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Exhibit 10.22
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AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of April 11, 1995
and amended and restated
as of July 8, 1997
Among
EKCO GROUP, INC.
as Borrower
FLEET NATIONAL BANK
as Agent
and
FLEET NATIONAL BANK
as Lender
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TABLE OF CONTENTS
Page
ARTICLE 1. DEFINITIONS AND ACCOUNTING TERMS..............................................................1
Section 1.1. Definitions.....................................................................1
Section 1.2. Accounting Terms...............................................................17
Section 1.3. Terms Defined Elsewhere........................................................17
ARTICLE 2. THE CREDITS..................................................................................18
Section 2.1. The Revolving Credit Facilities................................................18
Section 2.2. Notice and Manner of Borrowing and Conversion of Loans.........................19
Section 2.3. Interest; Duration of Interest Periods.........................................21
Section 2.4. Additional Interest Payments...................................................21
Section 2.5. Fees...........................................................................22
Section 2.6. Computation of Interest and Fees...............................................22
Section 2.7. Termination or Reduction of Revolving Credit Facilities........................23
Section 2.8. Yield Protection...............................................................23
Section 2.9. Availability of LIBOR Pricing Option; Changed Circumstances....................24
Section 2.10. Lender Certificates; Survival of Indemnity.....................................24
Section 2.11. Letters of Credit..............................................................25
ARTICLE 3. CONDITIONS OF LENDING........................................................................28
Section 3.1. Conditions to the Initial Advance..............................................28
Section 3.2. Conditions to All Advances and Letters of Credit...............................30
ARTICLE 4. PAYMENT AND REPAYMENT........................................................................31
Section 4.1. Mandatory Payment..............................................................31
Section 4.2. Voluntary Prepayment...........................................................32
Section 4.3. Payment and Interest Cutoff....................................................32
Section 4.4. Payment or Other Actions on Non-Business Days..................................32
Section 4.5. Method and Timing of Payments..................................................32
Section 4.6. Sharing of Payments, Etc.......................................................33
Section 4.7 Payments Not at End of Interest Period.........................................33
ARTICLE 5. REPRESENTATIONS AND WARRANTIES...............................................................34
Section 5.1. Corporate Existence, Good Standing, Etc........................................34
Section 5.2. Principal Places of Business; Location of Records..............................34
Section 5.3. Qualification..................................................................34
Section 5.4. Subsidiaries; Capital Stock....................................................34
Section 5.5. Corporate Power, etc...........................................................35
Section 5.6. Valid and Binding Obligations..................................................35
Section 5.7. Other Agreements...............................................................36
Section 5.8. Payment of Taxes...............................................................36
Section 5.9. Financial Statements...........................................................36
Section 5.10. Other Materials Furnished......................................................36
(ii)
3
Section 5.11. Commitments to Issue Securities................................................37
Section 5.12. Dividends and Capital Distributions............................................37
Section 5.13. Changes in Condition...........................................................37
Section 5.14. Title to Real Property.........................................................37
Section 5.15. Title to Personal Property.....................................................38
Section 5.16. Absence of Undisclosed Liabilities.............................................38
Section 5.17. Patents; Trademarks; Etc.......................................................38
Section 5.18. Litigation.....................................................................39
Section 5.19. Compliance with Laws and Contracts, Etc........................................40
Section 5.20. Foreign Trade Regulations......................................................41
Section 5.21. Governmental Regulations.......................................................42
Section 5.22. Pension Plans; Employees and Benefits..........................................42
Section 5.23. Outstanding Indebtedness.......................................................42
Section 5.24. Employment Practices...........................................................42
Section 5.25. Regulation U...................................................................43
Section 5.26. Solvency.......................................................................43
ARTICLE 6. REPORTS......................................................................................43
Section 6.1. Interim Financial Statements...................................................43
Section 6.2. Annual Financial Statements....................................................43
Section 6.3. Notice of Defaults.............................................................44
Section 6.4. Notice of Litigation...........................................................44
Section 6.5. Communications with Others.....................................................44
Section 6.6. Reportable Events..............................................................45
Section 6.7. Annual Pension Reports.........................................................45
Section 6.8. Multiemployer Pension Plans....................................................45
Section 6.9. Environmental Reports..........................................................46
Section 6.10. Reports to Other Creditors.....................................................46
Section 6.11. Management Letters.............................................................46
Section 6.12. Annual Projections.............................................................46
Section 6.13. Miscellaneous..................................................................47
ARTICLE 7. FINANCIAL RESTRICTIONS.......................................................................47
Section 7.1. Consolidated Fixed Charge Coverage Ratio.......................................47
Section 7.2 Minimum Net Worth..............................................................47
ARTICLE 8. AFFIRMATIVE COVENANTS........................................................................47
Section 8.1. Taxes and Other Obligations....................................................47
Section 8.2. Maintenance of Property; Leases................................................48
Section 8.3. Insurance......................................................................48
Section 8.4. Records, Accounts and Places of Business.......................................49
Section 8.5. Inspection.....................................................................50
Section 8.6. Change in Officers or Directors................................................50
Section 8.7. Existence and Business.........................................................50
(iii)
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Section 8.8. Use of Proceeds................................................................50
Section 8.9. Borrower Common Stock; Ownership of Subsidiaries...............................50
Section 8.10. Additional Mortgages...........................................................50
ARTICLE 9. NEGATIVE COVENANTS...........................................................................51
Section 9.1. Restrictions on Borrowed Funds Indebtedness....................................51
Section 9.2. Restrictions on Liens..........................................................52
Section 9.3. Investments....................................................................52
Section 9.4. Asset Dispositions.............................................................54
Section 9.5. Assumptions, Guarantees, Etc...................................................56
Section 9.6. Mergers and Acquisitions.......................................................56
Section 9.7. Payment of Obligations.........................................................57
Section 9.8. ERISA..........................................................................57
Section 9.9. Restricted Payments and Restricted Investments.................................58
Section 9.10. Transactions with Affiliates...................................................59
Section 9.11. Restrictions on Negative Pledges...............................................59
Section 9.12. Fiscal Year End................................................................59
Section 9.13. Amendments to Certain Agreements...............................................59
Section 9.14. Inactive Subsidiaries..........................................................59
ARTICLE 10. EVENTS OF DEFAULT AND REMEDIES..............................................................60
Section 10.1. Events of Default..............................................................60
Section 10.2. Remedies.......................................................................62
Section 10.3. Setoff.........................................................................62
Section 10.4. Cash Deposits to Support Outstanding Letters of Credit.........................63
Section 10.5. Application of Proceeds........................................................63
ARTICLE 11. WAIVERS; CONSENTS; AMENDMENTS; REMEDIES.....................................................64
Section 11.1. Actions by Lenders.............................................................64
Section 11.2. Actions by Borrower............................................................64
ARTICLE 12. SUCCESSORS AND ASSIGNS......................................................................65
Section 12.1. General........................................................................65
Section 12.2. Assignments....................................................................65
Section 13.3. Participations.................................................................66
ARTICLE 13. THE AGENT...................................................................................67
Section 13.1. Authorization and Action.......................................................67
Section 13.2. Employees and Agents...........................................................68
Section 13.3. Agent's Reliance, Etc..........................................................68
Section 13.4. Payments.......................................................................69
Section 13.5. Fleet and Affiliates...........................................................70
Section 13.6. Lender Credit Decision.........................................................70
Section 13.7. Indemnification of Agent.......................................................70
(iv)
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Section 13.8. Successor Agent................................................................71
Section 13.9. Collateral Security............................................................71
Section 13.10. Notification of Defaults.......................................................71
Section 13.11. Amendment of Article 13........................................................71
ARTICLE 14. MISCELLANEOUS...............................................................................72
Section 14.1. Limitation of Liability; Indemnification.......................................72
Section 14.2. Confidentiality................................................................72
Section 14.3. Survival of Representations....................................................72
Section 14.4. Governmental Regulation........................................................72
Section 14.5. Notices........................................................................73
Section 14.6. Entire Agreement...............................................................74
Section 14.7. Governing Law; Consent to Jurisdiction.........................................74
Section 14.8. Headings.......................................................................75
Section 14.9. Counterparts...................................................................75
Section 14.10. Expenses; Indemnification......................................................75
Section 14.11. Severability of Provisions.....................................................76
Section 14.12. Nonliability of Lenders........................................................76
Section 14.13. WAIVER OF JURY TRIAL...........................................................76
(v)
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LIST OF EXHIBITS AND SCHEDULES
Exhibit A Form of Revolving Credit Note
Exhibit B Form of Guaranty Agreement
Exhibit C Form of Pledge Agreement
Exhibit D Form of Security Agreement
Exhibit E Form of Notice of Borrowing or Conversion
Exhibit F Form of Letter of Credit Notice
Exhibit G Form of Officer's Certificate re: Places of Business, etc.
Exhibit H Form of Compliance Certificate
Exhibit I Form of Opinion of Counsel
Exhibit J Form of Assignment and Acknowledgment Agreement
Exhibit K Form of Certificate of Executive Vice President or Treasurer
Exhibit L Form of Assignment and Assumption Agreement
Schedule 5.4 Subsidiaries; Capital Stock
Schedule 5.12 Dividends and Capital Distributions
Schedule 5.13 Changes in Condition
Schedule 5.14 Title to Real Property
Schedule 5.15 Title to Personal Property
Schedule 5.16 Material Liabilities
Schedule 5.17 Key Employee Contracts; Etc.
Schedule 5.18 Litigation
Schedule 5.19 Compliance with Laws
Schedule 5.22 Pension Plans
Schedule 5.23 Indebtedness
Schedule 5.24 Employment Practice
Schedule 8.3 Insurance
Schedule 9.3 Investments
(vi)
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AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of July
8, 1997, among EKCO GROUP, INC., a Delaware corporation (the "Borrower"), FLEET
NATIONAL BANK (f/k/a Fleet Bank of Massachusetts, N.A.) a national banking
association, as Agent (the "Agent") and Fleet National Bank, as Lender
("Fleet").
R E C I T A L S
- - - - - - - -
WHEREAS, the Borrower, Ekco Housewares, Inc., Ekco Consumer Plastics,
Inc. (f/k/a Frem Corporation), the Agent and various lenders are parties to a
Credit Agreement dated as of April 11, 1995, as amended by a First Amendment to
Credit Agreement dated as of December 31, 1995, a Second Amendment to Credit
Agreement dated as of March 25, 1996 and a Third Amendment to Credit Agreement
dated as of November 13, 1996 (the "Original Credit Agreement");
WHEREAS, Fleet has acquired by assignment all of the interests of the
other lenders under the Original Credit Agreement;
WHEREAS the Borrower, the Agent and Fleet have agreed to amend and
restate the existing credit facility described above;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the parties hereby agree as follows:
ARTICLE 1. DEFINITIONS AND ACCOUNTING TERMS
Section 1.1. DEFINITIONS. In addition to the terms defined elsewhere in
this Agreement, unless otherwise specifically provided herein, the following
terms shall have the following meanings for all purposes when used in this
Agreement, and in any note, certificate, report or other document made or
delivered in connection with this Agreement:
"ADVANCE" shall mean any loan or extension of credit from the
Lenders to the Borrower pursuant to Section 2.1 hereof.
"AFFILIATE" shall mean, with respect to any Person, (i) any
director or officer of such Person, any Person owning, to the knowledge
of such Person more than 5% of the outstanding common stock of such
Person or any director or officer of such a Person, and (ii) any Person
of which any one or more of the Persons described in clause (i) above
is an officer, director, partner, trustee or holder of more than 5% of
the shares or other beneficial interest.
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"AGREEMENT" shall mean this Amended and Restated Credit
Agreement, as amended or supplemented from time to time. References to
Articles, Sections, Exhibits, Schedules and the like refer to the
Articles, Sections, Exhibits, Schedules and the like of this Agreement
unless otherwise indicated.
"APPLICABLE LIBOR RATE" shall mean, with respect to any
Advance, the aggregate of (i) the LIBOR Rate, plus (ii) the Applicable
Margin - LIBOR Rate, each as in effect from time to time.
"APPLICABLE MARGIN - LIBOR RATE" and "APPLICABLE MARGIN - BASE
RATE" shall mean the percentage set forth below opposite the
Consolidated Total Leverage Ratio in effect as of the last day of the
immediately preceding fiscal quarter:
Consolidated Total Applicable Margin -
Leverage Ratio Base Rate LIBOR Rate
-------------- --------- ----------
Greater than 2.25:1.0 0% 1.50%
Equal to or less than
2.25:1.0 0 1.25%
"APPLICABLE BASE RATE" shall mean, with respect to any
Advance, the aggregate of (i) the Prime Rate, plus (ii) the Applicable
Margin - Base Rate, each as in effect from time to time.
"ASSET DISPOSITION" shall mean the direct or indirect sale,
lease, assignment, transfer or other disposition (including, without
limitation, disposition pursuant to sale-leaseback transactions), in a
single transaction or a series of transactions, by the Borrower or any
of its Subsidiaries, of any assets, including shares of stock of a
Subsidiary, other than (i) in the ordinary course of business of the
Borrower or Subsidiary, and (ii) to a Guarantor.
"ASSIGNMENT AND ACKNOWLEDGMENT" shall mean the Amended and
Restated Assignment and Acknowledgment executed as of the date hereof
substantially in the form of EXHIBIT J hereto, between the Borrower and
Xxxxxxx and consented to by Woodstream, as the same may be amended,
modified or supplemented from time to time.
"AVERAGE LIFE" shall mean, as of any date of determination,
with respect to any Borrowed Funds Indebtedness, the quotient obtained
by dividing (i) the sum of the products of the number of years (or
fractions of years) from the date of determination
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to the date of each successive scheduled principal payment under such
Borrowed Funds Indebtedness, multiplied by the amount of each such
principal payment, by (ii) the sum of all such principal payments.
"BASE RATE" shall mean for any date, the Prime Rate on such
date; PROVIDED, HOWEVER, that if the Prime Rate shall no longer be
available, the Base Rate shall be the Federal Funds Rate on such date
plus 1/2% per annum.
"BASE RATE ADVANCE" shall mean any loan or Advance hereunder
upon which interest will accrue on the basis of a formula including as
a component thereof the Prime Rate.
"BORROWED FUNDS INDEBTEDNESS" shall mean any Indebtedness for
borrowed money, including, without limitation, the Lender Obligations
and all Capitalized Lease Obligations.
"BORROWER" shall mean Ekco Group, Inc. together with its
respective successors and assigns.
"BORROWING BASE" shall mean eighty percent (80%) of Eligible
Accounts and fifty percent (50%) of Eligible Inventory of the Borrower
and its Restricted Subsidiaries. The Agent, in its reasonable
discretion, may from time to time by seven (7) days prior written
notice to the Borrower (a) determine that any item included in the
Borrowing Base is unacceptable for inclusion in the Borrowing Base in
the future; or (b) establish reserves against the collection of any
accounts receivable where the Agent has a reasonable basis to doubt the
full and timely collectability of such accounts receivable; or (c)
establish reasonable reserves with respect to the saleability of the
Eligible Inventory.
"BUSINESS DAY" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day other than a Saturday, Sunday or
legal holiday on which banks in Boston, Massachusetts are open for the
conduct of a substantial part of their commercial banking business, and
(ii) with respect to all notices and determinations in connection with,
and payments of principal and interest on, LIBOR Rate Advances, any day
that is a Business Day described in clause (i) and that is also a day
for trading by and between banks in U.S. Dollar deposits in the
interbank Eurodollar market.
"CAPITAL EXPENDITURES" shall mean amounts paid or Indebtedness
incurred by the Borrower and its Subsidiaries in connection with the
purchase or lease of tangible fixed assets that would be required to be
capitalized and shown on the consolidated balance sheet of Borrower in
accordance with GAAP.
"CAPITALIZED LEASE" shall mean any lease which is or should be
capitalized on the balance sheet of the lessee in accordance with GAAP.
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"CAPITALIZED LEASE OBLIGATIONS" shall mean the amount of the
liability reflecting the aggregate discounted amount of future payments
under all Capitalized Leases calculated in accordance with GAAP and
Statement of Financial Accounting Standards No. 13.
