general counsel for Holdings and its subsidiaries, each dated the
Closing Date and addressed to the Lenders, and in form and substance
satisfactory to the Administrative Agent and covering the matters set
forth in Exhibit D.
(g) The Administrative Agent shall have received (i) a copy of the
certificate or articles of incorporation, including all amendments
thereto, of each of the Borrower, Holdings and Larizza, certified as of
a recent date, and a certificate as to the good standing of each of the
Borrower, Holdings and Larizza as of a recent date, from such Secretary
of State; (ii) a certificate of the Secretary or Assistant Secretary of
each of the Borrower, Holdings and Larizza dated the Closing Date and
certifying (A) that attached thereto is a true and complete copy of the
by-laws of such entity as in effect on the Closing Date and (except as
specified in such certificate) at all times since a date prior to the
date of the resolutions described in clause (B) below, (B) that
attached thereto is a true and complete copy of resolutions duly
adopted by the Board of Directors of such entity authorizing the
execution, delivery and performance of the Loan Documents to which it
is a party, the granting of the Liens thereunder and, in the case of
the Borrower, the borrowings hereunder, and that such resolutions have
not been modified, rescinded or amended and are in full force and
effect, (C) that the certificate or articles of incorporation of such
entity have not been amended since the date of the last amendment
thereto shown on the certificate of good standing furnished pursuant to
clause (i) above, and (D) as to the incumbency and specimen signature
of each officer executing on the Closing Date any Loan Document or any
other document delivered in connection herewith on behalf of such
entity; (iii) a certificate of another officer as to the incumbency and
specimen signature of the Secretary or Assistant Secretary executing
the certificate pursuant to (ii) above; (iv) a certificate or
equivalent documentation from the Secretary of State of each state in
which any of the Borrower, Holdings and Larizza conducts material
business or owns material assets as to the qualification of such entity
to do
33
business and its good standing in such state; and (v) such other
documents as the Lenders or their counsel or Xxxxxxx Xxxxxxx &
Xxxxxxxx, special counsel for the Administrative Agent, may reasonably
request.
(h) The Administrative Agent shall have received a certificate,
dated the Closing Date and signed by a Financial Officer of Holdings
and the Borrower, confirming compliance with the conditions precedent
set forth in paragraphs (b) and (c) of Section 4.01 and those set forth
in paragraphs (l), (n) and (o) of this Section 4.01 (disregarding, for
this purpose, the provisions of any such paragraph that refer to the
satisfaction of the Administrative Agent, its counsel or the Lenders
with any matter).
(i) The Pledge Agreement shall have been duly executed by Holdings
and each Restricted Subsidiary listed therein and delivered to the
Collateral Agent and shall be in full force and effect, all outstanding
shares of capital stock of the Borrower and each domestic subsidiary
thereof (including Larizza), 65% of the outstanding shares of capital
stock of each foreign subsidiary owned directly by the Borrower or a
domestic subsidiary of the Borrower and all inter-company obligations
in excess of $10,000,000 held by Holdings, the Borrower or any
subsidiary of the Borrower and evidenced by notes, bonds or other
instruments shall have been duly and validly pledged to the Collateral
Agent for the benefit of the Secured Parties and certificates
representing all such shares and the instruments representing all such
obligations shall be in the actual possession of the Collateral Agent.
(j) The Collateral Agent shall have received each document
(including Uniform Commercial Code financing statements) required by
law or reasonably requested by the Collateral Agent to be filed,
registered or recorded in order to create in favor of the Collateral
Agent for the benefit of the Secured Parties a valid, legal and
perfected first priority security interest in or lien on the Collateral
that is the subject of the Pledge Agreement. The Collateral Agent shall
have accepted the Acknowledgement.
(k) The Guarantee Agreement shall have been duly executed by
Holdings and each other Guarantor and delivered to the Collateral Agent
and shall be in full force and effect on such date.
(l) Except in connection with the Larizza Acquisition, there shall
not have occurred any material change in the capitalization (whether in
debt or equity), corporate structure or assets of Holdings or any of
its subsidiaries, or any changes in the certificate of incorporation or
by-laws of Holdings or any of its Subsidiaries.
(m) (i) There shall have been delivered to the Lenders true and
correct copies of the Merger Agreement. The Larizza Acquisition,
including all of the terms and conditions thereof, shall have been duly
approved by the board of directors and, if legally required, the
stockholders of the Borrower and each party to the Merger Agreement,
and all Merger Documents shall have been duly executed and delivered by
the parties thereto and shall be in full force and effect. Each of the
material conditions precedent to each party's obligation to consummate
the Merger as set forth in the Merger Documents shall have been
satisfied, or waived, all to the reasonable satisfaction of the
Administrative Agent, and concurrently with the making of the Loans on
the Closing Date the Merger shall have been consummated for an
aggregate merger consideration not to exceed $145,000,000 (excluding
repayment of debt) in accordance with the Merger Documents, any waivers
relating thereto (which, if material, have been approved by the
Administrative Agent, such approval not to be unreasonably withheld),
if any, and all applicable laws, rules and regulations. The Larizza
Acquisition shall have been approved or exempted by all requisite
Governmental Authorities, and all such approvals or exemptions,
including any conditions imposed thereby, shall be in form and
substance acceptable to the Required Lenders in their sole discretion.
No action shall have been taken by any Governmental Authority which
restrains or prevents or seeks to restrain or prevent, or imposes or
seeks to impose materially adverse conditions upon, the Larizza
Acquisition. Without limiting the generality of the foregoing, the
Required Lenders shall be satisfied, in their sole discretion, that all
governmental approvals have been obtained which, if not obtained, could
render the obligations to the Lenders under the Loan Documents either
void or voidable or subordinate them to other claims or obligations or
could impair or subject to subordination the security interests of, or
the exercise of remedies by, the Lenders.
34
(ii) The Administrative Agent shall be satisfied with fees
and expenses relating to the Merger shall not exceed $12,000,000.
(n) No action, suit, litigation or similar proceeding at law or in
equity or by or before any court or Governmental Authority shall exist
or, in the case of litigation by a Governmental Authority, be
threatened, with respect to the Larizza Acquisition which would in the
reasonable opinion of the Required Lenders be likely to have a Material
Adverse Effect.
(o) Larizza shall, on a basis that is reasonably satisfactory to
the Administrative Agent and is substantially contemporaneous with the
Borrowing hereunder on the Closing Date (A) have repaid in full the
principal of and accrued interest on all loans and other amounts
outstanding under the Existing Larizza Credit Agreements, (B) have
terminated the Existing Larizza Credit Agreements and all commitments
thereunder and (C) have obtained the release and termination (or
assignment to the Collateral Agent) of all liens securing obligations
thereunder (including the execution, delivery and filing of all
necessary releases and termination or assignment statements, in form
and substance satisfactory to the Administrative Agent).
(p) The Closing Date shall occur prior to January 31, 1996.
(q) Each Lender and the Administrative Agent shall have received
the pro forma consolidating balance sheet of Holdings described in
Section 3.08(b) and the same shall be satisfactory to the Required
Lenders.
(r) All aspects of the structure and documentation of the Larizza
Acquisition and all corporate and other proceedings taken or to be
taken in connection therewith and all documents incidental thereto
shall be reasonably satisfactory in form and substance to the
Administrative Agent and to Xxxxxxx Xxxxxxx & Xxxxxxxx, special counsel
for the Administrative Agent, and each Lender shall have received
copies of all such documents as such Lender, acting through the
Administrative Agent, may reasonably request. All legal matters
incident to this Agreement and the borrowings hereunder shall be
reasonably satisfactory to the Administrative Agent and to Xxxxxxx
Xxxxxxx & Xxxxxxxx, special counsel for the Administrative Agent.
Each of Holdings and the Borrower hereby directs its counsel referred
to in clause (f) above to deliver the opinions to be delivered by such counsel
pursuant to such paragraph, it being understood that the Lenders will and may
rely thereon.
ARTICLE V.
AFFIRMATIVE COVENANTS
Each of Holdings and the Borrower covenants and agrees that from and
after the Closing Date, so long as this Agreement shall remain in effect or the
principal of or interest on any Loan, any Fees or any other expenses or amounts
payable under or in respect of any Loan Document shall be unpaid, unless the
Required Lenders shall otherwise consent in writing, Holdings and the Borrower
will, and will cause each of the Restricted Subsidiaries to:
SECTION 5.01. Existence; Businesses and Properties. (a) Do or cause to
be done all things necessary to preserve, renew and keep in full force and
effect its legal existence, except as otherwise expressly permitted under
Section 6.08 and except for the liquidation or dissolution of Restricted
Subsidiaries (other than Significant Subsidiaries) if the assets of such
corporations to the extent they exceed estimated liabilities are acquired by a
wholly owned Restricted Subsidiary in such liquidation or dissolution; provided
that Subsidiaries which are Guarantors may not be liquidated into Subsidiaries
that are not Guarantors and domestic Subsidiaries may not be liquidated into
foreign Subsidiaries.
(b) Do or cause to be done all things necessary to obtain, preserve,
renew, extend and keep in full force and effect the rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business; comply in all material respects with
all applicable laws, rules, regulations and
35
orders of any Governmental Authority, whether now in effect or hereafter
enacted; and at all times maintain and preserve all property material to the
conduct of such business and keep such property in good repair, working order
and condition and from time to time make, or cause to be made, all needful and
proper repairs, renewals, additions, improvements and replacements thereto
necessary in order that the business carried on in connection therewith, if any,
may be properly conducted at all times.
(c) Without limiting the generality of the provisions of Section
5.01(b), each of Holdings and the Borrower shall (i)(A) undertake reasonable
efforts to comply, and to cause each Subsidiary to comply, in all material
respects with all Environmental Laws and any order, decree or similar
requirements of any Governmental Authority concerning (1) a material violation
of any Environmental Law, (2) a financial contribution by Holdings or any of its
Subsidiaries under any Environmental Law or (3) a Remedial Action by or on the
part of Holdings or any of its Subsidiaries under any Environmental Law and (B)
undertake reasonable efforts to remedy and to cause each of its Subsidiaries to
remedy, as soon as reasonably practicable, any material violation of
Environmental Laws, except in any case that compliance or remedy shall not be
required insofar as any failure to undertake such efforts cannot reasonably be
expected by Holdings or the Borrower to have a Material Adverse Effect, or so
long as (x) the validity of the same shall be contested diligently and in good
faith, (y) the subject property does not contain a material plant or other
facility or shall then be in no danger of being sold, forfeited or lost pursuant
to such contest and (z) reserves have been established in accordance with GAAP
by Holdings or such subsidiary in connection therewith; and (ii) undertake
reasonable efforts to require and to cause each of its subsidiaries to require,
to the extent practicable and appropriate, that a lease for any renewing or new
tenant contain terms substantially equivalent to those of clause (i) above.
SECTION 5.02. Insurance. Keep its insurable properties insured
(including through self-insurance) at all times by financially sound and
reputable insurers in such amounts as shall be customary for similar businesses
and maintain such other insurance, of such types, to such extent and against
such risks, as is customary with companies in the same or similar businesses,
including insurance against fire and other risks insured against by extended
coverage and public liability insurance against claims for personal injury or
death or property damage occurring upon, in, about or in connection with the use
of any properties owned, occupied or controlled by it; and maintain such other
insurance as may be required by law.
SECTION 5.03. Taxes. Pay and discharge promptly all taxes, assessments
and governmental charges or levies imposed upon it or upon its income or profits
or in respect of its property, before the same shall become delinquent or in
default, as well as all lawful claims for labor, materials and supplies or
otherwise which, if unpaid, might give rise to a Lien upon such properties or
any part thereof; provided, however, that such payment and discharge shall not
be required with respect to any such tax, assessment, charge, levy or claim so
long as (a) the validity or amount thereof shall be contested in good faith by
appropriate proceedings and Holdings or any Restricted Subsidiary, as
applicable, shall set aside on its books adequate reserves as required by GAAP
with respect thereto, (b) such tax, assessment, charge, levy or claim is in
respect of property taxes for property that Holdings or one of the Restricted
Subsidiaries has determined to abandon and the sole recourse for such tax,
assessment, charge, levy or claim is to such property or (c) the amount of such
taxes assessments, charges, levies and claims and interest and penalties thereon
does not exceed $1,000,000 in the aggregate.
SECTION 5.04. Financial Statements, Reports, Amendments, etc. In the
case of Holdings, furnish to the Administrative Agent for distribution to each
1995 Credit Agreement Creditor (with sufficient copies for each 1995 Credit
Agreement Creditor):
(a) within 90 (or, in the case of clause (ii) below, 105) days
after the end of each fiscal year (x) consolidated balance sheets and
related statements of income and cash flows, showing the consolidated
financial condition of each of (i) Holdings and its Subsidiaries and
(ii) Holdings and the Restricted Subsidiaries, in each case as of the
close of such fiscal year and the results of their operations during
such year, audited in the case of clause (i) above by Xxxxxx Xxxxxxxx &
Co. or other independent public accountants of recognized national
standing (who shall be reasonably acceptable to the Administrative
Agent) and accompanied by (1) in the case of clause (i), an opinion of
such accountants (which shall not be qualified in any material respect)
to the effect that such consolidated financial statements fairly
present
36
the financial condition and results of operations of Holdings and its
consolidated subsidiaries and Holdings and the Restricted Subsidiaries,
respectively, in accordance with GAAP and (2) a certificate of a
Financial Officer certifying that such consolidated financial
statements fairly present the financial condition and results of
operations of Holdings and its consolidated subsidiaries and Holdings
and the Restricted Subsidiaries, respectively, in accordance with GAAP
consistently applied (except as disclosed in such certificate, in
reasonable detail, which detail shall be reasonably acceptable to the
Administrative Agent) and (y) a statement of stockholders' equity of
Holdings, presented on a basis consistent with the financial statements
furnished pursuant to clause (x) above, and certified by one of
Holdings' Financial Officers as fairly presenting the stockholders'
equity of Holdings in accordance with GAAP consistently applied (except
as disclosed in such certificate in reasonable detail, which detail
shall be reasonably acceptable to the Administrative Agent);
(b) within 45 (or, in the case of clause (ii) below, 60) days
after the end of each of the first three fiscal quarters of each fiscal
year, the consolidated balance sheets and related statements of income
and cash flows, showing the consolidated financial condition of each of
(i) Holdings and its Subsidiaries and (ii) Holdings and the Restricted
Subsidiaries, in each case as of the close of such fiscal quarter and
the results of their operations during such fiscal quarter and the then
elapsed portion of the fiscal year, together with the balance sheets
and related statements of income and cash flows as of the corresponding
dates and for the corresponding periods in the prior year, all
certified by one of its Financial Officers as fairly presenting the
consolidated financial condition and results of operations of Holdings
and its consolidated subsidiaries and Holdings and the Restricted
Subsidiaries, respectively, in accordance with GAAP (other than the
absence of footnotes in accordance with GAAP) consistently applied
(except as disclosed in such certificate in reasonable detail, which
detail shall be reasonably acceptable to the Administrative Agent),
subject to normal year-end audit adjustments;
(c) concurrently with any delivery of financial statements under
(a) or (b) above, a certificate (a "Compliance Certificate") of the
accounting firm or Financial Officer (which certificate shall be in the
form of Exhibit E if delivered by a Financial Officer) opining on or
certifying such statements (which certificate, when furnished by an
accounting firm, may be limited to accounting matters and disclaim
responsibility for legal interpretations) (i) certifying that no
Default or Event of Default has occurred or, if such Default or Event
of Default has occurred, specifying the nature and extent thereof and
any corrective action taken or proposed to be taken with respect
thereto and (ii) setting forth computations in reasonable detail (which
detail shall be reasonably satisfactory to the Administrative Agent)
demonstrating compliance with the covenants contained in Sections 6.14,
6.15, 6.16 and 6.17;
(d) if, as a result of any change in accounting principles and
policies from those as in effect on the date of this Agreement, the
consolidated financial statements of Holdings and the Subsidiaries or
Holdings and the Restricted Subsidiaries, as the case may be, delivered
pursuant to clauses (a) and (b) above will differ in any material
respect from the consolidated financial statements that would have been
delivered pursuant to such clauses had no such change in accounting
principles and policies been made, then, together with the first
delivery of financial statements pursuant to clauses (a) and (b) above
following such change, a schedule prepared by a Financial Officer
reconciling such changes to what the financial statements would have
been without such changes;
(e) promptly after the same become publicly available, copies of
all periodic reports and proxy statements and, to the extent requested
by the Administrative Agent, any other materials filed by Holdings or
any of its Subsidiaries with the Securities and Exchange Commission
under the Securities Exchange Act of 1934, or any Governmental
Authority succeeding to any of or all the functions of said Commission,
or with any national securities exchange, or distributed to its
shareholders generally, as the case may be;
(f) within 90 days after the beginning of each fiscal year, a copy
of the annual income and capital expenditure budget for such fiscal
year;
37
(g) promptly, from time to time, such other information regarding
the operations, business affairs and financial condition of Holdings or
any of its Restricted Subsidiaries, or compliance with the terms of any
Loan Document, as any 1995 Credit Agreement Creditor, acting through
the Administrative Agent, may reasonably request;
(h) promptly, a copy of any amendment or waiver of any provisions
of any agreement which amendment or waiver is described in Section
6.10 or 6.11;
(i) promptly following the creation or acquisition of any
Subsidiary, a certificate from a Responsible Officer, identifying such
new Subsidiary and the ownership interest of Holdings and its
Subsidiaries therein; and concurrently with the delivery of financial
statements under (a) or (b) above, a description of the Investments in
Unrestricted Subsidiaries made during the fiscal quarter ending on the
date of such financial statements and the amount thereof; provided,
that with respect to the Subordinated Notes owed by Carcorp, Inc. under
the receivables financing facility (the "Sub Notes"), the Borrower
shall not be required to report any changes in the outstanding
principal amount of the Sub Notes, unless the aggregate outstanding
principal amount of such Sub Notes exceeds $75,000,000;
(j) if requested by the Administrative Agent, within 105 days
following the end of any fiscal year of any Unrestricted Subsidiary, a
balance sheet and related statements of income and cash flow for such
Unrestricted Subsidiary at the end of and for such fiscal year; and
(k) promptly, a copy of all reports submitted in connection with
any interim or special audit made by independent accountants of the
books of Holdings or any of its Subsidiaries.
SECTION 5.05. Litigation and Other Notices. Furnish to each 1995
Credit Agreement Creditor prompt written notice of the following:
(a) any Default or Event of Default, specifying the nature and
extent thereof and the corrective action (if any) proposed to be taken
with respect thereto;
(b) the filing or commencement of any action, suit or proceeding,
whether at law or in equity or by or before any Governmental Authority,
against Holdings or any Subsidiary in respect of which there is a
reasonable possibility of an adverse determination and which, if
adversely determined, could reasonably be expected to result in a
Material Adverse Effect; and
(c) any development specific to Holdings and its Subsidiaries and
not otherwise publicly disclosed known to a Responsible Officer that
has resulted in, or could reasonably be anticipated to result in, a
Material Adverse Effect.
SECTION 5.06. ERISA. (a) Comply in all material respects with the
applicable provisions of ERISA and (b) furnish to each 1995 Credit Agreement
Creditor (i) as soon as possible, and in any event within 30 days after any
Responsible Officer of the Borrower, any Guarantor or any ERISA Affiliate of any
of them knows or has reason to know that any Reportable Event has occurred that
alone or together with any other Reportable Event could reasonably be expected
to result in liability of the Borrower, any Guarantor or any of their ERISA
Affiliates to the PBGC in an aggregate amount exceeding $10,000,000, a statement
of a Financial Officer setting forth details as to such Reportable Event and the
action proposed to be taken with respect thereto, together with a copy of the
notice, if any, of such Reportable Event given to the PBGC, (ii) promptly after
any Responsible Officer learns of receipt thereof, a copy of any notice the
Borrower or any Guarantor or any of their ERISA Affiliates may receive from the
PBGC relating to the intention of the PBGC to terminate any Plan or Plans (other
than a Plan maintained by any of their ERISA Affiliates which is considered an
ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the
Code) or to appoint a trustee to administer any Plan or Plans, (iii) within 20
days after the due date for filing with the PBGC pursuant to Section 412(n) of
the Code a notice of failure to make a required installment or other payment
with respect to a Plan, a statement of a Financial Officer setting forth details
as to such failure and the action proposed to be taken with respect thereto,
together with a copy of such notice given to the PBGC and (iv)
38
promptly after any Responsible Officer learns thereof and in any event within 30
days after receipt thereof by the Borrower, any Guarantor or any ERISA Affiliate
from the sponsor of a Multiemployer Plan, a copy of each notice received by the
Borrower, any Guarantor or such ERISA Affiliate concerning (A) the imposition of
Withdrawal Liability or (B) a determination that a Multiemployer Plan is, or is
expected to be, terminated or in reorganization, in each case within the meaning
of Title IV of ERISA.
SECTION 5.07. Maintaining Records; Access to Properties and
Inspections. Maintain all financial records in accordance with GAAP and permit
any persons designated by the Administrative Agent (or, during the continuance
of an Event of Default, any Lender) to visit and inspect the financial records
and the properties of Holdings or any Restricted Subsidiary at reasonable times,
upon reasonable notice and as often as reasonably requested and to make extracts
from and copies of such financial records, and permit any persons designated by
the Administrative Agent (or, during the continuance of an Event of Default, any
Lender) to discuss the affairs, finances and condition of Holdings or any
Restricted Subsidiary with the officers thereof and independent accountants
therefor (subject to reasonable requirements of confidentiality, including
requirements imposed by law or by contract).
SECTION 5.08. Use of Proceeds. Use the proceeds of the Loans solely (i)
to pay the merger consideration for the Merger, (ii) to repay the principal of
and accrued interest on all loans and all other amounts outstanding under the
Existing Larizza Credit Agreements, and other Indebtedness of Larizza and its
subsidiaries and (iii) to fund fees and expenses related to the Larizza
Acquisition.
SECTION 5.09. Further Assurances. Execute any and all further
documents, financing statements, agreements and instruments, and take all
further action (including filing UCC financing statements, mortgages and deeds
of trust), which may be required under applicable law, or which the Collateral
Agent may reasonably request, in order to effectuate the transactions
contemplated by the Loan Documents, in order to release the security interests
securing obligations in respect of the Existing Larizza Credit Agreements and in
order to grant, preserve, protect and perfect the validity and first priority
(subject to Liens permitted by Section 6.04) of the security interests created
or intended to be created pursuant to the Pledge Agreement. In addition, from
time to time, Holdings and the Restricted Subsidiaries will, at their cost and
expense, subject to the obtaining of any required regulatory authorizations
(which Holdings and Borrower agree to use their best efforts to obtain) promptly
secure the Obligations by causing the following to occur: (i) promptly upon
creating or acquiring any additional subsidiary, the stock of such subsidiary
will (unless such subsidiary is a subsidiary of an Unrestricted Subsidiary or of
a foreign subsidiary) be pledged pursuant to the Pledge Agreement, provided that
no more than 65% of the capital stock of any foreign subsidiary shall be
required to be pledged pursuant to this Section 5.09, and (ii) such subsidiary
will (unless such subsidiary is an Unrestricted Subsidiary or a foreign
subsidiary) become a party to the Guarantee Agreement. All such security
interests and Liens will be created under the Pledge Agreement and other
security agreements and other instruments and documents in form and substance
reasonably satisfactory to the Collateral Agent, and Holdings and the Restricted
Subsidiaries shall deliver or cause to be delivered to the Administrative Agent
all such instruments and documents (including legal opinions and lien searches)
as the Required Lenders shall reasonably request to evidence compliance with
this Section 5.09. Holdings and the Restricted Subsidiaries agree to provide
such evidence as the Administrative Agent shall reasonably request as to the
perfection and priority status of each such security interest and Lien.
SECTION 5.10. Change in Ownership. In the case of Holdings, own
directly at all times, legally and beneficially, 100% of the capital stock of
the Borrower, free of Liens except Liens in favor of the Collateral Agent; and,
in the case of Borrower, own (a) directly at all times, legally and
beneficially, 100% of the capital stock of the Finance Subsidiary free of Liens
except Liens in favor of the Collateral Agent and (b) directly or indirectly at
all times, legally and beneficially, 100% of the capital stock of C&A Canada
free of Liens except Liens, if any, in favor of the Collateral Agent.
SECTION 5.11. Fiscal Year; Accounting. In the case of each of Holdings
and its subsidiaries, cause its respective fiscal year to end on the last
Saturday in January.
SECTION 5.12. Dividends. In the case of the Borrower, permit its
subsidiaries to pay dividends and cause such dividends to be paid to the
extent required to pay the monetary Obligations.
39
SECTION 5.13. Rate Protection Agreements. As promptly as practicable
and in any event within 90 days after the Closing Date, enter into, and
thereafter maintain in effect, one or more interest rate protection agreements
(including interest rate swaps, caps, collars and other interest rate hedging
transactions) with any of the Lenders or other financial institutions reasonably
satisfactory to the Administrative Agent, the effect of which shall be to limit
for at least two years the interest payable by the Borrower in connection with
Indebtedness under this Agreement having an aggregate outstanding principal
amount not less than an amount equal to 40% of the aggregate principal amount of
the Loans projected to be outstanding during such period on terms and conditions
reasonably acceptable, taking into account current market conditions, to the
Administrative Agent and deliver evidence of the execution and delivery thereof
to the Administrative Agent.