"CHANGE IN CONTROL" shall mean the occurrence of any of the
following events: (i) any Person or Borrower shall beneficially own (as
defined in Rule 13d-3 under the Exchange Act) 35% or more of the total
voting power of all classes of capital stock of Borrower entitled to
vote generally in the election of the Board of Directors of Borrower,
without the consent of a majority of the Continuing Directors of
Borrower or (ii) any Person or Borrower, or any Affiliates thereof,
shall succeed in having sufficient of its or their nominees elected to
the Board of Directors of Borrower such that such nominees, when added
to any existing Directors remaining on the Board of Directors of
Borrower after such election who are Affiliates of such Borrower, shall
constitute a majority of the Board of Directors of Borrower, without
consent of a majority of the Continuing Directors of Borrower.
"CLEANING" shall mean Cleaning Specialty Company, a Tennessee
corporation, and its successors and assigns.
"CLOSING DATE" shall mean July 8, 1997.
"COLLATERAL" shall mean any and all property of the Borrower,
the Guarantors or any other Person now or hereafter intended to be
subject to a lien or security interest in favor of the Agent, for the
ratable benefit of the Lenders, pursuant to the Security Documents.
"COMPLIANCE CERTIFICATE" shall mean a certificate in the form
of EXHIBIT H attached hereto and executed by the Chief Executive
Officer, Chief Financial Officer or Treasurer of the Borrower.
"CONSOLIDATED" or "CONSOLIDATED" shall mean, with reference to
any term defined herein, such term as applied to the accounts of the
applicable Person and all of its Subsidiaries, consolidated in
accordance with GAAP; PROVIDED, HOWEVER, that for purposes of
calculations under Article 7 hereof, (i) the assets, liabilities and
items of income and expense of Unrestricted Subsidiaries, and (ii) 100%
of the positive net earnings (but none of the net losses) of any
Subsidiary of which the applicable Person owns, directly or indirectly,
less than 100% of the issued and outstanding stock entitled to vote in
the election of directors (other than director's qualifying shares),
shall not be included, except (in the case of this clause (ii) only) to
the extent of the lesser of (x) cash actually distributed by such
Subsidiary to such Person as a dividend, and (y) the positive net
earnings of such Subsidiary.
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"CONSOLIDATED CASH FLOW" shall mean for any period, the sum of
(i) Consolidated EBITDA, MINUS (ii) Capital Expenditures of Borrower
and its Subsidiaries made or incurred during such period, all as
determined in accordance with GAAP.
"CONSOLIDATED EBITDA" shall mean for any period the sum of (i)
Consolidated Net Income for such period, plus to the extent deducted in
calculating Consolidated Net Income, (ii) Consolidated Interest
Expense, (iii) federal, state and foreign income taxes, (iv)
depreciation expense, (v) amortization expense (but excluding
amortization relating to marketing arrangements with certain retail
customers), and (vi) other similar non-cash expenses (including
non-cash expenses relating to compensation in the form of stock) all
determined with respect to such Person and its Subsidiary.
"CONSOLIDATED FIXED CHARGES" shall mean for any period for any
Person, the sum of (i) Consolidated Cash Interest Expense, plus (ii)
the aggregate amount of scheduled payments of principal by such Person
and its Subsidiaries on Borrowed Funds Indebtedness for such period,
including payments of principal at maturity unless such Indebtedness is
paid at maturity or renewed, extended or refinanced in compliance with
the terms of this Agreement, plus (iii) all federal, state and other
taxes actually paid or required to be paid during such period by such
Person or its Subsidiaries (but excluding accrued and deferred taxes),
plus (iv) all Capital Lease Obligations scheduled to be paid during
such period by such Person and its Subsidiaries, plus (v) any dividends
made during such period by such Person and its Subsidiaries.
"CONSOLIDATED CASH INTEREST EXPENSE" shall mean for any period
for any Person, the aggregate amount of interest actually paid or
required to be paid by such Person and its Subsidiaries (but excluding
any interest accrued, but not required to be paid) during such period
on all Indebtedness outstanding during all or any part of such period.
"CONSOLIDATED NET INCOME" shall mean for any Person, the
consolidated net income (or deficit) from operations of such Person and
its Subsidiaries, after taxes, determined in accordance with GAAP.
"CONSOLIDATED NET WORTH" shall mean as of the date of
determination such Person's net worth as determined in accordance with
GAAP.
"CONSOLIDATED TOTAL LEVERAGE RATIO" shall mean as of any date
of determination, the ratio of (i) all Borrowed Funds Indebtedness less
any cash or cash equivalents of Borrower and its Subsidiaries
determined on a consolidated basis, to (ii) Borrower's Consolidated
EBITDA for the four fiscal quarters ending on such date.
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"CONTINUING DIRECTORS" shall mean (i) the members of the Board
of Directors of Borrower, while such Persons are members of such Board,
who at the beginning of the period of two consecutive years (or, if
shorter, a period commencing on the date of this Agreement and) ending
immediately prior to the consent required by clauses (iii) or (iv) of
the definition of "Change in Control" above (not including any period
prior to the date of this Agreement) constituted Borrower's Board of
Directors, and (ii) any new directors, whose election by Borrower's
Board of Directors or nomination for election by stockholders was
approved by a vote of at least two-thirds (2/3) of Borrower's Directors
then still in office who either were Borrower's Directors at the
beginning of the period or whose election or nomination for election
was previously so approved.
"CONSUMER PLASTICS" shall mean Ekco Consumer Plastics, Inc., a
Massachusetts corporation, and its successors and assigns.
"DEFAULT" shall mean an Event of Default as defined in Article
10, or an event or condition which with the passage of time or giving
of notice, or both, would become such an Event of Default.
"DISTRIBUTION" shall mean with respect to any Person: (i) the
declaration or payment of any dividend on or in respect of any shares
of any class of capital stock of such Person, other than dividends
payable solely in shares of common stock of such Person; (ii) the
purchase, acquisition, redemption or other retirement of any shares of
any class of capital stock of such Person, directly or indirectly;
(iii) any other distribution on or in respect of any shares of any
class of capital stock of such Person; and (iv) the forgiveness of any
Indebtedness owed to such Person by any of its Affiliates.
"EKCO DISTRIBUTION" shall mean Ekco Distribution, Inc. of
Illinois, a Delaware corporation.
"ELIGIBLE ACCOUNTS" shall mean accounts receivable which (a)
arise from the sale of goods which have been shipped; (b) are not
outstanding for more than 120 days after the date of invoice; (c) are
not past due for more than 30 days beyond the due date specified in the
invoice; (d) are not represented by a note or other negotiable
instrument; (e) are due from an account debtor located in the United
States or supported by a letter of credit in form and substance
satisfactory to Agent; (f) the account debtor is creditworthy and not
subject to any insolvency proceedings; (g) are not due from a
Subsidiary or an Affiliate; (h) if due from a governmental agency, the
Borrower has complied with the Assignment of Claims Act or any similar
statute such that the Agent may collect the account directly from the
agency; and (i) are subject to a first priority perfected security
interest in favor of the Lenders. In calculating the amount of Eligible
Accounts, the Borrower shall deduct the amount of any (i) deposit which
an account debtor may have paid with respect to the goods or services
to which
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such account receivable relates, (ii) any chargeback, unauthorized
deduction, current or aged credit or other potential setoff; (iii) any
amount in dispute, (iv) any advertising, volume or other allowance
(except allowance for prompt payment) that may be deducted from the
accounts receivable, (v) any cash accounts, and (vi) any accounts
receivable arising from sales of scrap or from transactions outside the
normal distribution of goods to customers.
"ELIGIBLE INVENTORY" shall mean finished goods inventory which
(i) is held for sale in the ordinary course of business, (ii) owned by
the Borrower or a Subsidiary, (iii) located in the United States at
premises owned by the Borrower or a Subsidiary (or at a premises leased
by the Borrower or a Subsidiary where the Agent has obtained a
landlord's waiver satisfactory to the Agent), (iv) in which the Agent
holds a first priority security interest in favor of the Lenders. In
calculating the amount of Eligible Inventory, the Borrower shall deduct
the amount of any (i) reserve for obsolescence, overstock or other
reserve maintained in the Borrower's accounting records, (ii) samples,
(iii) returned goods, and (iv) defective goods.
"ENVIRONMENTAL LAWS" shall mean any and all applicable
foreign, federal, state and local environmental, health or safety
statutes, laws, regulations, rules, ordinances, policies and rules or
common law (whether now existing or hereafter enacted or promulgated),
of all governmental agencies, bureaus or departments which may now or
hereafter have jurisdiction over the Borrower and its Subsidiaries, and
all applicable judicial and administrative and regulatory decrees,
judgments and orders, including common law rulings and determinations,
relating to injury to, or the protection of, real or personal property
or human health or the environment, including, without limitation, all
requirements pertaining to reporting, licensing, permitting,
investigation, remediation and removal of emissions, discharges,
releases or threatened releases of Hazardous Materials, chemical
substances, pollutants or contaminants, whether solid, liquid or
gaseous in nature, into the environment or relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of such Hazardous Materials, chemical substances,
pollutants or contaminants.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time.
"ESOP" shall mean the Ekco Group, Inc. Employees' Stock
Ownership Plan Trust, as in effect on the Closing Date.
"EXCHANGE ACT" shall mean the Securities and Exchange Act of
1934 and all rules and regulations promulgated thereunder, as amended
from time to time.
"EXISTING LETTERS OF CREDIT" shall mean each of the letters of
credit issued by the Agent for the account of Borrower and its
Subsidiaries which are identified on
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SCHEDULE 1 attached hereto, as such letters of credit may, from time to
time, be amended or renewed from time to time.
"FEDERAL FUNDS RATE" shall mean, as of any date, the weighted
average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such date is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is
a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"GAAP" shall mean generally accepted accounting principles as
defined by controlling pronouncements of the Financial Accounting
Standards Board, as from time to time supplemented and amended.
"GUARANTORS" shall mean individually, each of Cleaning,
Consumer Plastics, Ekco Distribution, Housewares, Xxxxxxx,
Manufacturing, Woodstream, Xxxxxx-Xxxxxx, Via and any other Person that
shall become a guarantor of the Lender Obligations pursuant to the
provisions hereof, and collectively, all of them.
"GUARANTY" or "GUARANTEE" or "GUARANTIES" shall mean any
arrangement whereby any Person (for purposes of this definition, the
"guarantor") is or becomes liable in respect of any Indebtedness or
other obligation of another, and any other arrangement whereby credit
is extended to another obligor on the basis of any promise of the
guarantor, whether that promise is expressed in terms of an obligation
to pay the Indebtedness of such obligor, or to purchase or lease assets
under circumstances that would enable such obligor to discharge one or
more of its obligations, or to maintain the capital, the working
capital, solvency or general financial condition of such obligor,
whether or not such arrangement is listed in the balance sheet of the
guarantor or referred to in a footnote thereto, except for endorsements
made in connection with the deposit of items for credit or collection
in the ordinary course of business.
"GUARANTY AGREEMENTS" shall mean each of the Guaranty
Agreements executed by the Guarantors in connection with the Original
Credit Agreement, as amended by the Amended and Restated Guaranty
Agreements dated as of the date hereof, substantially in the form of
EXHIBIT B hereto, to be executed and delivered by each of the
Guarantors in favor of the Agent, as the same may be amended, modified
or supplemented from time to time.
"HOUSEWARES" shall mean Ekco Housewares, Inc., a Delaware
corporation.
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"HOUSEWARES PAYABLE" shall mean the intercompany payable due
from Housewares to Borrower from time to time, which as of June 1, 1997
was in the aggregate amount of $47,145,000.
"INACTIVE SUBSIDIARIES" shall mean collectively, (i) Delhi
Manufacturing Corporation, a Delaware corporation, (ii) Ekco Wood
Products Co., a Delaware corporation, (iii) Fenwick, a California
corporation, (iv) FPI, Inc., a Washington corporation, (v) Trappe of
Aspen, Inc., a Pennsylvania corporation, and (vi) Ekco Consumer
Products, Ltd., a Delaware corporation.
"INDEBTEDNESS" shall mean, as to any Person, all obligations,
contingent and otherwise, which in accordance with GAAP should be
classified upon such Person's balance sheet as liabilities.
"INTERCOMPANY PAYABLES" shall mean collectively, the
Housewares Payable, the Xxxxxxx Payable and the Via Payable.
"INTERCOMPANY SECURITY AGREEMENTS" shall mean (i) the Security
Agreements dated as of April 11, 1995 in substantially the form of
Exhibit D to the Original Credit Agreement by each of Woodstream and
Xxxxxxx and (ii) the Intercompany Security Agreements dated as of the
date hereof by each of Via and Housewares, each in favor of Borrower to
secure their respective obligations under the Intercompany Payables as
the same may be amended, modified or supplemented from time to time.
"INTEREST PERIOD" shall mean with respect to any LIBOR Rate
Advance, the period commencing on the date of such LIBOR Rate Advance
and ending one, two, three or six months thereafter, as the Borrower
may request as provided in Section 2.2 or 2.3(a) hereof; PROVIDED THAT:
(i) any Interest Period (other than an Interest
Period determined pursuant to clause (ii) below) that would otherwise
end on a day that is not a Business Day shall be extended to the next
succeeding Business Day;
(ii) any Interest Period that would otherwise end
after the Revolving Credit Termination Date shall end on the Revolving
Credit Termination Date; and
(iii) notwithstanding clause (ii) above, no
Interest Period shall have a duration of less than 30 days, and if any
Interest Period applicable to LIBOR Rate Advances would be for a
shorter Period, such Interest Period shall not be available hereunder.
"INVESTMENT" shall mean with respect to any Person, (i) any
stock, evidence of Indebtedness or other security of another Person,
(ii) any loan, advance, contribution to
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capital, extension of credit (except for current trade and customer
accounts receivable for inventory sold or services rendered in the
ordinary course of business and payable in accordance with customary
trade terms) to another Person, and (iii) any purchase of (A) stock or
other securities of another Person, or (B) any business or undertaking
of another Person (whether by purchase of assets or securities), or any
commitment or option to make any such purchase, or (C) any other
investment, whether existing on the date of this Agreement or
thereafter made. The term "Investment" shall not include ordinary
advances to employees for travel expenses, drawing accounts and similar
expenditures made in the ordinary course of business.
"XXXXXXX" shall mean Xxxxxxx Brush Manufacturing Co., a
Massachusetts corporation.
"XXXXXXX PAYABLE" shall mean the intercompany payable due from
Xxxxxxx to Borrower from time to time, which as of June 1, 1997 was in
the aggregate amount of $47,773,000.
"LENDER AGREEMENTS" shall mean this Agreement, the Notes, the
Security Documents, all letter of credit applications and other
agreements executed in connection with the issuance of Letters of
Credit, and any other present or future agreement from time to time
entered into between or among one or more Lenders and/or the Agent on
the one hand, and the Borrower, or the Guarantors, or any Affiliate on
the other hand, relating to this Agreement or which the Borrower and
the Majority Lenders have acknowledged is a Lender Agreement, each as
from time to time amended or modified, and all statements, reports and
certificates delivered by the Borrower to the Lenders and/or the Agent
in connection therewith.
"LENDER(S)" shall mean (i) each Person signatory hereto as a
Lender, and (ii) from and after any time that any other Person becomes
a party hereto as a Lender, all Persons who are Lenders hereunder.
"LENDER OBLIGATIONS" shall mean all present and future
obligations and Indebtedness of the Borrower or any Guarantor owing to
the Lenders or the Agent under this Agreement, the Notes or any other
Lender Agreement, of every kind and description, direct or indirect,
absolute or contingent, primary or secondary, due or to become due,
whether now existing or hereafter arising, including, without
limitation, the obligations to pay the Indebtedness from time to time
evidenced by the Notes and obligations to pay interest, commitment fees
and other fees and charges from time to time owed under any Lender
Agreement, and further including, without limitation, all obligations
of the Borrower or Guarantor arising under or in connection with any
checking or disbursement account maintained by the Agent or any Lender.
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"LETTERS OF CREDIT" shall mean all documentary and standby
letters of credit issued by the Agent for the account of the Borrower
pursuant to Section 2.11 hereof, each of which shall be in form
satisfactory to the Agent in its sole discretion.
"LIBOR PRICING OPTION" shall mean the option granted to the
Borrower pursuant to Section 2.3 to have interest on all or a portion
of the Advances computed on the basis of the LIBOR Rate for an
applicable Interest Period.
"LIBOR RATE" shall mean for any Interest Period for any LIBOR
Rate Advance, the quotient of (i) the rate of interest determined by
the Agent, at about 11:00 a.m. (Boston, Massachusetts time) on the Rate
Fixing Day as being the rate at which deposits in U.S. dollars are
offered to it by first-class banks in the London Interbank Market for
deposit for such Interest Period in amounts comparable to the aggregate
principal amount of LIBOR Rate Advances to which such Interest Period
relates, divided by (ii) the difference between one (1) minus the
Reserve Requirement (expressed as a decimal) applicable to that
Interest Period. The LIBOR Rate shall be adjusted automatically as of
the effective date of any change in the Reserve Requirement.
"LIBOR RATE ADVANCE" means any Advance hereunder upon which
interest will accrue on the basis of a formula including as a component
thereof the LIBOR Rate. The expiration date of any LIBOR Rate Advance
shall mean the last day of the Interest Period applicable to such LIBOR
Rate Advance.
"MAJORITY LENDERS" shall mean, at any time, the Lenders having
made not less than 51% of the outstanding principal amount of the
Advances hereunder, or, if no Advances have been made, the Lender or
Lenders having 51% of the aggregate Commitments.
"MANUFACTURING" shall mean Ekco Manufacturing of Ohio, Inc., a
Delaware corporation.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect
on the business, properties, assets, operations or condition of (i) the
Borrower, or (ii) the Borrower and the Guarantors taken as a whole.
"MAXIMUM REVOLVING CREDIT AMOUNT" shall mean $35,000,000.
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"MORTGAGES" shall mean collectively (i) the Open End Mortgage
and Security Agreement, Fixture Filing Statement, Assignment of Rents
and Financing Statement executed by Woodstream with respect to the real
property owned by Woodstream in Lititz, Pennsylvania, (ii) the Mortgage
and Security Agreement executed by Xxxxxxx with respect to the real
property owned by Xxxxxxx located in Easthampton, Massachusetts, (iii)
the Mortgage and Security Agreement executed by Xxxxxx-Xxxxxx with
respect to the real property owned by Xxxxxx-Xxxxxx located in
Hamilton, Ohio, (iv) the Mortgage and Security Agreement executed by
Housewares with respect to real property in Chicago, Illinois, and (v)
the Open-End Mortgage and Security Agreement executed by Manufacturing
with respect to the real property in Massillon, Ohio, each such
document executed in connection with the Original Credit Agreement and
amended by the Amendment to Mortgages, dated as of the date hereof, to
be executed and delivered by the Borrower and the Guarantors, as
appropriate, to the Agent, and as the same may be amended, modified or
supplemented from time to time.
"MULTIEMPLOYER PENSION PLAN" shall mean a multiemployer plan
within the meaning of Section 4001(a)(3) of ERISA, to which the
Borrower or Subsidiary is required to make contributions.
"NET PROCEEDS" shall mean, in each case as set forth in a
statement in reasonable detail delivered by the Borrower or Subsidiary
to the Agent: with respect to any property or asset subject to an Asset
Disposition, the excess, if any, of (i) the cash received in connection
with such Asset Disposition (including cash paid pursuant to the terms
of any note or other deferred payment obligation delivered as part of
the purchase price in connection with such Asset Disposition, when and
as such cash is received) over (ii) the sum of (A) the principal amount
of any Indebtedness which is secured by such property or asset and
which is required to be repaid in connection with such Asset
Disposition, PLUS (B) the reasonable out-of-pocket expenses incurred by
the Borrower or Subsidiary, as the case may be, in connection with such
Asset Disposition, PLUS (C) provision for taxes, including income
taxes, attributable to such Asset Disposition.
"1996 CONSOLIDATED FINANCIAL STATEMENTS" shall mean the
Consolidated Balance Sheet of the Borrower as of December 29, 1996 and
the related Consolidated Statements of Earnings and Retained Earnings
for the year then ended and notes to such financial statements.
"NOTES" shall mean the Revolving Credit Notes and any other
notes issued by the Borrower to the Lenders from time to time pursuant
to this Agreement.
"OBLIGOR" shall mean any Person that is the Borrower under
this Agreement or a Guarantor of any Lender Obligations.
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"PENSION PLAN" shall mean an employee benefit plan or other
plan maintained for the employees of the Borrower or Subsidiary as
described in Section 4021(a) of Title IV of ERISA.
"PERMITTED LIENS" shall mean:
(i) Deposits or pledges made in connection with,
or to secure payment of, workmen's compensation, unemployment
insurance, old age pensions or other social security; liens in respect
of judgments or awards to the extent such judgments or awards do not
constitute a Default hereunder; and liens for taxes, assessments or
governmental charges or levies and liens to secure claims for labor,
material or supplies to the extent that payment thereof shall not at
the time be required to be made in accordance with Section 8.1 hereof;
(ii) Encumbrances in the nature of zoning
restrictions, easements, and rights or restrictions of record on the
use of real property which do not materially detract from the value of
such property or impair its use in the business of the owner or lessee;
(iii) Liens (other than judgments and awards)
created by or resulting from any litigation or legal proceeding which
is currently being contested in good faith by appropriate proceedings
satisfactory to the Lenders;
(iv) Liens arising by operation of law to secure
landlords, lessors or renters under leases or rental agreements made in
the ordinary course of business and confined to the premises or
property rented; and
(v) Workmen's or materialmen's liens arising out
of construction, reconstruction, rehabilitation or maintenance of any
of the properties of the Borrower or any of its Subsidiaries.
"PERSON" shall mean an individual, corporation, partnership,
joint venture, association, estate, joint stock company, trust,
organization, business, or a government or agency or political
subdivision thereof.
"PLEDGE AGREEMENTS" shall mean each of the Pledge Agreements
executed and delivered by any Person in connection with the Original
Credit Agreement, as amended by the Amended and Restated Pledge
Agreements, substantially in the form of EXHIBIT C hereto, to be
executed and delivered by the Borrower and the Guarantors, as
appropriate, in connection with this Agreement in favor of the Agent,
as the same may be amended, modified or supplemented from time to time.
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"PRIME RATE" shall mean the rate of interest from time to time
announced and made effective by the Agent as its "Prime Rate," it being
understood that such rate is a reference rate, not necessarily the
lowest, which serves as the basis upon which effective rates of
interest are calculated for obligations making reference thereto.
"RATE FIXING DAY" shall mean, in the case of a LIBOR Rate
Advance, the second Business Day preceding the Business Day on which an
Interest Period begins.
"REGULATION D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System from time to time in effect and
shall include any successor or other regulation or official
interpretation of said Board of Governors relating to reserve
requirements applicable to member banks of the Federal Reserve System.
"REGULATION U" shall mean Regulation U of the Board of
Governors of the Federal Reserve System from time to time in effect and
shall include any successor or other regulation or official
interpretation of said Board of Governors relating to the extension of
credit by banks for the purpose of purchasing or carrying margin stocks
applicable to member banks of the Federal Reserve System.
"REPORTABLE EVENT" shall mean an event reportable to the
Pension Benefit Guaranty Corporation under Section 4043 of Title IV of
ERISA, unless exempted from the reporting requirements by regulations
of the Pension Benefit Guaranty Corporation.
"RESERVE REQUIREMENT" shall mean the maximum aggregate reserve
requirement (including all basic, supplemental, marginal and other
reserves) which is imposed under Regulation D on the Lenders against
"Euro-currency Liabilities" as defined in Regulation D.
"RESTRICTED INVESTMENT" shall mean any Investment other than
those permitted under subsections 9.3(a) through (h) hereof.
"RESTRICTED PAYMENT" shall mean, with respect to any Person:
(i) any Distribution by such Person; or (ii) any payment of principal
or interest on, or any retirement of principal of, loans or advances
owed by such Person to any of its Affiliates, or (iii) any payment of
principal or interest on account of, or acquisition, redemption or
retirement of, any Subordinated Indebtedness of such Person.
"RESTRICTED STOCK PLANS" shall mean collectively the following
as amended from time to time, (i) The 1984 Ekco Group, Inc. Restricted
Stock Plan, (ii) The 1985 Ekco Group, Inc. Restricted Stock Plan, (iii)
Ekco Group Inc.'s 1984 Employee Stock Purchase Plan, (iv) the 1995
Restatement of the Incentive Compensation Plan for Executive Employees
of Ekco Group, Inc. and its Subsidiaries, and (v) comparable plans
providing for the issuance of capital stock of Borrower to officers,
directors and
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employees of Borrower and its Subsidiaries having terms similar to the
foregoing, each as amended from time to time by a resolution of the
Board of Directors of Borrower or a duly authorized committee thereof.
"RESTRICTED SUBSIDIARY" shall mean any Subsidiary other than
an Unrestricted Subsidiary.
"REVOLVING CREDIT COMMITMENT" shall mean, as to any Lender in
respect of the Revolving Credit Facility, the amount set forth below
such Lender's name on an execution page hereof as its Revolving Credit
Commitment, which amount equals the product of (i) the Maximum
Revolving Credit Amount, TIMES (ii) such Lender's Revolving Credit
Commitment Percentage.
"REVOLVING CREDIT COMMITMENT PERCENTAGE" shall mean, as to any
Lender, the percentage figure set forth below such Lender's name on an
execution page hereof as its Revolving Credit Commitment Percentage, as
the same may, from time to time, be modified pursuant to any Assignment
and Assumption Agreements executed by such Lender.
"REVOLVING CREDIT FACILITY" shall mean the revolving credit
facility in favor of Borrower.
"REVOLVING CREDIT NOTES" shall mean the Amended and Restated
Revolving Credit Notes executed by the Borrower in favor of each Lender
evidencing the Indebtedness of the Borrower in respect of the Revolving
Credit Facility. Each Revolving Credit Note shall be in the amount of
the applicable Lender's Revolving Credit Commitment and shall be
substantially in the form of EXHIBIT A hereto.
"REVOLVING CREDIT TERMINATION DATE" means April 30, 2000.
"SECURITY AGREEMENTS" shall mean each of the Security
Agreements executed by the Obligors in connection with the Original
Credit Agreement, as amended by the Amended and Restated Security
Agreements, substantially in the form of EXHIBIT D hereto, to be
executed and delivered by the Borrower and each of the Guarantors in
favor of the Agent, as the same may be amended, modified or
supplemented from time to time.
"SECURITY DOCUMENTS" shall mean the Security Agreements, the
Intercompany Security Agreements, the Assignment and Acknowledgment,
the Xxxxxxx Note, the Pledge Agreements, the Guaranty Agreements and
the Mortgages, and any other document, instrument or agreement now or
hereafter executed by the Borrower, a Guarantor or any other Person
guarantying or providing collateral security for the Lender
Obligations.
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"SENIOR NOTES" shall mean the senior unsecured notes due 2006
in the principal amount of $125,000,000 issued by Borrower pursuant to
an Indenture dated as of March 25, 1996 among Borrower, the guarantors
named therein and Fleet National Bank of Connecticut as Trustee (the
"Indenture")
"STOCK OPTION PLANS" shall mean collectively the following as
amended from time to time, (i) The Ekco Group, Inc. 1987 Stock Option
Plan, (ii) the Ekco Group, Inc. 1988 Directors' Stock Option Plan, and
(iii) comparable plans providing for the issuance of options to
purchase capital stock of Borrower to officers, directors and employees
of Borrower and its Subsidiaries having terms similar to the foregoing,
each as amended from time to time by a resolution of the Board of
Directors of Borrower or a duly authorized committee thereof.
"SUBORDINATED INDEBTEDNESS" shall mean as to the Borrower,
Indebtedness of the Borrower which is subordinated to the Indebtedness
of the Borrower hereunder, under the Notes and to all other Lender
Obligations, on terms and conditions approved in writing by the
Lenders.
"SUBSIDIARY" shall mean any Person of which the Borrower shall
now or hereafter at the time own, directly or indirectly through one or
more Subsidiaries or otherwise, sufficient voting stock (or other
beneficial interest) to entitle it to elect at least a majority of the
board of directors or trustees or similar managing body. The term
"Subsidiary" shall not include any employee benefit plan of the
Borrower or any entity appointed or established by the Borrower for or
pursuant to the terms of any such plan.
"UNIFORM CUSTOMS AND PRACTICE" shall mean the Uniform Customs
and Practice for Documentary Credits (1993 Revision) International
Chamber of Commerce
Publication No. 500.
"UNRESTRICTED SUBSIDIARY" shall mean any of the Inactive
Subsidiaries; PROVIDED, HOWEVER, that any Unrestricted Subsidiary may
become a Restricted Subsidiary on the date on which each of the
following conditions shall have occurred: (i) such Subsidiary shall
have executed and delivered a Guaranty of the Lender Obligations
substantially in the form of the Guaranty Agreements; (ii) such
Subsidiary shall have executed and delivered a Security Agreement, a
Pledge Agreement, Uniform Commercial Code financing statements on
appropriate form, mortgages, and any other documents required to grant
to the Agent, for the benefit of the Lenders, a perfected security
interest and lien on all real and personal property of such Subsidiary,
subject to no other liens or encumbrances other than liens permitted
under Section 9.2 hereunder; (iii) all of the representations and
warranties set forth in Article 5 hereof shall be true and correct with
respect to such Subsidiary in all material respects (except for any
such
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representations and warranties which expressly relate to an earlier
date, and except for matters permitted under Articles 8 and 9 hereof);
and (iv) no Default shall occur after giving effect to the conversion
of such Subsidiary into a Restricted Subsidiary, PROVIDED, that for
purposes of this clause (iv) and the financial covenants set forth in
Article 7 hereof, such conversion shall be deemed to have occurred and
become effective on the last day of the immediately preceding fiscal
quarter.
"VIA" shall mean B. Via International Housewares, Inc., a
Delaware corporation.
"VIA PAYABLE" shall mean the intercompany payable due from Via
to Borrower from time to time, which as of June 1, 1997 was in the
aggregate amount of $9,633,000.
"WOODSTREAM" shall mean Woodstream Corporation, a Pennsylvania
corporation.
"XXXXXX-XXXXXX" shall mean Xxxxxx-Xxxxxx, Inc., an Ohio
corporation.
Section 1.2. ACCOUNTING TERMS. All accounting terms used and not
defined in this Agreement shall be construed in accordance with GAAP, and all
financial data required to be delivered hereunder shall be prepared in
accordance with such principles. If any changes in accounting principles are
hereafter occasioned by promulgation of rules, regulations, pronouncements or
opinions by or are otherwise required by the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants (or successors
thereto or agencies with similar functions), and any of such changes results in
a change in the method of calculation of, or affect the results of such
calculation of, any of the financial covenants, standards or terms found herein,
then the parties hereto agree to enter into and diligently pursue negotiations
in order to amend such financial covenants, standards or terms so as to reflect
fairly and equitably such changes, with the desired result that the criteria for
evaluating the financial condition and results of operations of the Borrower and
its Subsidiaries shall be the same after such changes as if such changes had not
been made. If the parties are unable to agree upon the amendments to any such
financial covenants, standards or terms, the parties agree to submit any
remaining disputes to an independent third-party accounting firm (having no
substantial relationship with any party) of national recognition selected by
such parties for a determination of the appropriate amendments to such financial
covenant, standard or term, which determination shall be binding upon the
parties.