SECTION 5.14. Corporate Separateness. Cause the management, business
and affairs of each of Holdings and the Subsidiaries to be conducted in such a
manner so that each of Holdings and the Unrestricted Subsidiaries will be
perceived as a legal entity separate and distinct from each other and the
Restricted Subsidiaries.
SECTION 5.15. Business of Restricted Subsidiaries. Cause all of the
business and activities of the Restricted Subsidiaries to be performed and
conducted by the Borrower and Restricted Subsidiaries which are subsidiaries
of the Borrower.
ARTICLE VI.
NEGATIVE COVENANTS
Each of Holdings and the Borrower covenants and agrees that from and
after the Closing Date, so long as this Agreement shall remain in effect or any
monetary Obligation shall be unpaid, unless the Required Lenders shall otherwise
consent in writing, Holdings and the Borrower will not, and will not cause or
permit any Restricted Subsidiary to:
SECTION 6.01. Indebtedness. Incur, create, assume or permit to exist
any Indebtedness, except:
(a) Indebtedness of the Borrower and the Restricted Subsidiaries
for borrowed money in an amount not to exceed $23,000,000 under
agreements existing on June 22, 1994 and set forth in Schedule 6.01 and
other Indebtedness existing on the Closing Date, but not any
extensions, renewals or refinancings of such Indebtedness except (i)
renewals and extensions expressly provided for in the agreements
evidencing any such Indebtedness as the same are in effect on the date
of this Agreement and (ii) refinancings and extensions of any such
Indebtedness if the interest rate with respect thereto and other terms
thereof are no less favorable than the Indebtedness being refinanced or
extended and the average life to maturity thereof is greater than or
equal to the Indebtedness being refinanced or extended (provided that
such Indebtedness permitted under clause (i) or clause (ii) above shall
not be (A) Indebtedness of an obligor that was not an obligor with
respect to the Indebtedness being extended, renewed or refinanced, (B)
in a principal amount which exceeds the Indebtedness being renewed,
extended or refinanced or (C) incurred, created or assumed if any
Default or Event of Default has occurred and is continuing or would
result therefrom);
(b) Indebtedness of the Borrower consisting of contingent
liabilities arising from indemnities and other contractual obligations
of the Borrower existing on June 22, 1994 from the sale of properties
prior to the date hereof by Holdings and the Borrower and their
predecessors;
(c) So long as immediately after giving effect to the incurrence
thereof: (i) no Default or Event of Default shall have occurred and be
continuing and (ii) the outstanding principal amount of the 1994 Term
Loans and 1994 Canadian Term Loans is less than $350,000,000, Permitted
Subordinated Indebtedness;
(d) Indebtedness of (i) the Borrower to any subsidiary of the
Borrower evidenced, if the amount of such Indebtedness exceeds
$10,000,000, by an Intercompany Note pledged to the Collateral Agent
under the Pledge Agreement, (ii) any Domestic Restricted Subsidiary to
the Borrower evidenced, if the amount
40
of such Indebtedness exceeds $10,000,000, by an Intercompany Note
pledged to the Collateral Agent under the Pledge Agreement, (iii) any
Domestic Restricted Subsidiary to any other Restricted Subsidiary
evidenced, if the amount of such Indebtedness exceeds $10,000,000, by
an Intercompany Note pledged to the Collateral Agent under the Pledge
Agreement, (iv) any Restricted Subsidiaries other than Domestic
Restricted Subsidiaries to the Borrower or to any other Restricted
Subsidiary in an aggregate principal amount not at any time in excess
of $10,000,000 and evidenced by one or more Intercompany Notes pledged
to the Collateral Agent under the Pledge Agreement if the outstanding
amount of such Indebtedness exceeds $5,000,000 in the aggregate, (v)
Holdings to the Borrower in an amount not greater than $2,000,000 at
any time and (vi) Manchester Plastics, Ltd. to any Domestic Restricted
Subsidiary in an aggregate principal amount not to exceed $35,000,000,
evidenced by one or more Intercompany Notes pledged to the Collateral
Agent under the Pledge Agreement; provided that no Indebtedness may be
incurred under this paragraph (d) by any Domestic Restricted Subsidiary
of the Borrower that is not a Guarantor;
(e) Capital Lease Obligations and Purchase Money Indebtedness
incurred by the Borrower (or any other Restricted Subsidiary in the
case of Purchase Money Indebtedness incurred not in excess of
$10,000,000 in the aggregate at any time outstanding) prior to or
within 270 days after a Capital Expenditure permitted under Section
6.03 in order to finance such Capital Expenditure, and extensions,
renewals and refinancings thereof if the interest rate with respect
thereto and other terms thereof are no less favorable than the
Indebtedness being refinanced and the average life to maturity thereof
is greater than or equal to the Indebtedness being refinanced (provided
that such Indebtedness shall not be (A) Indebtedness of an obligor that
was not an obligor with respect to the Indebtedness being extended,
renewed or refinanced, (B) in a principal amount which exceeds the
Indebtedness being renewed, extended or refinanced or (C) incurred,
created or assumed if any Default or Event of Default has occurred and
is continuing or would result therefrom);
(f) Capital Lease Obligations incurred by the Borrower or any
Restricted Subsidiary in respect of any Sale and Leaseback Transaction
that is permitted under Section 6.06;
(g) Indebtedness of the Borrower and its subsidiaries in the
nature of Interest Rate Agreements and other interest rate and foreign
currency hedging transactions entered into in order to fix the
effective rate of interest, or to hedge against currency fluctuations,
on the Loans and other Indebtedness (it being understood that such
transactions shall be entered into for business purposes and not for
the purpose of speculation);
(h) Indebtedness of a Domestic Restricted Subsidiary which
represents the assumption by such Domestic Restricted Subsidiary of
Indebtedness of a Restricted Subsidiary in connection with the merger
of such Restricted Subsidiary with or into the assuming Domestic
Restricted Subsidiary or the purchase of all or substantially all the
assets of such other Restricted Subsidiary;
(i) Indebtedness of the Restricted Subsidiaries in respect of
performance bonds, bid bonds, appeal bonds, bankers acceptances,
letters of credit and surety bonds provided in the ordinary course of
business, and any extension, renewal or refinancing thereof to the
extent not provided to secure the repayment of other Indebtedness and
to the extent that the amount of refinancing Indebtedness is not
greater than the amount of Indebtedness being refinanced;
(j) Indebtedness arising from the honoring by a bank or other
financial institutions of a check, draft or similar instrument drawn
against insufficient funds in the ordinary course of business; provided
that such Indebtedness is extinguished within two Business Days of its
incurrence;
(k) Indebtedness of a Restricted Subsidiary acquired after the
date hereof and Indebtedness of a corporation merged or consolidated
with or into a Restricted Subsidiary after the date hereof, which
Indebtedness exists at the time of such acquisition, merger or
consolidation and is not created in contemplation of such event and
such acquisition, merger or consolidation is permitted by this
Agreement,
41
provided that the aggregate principal amount of Indebtedness under
this clause (k) shall not exceed $50,000,000;
(l) (i) Indebtedness under this Agreement and (ii) Indebtedness of
the Borrower incurred after the date hereof, which Indebtedness is
created or incurred at the time of any Permitted Business Acquisition
to finance such acquisition; provided that the aggregate principal
amount of Indebtedness which may be created or incurred under this
paragraph (l)(ii) together with Indebtedness permitted by paragraph (k)
above shall not exceed $3,000,000;
(m) Indebtedness owed to (including obligations in respect of
letters of credit for the benefit of) any person providing worker's
compensation, health, disability or other employee benefits, property,
casualty, liability or other insurance to Holdings or any Subsidiary,
pursuant to reimbursement or indemnification obligations to such
person;
(n) (i) Indebtedness under the 1994 Credit Agreement and the
Guarantees thereof by the Guarantors pursuant to the Guarantee
Agreement and (ii) Indebtedness represented by the Guarantees of
Indebtedness permitted under clause (l) above by the Guarantors
pursuant to the Guarantee Agreement;
(o) other Capital Lease Obligations of the Restricted
Subsidiaries in an aggregate principal amount at any time outstanding
not in excess of $10,000,000;
(p) other unsecured Indebtedness of the Borrower and C&A Canada in
an aggregate principal amount at any time outstanding not in excess of
$40,000,000 and unsecured Guarantees by the Borrower of any
Indebtedness of C&A Canada incurred in accordance with this clause (p);
(q) other Indebtedness of the Borrower or any other Restricted
Subsidiary together with Indebtedness listed on Schedule 6.01 (as such
Indebtedness may be refinanced as permitted by Section 6.01(a)) in an
aggregate principal amount outstanding at any time not to exceed
$35,000,000; and
(r) all premium (if any), interest (including post-petition
interest), fees, expenses, indemnities, charges and additional or
contingent interest on obligations described in clauses (a) through (q)
above.
SECTION 6.02. Dividends and Distributions. Declare or pay, directly or
indirectly, any dividend or make any other distribution (by reduction of capital
or otherwise), whether in cash, property, securities or a combination thereof,
with respect to any shares of its capital stock (other than dividends and
distributions on Holdings Common Stock payable solely by the issuance of
additional shares of Holdings Common Stock) or directly or indirectly redeem,
purchase, retire or otherwise acquire for value (or permit any Restricted
Subsidiary to purchase or acquire) any shares of any class of its capital stock
or any option, warrant or other right to acquire shares of such stock or set
aside any amount for any such purpose; provided, however, that:
(a) any Subsidiary may declare and pay dividends or make other
distributions to the Borrower or to wholly owned Restricted
Subsidiaries;
(b) if at the time thereof and after giving effect thereto no
Default or Event of Default shall have occurred and be continuing,
Holdings may pay dividends in cash on its common stock or preferred
stock or may redeem, purchase, retire or otherwise acquire for value
its common stock or preferred stock provided that the sum of such
dividends and consideration paid for such redemptions, purchases,
retirements and other acquisitions in any fiscal year shall not exceed
$12,000,000;
(c) if at the time thereof and after giving effect thereto no
Default or Event of Default shall have occurred and be continuing and
the Dividend Condition shall have been met, Holdings may pay dividends
in cash on its common stock or any preferred stock and may redeem,
purchase, retire or otherwise acquire for value its common stock or any
preferred stock in any fiscal year in an amount not to exceed in the
aggregate for all such transactions 25% of Net Income for the prior
fiscal year less the amount of dividends
42
and consideration (for redemptions, purchases, retirements and other
acquisitions) paid in such current fiscal year pursuant to clause (b)
above;
(d) if at the time thereof and after giving effect thereto no
Default or Event of Default shall have occurred and be continuing,
Holdings may repurchase director's qualifying shares of Holdings and
capital stock of Holdings and options therefor of employees and
directors of Holdings and the Restricted Subsidiaries provided that (i)
no such repurchase may be made unless Holdings is obligated to do so at
the time of repurchase pursuant to contractual agreements between
Holdings and the applicable officer or director and (ii) the aggregate
amount paid by Holdings in connection with such repurchases at any time
shall not exceed $3,000,000 plus the aggregate amount (but only to the
extent such amount is simultaneously contributed by Holdings to the
Borrower) received by Holdings from the sale or issuance of its capital
stock or options therefor to officers and directors of Holdings and the
Restricted Subsidiaries after the 1994 Closing Date;
(e) the Borrower may pay dividends or make other distributions to
Holdings in amounts sufficient to allow Holdings to pay (i) Permitted
Tax Payments and state and local taxes and other governmental charges,
and administrative and routine expenses required to be paid by Holdings
in the ordinary course of its business, (ii) the dividends, other
consideration (for redemptions, purchases, retirements and other
acquisitions of common stock and preferred stock) and other amounts
contemplated by clauses (b) and (c) above; provided that dividends paid
to Holdings pursuant to this clause (ii) in order to permit Holdings to
pay dividends are used by Holdings for such purpose within 20 days of
the receipt of such dividends by Holdings, (iii) the repurchase price
for the capital stock and options therefor of Holdings contemplated by
clause (d) above provided that such dividends pursuant to clause (iii)
are used by Holdings for such purpose within 20 days of the receipt of
such dividends by Holdings and (iv) the amount of any Investment in an
Unrestricted Subsidiary if the Borrower and the Restricted Subsidiaries
could have made such Investment in Unrestricted Subsidiaries pursuant
to Section 6.07 (l) (but on the assumption that the Borrower could
otherwise invest in such Unrestricted Subsidiary); provided that such
dividends pursuant to clause (iv) are used by Holdings for such purpose
within 20 days of receipt of such dividends by Holdings; provided
further that no dividend may be paid to Holdings pursuant to clause
(ii) or (iii) or (iv) if at the time of such dividend or after giving
effect thereto a Default or Event of Default shall have occurred and be
continuing; and
(f) the foregoing shall not prohibit the ESOP Investment.