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Section 1.3. TERMS DEFINED ELSEWHERE. The following terms, defined
elsewhere in this Agreement as set forth below, shall have the respective
meanings therein defined:
Section of Agreement
Term Where Defined
---- --------------------
"Acquiror" Section 9.6
"Assignment and Assumption Agreement" Section 12.2
"CERCLA" Section 5.19(b)(ii)
"Code" Section 6.7
"Commitment Fee" Section 2.5(a)
"Control Group Person" Section 6.8
"Credit Participants" Section 13.3
"Disbursement Date" Section 2.11.2
"Event of Default" Section 10.1
"Hazardous Substances" Section 5.19(b)
"Letter of Credit Facility Fee" Section 2.5(b)
"Letter of Credit Notice" Section 2.11.1(b)
"Notice of Borrowing" Section 2.2(a)
"Officer's Certificate" Section 3.1
"Real Property" Section 5.14
"Revolving Credit Commitment Fee" Section 2.5(a)
"Reimbursement Amount" Section 2.11.3
"Register" Section 12.2(c)
"Revolving Credit" Article 2
"Successor Lender" Section 12.2(a)
"Supporting Schedules" Section 6.1
ARTICLE 2. THE CREDITS
Subject to the terms and conditions hereof, and in reliance on the
representations and warranties contained herein, each of the Lenders hereby
establishes credit facilities in favor of the Borrower in the respective
principal amounts of each Lender's Revolving Credit Commitments. The aggregate
principal amount of the Lenders' Revolving Credit Commitments is $35,000,000.
The credit facilities shall consist of a secured revolving credit facility in
favor of Borrower in the maximum principal amount of $35,000,000.
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Section 2.1. THE REVOLVING CREDIT FACILITIES.
(a) Subject to the terms and conditions of this Agreement and
so long as there exists no Default, at any time prior to the Revolving Credit
Termination Date or the earlier acceleration of the Revolving Credit Notes, each
Lender shall severally make such Advances to the Borrower as the Borrower may
from time to time request, by notice to the Agent in accordance with Section
2.2, in an aggregate amount (i) as to each Lender, not to exceed at any time the
amount of such Lender's Revolving Credit Commitment, and (ii) as to all of the
Lenders, not to exceed an amount determined by subtracting (A) the aggregate
outstanding balance of all Advances theretofore made by the Lenders with respect
to such Revolving Credit Facility PLUS the aggregate amount available to be
drawn under all Letters of Credit issued by the Agent for the account of the
Borrower in accordance with Section 2.11 hereof, PLUS the amount of any
unreimbursed draws under Letters of Credit FROM (B) the lesser of (x) the
Borrowing Base or (y) the Maximum Revolving Credit Amount from time to time in
effect. Concurrently with the execution of the Agreement, the Borrower will
execute and deliver to the Lenders the Revolving Credit Notes to evidence the
Advances.
(b) Subject to the foregoing limitations and the provisions of
Article 4 hereof, the Borrower shall have the right to repay the outstanding
balance of the Advances and to request further Advances, by notice to the Agent
in accordance with Section 2.2; PROVIDED that the Agent and the Lenders shall
have the absolute right to refuse to make any Advances for so long as there
would exist any Default upon the making of such Advance or after giving effect
thereto. All outstanding Advances and all interest accrued and unpaid thereon
and all other amounts outstanding hereunder shall be paid in full on the
Revolving Credit Termination Date.
(c) The Borrower shall furnish a computation of the Borrowing
Base on a form approved by the Agent by the fifteenth (15th) day of each
calendar month which computation shall be prepared as of the close of business
on the last business day of the preceding month of each respective subsidiary's
month end and certified as correct by the Borrower's chief financial officer,
treasurer or controller. The Lenders shall have no obligation to make any
Advance if the Borrower fails to furnish such computation on a timely basis.
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Section 2.2. NOTICE AND MANNER OF BORROWING AND CONVERSION OF LOANS.
(a) Whenever the Borrower desires to obtain or continue an
Advance hereunder or to convert an outstanding Advance into an Advance of
another type provided for in this Agreement, the Borrower shall notify the Agent
(which notice shall be irrevocable) by telephone, telecopy, telex or cable
received no later than (i) 2:00 p.m. (Boston, Massachusetts time) on the date on
which the requested Advance is to be made or continued as or converted to a Base
Rate Advance, and (ii) 2:00 p.m. (Boston, Massachusetts time) on the date two
(2) Business Days before the day on which the requested Advance is to be made or
continued as or converted to a LIBOR Rate Advance. Each such notice shall be
made to the Agent by the President, Chief Executive Officer, Vice President,
Treasurer, Assistant Treasurer or Chief Financial Officer of the Borrower, or by
any individual who is an employee or representative of the Borrower and who has
been designated in writing to the Agent by any of the foregoing officers to be
authorized to act in such capacity on behalf of the Borrower, and shall specify
(A) the effective date of each Advance (or portion thereof) to be borrowed,
continued or converted (which date must be a Business Day), (B) the amount of
such Advance (which must be a minimum of $500,000 and in integral multiples of
$100,000 for a LIBOR Rate Advance), (C) the interest rate option to be
applicable thereto, and (D) if applicable, the duration of the requested
Interest Period (subject to the provisions of the definition of Interest Period
and Section 2.3). Each such notification (a "Notice of Borrowing or Conversion")
shall be immediately followed by a written confirmation thereof by the Borrower
in substantially the form of EXHIBIT E attached hereto, PROVIDED that if such
written confirmation differs in any material respect from the action taken by
the Agent, the records of the Agent shall control absent manifest error.
The Borrower agrees to indemnify and hold the Lenders harmless
for any action, including the making of any Advances hereunder, or loss or
expense, taken or incurred by the Lenders in good faith reliance upon any
telephonic Notice of Borrowing or Conversion. In the event the Borrower shall
fail to state the choice of an interest rate to apply to any Advance in
accordance with this Section 2.2, or if the Borrower shall select a LIBOR Rate
Advance but shall fail to select an Interest Period with respect to such
Advance, the Borrower shall be deemed to have chosen a Base Rate Advance. At the
time of the initial request for an Advance made under this Section 2.2, the
Borrower shall have provided the Agent with a Compliance Certificate. The
Borrower hereby agrees (i) that the Lenders shall be entitled to rely upon the
Compliance Certificate most recently delivered to the Agent until it is
superseded by a more recent Compliance Certificate, and (ii) that each request
for an Advance, whether by telephone or in writing or otherwise, shall
constitute a confirmation of the truth and accuracy in all material respects of
the representations and warranties contained in the most recent Compliance
Certificate then in the Agent's possession (except as to changes which are
permitted under this Agreement and the other Lender Agreements). Notwithstanding
the provisions of this Section 2.2 and Section 2.3 hereof, the Borrower may not
request the making, conversion or continuation of LIBOR Rate Advances if it
would result in there being more than fifteen (15) LIBOR Pricing Options in the
aggregate outstanding at any one time.
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(b) Subject to the terms and conditions of this Agreement,
each Lender shall make available on or before 3:00 p.m. (Boston, Massachusetts
time) on the date of each proposed Advance, to the Agent at the Agent's address
and in immediately available funds, such Lender's Revolving Credit Commitment
Percentage of such Advance. After the Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article 3, the Agent will
credit such funds to the applicable Borrower on the date of the proposed
Advance.
(c) Unless the Agent shall have received notice from a Lender
prior to the date of any Advance that such Lender will not make available to the
Agent such Lender's Revolving Credit Commitment Percentage of such Advance, the
Agent may assume that such Lender has made such amount available to the Agent on
the date of such Advance in accordance with and as provided in this Section 2.2
and the Agent may, in reliance upon such assumption, make available on such date
a corresponding amount to the Borrower. If and to the extent such Lender shall
not have so made its Revolving Credit Commitment Percentage of such Advance
available to the Agent and the Agent shall have made available such
corresponding amount to the Borrower, such Lender agrees to pay to the Agent
forthwith on demand, and the Borrower agrees to repay to the Agent within thirty
(30) days after demand (but only after demand for payment has first been made to
such Lender and such Lender has failed to make such payment), an amount equal to
such corresponding amount together with interest thereon for each day from the
date the Agent shall make such amount available to the Borrower until the date
such amount is paid or repaid to the Agent, at an interest rate equal to the
Federal Funds Rate in effect from time to time plus one-half of one percent
(1/2%). If such Lender shall pay to the Agent such corresponding amount, such
amount so paid shall constitute such Lender's Advance for purposes of this
Agreement. If the Borrower makes a repayment required by the foregoing
provisions of this Section 2.2(c) and thereafter the applicable Lender or
Lenders make the payments to the Agent required by this Section 2.2(c), the
Agent shall promptly refund the amount of the Borrower's payment.
(d) The failure of any Lender to make the Advance to be made
by it on any date shall not relieve such Lender or any other Lender of its
obligation, if any, hereunder to make its Advance on such date, but no Lender
shall be responsible for the failure of any other Lender to make the Advance to
be made by such other Lender.
(e) Notwithstanding the foregoing, the requirements of notice
and minimum amounts with respect to Advances imposed by Section 2.2(a) shall not
apply to Advances made pursuant to Section 2.11.3(a).
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Section 2.3. INTEREST; DURATION OF INTEREST PERIODS.
(a) Subject to the terms of Sections 2.4 and 2.9 hereof, the
Borrower shall pay interest on the unpaid balance of the Advances from time to
time outstanding at the Applicable Base Rate or the Applicable LIBOR Rate, as
elected by the Borrower in accordance with Section 2.2 and this Section 2.3.
(b) With respect to Base Rate Advances, interest shall be
payable in arrears on the last day of each calendar month, commencing July 30,
1997, and continuing until all amounts of principal which are Base Rate Advances
shall have been fully paid. With respect to LIBOR Rate Advances, interest shall
be payable in arrears on the last day of the applicable Interest Period and, if
such Interest Period is more than three months, interest shall be paid in three
month intervals from the first day of such Interest Period and on the last day
of such Interest Period, for interest accrued to each such date.
(c) Subject to the provisions of the definition of Interest
Period, the duration of each Interest Period applicable to a LIBOR Rate Advance
shall be as specified in the applicable Notice of Borrowing or Conversion. The
Borrower shall have the option to elect a subsequent Interest Period to be
applicable to such LIBOR Rate Advance by delivering to the Agent a Notice of
Borrowing or Conversion evidencing such election received no later than (i) 2:00
p.m. (Boston, Massachusetts time) on the last day of the then applicable
Interest Period if such LIBOR Rate Advance is to be continued as or converted to
a Base Rate Advance, and (ii) two (2) Business Days before the end of the then
applicable Interest Period if such LIBOR Rate Advance is to be continued as or
converted to a LIBOR Rate Advance; PROVIDED, HOWEVER, that the Borrower may not
elect to continue or convert any Advance as a LIBOR Rate Advance if any Default
shall exist. The Agent will promptly inform each Lender of a Notice of Borrowing
or Conversion electing a LIBOR Rate Advance received by the Agent pursuant to
this Section 2.3(c) and of the duration of the Interest Period specified by the
Borrower therein.
(d) If the Agent does not receive a notice of election of
duration of an Interest Period for a LIBOR Rate Advance pursuant to subsection
(c) above within the applicable time limits specified therein, or if, when such
notice must be given, a Default exists, the Borrower shall be deemed to have
elected to convert such Advance in whole into a Base Rate Advance on the last
day of the then current Interest Period with respect thereto.
Section 2.4. ADDITIONAL INTEREST PAYMENTS. During the continuance of
any Event of Default, the Borrower shall, on demand, pay to the Lenders interest
on the unpaid principal balance of the Advances and, to the extent permitted by
law, on any overdue installments of interest, at a rate per annum equal to the
lesser of (i) the applicable interest rate on Advances hereunder plus three
percent (3%), or (ii) the maximum rate of interest permitted to be charged under
applicable law.
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Section 2.5. FEES.
(a) The Borrower shall pay to the Agent, for the account of
the Lenders with respect to the Revolving Credit Facility in proportion to each
Lender's respective Revolving Commitment Percentage, a credit commitment fee
(the "Revolving Credit Commitment Fee") of three eighths of one percent (.375%)
per annum of the difference between (i) the Maximum Revolving Credit Amount, and
(ii) the daily average principal amount of the Advances and face amount of all
Letters of Credit outstanding under the Revolving Credit Facility from time to
time, from the date hereof to and including the Revolving Credit Termination
Date. The Revolving Credit Commitment Fee shall be payable quarterly in arrears
on the last day of each March, June, September and December, commencing June 30,
1997, for the quarter then ended (and in the case of the payment due on June 30,
1997, for the period from April 1, 1997 to June 30, 1997).
(b) The Borrower shall pay to the Agent for the account of the
Lenders, in proportion to each Lender's Revolving Credit Commitment Percentage,
a fee (the "Letter of Credit Facility Fee") with respect to each Letter of
Credit issued for the account of the Borrower hereunder, calculated at a rate of
one and one-half percent (1.50%) per annum on the aggregate amount available to
be drawn on all such outstanding Letters of Credit, from and including the date
of issuance of each Letter of Credit until the expiration date thereof. The
Letter of Credit Facility Fee shall be payable quarterly in advance, on the date
of issuance of the initial Letter(s) of Credit hereunder and thereafter on the
last day of each March, June, September and December.
(c) AMENDMENT FEE. The Borrower has paid the Agent for its own
account an amendment fee of $131,250 with respect to the credit facilities
provided hereunder and such fee shall be deemed earned by the Agent in full on
the date hereof.
Section 2.6. COMPUTATION OF INTEREST AND FEES.
(a) All computations of interest and fees hereunder shall be
made by the Agent on the basis of a year of 360 days for the actual number of
days (including the first day but excluding the last day) elapsed. No interest
payment or interest rate charged hereunder shall exceed the maximum rate
authorized from time to time by applicable law. The outstanding principal
balance of the Notes as reflected on the Agent's records from time to time shall
be considered correct and binding on the Borrower and the Lenders (absent
manifest error) unless within sixty (60) days after receipt of any notice by the
Agent of such outstanding amount, the Borrower or any Lender notifies the Agent
to the contrary.
(b) Any change in the rate of interest resulting from a change
in the Base Rate shall become effective as of the opening of business on the day
on which such change in the Base Rate becomes effective.
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Section 2.7. TERMINATION OR REDUCTION OF REVOLVING CREDIT FACILITIES.
The Borrower may at any time terminate or reduce the Revolving Credit Facility
in whole or in part, subject to Section 4.7 hereof, without premium or penalty,
upon not less than three (3) Business Days prior written notice to the Agent;
PROVIDED that any such partial reduction or termination shall be in a minimum
amount of $1,000,000 and integral multiples of $1,000,000. Following termination
or reduction of all or part of the Revolving Credit Facility, such terminated
portion may not be reinstated. On the date of any such termination or reduction
the Borrower shall pay all interest and Revolving Credit Commitment Fees accrued
to such date.
Section 2.8. YIELD PROTECTION. If any law or any governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law), or any interpretation thereof, or compliance of the Lenders with such:
(i) subjects any of the Lenders to any tax,
duty, charge or withholding on or from payments due from the Borrower
(excluding taxation of the overall net income of the Lenders), or
changes the basis of taxation of payments to such Lender in respect of
its loans or Advances or other amounts due it hereunder; or
(ii) imposes or increases or deems applicable any
reserve, assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the account of, or
credit extended by, any of the Lenders (other than the Reserve
Requirement, to the extent it is taken into account in determining the
interest rate applicable to LIBOR Rate Advances); or
(iii) imposes any other condition the result of
which is to increase the cost to any Lender of making, funding or
maintaining loans or Advances hereunder or issuing Letters of Credit or
maintaining participations therein or reduces any amount receivable by
any Lender in connection with such loans, Advances or Letters of
Credit, or requires any Lender to make any payment calculated by
reference to the amount of loans held or interest received by it, by an
amount deemed material by such Lender; or
(iv) affects the amount of capital required or
expected to be maintained by any Lender or any corporation controlling
any Lender and such Lender determines the amount of capital required is
increased by or based upon the existence of this Agreement or its
obligation to make loans or Advances or issue Letters of Credit
hereunder or of commitments of this type;
then, within fifteen (15) days of demand by such Lender, the Borrower shall pay
such Lender that portion of such increased expense incurred (including, in the
case of the preceding clause (iv), any reduction in the rate of return on
capital to an amount below that which such Lender could have achieved but for
such change in regulation after taking into account such Lender's policies as to
capital adequacy) or reduction in an amount received which such
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Lender determines is attributable to making, funding and maintaining its loans
and Advances hereunder.
Section 2.9. AVAILABILITY OF LIBOR PRICING OPTION; CHANGED
CIRCUMSTANCES. In the event that:
(a) on any date on which the LIBOR Rate would otherwise
be set, the Agent shall have determined in good faith (which determination shall
be final and conclusive) that adequate and fair means do not exist for
ascertaining the LIBOR Rate; or
(b) at any time the Agent shall have determined in good
faith (which determination shall be final and conclusive) that
(i) the implementation of the LIBOR Pricing
Option has been made impracticable or unlawful by (A) the occurrence of
a contingency that materially and adversely affects the interbank
Eurodollar market, or (B) compliance by any Lender in good faith with
any applicable law or governmental regulation, guideline or order or
interpretation or change thereof by any governmental authority charged
with the interpretation or administration thereof or with any request
or directive of any such governmental authority (whether or not having
the force of law); or
(ii) the LIBOR Rate shall no longer represent the
effective cost to the Lenders for U.S. dollar deposits in the interbank
market for deposits in which they regularly participate;
then, and in such event, the Agent shall forthwith so notify the Borrower
thereof. Until the Agent notifies the Borrower that the circumstances giving
rise to such notice no longer apply, the obligation of the Lenders and the Agent
to allow election by the Borrower of LIBOR Rate Advances shall be suspended. If
at the time the Agent so notifies the Borrower, the Borrower has previously
given the Agent a Notice of Borrowing or a notice pursuant to Section 2.3(c)
requesting a LIBOR Rate Advance, but such LIBOR Pricing Option has not yet gone
into effect, such Notice of Borrowing or notice shall automatically be deemed to
be a request for a Base Rate Advance. Upon such date as shall be specified in
such notice (which shall not be earlier than the date such notice is given) all
outstanding LIBOR Rate Advances shall automatically convert to Base Rate
Advances and, in the event of an occurrence of the type specified in Section
2.9(b), to the extent that the Agent or any Lender has incurred any so-called
"LIBOR breakage costs" relating to such outstanding LIBOR Rate Advances, the
Borrower shall pay any amounts required to be paid pursuant to Section 4.7 with
respect to such Advances.
Section 2.10. LENDER CERTIFICATES; SURVIVAL OF INDEMNITY. If any Lender
shall seek reimbursement or indemnification pursuant to Section 2.8 or 4.7, such
Lender shall deliver a certificate to the Borrower stating the amount due
thereunder. Such certificate as to the amount due under Section 2.8 or 4.7 shall
be final, conclusive and binding on the Borrower in
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the absence of manifest error. Determination of amounts payable under Section
2.8 or 4.7 in connection with a LIBOR Rate Advance shall be calculated as though
the Lenders funded the LIBOR Rate Advance through the purchase of a deposit of
the type and maturity corresponding to the deposit used as a reference in
determining the LIBOR Rate applicable to such LIBOR Rate Advance, whether in
fact that is the case. Unless otherwise provided herein, the amount specified in
the certificate shall be payable within fifteen (15) days after receipt by the
Borrower of the certificate. The obligations of the Borrower under Section 2.8
shall survive for six months following payment of all Lender Obligations and
termination of this Agreement; provided that such continuation shall not affect
the obligation of the Agent to release the liens granted pursuant to the
Security Documents upon termination of this Agreement and the Security
Documents.
Section 2.11. LETTERS OF CREDIT.
SECTION 2.11.1. ISSUING LETTERS OF CREDIT.
(a) Subject to the terms and conditions hereof,
including satisfaction of the conditions set forth in Sections 3.1 and
3.2 hereof, and provided no Default has occurred and is continuing, the
Agent shall at any time prior to the Revolving Credit Termination Date,
upon the request of the Borrower pursuant to Section 2.11.1(b) hereof,
issue Letters of Credit for the account of the Borrower; PROVIDED,
HOWEVER, that (i) the aggregate face amount of all outstanding Letters
of Credit shall not at any time exceed $17,500,000 and (ii) the
aggregate face amount under all outstanding Letters of Credit issued
for the account of the Borrower PLUS the aggregate of all Advances
theretofore made by the Lenders to the Borrower PLUS all unreimbursed
draws under Letters of Credit shall not at any time exceed the
Borrower's Maximum Revolving Credit Amount. The parties hereto
acknowledge and agree that on the Closing Date, all Existing Letters of
Credit shall automatically and without any further action become
Letters of Credit hereunder, be subject, in all respects, to the
provisions of this Section 2.11 and the other provisions of this
Agreement.
(b) The Borrower may request that the Agent issue a
Letter of Credit for the account of the Borrower by written notice in
the form attached hereto as EXHIBIT F (a "Letter of Credit Notice")
given to the Agent not less than three (3) Business Days prior to the
proposed date of issuance of such Letter of Credit. The Letter of
Credit Notice shall (i) the proposed date of issuance, beneficiary,
amount and expiry date (which shall not be later than one year after
the date of issuance of such Letter of Credit or later than the
Revolving Credit Termination Date) of such Letter of Credit, (ii)
specify whether such request is for a standby or a documentary letter
of credit, and (iii) be accompanied by a letter of credit application
on the appropriate form completed to the satisfaction of, and with such
amendments and modifications as may be deemed necessary by, the Agent.
Subject to the terms and conditions thereof, the Agent shall, as soon
as practicable and in any event within three (3) Business Days of
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receipt of the Letter of Credit Notice, issue the proposed Letter of
Credit. The Agent shall notify each Lender of the Letter of Credit
Notice prior to the date of issuance of the applicable Letter of
Credit.
SECTION 2.11.2. LENDERS' PARTICIPATION. Upon the issuance by
the Agent of a Letter of Credit, and without further action, each
Lender shall be deemed to have irrevocably purchased, to the extent of
its Revolving Credit Commitment Percentage, a participation interest in
such Letter of Credit and any Letter of Credit application or other
documents relating thereto. The Agent shall notify each Lender of the
presentment for payment of any draft under a Letter of Credit, together
with notice of the date (the "Disbursement Date") on which such payment
shall be made. On the Disbursement Date each Lender shall deliver to
the Agent by wire funds transfer such Lender's Revolving Credit
Commitment Percentage of the draft paid by the Agent under the
applicable Letter of Credit.
SECTION 2.11.3. REIMBURSEMENT AND OTHER PAYMENTS.
(a) The Borrower hereby agrees to pay to the Agent on
the date on which the Agent shall be required to pay any draft
presented under any Letter of Credit issued for the account of the
Borrower, a sum (the "Reimbursement Amount") equal to: (i) the amount
so paid under such Letter of Credit, plus (ii) interest on any amount
remaining unpaid by the Borrower to the Agent under clause (i) from and
including the date on which such amount becomes payable pursuant to
clause (i) until payment in full, payable on demand, at a per annum
rate of interest equal to the rate applicable to Base Rate Advances of
the Borrower under Section 2.3(a). If the Borrower shall fail to pay to
the Agent the Reimbursement Amount on the date on which the Agent shall
be required to pay any draft presented under any such Letter of Credit,
the Agent shall, to the extent the Borrower has availability under the
Revolving Credit Facility to request an Advance and in the absence of
an event of the type referred to in Section 10.1(f) hereof, consider
such failure to be a request for a Base Rate Advance in the amount of
the unpaid Reimbursement Amount, and, to the extent the Agent has
received each Lender's Revolving Credit Commitment Percentage of the
amount paid by the Agent under such Letter of Credit, the Agent shall
apply the proceeds of such Advance to reimburse the Lenders for such
amounts received from the Lenders.
(b) The Borrower hereby agrees to pay to the Agent,
for its own account, sums equal to any and all customary fees and
expenses which the Agent may pay or incur relative to the issuance of
any Letter of Credit issued for the account of the Borrower, any
amendment, transfer or negotiation thereof or any payment by the Agent
thereunder.
SECTION 2.11.4. OBLIGATIONS ABSOLUTE. The obligations of the
Borrower with respect to the Letters of Credit shall be unconditional
and irrevocable, and shall be paid
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strictly in accordance with the terms of this Agreement under all
circumstances, including, without limitation, the following
circumstances:
(a) any lack of validity or enforceability of any
Letter of Credit or this Agreement;
(b) any amendment or waiver of or any consent to or
actual departure from this Agreement;
(c) the existence of any claim, set-off, defense or
other right which the Borrower may have at any time against any
beneficiary or any transferee of a Letter of Credit (or any Persons or
entities for which any such beneficiary or any such transferee may be
acting), the Agent, any Lender or any other Person or entity, whether
in connection with this Agreement, the transactions contemplated herein
or in any other agreements or any unrelated transaction;
(d) any statement or any other document presented
under a Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(e) payment by the Agent under a Letter of Credit
against presentation by the beneficiary thereof of a draft or
certificate which does not comply with the terms of such Letter of
Credit; or
(f) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing.
SECTION 2.11.5. THE UNIFORM CUSTOMS AND PRACTICE. The Uniform
Customs and Practice shall be binding on the Borrower, the Agent and
the Lenders. The Borrower assumes all risks of the acts or omissions of
the beneficiary of each Letter of Credit with respect to such Letter of
Credit. In furtherance of, and not in limitation of the Agent's rights
and powers under the Uniform Customs and Practice, but subject to all
other provisions of this Section 2.11.5, it is understood and agreed
that the Agent and the Lenders shall not have any liability for, and
that the Borrower assume all responsibility for: (a) the genuineness of
any signature; (b) the form, correctness, validity, sufficiency,
genuineness, falsification and legal effect of any draft, certification
or other document required by a Letter of Credit or the authority of
the Person signing the same; (c) the failure of any instrument to bear
any reference or adequate reference to a Letter of Credit or the
failure of any Persons to note the amount of any instrument on the
reverse of a Letter of Credit or to surrender a Letter of Credit or
otherwise to comply with the terms and condition of a Letter of Credit;
(d) the good faith or acts of any Person other than the Agent and its
agents and employees; (e) the existence, form or sufficiency or breach
or default under any agreement or instrument of any nature whatsoever;
(f) any delay in giving or failure to
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give any notice, demand or protest; and (g) any error, omission, delay
in or nondelivery of any notice or other communication, however sent.
The determination as to whether the required documents are presented
prior to the expiration of a Letter of Credit and whether such other
documents are in proper and sufficient form for compliance with a
Letter of Credit shall be made by the Agent in its sole discretion,
which determination shall be conclusive and binding upon the Borrower
and the Lenders absent manifest error. It is agreed that the Agent may
honor, as complying with the terms of a Letter of Credit and this
Agreement, any documents otherwise in order and signed or issued by the
beneficiary thereof. Any action, inaction or omission on the part of
the Agent under or in connection with any Letter of Credit or any
related instruments or documents, if in good faith and in conformity
with such laws, regulations or commercial or banking customs as the
Agent may reasonably deem to be applicable, shall be binding upon the
Borrower and the Lenders, shall not place the Agent under any liability
to the Borrower and the Lenders, and shall not affect, impair or
prevent the vesting of any of the Agent's rights or powers hereunder or
the Borrower's obligation to make full reimbursement or the Lenders'
obligations to purchase participations in amounts paid by the Agent
pursuant to Section 2.11.2.
SECTION 2.11.6. MODIFICATION, CONSENT, ETC. If Borrower,
either in writing or orally, requests or consents to any modification
or extension of a Letter of Credit or waives failure of any draft,
certificate or other documents to comply with the terms of a Letter of
Credit, the Agent and the Lenders shall be entitled to rely and shall
be deemed to have relied on such request, consent or waiver with
respect to any action taken or omitted by the Agent pursuant to any
such request, consent or waiver, and such extension, modification or
waiver shall be binding upon the Borrower.
SECTION 2.11.7. LIABILITY OF THE AGENT AND THE LENDERS.
Neither the Agent, the Lenders nor any of their respective officers,
directors or employees shall be liable or responsible for: (a) the use
which may be made of any Letter of Credit or any acts or omissions of
any beneficiary or transferee in connection therewith; (b) the
validity, sufficiency or genuineness of documents, or of any
endorsement thereon, even if such documents should prove to be in any
or all respects invalid, insufficient, fraudulent or forged; (c)
payment by the Agent against presentation of documents which do not
comply with the terms of a Letter of Credit, including failure of any
documents to bear any reference or adequate reference to a Letter of
Credit; or (d) any other circumstances whatsoever in making or failure
to make payment under a Letter of Credit. In furtherance and not in
limitation of the foregoing, the Agent may accept documents that appear
on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary.
Notwithstanding anything in this Section 2.11 to the contrary, the
Borrower shall have a claim against the Agent, and the Agent shall be
liable to the Borrower, to the extent, but only to the extent, of any
direct, as opposed to consequential, damages suffered by the Borrower
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which were caused by the Agent's failure to conform to the standards of
the Uniform Customs and Practice.
ARTICLE 3. CONDITIONS OF LENDING
Section 3.1. CONDITIONS TO THE INITIAL ADVANCE. The Lenders'
obligations to make available the Revolving Credit Facilities provided for
herein and to make the initial Advance(s) and/or issue the initial Letter(s) of
Credit thereunder shall be subject to compliance by the Borrower with its
obligations contained herein, and to the satisfaction or waiver by the Lenders,
at or before the Closing Date, of all the following conditions precedent:
(a) RECEIPT OF DOCUMENTS. The Agent shall have received
each of the following, in form and substance satisfactory to the Agent and its
counsel or in the form attached hereto as an Exhibit, as the case may be:
(1) REVOLVING CREDIT NOTES. The Revolving Credit
Notes duly executed by the Borrower;
(2) SECURITY DOCUMENTS. (i) the Amended and Restated
Guaranty Agreements duly executed by each Guarantor; (ii) the Amended
and Restated Security Agreements duly executed by the Borrower and each
of the Guarantors, (iii) Amended and Restated Assignment and
Acknowledgment duly executed by Xxxxxxx, Woodstream and Borrower, as
appropriate; (iv) Amended and Restated Pledge Agreements duly executed
by Borrower and the Guarantors, as appropriate, (v) the amendments to
Mortgages duly executed by the Borrower and the Guarantors, as
appropriate, and (vi) Assignment and Acknowledgment duly executed by
Via, Housewares and Borrower, as appropriate;
(3) CERTIFICATE OF CORPORATE ACTION BY THE BORROWER.
A certificate of the Clerk or Secretary of the Borrower, dated the
Closing Date, certifying the names and true signatures of the officers
of the Borrower authorized to sign this Agreement, the Revolving Credit
Notes and the other Lender Agreements to which the Borrower is a party;
(4) OFFICER'S CERTIFICATES. A certificate regarding
places of business and locations of collateral duly executed by the
Chairman, President, Treasurer or Chief Financial Officer of the
Borrower and each of the Guarantors, in the form attached hereto as
EXHIBIT G;
(5) RESOLUTIONS. Copies of all resolutions of the
Executive Committee of, or the Board of Directors of, the Borrower and
each of the Guarantors, certified by the Secretary or Clerk of the
Borrower and the applicable Guarantor, as
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being contained in the minutes of each such Committee or Board of
Directors, and all such other documents, similarly certified,
evidencing all other necessary corporate actions by the Borrower and
the Guarantors, duly authorizing the execution, delivery and
performance by the Borrower and each Guarantor of the Lender Agreements
to which each of them is a party and all other transactions
contemplated hereby and thereby;
(6) CERTIFICATES OF CORPORATE ACTION BY GUARANTORS. A
certificate of the Secretary or Clerk of each Guarantor, dated the
Closing Date, certifying the names and true signatures of the officers
of the Guarantor authorized to sign the Guaranty Agreements and the
other Lender Agreements to which such Guarantor is a party;
(7) OPINION OF COUNSEL TO BORROWER AND GUARANTORS.