SECTION 6.03. Capital Expenditures. Permit Capital Expenditures of the
Restricted Subsidiaries on a consolidated basis during any fiscal year to be
greater than the amount set forth below for such fiscal year:
Fiscal Year Amount
1994 $85,000,000
1995 130,000,000
1996 80,000,000
1997 80,000,000
1998 80,000,000
1999 80,000,000
2000 80,000,000
2001 80,000,000
2002 80,000,000
provided, however, that (i) to the extent Capital Expenditures made in
any fiscal year are less than the amount set forth above opposite such
fiscal year, Restricted Subsidiaries shall be permitted to carry
forward the unused amount to the succeeding fiscal years so long as
such aggregate Capital Expenditures in any fiscal year do not exceed
$130,000,000; (ii) Capital Expenditures may not be made by Holdings;
and (iii)
43
Capital Expenditures that are refinanced with Sale and Lease-Back
Transactions within 270 days of acquisition which result in Operating
Leases shall be deemed not to be Capital Expenditures.
SECTION 6.04. Liens. Create, incur, assume or permit to exist any Lien
on any property or assets (including stock or other securities) now owned or
hereafter acquired by it or on any income or rights in respect of any thereof,
except:
(a) Liens on property or assets of the Restricted Subsidiaries
existing on the date of this Agreement and, in the case of Liens
securing Indebtedness for borrowed money, set forth in Schedule 6.04;
provided that such Liens shall secure only those obligations which they
secure on such date (and extensions, renewals and refinancings of such
obligations permitted by Section 6.01(a)) and do not subsequently apply
to any other property or assets of Holdings or any Restricted
Subsidiary;
(b) any Lien on any property or asset used by a Restricted
Subsidiary in the ordinary course of business, which Lien existed prior
to the acquisition thereof by such subsidiary; provided that (i) such
Lien is not created in contemplation of or in connection with such
acquisition and (ii) such Lien does not apply to any other property or
assets of any other Restricted Subsidiary;
(c) any Lien on any property or asset of a Restricted Subsidiary
securing Indebtedness permitted by Section 6.01(k), provided that such
Lien does not apply to any other property or assets of Holdings or any
Restricted Subsidiary not securing such Indebtedness at the date of
acquisition of such property or asset;
(d) Liens for taxes, assessments or other governmental charges or
levies not yet due, or which are for less than $1,000,000 in the
aggregate, or which are being contested in compliance with Section 5.03
or for property taxes for property that the Borrower or one of its
Restricted Subsidiaries has determined to abandon if the sole recourse
for such tax, assessment, charge, levy or claim is to such property;
(e) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business and securing obligations which are not due or which are being
contested in good faith by appropriate proceedings and in respect of
which, if applicable, Holdings or the relevant Restricted Subsidiary
shall have set aside on its books reserves in accordance with GAAP;
(f) pledges and deposits made in the ordinary course of business
in compliance with the Federal Employers Liability Act or any other
workmen's compensation, unemployment insurance and other social
security laws or regulations and deposits securing liability to
insurance carriers under insurance or self-insurance arrangements;
(g) deposits to secure the performance of bids, trade contracts
(other than for Indebtedness), leases (other than Capital Lease
Obligations), statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in
the ordinary course of business;
(h) zoning restrictions, easements, trackage rights, leases (other
than Capital Lease Obligations), licenses, special assessments,
rights-of-way, restrictions on use of real property and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and do not materially detract
from the value of the property subject thereto or interfere in any
material respect with the ordinary conduct of the business of any
Restricted Subsidiary;
(i) purchase money security interests in real property,
improvements thereto or equipment hereafter acquired (or, in the case
of improvements, constructed) by any Restricted Subsidiary (including
without limitation, the interests of vendors and lessors under
conditional sale and title retention agreements); provided that (i)
such security interests secure Indebtedness permitted by Section 6.01,
(ii) such security interests are incurred, and the Indebtedness secured
thereby is created, within 270 days after such acquisition (or
construction), (iii) the Indebtedness secured thereby does not exceed
100% of the cost of such real property, improvements or equipment at
the time of such acquisition (or construction), (iv) such
44
expenditures are Capital Expenditures permitted under Section 6.03 and
(v) such security interests do not apply to any other property or
assets of any Restricted Subsidiary (other than to accessions to such
real property, improvements or equipment and provided that individual
financings of equipment provided by a single lender may be
cross-collateralized to other financings of equipment provided solely
by such lender);
(j) Liens created in favor of the Collateral Agent for the
benefit of the Secured Parties;
(k) Liens securing reimbursement obligations in respect of
commercial letters of credit permitted under Section 6.01 and covering
the goods (or the documents of title in respect of such goods) financed
by such letters of credit;
(l) Liens arising out of capitalized or operating lease
transactions permitted under Section 6.06, so long as such Liens (i)
attach only to the property sold in such transaction and any accessions
thereto and (ii) do not interfere with the business of Holdings and the
Restricted Subsidiaries in any material respect;
(m) any Lien on assets of a person securing Indebtedness of such
person permitted by Section 6.01(q);
(n) any Lien arising by operation of law pursuant to Section
107(1) of the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. ss. 9607(l), or pursuant to analogous state
law, for costs or damages which are not yet due (by virtue of a written
demand for payment by a Governmental Authority) or which are being
contested in compliance with Section 5.03, or on property that a
Restricted Subsidiary has determined to abandon if the sole recourse
for such costs or damages is to such property, provided that the
liability of Holdings and the Restricted Subsidiaries with respect to
the matter giving rise to such Lien shall not, in the reasonable
estimate of the Borrower (in light of all attendant circumstances,
including the likelihood of contribution by third parties), exceed
$7,500,000;
(o) any leases or subleases to other persons of properties or
assets owned or leased by a Restricted Subsidiary;
(p) Liens consisting of interests of lessors under capital leases
permitted by Section 6.01;
(q) Liens securing judgements for the payment of money in an
aggregate amount not in excess of $7,500,000 (to the extent not covered
by insurance) which judgements shall not be undischarged or stayed for
a period of more than 30 consecutive days;
(r) the replacement, extension or renewal of any Lien permitted by
clause (b), (c) or (i) above, provided that such replacement, extension
or renewal Lien shall not cover any property other than the property
that was subject to such Lien prior to such replacement, extension or
renewal and provided further that the Indebtedness and other
obligations secured by such replacement, extension or renewal Lien are
permitted by this Agreement;
(s) other Liens with respect to property or assets not
constituting collateral for the Obligations with an aggregate fair
market value of not more than $25,000,000 at any time; and
(t) Permitted Receivables Financing.
SECTION 6.05. Priority of Loan Payments. (a) Until the Commitments have
been terminated and the Obligations have been indefeasibly paid in full,
directly or indirectly, make any payment, retirement, repurchase or redemption
on account of the principal of any Permitted Subordinated Indebtedness or
directly or indirectly prepay any Permitted Subordinated Indebtedness prior to
the stated maturity date of such Permitted Subordinated Indebtedness, make any
payment or prepayment of any Permitted Subordinated Indebtedness which would
violate the terms of this Agreement or of such Permitted Subordinated
Indebtedness, any agreement or document evidencing,
45
related to or securing the payment or performance of the Permitted Subordinated
Indebtedness or any subordination agreement applicable to such Permitted
Subordinated Indebtedness.
(b) Until the Commitments have been terminated and the Obligations have
been indefeasibly paid in full, repay any Funded Debt of Holdings and the
Restricted Subsidiaries except:
(i) the Obligations;
(ii) payments of Funded Debt made in conformity with the
regularly scheduled maturity thereof or mandatory prepayment provisions
thereof;
(iii) if no Default or Event of Default has occurred and is
continuing or would result therefrom, refinancings permitted by
Section 6.01;
(iv) if no Default or Event of Default has occurred and is
continuing or would result therefrom, prepayments by a Restricted
Subsidiary of its Funded Debt acquired in connection with a Permitted
Business Acquisition;
(v) if no Default or Event of Default has occurred and is
continuing or would result therefrom, prepayments of up to $10,000,000
in the aggregate of other Funded Debt of the Restricted Subsidiaries;
(vi) repayments of the 1994 Revolving Loans and Swing Line Loans
(as defined in the 1994 Credit Agreement); and
(vii) so long as the Loans are ratably prepaid in the same
proportion, optional prepayments of the 1994 Term Loans, 1994 Canadian
Term Loans and 1994 Delayed Draw Term Loans.
SECTION 6.06. Sale and Lease-Back Transactions. Enter into any
arrangement, directly or indirectly, with any person whereby Holdings or any
Restricted Subsidiary shall sell or transfer any property, real or personal,
used or useful in its business, whether now owned or hereafter acquired, and
thereafter rent or lease such property or other property which it intends to use
for substantially the same purpose or purposes as the property being sold or
transferred (a "Sale and Lease-Back Transaction"), other than any Sale and
Lease-Back Transaction which involves a sale by the Borrower or a Restricted
Subsidiary solely for cash consideration on terms not less favorable than would
prevail in an arms'-length transaction and which (a) results in a Capital Lease
Obligation or an Operating Lease, in either case entered into to finance a
Capital Expenditure permitted by Section 6.03 consisting of the initial
acquisition by such subsidiary of the property sold or transferred in such Sale
and Lease-Back Transaction, provided that such Sale and Lease-Back Transaction
occurs within 270 days after such acquisition or (b) results in a Capital Lease
Obligation or an Operating Lease entered into for any other purpose (provided
that any such Sale and Lease-Back Transaction in reliance upon this clause (b)
shall be deemed to be a Prepayment Event).
SECTION 6.07. Investments, Loans and Advances. Purchase, hold or
acquire any capital stock, evidences of indebtedness or other securities of,
make or permit to exist any loans or advances to, or make or permit to exist any
investment or any other interest in (collectively, an "Investment"), any other
person, except:
(a) Permitted Investments and Investments that were Permitted
Investments when made;
(b) Investments by Holdings in the Borrower and Investments by a
Restricted Subsidiary in another Domestic Restricted Subsidiary;
(c) Investments arising out of the receipt by the Borrower of
noncash consideration for the sale of assets permitted under Section
6.08 provided that such consideration (if the stated amount or value
thereof is in excess of $1,000,000) is pledged upon receipt pursuant to
the Pledge Agreement;
(d) intercompany loans permitted to be incurred as Indebtedness
under Section 6.01(d);
46
(e) Investments by a wholly-owned Restricted Subsidiary
constituting Permitted Business Acquisitions;
(f) (i) loans and advances to employees of any Restricted
Subsidiary not to exceed $300,000 at any time outstanding to any one
employee and not to exceed $2,000,000 in the aggregate at any time
outstanding and (ii) advances of payroll payments and expenses to
employees in the ordinary course of business;
(g) accounts receivable arising and trade credit granted in the
ordinary course of business and any securities received in satisfaction
or partial satisfaction thereof from financially troubled account
debtors to the extent reasonably necessary in order to prevent or limit
loss;
(h) an Investment by the Borrower or any of the Restricted
Subsidiaries in any Finance Subsidiary that the Borrower is
incorporating, but only to the extent necessary to incorporate such
Finance Subsidiary and acquire its capital stock and subordinated
indebtedness in connection with sales of receivables, all with the
minimum capitalization necessary;
(i) investments, other than investments listed in clauses (a)
through (h) of this Section, existing on the Closing Date and set forth
on Schedule 6.07;
(j) the ESOP Loans;
(k) Investments the sole consideration for which by Holdings and
the Restricted Subsidiaries is capital stock of Holdings provided that,
after giving effect thereto, no Default or Event of Default under
paragraph (m) of Article VII shall have occurred;
(l) if no Default or Event of Default exists immediately before or
after giving effect to such Investment, other Investments, including
joint ventures, currency xxxxxx and Investments in Unrestricted
Subsidiaries, provided that (i) the consideration for Investments other
than Investments in Unrestricted Subsidiaries (whether cash or
property, as valued at the time of such Investment) does not exceed
(net of any return representing return of capital of (but not return
on) any such Investment) at any time $75,000,000 in the aggregate less
one half of the amount of all Investments pursuant to clause (ii) below
in Unrestricted Subsidiaries and (ii) the consideration for Investments
in Unrestricted Subsidiaries (whether cash or property, as valued at
the time of such Investment) does not exceed (net of any return
representing return of capital of (but not return on) any such
Investment) at any time $50,000,000 in the aggregate; and
(m) Investments resulting from pledges and deposits referred to
in Section 6.04(f).
None of Holdings and the Restricted Subsidiaries may make any Investment in
Unrestricted Subsidiaries except as described in the definition of "Unrestricted
Subsidiaries" set forth in Section 1.01.
SECTION 6.08. Mergers, Consolidations, Sales of Assets and
Acquisitions. Merge into or consolidate with any other person, or permit any
other person to merge into or consolidate with it, or sell, transfer, lease or
otherwise dispose of (in one transaction or in a series of transactions) all or
any part of its assets (whether now owned or hereafter acquired) or any capital
stock of any subsidiary, or purchase, lease or otherwise acquire (in one
transaction or a series of transactions) all or any substantial part of the
assets of any other person, except that this Section 6.08 shall not prohibit:
(a) the purchase and sale of property and assets in the ordinary
course of business by any Restricted Subsidiary;
(b) Sale and Lease-Back Transactions permitted by Section 6.06;
(c) Permitted Business Acquisitions;
47
(d) sales, leases or transfers from one Restricted Subsidiary of
the Borrower to the Borrower or to a Domestic Restricted Subsidiary;
(e) sales, leases or other dispositions of (i) inventory of the
Restricted Subsidiaries determined by the Board of Directors of the
Borrower to be no longer useful or necessary in the operation of the
businesses of the Restricted Subsidiaries and (ii) assets of operations
that were discontinued prior to the 1994 Closing Date;
(f) any Permitted Receivables Financing;
(g) sales, leases or other dispositions of equipment or real
property of the Restricted Subsidiaries determined by the Board of
Directors of the Borrower to be no longer useful or necessary in the
operation of the business of the Restricted Subsidiaries, provided that
the Net Proceeds thereof in excess of $1,000,000 shall be used to
prepay the Loans in accordance with Section 2.12(c) or used to purchase
replacement assets or properties used for the same purpose as the
equipment or real property disposed of within 12 months of the receipt
thereof;
(h) any Restricted Subsidiary may merge with any other Restricted
Subsidiary, provided that (i) at the time of and immediately after
giving effect to any such merger no Default or Event of Default shall
have occurred, (ii) the Borrower shall be the surviving corporation of
any merger involving the Borrower, and C&A Canada shall be the
surviving corporation of any merger involving C&A Canada and (iii) no
Restricted Subsidiary organized under the laws of a jurisdiction
outside the United States may merge with a Domestic Restricted
Subsidiary unless the Domestic Restricted Subsidiary is the surviving
corporation;
(i) the Restricted Subsidiaries may sell or otherwise dispose of
assets having a fair market value, for all such transactions, not in
excess of 25% of the fair market value as determined by the Board of
Directors of the Borrower of the assets of the Restricted Subsidiaries
at the 1994 Closing Date, provided that (i) each such sale shall be for
a consideration determined in good faith by the Board of Directors of
the Borrower to be at least equal to the fair market value (if any) of
the asset sold, (ii) the aggregate amount of all noncash consideration
included in such sale proceeds may not exceed 15% of the fair market
value of the aggregate amount of all such sale proceeds; provided,
however, that obligations of the type referred to in clauses (a) and
(b) of the definition of "Permitted Investments" (without regard to the
maturity or the credit rating thereof) shall not be deemed non-cash
proceeds if such obligations are promptly sold for cash and the
proceeds of such sale are included in the calculation of Net Proceeds
from such sale, (iii) the aggregate Net Proceeds of all such sales and
dispositions under this clause (i) in excess of $50,000,000 are applied
to repay the Loans in accordance with Section 2.12(c) and the first
$50,000,000 of such aggregate Net Proceeds are either applied to the
purchase of assets or properties used in the business of the Borrower
and its Restricted Subsidiaries as permitted by Section 6.12 within 12
months of the receipt thereof or are applied to repay the 1994 Term
Loans, the 1994 Canadian Term Loans and the 1994 Delayed Draw Term
Loans in accordance with Section 2.12(e) of the 1994 Credit Agreement
and in accordance with Section 2.12(c) and (iv) no Default or Event of
Default shall have occurred and be continuing immediately prior to or
after such sale. Upon receipt by Holdings or any Restricted Subsidiary
of Net Proceeds of any Specified Asset Sale occurring after the Closing
Date, Borrower shall promptly deliver a certificate of a Responsible
Officer to the Administrative Agent setting forth the amount of the Net
Proceeds which Borrower expects to reinvest in replacement assets or
property during the subsequent 12-month period which are not required
to be applied to the repayment of the 1994 Term Loans, the 1994
Canadian Term Loans, the 1994 Delayed Draw Term Loans and the Loans. On
the first anniversary of the receipt of such Net Proceeds, Borrower
shall (i) deliver a certificate of a Responsible Officer to the
Administrative Agent certifying as to the amount and use of such Net
Proceeds actually reinvested in replacement assets or property during
the preceding 12-month period and (ii) deliver to the Administrative
Agent, for application in accordance with Section 2.12(d), an amount
equal to 25% of the remaining uninvested Net Proceeds; and
(j) Investments permitted by Section 6.07.
48
SECTION 6.09. Transactions with Affiliates and Stockholders. Sell or
transfer any property or assets to, or purchase or acquire any property or
assets of, or otherwise engage in any other transactions with, any of its
Affiliates (including Unrestricted Subsidiaries but excluding Domestic
Restricted Subsidiaries) or any known holder of 10% or more of any class of
capital stock of Holdings or any Unrestricted Subsidiary, except that Holdings
or any of the Restricted Subsidiaries may engage in any of the foregoing
transactions at prices and on terms and conditions not less favorable to each
than would prevail on an arm's-length basis from unrelated third parties;
provided that Holdings and the Restricted Subsidiaries may not pay any fees to
an Affiliate (including an Unrestricted Subsidiary) for the provision of
financial or advisory services if after giving effect thereto a Default or Event
of Default shall have occurred and is continuing.
SECTION 6.10. Subordinated Indebtedness. Amend or modify any
instruments, agreements or documents evidencing or related to any Permitted
Subordinated Indebtedness, unless, in the judgement of the Required Lenders, any
such amendment or modification does not substantially affect either the rights
or security interests granted to the 1995 Credit Agreement Creditors or the
Collateral Agent or the first and superior position of the Obligations owed to
the 1995 Credit Agreement Creditors relative to the second and inferior position
of the holders of the notes or other instruments evidencing the Permitted
Subordinated Indebtedness (without limiting the generality of the foregoing, it
is understood that any increase in interest, fees or other amounts payable in
connection therewith, or any amendment that imposes additional covenants or
events of default or makes more restrictive the covenants or events of default
contained therein, shall require the consent of the Required Lenders).
SECTION 6.11. Amendment of Constitutive Documents; Change in Corporate
Structure; Amendment of Merger Documents. (i) Permit any amendment or
modification to be made to the certificate of incorporation or By-laws of
Holdings or of any Restricted Subsidiary if such amendment or modification is
materially adverse to the interests of the Lenders, (ii) permit any Restricted
Subsidiary to issue any capital stock or other equity interest to any person
other than the Borrower or its wholly owned subsidiaries or (iii) amend or
modify, or permit the amendment or modification of, any provisions of any Merger
Document in any manner adverse to the interests of the Lenders.
SECTION 6.12. Business of Holdings and Restricted Subsidiaries. (a)
Engage at any time in any business or business activity other than the business
currently conducted by it and business activities reasonably incidental or
related thereto or (b) fail to maintain and operate such business in
substantially the manner in which it is presently conducted and operated (other
than as contemplated herein) if such failure would materially adversely affect
the 1995 Credit Agreement Creditors; provided, however, that the activities of
Holdings shall be limited to (i) the ownership of the stock of the Borrower
together with activities directly related thereto, (ii) the ownership of the
stock of Unrestricted Subsidiaries described in clause (ii) of the definition of
such term set forth in Section 1.01 together with activities directly related
thereto, (iii) performance of its obligations under the Loans Documents and the
1994 Credit Agreement and (iv) actions required by law to maintain its status as
a public company.
SECTION 6.13. Restrictive Agreements. Enter into any indenture,
agreement, instrument or other arrangement which, directly or indirectly,
prohibits or restrains, or has the effect of prohibiting or restraining, or
imposes materially adverse conditions upon, the granting of Liens, the provision
of Guarantees or the payment of dividends or the making of loans or advances or
transfers of property or assets by Holdings or any of the Restricted
Subsidiaries other than restrictions (i) on the granting of Liens on assets that
are encumbered by Liens permitted under clauses (b), (i), (k), (l) or (r) of
Section 6.04 or (ii) contained in agreements relating to Indebtedness not in
excess of $10,000,000 in the aggregate or (iii) contained in agreements relating
to Permitted Acquisition Indebtedness.
SECTION 6.14. Interest Coverage Ratio. In the case of Holdings, permit
the Interest Coverage Ratio for any period of four (or, if less, the number of
full fiscal quarters ending after the Closing Date) consecutive fiscal quarters
to be less than the ratio set forth below opposite the period which includes the
last day of such period of consecutive fiscal quarters:
49
Period: Amount:
Closing Date - January 31, 1996 3.25 to 1.00
February 1, 1996 - January 31, 1997 3.50 to 1.00
February 1, 1997 - April 30, 1997 3.75 to 1.00
May 1, 1997 - January 31, 1998 4.25 to 1.00
Thereafter 4.75 to 1.00
SECTION 6.15. EBITDA. In the case of Holdings, until such time as
$175,000,000 of the 1994 Term Loans and 1994 Canadian Term Loans have
permanently and irrevocably been repaid, permit its EBITDA for any fiscal year
to be less than $175,000,000.
SECTION 6.16. Leverage Ratio. In the case of Holdings, permit the
Leverage Ratio as of the last day of any fiscal quarter occurring during any
period set forth below to be greater than the ratio set forth below for such
period:
Quarter Ending: Ratio:
January 31, 1996 3.75 to 1.00
April 30, 1996 3.50 to 1.00
July 31, 1996 3.50 to 1.00
October 31, 1996 3.25 to 1.00
January 31, 1997 3.00 to 1.00
February 1, 1997 - January 31, 1998 2.75 to 1.00
February 1, 1998 - January 31, 1999 2.50 to 1.00
Thereafter 2.25 to 1.00
SECTION 6.17. Current Ratio. In the case of Holdings, permit the
Current Ratio to be less than 1.25:1.00 on the last day of any fiscal quarter.
SECTION 6.18. Tax Sharing. File or consent to the filing of any
consolidated income tax return with any person (other than Holdings, the
Restricted Subsidiaries and Unrestricted Subsidiaries that have entered into the
existing Tax Sharing Agreements).
SECTION 6.19. Significant Subsidiaries. Permit the Significant
Subsidiaries to account for less than 85% of the consolidated assets of Holdings
at any time or 90% of the consolidated EBITDA of Holdings for any two
consecutive periods of four fiscal quarters.
SECTION 6.20. Inactive Subsidiaries. Permit any Inactive Subsidiary,
at any time, to fail to satisfy any of the criteria set forth in the
definition of Inactive Subsidiary in Section 1.01.
ARTICLE VII.