The opinion of Messrs. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo,
P.C., counsel to the Borrower and the Guarantors, dated the Closing
Date;
(8) OTHER DOCUMENTS. Such other documents,
certificates and opinions as the Agent may reasonably request.
(b) REPRESENTATIONS AND WARRANTIES. The representations
and warranties herein and those made by or on behalf of the Borrower or any
Subsidiary in any other Lender Agreement shall be true and correct as of the
date of execution of this Agreement, with the same effect as if made at and as
of such time.
(c) NO DEFAULT, ETC. There shall exist no Default or any
other condition which, after the passage of time or giving of notice or both,
would result in a Default upon the making of the Advances or the issuance of the
Letters of Credit.
(d) LEGALITY. The making of the Advances and the issuance
of the Letters of Credit shall not be prohibited by any law or governmental
order or regulation applicable to the Lenders, the Agent or to the Borrower, and
all necessary consents, approvals and authorizations of any Person for all the
credits made pursuant to this Agreement shall have been obtained.
(e) LITIGATION. Except as set forth in SCHEDULE 5.18
attached hereto, there shall exist no litigation, at law or in equity, or any
proceeding before any federal, state, provincial or municipal board or other
governmental or administrative agency pending or, to the best knowledge of the
Borrower, threatened, or any basis therefore, (i) with respect to the Revolving
Credit Facilities, or (ii) which, if determined adversely to the Borrower or
Guarantor, is reasonably likely to have a Material Adverse Effect or a material
adverse effect on the ability of the Borrower or Guarantor to perform its
obligations to the Lenders and the Agent under the Lender Agreements to which it
is a party.
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Section 3.2. CONDITIONS TO ALL ADVANCES AND LETTERS OF CREDIT. The
Lenders' obligations to make any Advance or the Agent's obligation to issue any
Letter of Credit from time to time pursuant to this Agreement shall be subject
to compliance by the Borrower with its obligations contained in this Agreement
and each other Lender Agreement, and to the satisfaction, at or before making of
each Advance or issuance of each Letter of Credit, as the case may be, of all of
the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties herein and those made by or on behalf of the Borrower or any
Subsidiary in any other Lender Agreement shall be correct in all material
respects as of the date on which any Advance is made or any Letter of Credit is
issued, as the case may be, with the same effect as if made at and as of such
time, except that references in Article 5 to the 1996 Consolidated Financial
Statements shall refer to the most recent annual financial statements furnished
to the Lenders pursuant to Article 6 hereof, and references in Section 5.9(b) to
the financial projections dated May __, 1997 shall refer to the most recent
annual financial projections furnished to the Lenders pursuant to Section 6.12
hereof, and except as to changes which are permitted under this Agreement and
the other Lender Agreements.
(b) NO DEFAULT. On the date of any Advance or issuance of any
Letter of Credit hereunder, there shall exist no Default upon the making of, or
after giving effect to, the Advance or the issuance of, and after giving effect
to, the Letter of Credit, as the case may be.
(c) LEGALITY. The making of the requested Advance or the
issuance of the requested Letter of Credit, as the case may be, shall not be
prohibited by any law or governmental order or regulation applicable to the
Lenders, the Agent or the Borrower and all necessary consents, approvals and
authorizations of any Person for any such Advance or Letter of Credit shall have
been obtained.
(d) NOTICE OF BORROWING. The Agent shall have received a
Notice of Borrowing in accordance with Section 2.2 or a Letter of Credit Notice
in accordance with Section 2.11.1(b), as the case may be, duly executed and
completed by the Borrower, in form and substance satisfactory to the Agent.
(e) BORROWING BASE REPORT. The Agent shall have received a
computation of the Borrowing Base as required by Section 2.1(c).
(f) CASH MANAGEMENT. If the Agent shall have made a prior
written request to Borrower at a time when the Borrower has Advances outstanding
in excess of 75% of the Borrowing Base, within twenty-one (21) Business Days
after receipt of such request the Borrower shall have (a) established a lock box
arrangement with Agent to which all account debtors owing accounts receivable to
the Borrower or its Subsidiaries are requested to mail payments, and (b)
established a blocked account arrangement with all depository institutions
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under which all collections of the Borrower and its Subsidiaries are transferred
to Agent for application to payment of any outstanding Advances.
ARTICLE 4. PAYMENT AND REPAYMENT
Section 4.1. MANDATORY PAYMENT. If at any time the Maximum Revolving
Credit Amount shall be less than the aggregate outstanding principal balance of
all Advances made under the Revolving Credit Facility, plus the aggregate amount
available to be drawn under, and all unreimbursed drawings under, all Letters of
Credit issued by the Agent for the account of the Borrower, the Borrower shall
immediately repay to the Agent for the account of the Lenders an amount equal to
the difference between such Maximum Revolving Credit Amount then in effect and
such amount.
Section 4.2. VOLUNTARY PREPAYMENT. The Borrower may make prepayments to
the Agent for the account of the Lenders of any outstanding principal amount of
the Advances which are Base Rate Advances at any time prior to 12:30 p.m.
(Boston, Massachusetts time) on any Business Day without premium or penalty. The
Borrower may make prepayments to the Agent for the account of the Lenders of any
outstanding principal amount of Advances which are LIBOR Rate Advances at any
time prior to 12:30 p.m. (Boston, Massachusetts time) on any Business Day,
subject, however, to the premiums and penalties set forth in Section 4.7.
Section 4.3. PAYMENT AND INTEREST CUTOFF. Notice of each prepayment
pursuant to Section 4.2 shall be given to the Agent (i) in the case of
prepayment of Prime Rate Advances, not later than 12:00 noon (Boston,
Massachusetts time) on the date of payment, and (ii) in the case of prepayment
of LIBOR Rate Advances on any day other than the last day of the Interest Period
applicable thereto, not later than 12:00 noon (Boston, Massachusetts time) one
Business Day prior to the proposed date of payment, and, in each case, shall
specify the total principal amount of the Advances to be paid on such date.
Notice of prepayment having been given in compliance with this Section 4.3, the
amount specified to be prepaid shall become due and payable on the date
specified for prepayment, and from and after said date (unless the Borrower
shall default in the payment thereof) interest thereon shall cease to accrue.
Unpaid interest on the principal amount of any LIBOR Rate Advance so prepaid
accrued to the date of prepayment shall be due on the date of prepayment.
Section 4.4. PAYMENT OR OTHER ACTIONS ON NON-BUSINESS DAYS. Subject to
clause (i) of the definition of Interest Period, whenever any payment to be made
hereunder shall be stated to be due on a day other than a Business Day such
payment shall be made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of payment of interest,
Revolving Credit Commitment Fees or Letter of Credit Facility Fees, as the case
may be. In the case of any other action the last day for performance of which
shall be a day other than a Business Day, the date for performance shall be
extended to the next succeeding Business Day.
Section 4.5. METHOD AND TIMING OF PAYMENTS.
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(a) All payments required to be made pursuant to the
provisions of this Agreement and any other Lender Agreement, and all prepayments
pursuant to Section 4.1, may be charged by the Agent against the Borrower's
accounts with the Agent, for the account of the respective Lenders in proportion
to their respective Commitments hereunder. The Borrower hereby authorizes the
Agent and the Lenders, without notice to the Borrower, to charge against any
account of the Borrower with the Agent or such Lender an amount equal to the
accrued interest, principal, Reimbursement Amounts and other amounts from time
to time due and payable to the Agent and the Lenders hereunder and under all
other Lender Agreements which are owed by the Borrower.
(b) The Borrower shall make each payment to be made hereunder
not later than 12:00 noon (Boston time) on the day when due in lawful money of
the United States to the Agent at its address set forth in Section 13.5 in
immediately available funds. The Agent will, after its receipt thereof,
distribute like funds relating to the payment of principal, interest,
Reimbursement Amounts, Revolving Credit Commitment Fees or any other amounts
payable hereunder ratably to the Lenders.
Section 4.6. SHARING OF PAYMENTS, ETC. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Advances in excess of its ratable share
of payments in respect thereof, such Lender shall forthwith notify the Agent
thereof and purchase from each other Lender such participations in the Advances
held by such other Lenders as shall be necessary to cause such purchasing Lender
to share the excess payment ratably with each other Lender; PROVIDED, HOWEVER,
that if all or any portion of such excess payment is thereafter recovered from
such purchasing Lender, such purchase from each Lender shall be rescinded and
each Lender shall repay to the purchasing Lender the purchase price to the
extent of such recovery together with an amount equal to such Lender's ratable
share (according to the proportion of (i) the amount of such Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered. The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section 4.6 may,
to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrower in the amount of such
participation.
Section 4.7 PAYMENTS NOT AT END OF INTEREST PERIOD. If the Borrower for
any reason makes any payment of principal with respect to any LIBOR Rate Advance
on any day other than the last day of the Interest Period applicable to such
LIBOR Rate Advance, including without limitation by reason of acceleration, or
fails to borrow an Advance after electing a LIBOR Pricing Option with respect
thereto pursuant to Section 2.2, the Borrower shall pay to the Agent, for the
ratable account of the Lenders, an amount computed pursuant to the following
formula:
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L = (R - T) x P x D
---------------
360
L = amount payable to the Agent
R = interest rate on such LIBOR Rate Advance
T = effective interest rate per annum at which any readily marketable
bond or other obligation of the United States, selected at the
Agent's reasonable discretion, maturing on or near the last day of
the then applicable Interest Period of such LIBOR Rate Advance and
in approximately the same amount as such LIBOR Rate Advance can be
purchased by the Agent on the day of such payment of principal or
failure to borrow
P = the amount of principal prepaid or the amount of the requested
LIBOR Rate Advance
D = the number of days remaining in the Interest Period as of the date
of such payment or the number of days of the requested Interest
Period
The Borrower shall pay such amount upon presentation by the Agent of a statement
setting forth the amount and the Agent's calculation thereof pursuant hereto,
which statement shall be deemed true and correct absent manifest error.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement and extend
the Revolving Credit Facilities contemplated hereby, the Borrower hereby makes
the following representations and warranties.
Section 5.1. CORPORATE EXISTENCE, GOOD STANDING, ETC. The Borrower and
each of its Restricted Subsidiaries is a corporation validly organized, legally
existing and in good standing under the laws of the jurisdiction in which it is
organized, with all requisite corporate power and authority and full legal right
to own or to hold under lease its properties and conduct its business as now
conducted and as proposed to be conducted by it. The Borrower has the corporate
power to enter into and perform this Agreement and all other Lender Agreements
to which it is a party and to execute and deliver the Revolving Credit Notes to
be issued by it. Certified copies of the charter documents and By-laws of the
Borrower and its Restricted Subsidiaries have been previously delivered to the
Agent and are true, accurate and complete as of the date hereof.
Section 5.2. PRINCIPAL PLACES OF BUSINESS; LOCATION OF RECORDS. The
principal places of business of the Borrower and each of its Restricted
Subsidiaries as of the date hereof are listed on SCHEDULE 5.14 attached hereto.
All of the books and records or true and complete copies thereof relating to the
respective accounts and contracts of the Borrower and its
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Restricted Subsidiaries are and will be kept at such locations or such other
locations as to which the Borrower provides the Agent at least 15 days' prior
written notice.
Section 5.3. QUALIFICATION. The Borrower and each of its Restricted
Subsidiaries is duly qualified, licensed and authorized to do business and is in
good standing as a foreign corporation in each jurisdiction where its failure to
be so qualified, licensed or authorized to do business would have a Material
Adverse Effect.
Section 5.4. SUBSIDIARIES; CAPITAL STOCK. As of the date hereof, the
Borrower has no Subsidiaries other than those listed on SCHEDULE 5.4 attached
hereto. There are presently issued by the Subsidiaries of the Borrower and
outstanding the shares of capital stock indicated on SCHEDULE 5.4 attached
hereto. Each such Subsidiary has received the consideration for which such stock
was authorized to be issued and has otherwise complied with all legal
requirements relating to the authorization and issuance of shares of stock and
all such shares are validly issued, fully paid and non-assessable. Except as set
forth on SCHEDULE 5.4, no Subsidiary has any other capital stock of any class
outstanding.
Section 5.5. CORPORATE POWER, ETC. The execution, delivery and
performance of this Agreement, the Revolving Credit Notes and all other Lender
Agreements, and the incurrence of Indebtedness to the Lenders hereunder or
thereunder, now or hereafter owing:
(a) are within the corporate powers of the Borrower and
each of the Guarantors, having been duly authorized by its respective Board of
Directors or applicable Committee thereof or other similar governing body, and,
if required by law, by its charter documents, By-laws and stockholders;
(b) do not require any approval or consent of, or filing
with, any governmental agency or other Person (or such approvals and consents
have been obtained and delivered to the Agent) and are not in contravention of
law or the terms of the charter documents or By-laws of the Borrower or such
Guarantor or any amendment thereof, except to such extent as shall have no
practical adverse effect, as determined by the Lenders in their sole discretion;
(c) do not and will not
(i) result in a breach of or constitute a
default under any indenture or loan or credit agreement or any other
agreement, lease or instrument to which the Borrower or such Guarantor
is a party or by which the Borrower or such Guarantor, or any of their
respective properties are bound or affected, except to such extent as
shall have no practical adverse effect, as determined by the Lenders in
their sole discretion,
(ii) result in, or require, the creation or
imposition of any mortgage, deed of trust, pledge, lien, security
interest or other charge or encumbrance of any
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nature on any property now owned or hereafter acquired by the Borrower
or such Guarantor, except as provided in the Lender Agreements, or
(iii) result in a violation of or default under any
law, rule, regulation, order, writ, judgment, injunction, decree,
determination, award, indenture, agreement, lease or instrument now in
effect having applicability to the Borrower or Guarantors, or to any of
their respective properties, except to such extent as shall have no
practical adverse effect, as determined by the Lenders in their sole
discretion.
Section 5.6. VALID AND BINDING OBLIGATIONS. This Agreement, the
Revolving Credit Notes and all the other Lender Agreements executed in
connection herewith and therewith constitute, or will constitute when delivered,
the valid and binding obligations of the Borrower and the Guarantors party
thereto, as the case may be, enforceable in accordance with their respective
terms.
Section 5.7. OTHER AGREEMENTS. Neither the Borrower nor any Guarantor
is a party to any indenture, loan or credit agreement, or any lease or other
agreement or instrument, or subject to any charter or corporate restriction,
which is likely to have a Material Adverse Effect, or a material adverse effect
on the ability of the Borrower or any Guarantor to carry out any of the
provisions of this Agreement, the Revolving Credit Notes or any of the other
Lender Agreements to which it is a party.
Section 5.8. PAYMENT OF TAXES. The Borrower and each of its Restricted
Subsidiaries has filed all federal, state, county, local, foreign or other
income tax, excise tax, sales tax, use tax, gross receipts tax, franchise tax,
employment and payroll related tax, property tax and all other tax returns which
are required to be filed by it and has paid, or made adequate provision for the
payment of, all taxes which have or may become due pursuant to said returns or
to assessments received, for which the failure to file or pay would have a
Material Adverse Effect. The federal tax returns of Borrower have been audited
by the Internal Revenue Service through the end of its fiscal year 1987. The
Borrower knows of no material additional assessments for any taxes for which
adequate reserves appearing in the balance sheet contained in the 1996
Consolidated Financial Statements have not been established. The Borrower and
its Restricted Subsidiaries have made adequate provisions for all current taxes,
and in the opinion of the Borrower there will not be any additional assessments
for any fiscal periods prior to and including that which ended on the date of
said balance sheet in excess of the amounts reserved therefor.
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44
Section 5.9. FINANCIAL STATEMENTS.
(a) The 1996 Consolidated Financial Statements and the
unaudited consolidating balance sheet of Borrower and its Subsidiaries as of
December 29, 1996, and the related consolidating statements of income for the
fiscal quarter then ended, have been prepared in accordance with GAAP (subject,
in the case of such consolidating statements, to the absence of footnotes and
ordinary year-end audit adjustments) and present fairly the consolidated (and,
in the case of such consolidating statements, consolidating) financial condition
of Borrower and its Subsidiaries; and all information contained therein is true,
complete and correct in all material respects.