EVENTS OF DEFAULT
In case of the happening of any of the following events ("Events of
Default"):
(a) any representation or warranty made or deemed made in any Loan
Document, or any representation, warranty, statement or information
contained in any report, certificate, financial statement or other
instrument furnished in connection with or pursuant to any Loan
Document, shall prove to have been false or misleading in any material
respect when so made, deemed made or furnished;
50
(b) default shall be made in the payment of any principal of any
Loan when and as the same shall become due and payable, whether at the
due date thereof or at a date fixed for prepayment thereof or by
acceleration thereof or otherwise;
(c) default shall be made in the payment of any interest on any
Loan or any Fee or any other amount (other than an amount referred to
in (b) above) due under any Loan Document, when and as the same shall
become due and payable, and such default shall continue unremedied for
a period of five Business Days;
(d) default shall be made in the due observance or performance by
the Borrower or Holdings or any subsidiary thereof of any covenant,
condition or agreement contained in Section 2.12(c), 5.01(a), 5.05(a),
5.08 or 5.10 or in Article VI;
(e) default shall be made in the due observance or performance by
the Borrower or Holdings or any subsidiary thereof of any covenant,
condition or agreement contained in any Loan Document (other than those
specified in (b), (c) or (d) above) and such default shall continue
unremedied for a period of 30 days in the case of Sections 5.01(b),
5.02, 5.09 and 5.13 and 15 days in the case of all others, in each case
after notice thereof from the Administrative Agent or any Lender to
Holdings or the Borrower;
(f) Holdings, any Restricted Subsidiary or any Significant
Subsidiary shall (i) fail to pay any principal or interest, regardless
of amount, due in respect of Indebtedness having an aggregate principal
or notional amount in excess of $7,500,000, when and as the same shall
become due and payable, or (ii) fail to observe or perform any other
term, covenant, condition or agreement contained in any agreements or
instruments evidencing or governing any Indebtedness having an
aggregate principal amount in excess of $7,500,000 if the effect of any
failure referred to in this clause (ii) is to cause, or to permit the
holder or holders of such Indebtedness or a trustee on its or their
behalf to cause, such Indebtedness to become due prior to its stated
maturity; or a termination event or comparable event shall occur under
the documents governing the Permitted Receivables Financing entitling
the persons financing the receivables owned by the Finance Subsidiary
to stop funding the purchase of receivables of all sellers of
receivables to the Finance Subsidiary;
(g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking
(i) relief in respect of the Borrower or Holdings or any Significant
Subsidiary, or of a substantial part of the property or assets of the
Borrower or Holdings or any Significant Subsidiary, under Title 11 of
the United States Code, as now constituted or hereafter amended, or any
other Federal or state bankruptcy, insolvency, receivership or similar
law or comparable foreign law, (ii) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for
the Borrower or Holdings or any Significant Subsidiary or for a
substantial part of the property or assets of the Borrower or Holdings
or any Significant Subsidiary or (iii) the winding-up or liquidation of
the Borrower or Holdings or any Significant Subsidiary; and such
proceeding or petition shall continue undismissed for 60 days or an
order or decree approving or ordering any of the foregoing shall be
entered;
(h) the Borrower or Holdings or any Significant Subsidiary shall
(i) voluntarily commence any proceeding or file any petition seeking
relief under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other Federal or state bankruptcy,
insolvency, receivership or similar law or comparable foreign law, (ii)
consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or the filing of any petition
described in (g) above, (iii) apply for or consent to the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar
official for the Borrower or Holdings or any Significant Subsidiary or
for a substantial part of the property or assets of the Borrower or
Holdings or any Significant Subsidiary, (iv) file an answer admitting
the material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of creditors,
(vi) become unable, admit in writing its inability or fail generally to
pay its debts as they become due or (vii) take any action for the
purpose of effecting any of the foregoing;
(i) one or more judgments for the payment of money in an aggregate
amount in excess of $7,500,000 (to the extent not covered by insurance)
shall be rendered against Holdings, any Restricted Subsidiary or
51
any Significant Subsidiary or any combination thereof and the same
shall remain undischarged or stayed for a period of 30 consecutive days
during which execution shall not be effectively stayed, or any action
shall be legally taken by a judgment creditor to levy upon assets or
properties of Holdings or any Restricted Subsidiary to enforce any such
judgment;
(j) a Reportable Event or Reportable Events, or a failure to make
a required installment or other payment (within the meaning of Section
412(n)(1) of the Code), shall have occurred with respect to any Plan or
Plans that reasonably could be expected to result in liability of the
Borrower, any Guarantor or any of their ERISA Affiliates to the PBGC or
to a Plan in an aggregate amount exceeding $5,000,000 and, within 30
days after the reporting of any such Reportable Event to the
Administrative Agent or after the receipt by the Administrative Agent
of the statement required pursuant to Section 5.06(b)(iii), the
Administrative Agent shall have notified the Borrower in writing that
(i) the Required Lenders have made a determination that, on the basis
of such Reportable Event or Reportable Events or the failure to make a
required payment, there are reasonable grounds (A) for the termination
of such Plan or Plans by the PBGC, (B) for the appointment by the
appropriate United States District Court of a trustee to administer
such Plan or Plans or (C) for the imposition of a lien in favor of a
Plan and (ii) as a result thereof an Event of Default exists hereunder;
or a trustee shall be appointed by a United States District Court to
administer any such Plan or Plans; or the PBGC shall institute
proceedings to terminate any Plan or Plans;
(k) (i) the Borrower, any Guarantor or any of their ERISA
Affiliates shall have been notified by the sponsor of a Multiemployer
Plan that it has incurred Withdrawal Liability to such Multiemployer
Plan, (ii) the Borrower, any Guarantor or such ERISA Affiliate does not
have reasonable grounds for contesting such Withdrawal Liability or is
not in fact contesting such Withdrawal Liability in a timely and
appropriate manner and (iii) the amount of the Withdrawal Liability
specified in such notice, when aggregated with all other amounts
required to be paid to Multiemployer Plans in connection with
Withdrawal Liabilities (determined as of the date or dates of such
notification), exceeds $7,500,000 or requires payments exceeding
$7,500,000 in any year;
(l) the Borrower, any Guarantor or any of their ERISA Affiliates
shall have been notified by the sponsor of a Multiemployer Plan that
such Multiemployer Plan is in reorganization or is being terminated,
within the meaning of Title IV of ERISA, if solely as a result of such
reorganization or termination the aggregate annual contributions of the
Borrower, the Guarantors and their ERISA Affiliates to all
Multiemployer Plans that are then in reorganization or have been or are
being terminated have been or will be increased over the amounts
required to be contributed to such Multiemployer Plans for their most
recently completed plan years by an amount exceeding $7,500,000;
(m) there shall have occurred a Change in Control;
(n) (i) any Loan Document shall for any reason be asserted by
Holdings or any of its subsidiaries not to be a legal, valid and
binding obligation of the respective parties thereto, (ii) any security
interest or Lien purported to be created by the Pledge Agreement and to
extend to assets which are not immaterial to Holdings and its
subsidiaries on a consolidated basis shall for any reason (except to
the extent resulting from the negligent or wilful failure of the
Collateral Agent to retain possession of the applicable collateral)
cease to be, or any security interest or Lien purported to be created
by the Pledge Agreement and to extend to any assets of Holdings or its
subsidiaries shall for any reason be asserted by Holdings or any of its
subsidiaries not to be, a valid, first priority perfected security
interest (subject to no Liens other than Liens not prohibited by any
applicable provision of the Loan Documents) in such collateral (other
than cash proceeds which are not identifiable proceeds) or (iii) the
Obligations and the guarantees thereof pursuant to the Guarantee
Agreement shall cease to constitute senior indebtedness under the
subordination provisions of any document or instrument evidencing any
Permitted Subordinated Indebtedness or such subordination provisions
shall be invalidated or otherwise cease to be a legal, valid and
binding obligation of the parties thereto, enforceable in accordance
with its terms; or
52
(o) the Finance Subsidiary shall engage in any business or
activity other than the purchase of receivables from the Restricted
Subsidiaries and the sale of such receivables and activities incidental
thereto;
then, and in every such event (other than an event with respect to the Borrower
described in paragraph (g) or (h) above), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Required Lenders, shall, by notice to the Borrower, take either or both of
the following actions, at the same or different times: (i) terminate forthwith
the Commitments and (ii) declare the Loans then outstanding to be forthwith due
and payable in whole or in part, whereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and any
unpaid accrued Fees and all other liabilities of the Borrower accrued hereunder
and under any other Loan Document, shall become forthwith due and payable,
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived by the Borrower, anything contained herein or
in any other Loan Document to the contrary notwithstanding; and in any event
with respect to the Borrower described in paragraph (g) or (h) above, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and any unpaid accrued Fees
and all other liabilities of the Borrower accrued hereunder and under any other
Loan Document, shall automatically become due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived by the Borrower, anything contained herein or in any other Loan
Document to the contrary notwithstanding.
ARTICLE VIII.
THE ADMINISTRATIVE AGENT
In order to expedite the transactions contemplated by this Agreement,
Chemical Bank is hereby appointed to act as Administrative Agent and Collateral
Agent on behalf of the Lenders. Each of the Lenders, and each subsequent holder
of any Note by its acceptance thereof, hereby irrevocably authorizes the
Administrative Agent to take such actions on behalf of such Lender or holder and
to exercise such powers as are specifically delegated to the Administrative
Agent by the terms and provisions hereof and of the other Loan Documents
(including the power to execute and deliver the Intercreditor Agreement if and
when requested to do so by any holders of any Permitted Acquisition
Indebtedness), together with such actions and powers as are reasonably
incidental thereto. The Administrative Agent is hereby expressly authorized by
the Lenders, without hereby limiting any implied authority, (a) to receive on
behalf of the Lenders all payments of principal of and interest on the Loans and
all other amounts due to the Lenders hereunder, and promptly to distribute to
each Lender its proper share of each payment so received; (b) to give notice on
behalf of each of the Lenders to the Borrower of any Event of Default specified
in this Agreement of which the Administrative Agent has actual knowledge
acquired in connection with its agency hereunder; and (c) to distribute to each
Lender copies of all notices, financial statements and other materials delivered
by the Borrower pursuant to this Agreement as received by the Administrative
Agent. In acting as Collateral Agent Chemical Bank shall be entitled to the
rights and benefits, and subject to the obligations, set forth for the
Administrative Agent under this Article VIII, mutatis mutandis, which Article is
hereby incorporated by reference, mutatis mutandis, in each of the Guarantee
Agreement and the Pledge Agreement.
Neither the Administrative Agent nor any of its affiliates, directors,
officers, employees or agents shall be liable as such for any action taken or
omitted by any of them except for its or his own gross negligence or wilful
misconduct, or be responsible for any statement, warranty or representation
herein or the contents of any document delivered in connection herewith, or be
required to ascertain or to make any inquiry concerning the performance or
observance by the Borrower or any Guarantor of any of the terms, conditions,
covenants or agreements contained in any Loan Documents. The Administrative
Agent shall not be responsible to the Lenders or the holders of the Notes for
the due execution (other than by the Administrative Agent), genuineness,
validity, enforceability (other than against the Administrative Agent) or
effectiveness of this Agreement, the Notes or any other Loan Documents or other
instruments or agreements. The Administrative Agent may deem and treat the payee
of any Note as the owner thereof for all purposes hereof until it shall have
received from the payee of such Note notice, given as provided herein, of the
transfer thereof in compliance with Section 9.04. The Administrative Agent shall
in all cases be fully protected in acting, or refraining from acting, in
accordance with written instructions signed by the Required Lenders
53
and, except as otherwise specifically provided herein, such instructions and any
action or inaction pursuant thereto shall be binding on all the Lenders and each
subsequent holder of any Note. The Administrative Agent shall, in the absence of
knowledge to the contrary, be entitled to rely on any instrument or document
believed by it in good faith to be genuine and correct and to have been signed
or sent by the proper person or persons. Neither the Administrative Agent nor
any of its directors, officers, employees or agents shall have any
responsibility to the Borrower on account of the failure of or delay in
performance or breach by any Lender of any of its obligations hereunder or to
any Lender on account of the failure of or delay in performance or breach by any
other Lender or the Borrower or any Guarantor of any of their respective
obligations hereunder or under any other Loan Document or in connection herewith
or therewith. The Administrative Agent may execute any and all duties hereunder
by or through agents or affiliates and shall be entitled to rely upon the advice
of legal counsel selected by it with respect to all matters arising hereunder
and shall not be liable for any action taken or suffered in good faith by it in
accordance with the advice of such counsel.
The Lenders hereby acknowledge that the Administrative Agent shall not
be under any duty to take any discretionary action permitted to be taken by it
pursuant to the provisions of this Agreement unless it shall be requested in
writing to do so by the Required Lenders.
Subject to the appointment and acceptance of a successor Administrative
Agent as provided below, the Administrative Agent may resign at any time by
notifying the Lenders and the Borrower. Upon any such resignation, the Required
Lenders shall have the right to appoint a successor, with the consent of the
Borrower (not to be unreasonably withheld). If no successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent, with the consent of the
Borrower (not to be unreasonably withheld), which shall be a bank with an office
in New York, New York, having a combined capital and surplus of at least
$500,000,000 or an Affiliate of any such bank which is also a bank. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
bank, such successor shall succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Administrative Agent and the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. After the Administrative Agent's resignation hereunder,
the provisions of this Article and Section 9.05 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Administrative Agent.
With respect to the Loans made by it hereunder and the Notes issued to
it, the Administrative Agent in its individual capacity and not as
Administrative Agent shall have the same rights and powers as any other Lender
and may exercise the same as though it were not the Administrative Agent, and
the Administrative Agent and its Affiliates may accept deposits from, lend money
to and generally engage in any kind of business with the Borrower or any
subsidiary or other Affiliate thereof as if it were not the Administrative
Agent.
Each Lender recognizes that applicable laws, rules, regulations or
guidelines of Governmental Authorities may require the Administrative Agent to
determine whether the transactions contemplated hereby should be classified as
"highly leveraged" or assigned any similar or successor classification, and that
such determination may be binding upon the other Lenders. Each Lender
understands that any such determination shall be made solely by the
Administrative Agent based upon such factors (which may include, without
limitation, the Administrative Agent's internal policies and prevailing market
practices) as the Administrative Agent shall deem relevant and agrees that the
Administrative Agent shall have no liability for the consequences of any such
determination.
Each Lender agrees (i) to reimburse each of the Administrative Agent,
on demand, in the amount of its pro rata share (based on its Commitments
hereunder) of any reasonable expenses incurred for the benefit of the Lenders by
the Administrative Agent, including counsel fees and compensation of agents and
employees paid for services rendered on behalf of the Lenders, which shall not
have been reimbursed by the Borrower and (ii) to indemnify and hold harmless the
Administrative Agent and any of its directors, officers, employees or agents, on
demand, in the amount of such pro rata share, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against it in its capacity as the
Administrative Agent or any of them in any way relating to
54
or arising out of this Agreement or any other Loan Document or any action taken
or omitted by it or any of them under this Agreement or any other Loan Document,
to the extent the same shall not have been reimbursed by the Borrower; provided
that no Lender shall be liable to the Administrative Agent for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the gross negligence or
wilful misconduct of the Administrative Agent or any of its directors, officers,
employees or agents.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement
or any other Loan Document, any related agreement or any document furnished
hereunder or thereunder.
ARTICLE IX.
MISCELLANEOUS
SECTION 9.01. Notices. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed or sent by telex or telecopy, as follows:
(a) if to Holdings or to the Borrower, to it at 000 XxXxxxxxxx
Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention of Chief Financial
Officer (Telecopy No. 704-548-2330) with copies to 000 Xxxxxxx Xxxxxx,
0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of General Counsel
(Telecopy No.
212-578-1269);
(b) if to the Administrative Agent, to it at 000 Xxxx Xxxxxx
(00xx Xxxxx), Xxx Xxxx, Xxx Xxxx 00000, Attention of Xxxxxxxx Xxxxxxx
(Telecopy No. 212-972-0009);
(c) if to a Lender, to it at its address (or telecopy number) set
forth in Schedule 2.01 or in the Assignment and Acceptance pursuant to
which such Lender shall have become a party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telex or telecopy, or on the date five Business Days after dispatch by certified
or registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 9.01 or in accordance with
the latest unrevoked direction from such party given in accordance with this
Section 9.01.
SECTION 9.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrower and the Guarantors herein
and in the certificates or other instruments prepared or delivered in connection
with or pursuant to this Agreement or any other Loan Document shall be
considered to have been relied upon by the Lenders and shall survive the making
by the Lenders of the Loans, and the execution and delivery to the Lenders of
the Notes evidencing such Loans, regardless of any investigation made by the
Lenders or on their behalf, and shall continue in full force and effect as long
as the principal of or any accrued interest on any Loan or any Fee or any other
amount payable under this Agreement or any other Loan Document is outstanding
and unpaid and so long as the Commitments have not been terminated. Without
prejudice to the survival of any other agreements contained herein,
indemnification and reimbursement obligations contained herein (including
pursuant to Sections 2.13, 2.15 and 9.05) shall survive the payment in full of
the principal and interest hereunder and the termination of the Commitments or
this Agreement.
SECTION 9.03. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Borrower, Holdings and the
Administrative Agent and when the Administrative Agent shall have received
copies hereof which, when taken together, bear the signatures of each Lender,
and thereafter shall be binding upon
55
and inure to the benefit of the Borrower, Holdings, the Administrative Agent and
each Lender and their respective successors and assigns, except that none of the
Borrower or Holdings shall have the right to assign its rights hereunder or any
interest herein without the prior consent of all the Lenders.
SECTION 9.04. Successors and Assigns. (a) Whenever in this Agreement
any of the parties hereto is referred to, such reference shall be deemed to
include the successors and assigns of such party; and all covenants, promises
and agreements by or on behalf of the Borrower, Holdings, the Administrative
Agent or the Lenders that are contained in this Agreement shall bind and inure
to the benefit of their respective successors and assigns.
(b) Each Lender may assign to one or more assignees all or a portion of
its interests, rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it and the Notes
held by it); provided, however, that (i) except in the case of an assignment to
a Lender or an Affiliate of such Lender, the Borrower and the Administrative
Agent must give their prior written consent to such assignment (which consents
shall not be unreasonably withheld or delayed), (ii) after giving effect to such
assignment, the aggregate amount of the Loans owing to and unused Commitments of
the assignee and its Affiliates and of the assignor (unless the assignor ceases
to be a Lender) and its Affiliates shall not be less than 5% of the aggregate
amount of outstanding Loans and unused Commitments at such time, (iii) the
parties to each such assignment shall execute and deliver to the Administrative
Agent an Assignment and Acceptance, together with the Note or Notes subject to
such assignment and a processing and recordation fee of $3,500 and (iv) the
assignee, if it shall not be a Lender, shall deliver to the Administrative Agent
an Administrative Questionnaire. Upon acceptance and recording pursuant to
paragraph (e) of this Section 9.04, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall be at least five
Business Days after the execution thereof unless agreed otherwise by the
Administrative Agent, (A) the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Acceptance, have
the rights and obligations of a Lender under this Agreement and (B) the
assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto but shall continue to be
entitled to the benefits of Sections 2.13, 2.15, 2.18 and 9.05, as well as to
any Fees accrued for its account and not yet paid).
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim and that
its Commitment, and the outstanding balances of its Loans, in each case without
giving effect to assignments thereof which have not become effective, are as set
forth in such Assignment and Acceptance, (ii) except as set forth in (i) above,
such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
any other Loan Document or any other instrument or document furnished pursuant
hereto, or the financial condition of the Borrower or any Guarantor or the
performance or observance by the Borrower or any Guarantor of any of its
obligations under this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto; (iii) such assignee represents
and warrants that it is legally authorized to enter into such Assignment and
Acceptance; (iv) such assignee confirms that it has received copies of this
Agreement, together with copies of the most recent financial statements
delivered pursuant to this Agreement and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (v) such assignee will independently and
without reliance upon the Administrative Agent, such assigning Lender or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (vi) such assignee appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all the obligations which by the terms of
this Agreement are required to be performed by it as a Lender.
56
(d) The Administrative Agent shall maintain at its address referred to
in subsection 9.01 a copy of each Assignment and Acceptance delivered to it and
a register (the "Register") for the recordation of the names and addresses of
the Lenders and the Commitments of, and principal amount of the Loans owing to,
each Lender from time to time. The Administrative Agent shall separately record
the names and addresses of each Lender that holds Notes in the Register. The
Administrative Agent shall also record the amount of the Commitments of, and the
aggregate principal amount of Loans owing to such Lender in the Register. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, the Administrative Agent and the Lenders shall treat each
person whose name is recorded in the Register as the owner of the Notes, the
Commitments and the Loans recorded therein for all purposes of this Agreement.
The Register shall be available for inspection by the Borrower and any Lender,
at any reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee together with the Note or Notes
subject to such assignment, an Administrative Questionnaire completed in respect
of the assignee (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) above and, if
required, the written consent of the Borrower and the Administrative Agent to
such assignment, the Administrative Agent shall (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Lenders. Within five Business Days after
receipt of notice, the Borrower, at its own expense, shall execute and deliver
to the Administrative Agent, in exchange for the surrendered Note or Notes, a
new Note or Notes to the order of such assignee in a principal amount equal to
the applicable Commitment assumed by it pursuant to such Assignment and
Acceptance and, if the assigning Lender has retained a Commitment, a new Note to
the order of such assigning Lender in a principal amount equal to the applicable
Commitment retained by it. Such new Note or Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Note; such new Notes shall be dated the date of the surrendered Notes which they
replace and shall otherwise be in substantially the form of Exhibit A hereto.
Canceled Notes shall be returned to the Borrower. Notwithstanding anything to
the contrary contained herein, no assignment under Section 9.04(b) of any rights
or obligations under or in respect of the Notes or Loans evidenced by the Notes
shall be effective unless and until the Administrative Agent shall have recorded
such assignment in the Register. The Administrative Agent shall record the name
of the transferor, the name of the transferee, and the amount of the transfer in
the Register after receipt of all documents required pursuant to this Section
9.04, including, without limitation, the Notes being assigned in connection with
such transfer, and such other documents as the Administrative Agent may
reasonably request.
(f) Each Lender may without the consent of the Borrower or the
Administrative Agent sell participations to one or more banks or other entities
in all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it and the
Notes held by it); provided, however, that (i) such Lender's obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) the participating banks or other entities shall be entitled to the benefit
of the cost protection provisions contained in Sections 2.13, 2.15, 2.18 and
9.06(a) to the same extent as if they were Lenders, provided, that no such
participating bank or entity shall be entitled to receive any greater amount
pursuant to such Sections than a Lender would have been entitled to receive in
respect of the amount of the participation sold by such Lender to such
participating bank or entity had no sale occurred, and (iv) the Borrower, the
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, and such Lender shall retain the sole right to
enforce the obligations of the Borrower relating to the Loans and to approve any
amendment, modification or waiver of any provision of this Agreement or any
other Loan Document (other than amendments, modifications or waivers decreasing
any fees payable hereunder or the amount of principal of or the rate at which
interest is payable on the Loans, extending any final maturity date, in each
case in respect of an Obligation in which the relevant participating bank or
entity is participating, or releasing all or substantially all of the Pledged
Securities or any Guarantor from the Guarantee Agreement unless all or
substantially all of the capital stock of such subsidiary is sold in a
transaction permitted by this Agreement). Each Lender will disclose the identity
of its participants to the Borrower and Administrative Agent if requested by the
Borrower or the Administrative Agent.
57
(g) Any Lender or participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.04, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrower furnished to such Lender by
or on behalf of the Borrower; provided that, prior to any such disclosure, each
such assignee or participant or proposed assignee or participant shall execute
an agreement whereby such assignee or participant shall agree to be bound by
Section 9.17.
(h) Any Lender may at any time assign all or any portion of its rights
under this Agreement and the Notes issued to it to a Federal Reserve Bank;
provided that no such assignment shall release a Lender from any of its
obligations hereunder.
(i) Neither the Borrower nor Holdings shall assign or delegate any of
its rights or duties hereunder.
SECTION 9.05. Expenses; Indemnity. (a) The Borrower agrees to pay all
reasonable out-of-pocket expenses incurred by the Administrative Agent in
connection with the preparation of this Agreement and the other Loan Documents,
or by the Administrative Agent in connection with the syndication of the
Commitments or the administration of this Agreement, or in connection with any
amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions hereby contemplated shall be consummated) or
incurred by the Administrative Agent or any Lender in connection with the
enforcement or protection of their rights in connection with this Agreement and
the other Loan Documents or in connection with the Loans made or the Notes
issued hereunder, including the reasonable fees, charges and disbursements of
Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel for the Administrative Agent, and, in
connection with any such enforcement or protection, the reasonable fees, charges
and disbursements of any other counsel (including the reasonable allocated costs
of internal counsel if a Lender elects to use internal counsel in lieu of
outside counsel) for the Administrative Agent or any Lender (but no more than
one such counsel for any Lender).
(b) The Borrower agrees to indemnify the Administrative Agent, each
Lender and each of their respective directors, officers, employees and agents
(each such person being called an "Indemnitee") against, and to hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including reasonable counsel fees, charges and disbursements,
incurred by or asserted against any Indemnitee arising out of, in any way
connected with, or as a result of (i) the execution or delivery of this
Agreement or any other Loan Document or any agreement or instrument contemplated
thereby, the performance by the parties thereto of their respective obligations
thereunder or the consummation of the Larizza Acquisition and the other
transactions contemplated thereby, (ii) the use of the proceeds of the Loans or
(iii) any claim, litigation, investigation or proceeding relating to any of the
foregoing, whether or not any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or wilful misconduct of such Indemnitee
(treating, for this purpose only, any Lender and its directors, officers,
employees and agents as a single Indemnitee). Subject to and without limiting
the generality of the foregoing sentence, the Borrower agrees to indemnify each
Indemnitee against, and hold each Indemnitee harmless from, any Environmental
Claim, and any and all losses, claims, damages, liabilities and related
expenses, including reasonable counsel or consultant fees, charges and
disbursements, incurred by or asserted against any Indemnitee (and arising out
of, or in any way connected with or as a result of, any of the events described
in clause (i), (ii) or (iii) of the preceding sentence) arising out of, in any
way connected with, or as a result of (i) any Environmental Claim, (ii) any
violation of any Environmental Law, or (iii) any act, omission, event or
circumstance (including the actual, proposed or threatened, release, removal,
disposition, discharge or transportation, storage, holding, existence,
generation, processing, abatement, handling or presence on, into, from or under
any present, past or future property of Holdings or any of its subsidiaries of
any Contaminant), regardless of whether the act, omission, event or circumstance
constituted a violation of Environmental Law at the time of its existence or
occurrence; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such Environmental Claim is, or such, losses,
claims, damages, liabilities or related expenses are, determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or wilful misconduct of such Indemnitee or any of its
employers, officers, directors, employees or agents.
58
(c) The Borrower shall be entitled to assume the defense of any action
for which indemnification is sought hereunder with counsel of its choice at its
expense (in which case the Borrower shall not thereafter be responsible for the
fees and expenses of any separate counsel retained by an Indemnitee except as
set forth below); provided, however, that such counsel shall be reasonably
satisfactory to each such Indemnitee. Notwithstanding the Borrower's election to
assume the defense of such action, each Indemnitee shall have the right to
employ separate counsel and to participate in the defense of such action, and
the Borrower shall bear the reasonable fees, costs, and expenses of such
separate counsel, if (i) the use of counsel chosen by the Borrower to represent
such Indemnitee would present such counsel with a conflict of interest; (ii) the
actual or potential defendants in, or targets of, any such action include both
the Borrower and such Indemnitee and such Indemnitee shall have reasonably
concluded that there may be legal defenses available to it that are different
from or additional to those available to the Borrower (in which case the
Borrower shall not have the right to assume the defense or such action on behalf
of such Indemnitee); (iii) the Borrower shall not have employed counsel
reasonably satisfactory to such Indemnitee to represent it within a reasonable
time after notice of the institution of such action; or (iv) the Borrower shall
authorize such Indemnitee to employ separate counsel at the Borrower's expense.