(b) The consolidated and consolidating financial projections
of Borrower and its Subsidiaries dated May, 1997, copies of which have been
delivered to the Agent and the Lenders, (i) have been prepared in accordance
with GAAP, (ii) are based upon reasonable estimates and assumptions, (iii) have
been prepared based on the assumptions stated therein and the Borrower's
reasonable estimates of the results of operations of Borrower and its
Subsidiaries for the subject period, and (iv) represent reasonably attainable
results of operations of Borrower and its Subsidiaries for such period.
Section 5.10. OTHER MATERIALS FURNISHED. No written information,
exhibits, memoranda or reports furnished by the Borrower or any of its
Subsidiaries to the Lenders in connection with the negotiation of this Agreement
contains any material misstatement of fact or omit to state a material fact
necessary to make the statements contained therein not misleading in the context
in which such statements were made.
Section 5.11. COMMITMENTS TO ISSUE SECURITIES. There are no outstanding
securities exchangeable for or convertible into or carrying any rights to
acquire from any Subsidiary of Borrower shares of any class of capital stock of
such Subsidiary, and there are no outstanding options, warrants or other similar
rights to acquire from any Subsidiary of Borrower any shares of any class of
capital stock of such Subsidiary. There are no outstanding commitments,
agreements or obligations binding on any Subsidiary of Borrower which require or
could require any such Subsidiary (i) to issue, sell, transfer, pledge or
otherwise dispose of any shares of any class of capital stock of such
Subsidiary, or (ii) to issue, sell or grant (A) any securities exchangeable for
or convertible into or carrying any rights to acquire any shares of any class of
capital stock of such Subsidiary, or (B) any option, warrants or any other
rights to acquire any shares of any class of capital stock of any such
Subsidiary.
Section 5.12. DIVIDENDS AND CAPITAL DISTRIBUTIONS. Except as described
on SCHEDULE 5.12 attached hereto, since the date of the balance sheet contained
in the 1996 Consolidated Financial Statements, (a) Borrower has not declared or
paid or otherwise agreed to pay any dividends on any shares of any class of its
capital stock, (b) the Borrower has not made or agreed to make any payments on
account of the purchase or other acquisition or redemption or other retirement
of any shares of any class of its capital stock or any warrants
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or options to purchase any such shares, and or (c) the Borrower has not made or
agreed to make any other distributions of any kind in respect of any shares of
any class of its capital stock or in respect of any such warrants or options,
except for (i) distributions by Borrower made in accordance with the terms of
the Restricted Stock Plans, (ii) the declaration and payment by Woodstream of
regularly scheduled dividends on its Preferred Stock in an aggregate amount not
in excess of $30,000, and (iii) redemptions by Borrower of shares of its
Preferred Stock, and issuance by Borrower of shares of its common stock in
respect of the conversion of shares of its Preferred Stock, as required under
the terms of the ESOP.
Section 5.13. CHANGES IN CONDITION. Except as set forth in SCHEDULE
5.13 attached hereto, since the date of the balance sheet contained in the 1996
Consolidated Financial Statements, there has been no material adverse change in
the business or assets or in the financial condition of the Borrower, or of the
Borrower and the Guarantors taken as a whole, and neither the Borrower nor any
Guarantor has entered into any transaction outside of the ordinary course of
business which is material to the Borrower or Guarantor.
Section 5.14. TITLE TO REAL PROPERTY. The Borrower and each of its
Restricted Subsidiaries has good and marketable title in fee simple to the real
property described as owned by them in SCHEDULE 5.14 attached hereto
(collectively, the "Real Property"), subject only to Permitted Liens and the
liens and other encumbrances described in said SCHEDULE 5.14. Except as set
forth in SCHEDULE 5.14, the buildings of the Borrower and each of its Restricted
Subsidiaries located on the Real Property do not encroach on the property of
others and none of the buildings, structures or other appurtenances or
improvements on the Real Property (or any equipment therein), nor the operation
or maintenance thereof, violate any restrictive covenant or any provision of any
federal, state or local law, ordinance, rule or regulation which could have a
material adverse effect on the value of the applicable Real Property. Except as
set forth in SCHEDULE 5.14, no condemnation proceeding is pending or threatened
which would preclude or impair the use of any of the Real Property by the
Borrower and its Restricted Subsidiaries for the purposes for which it is used.
Each lease of Real Property set forth on SCHEDULE 5.14 is in full force and
effect, all rents and additional rents due have been paid, and no material
default thereunder exists or has been claimed.
Section 5.15. TITLE TO PERSONAL PROPERTY. Except as set forth on
SCHEDULE 5.15 attached hereto, the Borrower and each of its Restricted
Subsidiaries has good and marketable title to all personal property and assets
of every type and description used by it in its business, other than property
held under leases, free and clear of any and all mortgages, liens, pledges,
privileges, charges or encumbrances of every kind, nature and description other
than Permitted Liens and liens and encumbrances noted in SCHEDULE 5.15; and all
properties and assets of the Borrower and its Restricted Subsidiaries are in
their respective possession or custody or under their respective control and all
of their respective operating assets are in good operating condition and repair,
normal wear and tear excepted.
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Section 5.16. ABSENCE OF UNDISCLOSED LIABILITIES. Neither the Borrower
nor any of its Restricted Subsidiaries has any material liabilities or
obligations of any nature or of any amount whatsoever, whether accrued,
absolute, liquidated or unliquidated, contingent or otherwise, including,
without limitation, tax liabilities due or to become due and whether incurred in
respect of or measured by the income of the Borrower or Restricted Subsidiary
for any period prior to the date hereof, or arising out of transactions entered
into or any state of facts existing prior thereto, except (i) to the extent
reflected in the 1996 Consolidated Financial Statements and not heretofore paid
or discharged, (ii) those since January 1, 1997 which have been incurred in or
as a result of the normal and ordinary course of business and consistent with
the prior practice of the Borrower and its Restricted Subsidiaries, none of
which liabilities or obligations, singly or in the aggregate, have a Material
Adverse Effect, and (iii) those contemplated by this Agreement or disclosed in
SCHEDULE 5.16 attached hereto.
Section 5.17. PATENTS; TRADEMARKS; ETC.
(a) The Borrower and each of its Restricted Subsidiaries has
sufficient rights in all patents, trade secrets, trademarks, trade names, brand
names, service marks and copyrights, as well as all designs, permits, labels,
packages and displays used or in connection with such rights, used in the
business or operations of the Borrower and its Restricted Subsidiaries or the
use of which are necessary or desirable in any material respect for the business
or operations of the Borrower and its Restricted Subsidiaries as now conducted
or as proposed to be conducted. Except as provided on SCHEDULE 5.15, neither the
Borrower nor any Restricted Subsidiary has pledged, assigned or otherwise
encumbered any such rights or properties, except to the Borrower or another
Restricted Subsidiary or pursuant to licenses granted in the ordinary course of
business. Neither the Borrower nor any Restricted Subsidiary is in default in
any material respect under or in relation to any license, sublicense, or other
agreement relating to any such rights or properties as to which it is the
licensee, except for such defaults which, singly or in the aggregate, could not
have a Material Adverse Effect.
(b) There is no claim by or demand of any Person pertaining
to, and there is no pending or (to the best knowledge of the Borrower)
threatened action, suit, proceeding or investigation relating to, or the outcome
of which, either individually or in the aggregate with any other such claim or
demand, could have a Material Adverse Effect; nor to the best knowledge of the
Borrower is there a basis for any such claim, suit, proceeding or investigation.
The Borrower and each of its Restricted Subsidiaries has taken all reasonable
steps to protect its right, title and interest in and to such intellectual
property rights which are material to the operation of its business.
(c) Except as set forth on SCHEDULE 5.17 attached hereto, to
the best knowledge of the executive officers of the Borrower, no Person who is a
director, officer or key employee of the Borrower or any Restricted Subsidiary
is presently obligated under or presently bound by any terms or provisions of
any agreements or contracts (including licenses,
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47
covenants or commitments of any nature), or subject to any judgments, decrees or
orders of any court or administrative agency, that conflict or may conflict with
his agreements and obligations to use his best efforts to promote the interests
of the Borrower or Subsidiary by which he is employed, or that conflict with or
may conflict with the business or operations of the Borrower or Restricted
Subsidiary by which he is employed as presently conducted or as proposed to be
conducted.
(d) Except as set forth on SCHEDULE 5.17 attached hereto,
neither the Borrower nor any Restricted Subsidiary is a party to or bound by any
agreement or contract (whether written or oral) containing any covenant
prohibiting it from competing in any business with any Person in any territory
presently conducted or proposed to be conducted by it, or from competing with
any Person, or prohibiting it from doing any kind of business presently
conducted or proposed to be conducted by it.
Section 5.18. LITIGATION. Except as set forth in SCHEDULE 5.18 attached
hereto, there is no litigation, at law or in equity, or any proceeding before
any federal, state, provincial or municipal board or other governmental or
administrative agency pending or threatened against the Borrower or any of its
Restricted Subsidiaries, or any basis therefor, which involves a material risk
of any judgment or liability not fully covered by insurance which may have,
either individually or in the aggregate, a Material Adverse Effect, and no
judgment, decree, or order of any federal, state, provincial or municipal court,
board or other governmental or administrative agency has been issued against the
Borrower or Restricted Subsidiary which has or may have a Material Adverse
Effect.
Section 5.19. COMPLIANCE WITH LAWS AND CONTRACTS, ETC.
(a) Except as provided on SCHEDULE 5.19 attached hereto,
to the best of the Borrower's knowledge, the Borrower and its Restricted
Subsidiaries have complied in all material respects with, and do not violate or
contravene in any material respect, any provision of any applicable law, or any
judgment, decree or order of any court or governmental or regulatory authority,
bureau, agency or official applicable to the Borrower or its Restricted
Subsidiaries or the business or operations of the Borrower and its Restricted
Subsidiaries, the violation or contravention of which are reasonably likely,
individually or in the aggregate, to have a Material Adverse Effect.
(b) Except as set forth in SCHEDULE 5.19 attached hereto:
(i) Neither the Borrower, any of its Subsidiaries,
nor any operator of any of its properties, is in violation or, to the
Borrower's knowledge, is in alleged violation, of any Environmental
Law, which violation would have a Material Adverse Effect;
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(ii) Neither the Borrower nor any Subsidiary has
received written notice from any third party, including without
limitation any federal, state, county, or local governmental authority,
(A) that it has been identified as a potentially responsible party
under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 as amended ("CERCLA") or any equivalent state
law, with respect to any site or location, (B) that any hazardous
waste, as defined in 42 U.S.C. sec. 6903(5), any hazardous substances,
as defined in 42 U.S.C. sec. 9601(14), any pollutant or contaminant, as
defined in 42 U.S.C. sec. 9601(33), or any toxic substance, oil or
hazardous materials or other chemicals or substances regulated by any
Environmental Laws ("Hazardous Substances") which it has generated,
transported or disposed of, has been found at any site at which a
federal, state, county, or local agency or other third party has
conducted or has ordered the Borrower, any Subsidiary or another third
party or parties (E.G. a committee of potentially responsible parties)
to conduct a remedial investigation, removal or other response action
pursuant to any Environmental Law, or (C) that it is or shall be a
named party to any claim, action, cause of action, complaint
(contingent or otherwise) or legal or administrative proceeding arising
out of any actual or alleged release or threatened release of Hazardous
Substances, in each case, which singly or in the aggregate is not
reasonably likely to have a Material Adverse Effect. For purposes of
this Agreement, "release" means any past or present releasing,
spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, disposing or dumping of Hazardous Substances into
the environment;
(iii) (A) The Borrower, each Subsidiary and, to the
best of the Borrower's knowledge, each operator of any real property
owned or operated by the Borrower or any Subsidiary is in compliance
with all provisions of Environmental Laws relating to the handling,
manufacturing, processing, generation, storage or disposal of any
Hazardous Substances except to the extent such noncompliance is not
reasonably likely to have a Material Adverse Effect, (B) no portion of
property owned, operated or controlled by the Borrower or any
Subsidiary has been used for the handling, manufacturing, processing,
generation, storage or disposal of Hazardous Substances except in
accordance with applicable Environmental Laws or except to the extent
the same is not reasonably likely to have a Material Adverse Effect,
(C) there have been no releases or threatened releases of Hazardous
Substances on, upon, into or from any property owned, operated or
controlled by the Borrower or any Subsidiary, which releases could
reasonably be expected to have a Material Adverse Effect, (D) to the
best of the Borrower's knowledge, there have been no releases of
Hazardous Substances on, upon, from or into any real property in the
vicinity of the real properties owned, operated or controlled by the
Borrower or any Subsidiary which, through soil or groundwater
contamination, may have come to be located on the properties of
Borrower or Subsidiary and which are reasonably likely, individually or
in the aggregate, to have a Material Adverse Effect (E) to the best of
the Borrower's knowledge, there have been no releases of Hazardous
Substances on, upon, from or into any real property formerly but no
longer owned, operated or controlled by
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Borrower or Subsidiary which, directly or indirectly, is reasonably
likely to result in a Material Adverse Effect;
(iv) None of the properties of the Borrower or its
Subsidiaries is subject to any applicable environmental cleanup
responsibility law or environmental restrictive transfer law or
regulation unless the effect thereof is not reasonably likely to result
in a Material Adverse Effect.
(c) Neither the Borrower nor any of its Restricted
Subsidiaries is in violation of or in default under any provision of its charter
documents or By-laws, or any provision of any contract, agreement or instrument
(including, without limitation, any writing evidencing any Indebtedness or any
guarantee) to which the Borrower or any such Restricted Subsidiary is a party or
by which such Person or any of its property is bound or affected, the violation
or default under or in respect of which are reasonably likely to, individually
or in the aggregate, have a Material Adverse Effect.
(d) To the best of Borrower's knowledge, neither the
Borrower nor any of its Restricted Subsidiaries have made any illegal payment to
officers or employees of any governmental or regulatory body, or made any
illegal payment to customers for the sharing of fees or to customers or
suppliers for rebating of charges, or engaged in any other reciprocal practices,
or made any illegal payment or given any other illegal consideration to
purchasing agents or other representatives of customers with respect to any
sales made or to be made by the Borrower or any Subsidiary.
Section 5.20. FOREIGN TRADE REGULATIONS. Neither the Borrower nor any
Guarantor is (a) a person included within the definition of "designated foreign
country" or "national" of a "designated foreign country" in Executive Order No.
8389, as amended, in Executive Order No. 9193, as amended, in the Foreign Assets
Control Regulations (31 C.F.R., Chapter V, Part 500, as amended), in the Cuban
Assets Control Regulations of the United States Treasury Department (31 C.F.R.,
Chapter V, Part 515, as amended) or in the Regulations of the Office of Alien
Property, Department of Justice (8 C.F.R., Chapter II, Part 507, as amended) or
within the meanings of any of the said Orders or Regulations, or of any
regulations, interpretations, or rulings issued thereunder, or in violation of
said Orders or Regulations or of any regulations, interpretations or rulings
issued thereunder; or (b) an entity listed in Section 520.101 of the Foreign
Funds Control Regulations (31 C.F.R., Chapter V, Part 520, as amended).
Section 5.21. GOVERNMENTAL REGULATIONS. Neither the Borrower, any
Guarantor nor any corporation controlling the Borrower or under common control
with the Borrower is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Investment Company Act of 1940,
or is a common carrier under the Interstate Commerce Act, or is subject to any
statute or regulation which regulates the incurrence by the Borrower of
indebtedness for borrowed money, including statutes or regulations relating to
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common or contract carriers or to the sale of electricity, gas, steam, water,
telephone or telegraph or other public utility services.
Section 5.22. PENSION PLANS; EMPLOYEES AND BENEFITS.
(a) SCHEDULE 5.22 attached hereto sets forth employee pension
benefit plans of the Borrower and its Subsidiaries, all of which are in material
compliance with the provisions of ERISA. None of such plans which are subject to
the minimum funding or termination insurance provisions of ERISA have a funding
deficiency as of the date hereof.