The Borrower will not be liable under this Agreement for any amount paid by an
Indemnitee to settle any claims or actions if the settlement is entered into
without the Borrower's consent, which consent may not be withheld unless such
settlement is unreasonable in light of such claims or actions against, and
defenses available to, such Indemnitee.
(d) Holdings and the Borrower shall not, and shall not permit any of
their subsidiaries to, bring any demand, claim, cost recovery or other action
they may now or hereafter have against any Indemnitee resulting from any
Environmental Claim; provided that this paragraph (d) shall not, as to any
Indemnitee, apply to the extent that such Environmental Claim has been
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or wilful misconduct of such
Indemnitee or any of its employers, directors, officers, employees or agents.
(e) Notwithstanding anything to the contrary in this Section 9.05, this
Section 9.05 shall not apply to taxes, it being understood that the Borrower's
only obligations with respect to taxes shall arise under Sections 2.13 and 2.18
and Section 19 of the Guarantee Agreement.
(f) The provisions of this Section 9.05 shall remain operative and in
full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Obligations, the invalidity or unenforceability of any
term or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Administrative Agent or any Lender.
All amounts due under this Section 9.05 shall be payable on written demand
therefor.
SECTION 9.06. Right of Setoff; Sharing. (a) If an Event of Default
shall have occurred and be continuing, each Lender is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Lender to or for the credit or the account of the Borrower against any of and
all the obligations of the Borrower now or hereafter existing under this
Agreement and other Loan Documents held by such Lender, irrespective of whether
or not such Lender shall have made any demand under this Agreement or such other
Loan Document and although such obligations may be unmatured. The rights of each
Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
(b) If any Lender (a "benefitted Lender") shall at any time
receive any payment of all or part of its Loans, or interest thereon, then due,
or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in paragraph (g) or (h) of Article VII, or otherwise), in a greater
proportion than any such payment to or collateral received by any other Lender,
if any, in respect of such other Lender's Loans, or interest thereon, then due,
such benefitted Lender shall purchase for cash from the other Lenders a
participating interest in such portion of each such other Lender's Loans, or
shall provide such other Lenders with the benefits of any such collateral, or
the proceeds thereof, as shall be necessary to cause such benefitted Lender to
share the excess payment or benefits of such collateral or proceeds ratably with
each of the Lenders; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered
59
from such benefitted Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but without
interest.
SECTION 9.07. Applicable Law. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK.
SECTION 9.08. Waivers; Amendment. (a) No failure or delay of the
Administrative Agent or any Lender in exercising any power or right hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the
Administrative Agent and the Lenders hereunder and under the other Loan
Documents are cumulative and are not exclusive of any rights or remedies which
they would otherwise have. No waiver of any provision of this Agreement or any
other Loan Document or consent to any departure by the Borrower or Holdings
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) below, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. No notice or demand
on the Borrower or Holdings in any case shall entitle the Borrower to any other
or further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders; provided, however, that
no such agreement shall (i) decrease the principal amount of, or extend the
final maturity of, or waive or excuse any such payment or any part thereof, or
decrease the rate of interest on any Loan, without the prior written consent of
each Lender affected thereby, (ii) extend any Loan Repayment Date (other than
final maturity) or any other date on which principal of the Loans is due, or
extend any date on which payment of interest on any Loan is due, without the
prior written consent of Lenders with Loans representing at least 80% of the
aggregate principal amount of the Loans then outstanding, (iii) increase or
extend the Commitment or decrease the Commitment Fees or other fees of any
Lender without the prior written consent of such Lender, or (iv) amend or modify
the provisions of Section 2.09(c) or 2.16, the provisions of this Section or the
definition of "Required Lenders", or release substantially all the Pledged
Securities from the Lien of the Pledge Agreement or release any Guarantor from
the Guarantee Agreement unless all or substantially all of the capital stock of
such subsidiary is sold in a transaction permitted by this Agreement, without
the prior written consent of each Lender; provided further that no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent hereunder without the prior written consent of the
Administrative Agent acting as such at the effective date of such agreement, as
the case may be. Each Lender and each holder of a Note shall be bound by any
waiver, amendment or modification authorized by this Section regardless of
whether its Note shall have been marked to make reference thereto, and any
consent by any Lender or holder of a Note pursuant to this Section shall bind
any person subsequently acquiring a Note from it, whether or not such Note shall
have been so marked.
SECTION 9.09. Interest Rate Limitation. Notwithstanding anything herein
or in the Notes to the contrary, if at any time the applicable interest rate,
together with all fees and charges which are treated as interest under
applicable law (collectively the "Charges"), as provided for herein or in any
other document executed in connection herewith, or otherwise contracted for,
charged, received, taken or reserved by any Lender, shall exceed the maximum
lawful rate (the "Maximum Rate") which may be contracted for, charged, taken,
received or reserved by such Lender in accordance with applicable law, the rate
of interest payable under the Note held by such Lender, together with all
Charges payable to such Lender, shall be limited to the Maximum Rate, provided
that such excess amount shall be paid to such Lender on the subsequent payment
dates to the extent not exceeding the legal limitation.
SECTION 9.10. Entire Agreement. This Agreement, the other Loan
Documents and the agreements regarding certain Fees referred to herein
constitute the entire contract between the parties relative to the subject
matter hereof. Any previous agreement among or representations from the parties
with respect to the subject matter hereof is superseded by this Agreement and
the other Loan Documents. Nothing in this Agreement or in the other Loan
Documents, expressed or implied, is intended to confer upon any party other than
the parties hereto and thereto any rights, remedies, obligations or liabilities
under or by reason of this Agreement or the other Loan Documents.
60
SECTION 9.11. Waiver of Jury Trial. Each party hereto hereby waives, to
the fullest extent permitted by applicable law, any right it may have to a trial
by jury in respect of any litigation directly or indirectly arising out of,
under or in connection with this Agreement or any of the other Loan Documents.
Each party hereto (a) certifies that no representative, agent or attorney of any
other party has represented, expressly or otherwise, that such other party would
not, in the event of litigation, seek to enforce the foregoing waiver and (b)
acknowledges that it and the other parties hereto have been induced to enter
into this Agreement and the other Loan Documents, as applicable, by, among other
things, the mutual waivers and certifications in this Section 9.11.
SECTION 9.12. Severability. In the event any one or more of the
provisions contained in this Agreement or in any other Loan Document should be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby. The parties shall endeavor
in good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
SECTION 9.13. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one contract, and shall become
effective as provided in Section 9.03.
SECTION 9.14. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 9.15. Jurisdiction; Consent to Service of Process. (a) Each of
the Borrower and Holdings hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State
court or Federal court of the United States of America sitting in New York City,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement or the other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that any Lender may otherwise have to bring any action or proceeding
relating to this Agreement or the other Loan Documents against the Borrower or
Holdings or their properties in the courts of any jurisdiction.
(b) Each of the Borrower and Holdings hereby irrevocably and
unconditionally waives, to the fullest extent they may legally and effectively
do so, any objection which it may now or hereafter have to the laying of venue
of any suit, action or proceeding arising out of or relating to this Agreement
or the other Loan Documents in any New York State or Federal court. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 9.16. Confidentiality. Each of the Lenders and the
Administrative Agent agrees that it shall maintain in confidence any information
relating to the Borrower furnished to it by or on behalf of the Borrower (other
than information that (x) has become generally available to the public other
than as a result of a disclosure by such party, (y) has been independently
developed by such party without violating this Section or (z) was available to
such party from a third party having, to such party's knowledge, no obligation
of confidentiality to the Borrower) and shall not reveal the same other than (i)
to its directors, officers, employees and advisors with a need to know and (ii)
as contemplated by Section 9.04(g), except: (a) to the extent necessary to
comply with law or any legal process or the requirements of any Governmental
Authority, of the National Association of Insurance Commissioners
61
or of any securities exchange on which securities of the disclosing party or any
Affiliate of the disclosing party are listed or traded, (b) as part of normal
reporting or review procedures to Governmental Authorities, to the National
Association of Insurance Commissioners or to its parent companies, Affiliates or
auditors and (c) in order to enforce its rights under any Loan Document in a
legal proceeding.
IN WITNESS WHEREOF, the Borrower, Holdings, the Administrative Agent
and the Lenders have caused this Agreement to be duly executed by their
respective authorized officers as of the day and year first above written.
XXXXXXX & XXXXXX PRODUCTS CO.
by /s/ Signature of J. Xxxxxxx Xxxxx
Name: J. Xxxxxxx Xxxxx
Title: Executive Vice Pres. & CFO
XXXXXXX & XXXXXX CORPORATION
by /s/ Signature of J. Xxxxxxx Xxxxx
Name: J. Xxxxxxx Xxxxx
Title: Executive Vice Pres. & CFO
CHEMICAL BANK, as Administrative Agent
and Collateral Agent and as a Lender
by /s/ Signature of Xxxxxxxx Xxxxxxx
Name: Xxxxxxxx Xxxxxxx
Title: Vice President
NEW YORK LIFE INSURANCE COMPANY, as
a Lender
by /s/ Signature of Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: Investment Vice President
CHL HIGH YIELD LOAN PORTFOLIO, as
a Lender (a unit of Chemical Bank)
by /s/ Signature of Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
XXXXXXX XXXXX SENIOR FLOATING RATE
FUND, INC., as a Lender
by /s/ Signature of R. Xxxxxxx Xxxxxxxxx
Name: R. Xxxxxxx Xxxxxxxxx
Title: Authorized Signatory
SENIOR HIGH INCOME PORTFOLIO, INC.
by /s/ Signature of R. Xxxxxxx Xxxxxxxxx
Name: R. Xxxxxxx Xxxxxxxxx
Title: Authorized Signatory
SENIOR HIGH INCOME PORTFOLIO II, INC., as
a Lender
by /s/ Signature of R. Xxxxxxx Xxxxxxxxx
Name: R. Xxxxxxx Xxxxxxxxx
Title: Authorized Signatory
SENIOR STRATEGIC INCOME FUND, INC., as
a Lender
by /s/ Signature of R. Xxxxxxx Xxxxxxxxx
Name: R. Xxxxxxx Xxxxxxxxx
Title: Authorized Signatory
XXX XXXXXX AMERICAN CAPITAL PRIME
RATE INCOME TRUST, as a Lender
by /s/ Signature of Xxxxxxxx X. Xxxx
Name: Xxxxxxxx X. Xxxx
Title: Vice President
NEW YORK LIFE INSURANCE AND ANNUITY
CORPORATION, as a Lender
by /s/ Signature of Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: Investment Vice President
SCHEDULE 2.01 TO
CREDIT AGREEMENT
COMMITMENTS
Lender Commitment
Chemical Bank $ 96,000,000.00
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
New York Life Insurance Company 15,000,000.00
New York Life Insurance and Annuity Corporation 15,000,000.00
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
CHL High Yield Loan Portfolio 15,000,000.00
(a unit of Chemical Bank)
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Xxxxxxx Xxxxx Senior Floating Rate Fund, Inc. 25,000,000.00
Senior High Income Portfolio, Inc. 5,000,000.00
Senior High Income Portfolio II, Inc. 5,000,000.00
Senior Strategic Income Fund, Inc. 2,000,000.00
c/o Merrill Xxxxx Asset Management
000 Xxxxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Xxx Xxxxxx American Capital Prime Rate Income Trust 19,000,000.00
Xxx Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
TOTAL: $197,000,000.00
SCHEDULE 2.11(a) TO
CREDIT AGREEMENT
Term Loan Amortization Schedule
Term Loan Repayment Date Repayment
1 March 31, 1996 $ 1,250,000
2 June 30, 1996 1,250,000
3 September 30, 1996 1,250,000
4 December 31, 1996 1,250,000
5 March 31, 1997 2,500,000
6 June 30, 1997 2,500,000
7 September 30, 1997 2,500,000
8 December 31, 1997 2,500,000
9 March 31, 1998 3,750,000
10 June 30, 1998 3,750,000
11 September 30, 1998 3,750,000
12 December 31, 1998 3,750,000
13 March 30, 1999 5,000,000
14 June 30, 1999 5,000,000
15 September 30, 1999 5,000,000
16 December 31, 1999 5,000,000
17 March 31, 2000 6,250,000
18 June 30, 2000 6,250,000
19 September 30, 2000 6,250,000
20 December 31, 2000 6,250,000
21 March 31, 2001 6,250,000
22 June 30, 2001 6,250,000
23 September 30, 2001 6,250,000
24 December 31, 2001 6,250,000
25 March 31, 2002 24,250,000
26 June 30, 2002 24,250,000
27 September 30, 2002 24,250,000
28 December 31, 2002 24,250,000