(b) Neither the Borrower nor any of its Subsidiaries (i) has
any obligation to contribute to a Multiemployer Pension Plan, and (ii) has
incurred (and/or does not expect to incur) any withdrawal liability to a
Multiemployer Pension Plan under the provisions of Section 4201 of ERISA.
(c) No event which constitutes a "reportable event" as defined
in Section 4043 of ERISA has occurred with respect to any employee pension
benefit plan maintained by the Borrower or its Subsidiaries on behalf of their
respective employees. The Borrower and each of its Subsidiaries have timely paid
all withholding, FICA and other taxes required to be paid by it on behalf of its
respective employees.
Section 5.23. OUTSTANDING INDEBTEDNESS. The outstanding amount of
Borrowed Funds Indebtedness (including Capitalized Lease Obligations) and all
Guarantees of the Borrower and the Restricted Subsidiaries is correctly set
forth in SCHEDULE 5.23 attached hereto, and said Schedule correctly describes
all security interests securing such Indebtedness.
Section 5.24. EMPLOYMENT PRACTICES. Neither the Borrower nor any
Restricted Subsidiary has received notice that it is not in substantial
compliance with all federal and state laws respecting employment and employment
practices, terms and conditions of employment and wages and hours. Neither the
Borrower nor any Restricted Subsidiary is engaged in any unfair labor practice.
SCHEDULE 5.24 attached hereto lists all collective bargaining agreements
covering any employees of the Borrower and its Restricted Subsidiaries.
Section 5.25. REGULATION U. Margin stock (as defined in Regulation U)
constitutes less than 25% of those assets of the Borrower and its Subsidiaries
which are subject to any limitation on sale, pledge, or other restriction
hereunder and under the other Lender Agreements.
Section 5.26. SOLVENCY. Neither the Borrower nor any Guarantor is now,
and, after giving effect to the transactions contemplated by this Agreement and
the other Lender Agreements, neither the Borrower nor any Guarantor will be, (i)
"insolvent" as defined in Section 101(32) of the Bankruptcy Code of 1978, as
amended, (ii) engaged in business or a transaction or about to engage in
business or a transaction for which its property is an
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unreasonably small capital, or (iii) incurring or intending to incur debts
beyond its ability to pay such debts as they mature.
ARTICLE 6. REPORTS
Section 6.1. INTERIM FINANCIAL STATEMENTS.
(a) MONTHLY FINANCIAL STATEMENTS. As soon as available, and in
any event within thirty-five (35) days after the end of each month (except
within forty-five (45) days after the last month of the fiscal year), the
Borrower shall furnish to the Agent and the Lenders (i) unaudited consolidated
and consolidating balance sheets of Borrower and its Subsidiaries, as of the end
of such month and related consolidated and consolidating statements of income
for such month and for the period commencing at the end of the previous fiscal
year and ending with the end of such month.
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available, and
in any event within fifty (50) days after the end of each fiscal quarter of the
Borrower, the Borrower shall furnish the Agent and the Lenders with (i)
unaudited consolidated and consolidating balance sheets of Borrower and its
Subsidiaries, as of the end of such quarter and related consolidated and
consolidating statements of income of Borrower and its Subsidiaries for such
quarter and for the period commencing at the end of the previous fiscal year and
ending with the end of such quarter.
Section 6.2. ANNUAL FINANCIAL STATEMENTS. As soon as available, but in
any event within ninety-five (95) days after the end of each fiscal year, the
Borrower shall furnish to the Agent and the Lenders (i) a consolidated balance
sheet of Borrower and its Subsidiaries as of the end of such fiscal year and
related consolidated statements of income, stockholders' equity and cash flows
of Borrower and its Subsidiaries for such fiscal year, in each case reported on
by independent certified public accountants of recognized national standing
reasonably acceptable to the Agent, which report shall express, without reliance
upon others (except for other independent certified public accountants of
recognized national standing acceptable to the Agent), a positive opinion
regarding the fairness of the presentation of such financial statements in
accordance with GAAP, said report to be without qualification, except in cases
of unresolved litigation and accounting changes with which such accountants
concur, together with the statement of such accountants that they have caused
the provisions of this Agreement to be reviewed and that nothing has come to
their attention to lead them to believe that any Default exists hereunder or
specifying any Default and the nature thereof, (ii) a consolidating balance
sheet of Borrower and its Subsidiaries as of the end of such fiscal year and
related consolidated and consolidating statements of income of Borrower and its
Subsidiaries for such fiscal year and for the period ending at the end of such
fiscal year, together with Supporting Schedules prepared on a consolidated and
consolidating basis for Borrower and its Subsidiaries, all in reasonable detail
and prepared in accordance with GAAP, (iii) a
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consolidated balance sheet of Borrower and its Subsidiaries as of the end of
such fiscal year and the related consolidated statements of income of Borrower
and its Subsidiaries for such fiscal year, together with Supporting Schedules
prepared on a consolidated basis for Borrower and its Subsidiaries, all in
reasonable detail and prepared in accordance with GAAP, (iv) a Compliance
Certificate, (v) a Certificate of the Executive Vice President - Finance and
Administration or the Treasurer of Borrower in the form of EXHIBIT K hereto and
(vi) the compliance certificate required by Section 4.7(a) of the Indenture
governing the Senior Notes; PROVIDED, HOWEVER that the Borrower may defer
delivery of such certificate until 120 days after the end of its fiscal year,
and such other information with respect to the Senior Notes as the Agent may
reasonably request.
Section 6.3. NOTICE OF DEFAULTS. As soon as possible, and in any event
within one Business Day after any executive officer of the Borrower knows or in
the exercise of reasonable care should have known of the occurrence of any
Default, the Borrower shall furnish the Agent and the Lenders with the statement
of the Chief Executive Officer, Chief Financial Officer, Vice President-Finance,
or Treasurer of Borrower setting forth details of such Default and the action
which the Borrower have taken or propose to take with respect thereto.
Section 6.4. NOTICE OF LITIGATION. Promptly after the commencement
thereof, the Borrower shall furnish the Agent and the Lenders with written
notice of all actions, suits and proceedings before any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, affecting the Borrower or its Subsidiaries, which, if adversely
determined, would have a Material Adverse Effect.
Section 6.5. COMMUNICATIONS WITH OTHERS. Promptly after the sending
thereof, Borrower shall furnish the Agent and the Lenders with copies of all
proxy statements, financial statements and reports which Borrower sends to its
stockholders as a Borrower, and copies of all regular, periodic and special
reports and all registration statements which Borrower or any of its
Subsidiaries files with the Securities and Exchange Commission or any
governmental authority which may be substituted therefor, or with any national
or regional securities exchange.
Section 6.6. REPORTABLE EVENTS. At any time that the Borrower or any
Subsidiary has a Pension Plan, the Borrower shall furnish to the Agent and the
Lenders, as soon as possible, but in any event within thirty (30) days after the
Borrower knows or have reason to know that any Reportable Event with respect to
any Pension Plan has occurred, the statement of the Chief Executive Officer,
Chief Financial Officer, Vice President-Finance or Treasurer of Borrower setting
forth the details of such Reportable Event and the action which the Borrower or
Subsidiary has taken or proposes to take with respect thereto, together with a
copy of the notice of such Reportable Event to the Pension Benefit Guaranty
Corporation.
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Section 6.7. ANNUAL PENSION REPORTS. At any time that the Borrower or
Subsidiary has a Pension Plan, if requested in writing by Agent, the Borrower
shall furnish to the Agent and the Lenders, promptly after the filing thereof
with the Internal Revenue Service, the Secretary of Labor, the Pension Benefit
Guaranty Corporation or other appropriate government agency, copies of each
annual report which is filed with respect to each Pension Plan for each plan
year, including:
(a) a statement of assets and liabilities of such Pension Plan
as of the end of such plan year and statements of changes in fund balance and in
financial position, or a statement of changes in net assets available for plan
benefits, for such plan year;
(b) an opinion of a firm of independent certified public
accountants of recognized standing acceptable to the Lenders relating to such
Pension Plan to the extent that any such opinion for the Pension Plan is
required by law; and
(c) an actuarial statement of such Pension Plan applicable to
such plan year, together with an opinion of an enrolled actuary of recognized
standing acceptable to the Lenders, to the extent that any such statement or
opinion for the Pension Plan is required by law.
Section 6.8. MULTIEMPLOYER PENSION PLANS. If the Borrower, any
Subsidiary or any Person which is a member of the controlled group or under
common control with the Borrower or any Subsidiary (within the meaning of
Section 414(b) of the Internal Revenue Code of 1986, as amended (the "Code"), or
Section 4001(b)(1) of ERISA) (a "Control Group Person") is required to make
contributions to a Multiemployer Pension Plan, (i) the Borrower shall notify the
Agent and the Lenders within thirty (30) days after the withdrawal from such
Multiemployer Pension Plan by the Borrower, any Subsidiary or any Control Group
Person of the details of any such withdrawal if such withdrawal could reasonably
result in the imposition of any withdrawal liability on the Borrower, any
Subsidiary, or any Control Group Person pursuant to Section 4201 of ERISA, and
(ii) the Borrower shall promptly provide the Agent and the Lenders with copies
of all assessments of such withdrawal liability received by the Borrower, any
Subsidiary or any Control Group Person.
Section 6.9. ENVIRONMENTAL REPORTS. The Borrower shall provide the
Agent and each Lender: (a) not later than seven days after notice thereof,
notice of any enforcement actions, or, to the knowledge of the Borrower,
threatened enforcement actions affecting the Borrower or any Subsidiary by any
federal, state or municipal governmental authority or agency related to all
Environmental Laws which could have a Material Adverse Effect; (b) copies,
promptly after they are received, of all orders, notices of responsibility,
notices of violation, notices of enforcement actions, and assessments which
could have a Material Adverse Effect, and other written communications
pertaining to any such orders, notices, claims and assessments received by the
Borrower or any Subsidiary from any federal, state or municipal governmental
authority or agency; (c) not later than seven days after notice thereof, notice
of any civil claims or threatened civil claims affecting the Borrower or any
Subsidiary by any third party
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alleging any violation of any Environmental Laws which could have a Material
Adverse Effect; (d) copies of all cleanup plans, site assessment reports,
response plans, remedial proposals, or other submissions of the Borrower or any
Subsidiary, other third party (e.g., committee of potentially responsible
parties at a Superfund site), or any combination of same, submitted to a
federal, state or municipal governmental agency in response to any communication
referenced in subsections (a) and (b) herein simultaneously with their
submission to such governmental agency; and (e) from time to time, on request of
the Agent, evidence satisfactory to the Lenders of the Borrower's insurance
coverage, if any, for any environmental liabilities.
Section 6.10. REPORTS TO OTHER CREDITORS. Promptly after filing the
same, the Borrower shall furnish to the Agent and the Lenders copies of any
compliance certificate and other information furnished to any other holder of
the securities (including debt obligations) of the Borrower or any of the
Guarantors pursuant to the terms of any indenture, loan or credit or similar
agreement and not otherwise required to be furnished to the Agent or the Lenders
pursuant to any other provision of this Agreement.
Section 6.11. MANAGEMENT LETTERS. Promptly after the receipt thereof,
the Borrower shall furnish to the Agent and the Lenders copies of any written
recommendations concerning the management, finances, financial controls, or
operations of the Borrower received from the Borrower's independent public
accountants.
Section 6.12. ANNUAL PROJECTIONS. Promptly after approval by Borrower's
Board of Directors and in any event no later than March 1, of each year, the
Borrower shall furnish to the Agent and the Lenders a consolidated financial
budget forecast for Borrower and its Subsidiaries for the immediately following
fiscal year, such projections to include a consolidated balance sheet and
related consolidated statements of income and cash flow, and shall be prepared
on a quarter-by-quarter basis in accordance with GAAP consistently applied. All
such projections shall be based upon reasonable estimates and assumptions, and
shall have been prepared based on the assumptions stated therein and the
Borrower's reasonable estimates of the results of operations of Borrower and its
Subsidiaries for the subject period and other information provided therein.
Section 6.13. MISCELLANEOUS. The Borrower shall provide the Agent and
the Lenders with such other information as the Agent or the Lenders may from
time to time reasonably request respecting the business, properties, condition
or operations, financial or otherwise, of the Borrower and its Subsidiaries.
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ARTICLE 7. FINANCIAL RESTRICTIONS
On and after the date hereof, until all of the Lender Obligations shall
have been paid in full and the Borrower shall have no further right to borrow
hereunder, the Borrower shall observe the following covenants.
Section 7.1. CONSOLIDATED FIXED CHARGE COVERAGE RATIO. The ratio of
Borrower's Consolidated Cash Flow to Consolidated Fixed Charges shall at no time
be less than the ratios set forth below during the periods indicated, as
measured at the end of each fiscal quarter on the basis of the fiscal quarter
ending on such date and the three immediately preceding fiscal quarters:
PERIOD RATIO
------ --------
First Quarter Fiscal 1997 through
Third Quarter Fiscal 1997 1.0:1.0
Fiscal Year End 1997 and thereafter 1.20:1.0
Section 7.2. MINIMUM NET WORTH. The Consolidated Net Worth of Borrower,
as measured at the end of such fiscal quarter, shall be not less than:
PERIOD AMOUNT
------ ------------
Fiscal 1997 $ 95,000,000
Fiscal 1998 and $105,000,000
thereafter
ARTICLE 8. AFFIRMATIVE COVENANTS
On and after the date hereof, until all of the Lender Obligations shall
have been paid in full and the Borrower shall have no further right to borrow
hereunder, the Borrower covenant and agree as follows:
Section 8.1. TAXES AND OTHER OBLIGATIONS. The Borrower will, and will
cause each of its Subsidiaries to, (i) duly pay and discharge, or cause to be
paid and discharged, when the same shall become due and payable, all material
taxes, assessments and other governmental charges, imposed upon it and its
properties, sales and activities, or upon the income or profits therefrom, as
well as the claims for labor, materials, or supplies which if unpaid might by
law become a lien or charge upon any of its properties, and (ii) promptly pay or
cause to be paid when due, or in conformance with customary trade terms (but not
later than 60 days from the
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due date in the case of trade debt), all lease obligations, trade debt and all
other Indebtedness incident to its operations; PROVIDED, HOWEVER, that the
Borrower and its Subsidiaries shall not be required to make any such payment at
any time while the Borrower or a Subsidiary shall be contesting in good faith by
appropriate actions its obligations to do so if it shall have set aside on its
books reserves (segregated to the extent required by GAAP) adequate with respect
thereto, all determined in accordance with GAAP and reflected in the financial
statements to be delivered to the Agent and the Lenders under Sections 6.1 and
6.2. The Borrower shall cause all required tax returns and all amounts shown as
due therein to be timely filed and paid, as the case may be, and take all other
steps necessary to maintain its and its Subsidiaries' good standing under the
laws of their respective states of incorporation and the laws of any
jurisdiction where they are qualified, licensed and authorized to do business as
a foreign corporation, except where the failure to be so qualified, licensed or
authorized to do business as a foreign corporation would not have a Material
Adverse Effect.
Section 8.2. MAINTENANCE OF PROPERTY; LEASES. The Borrower will, and
will cause each of the Guarantors to, (a) maintain its respective property in
good repair and working order, ordinary wear and tear excepted, (b) replace and
improve its respective property as necessary for the conduct of its business,
and (c) comply in all material respects with all material leases naming it as
lessee.
Section 8.3. INSURANCE.
(a) The Borrower will, and will cause each of the Guarantors
to, (i) keep its principal assets which are of an insurable character insured by
financially sound and reputable insurers against loss or damage by fire,
explosion or hazards, by extended coverage in an amount not less than 80% of the
insurable value of the property insured, and (ii) maintain with financially
sound and reputable insurers insurance against other hazards and risks and
liability to persons and property to the extent and in the manner as reasonably
requested by the Agent, and in any event as customary for companies in similar
businesses similarly situated; PROVIDED, HOWEVER, that the Borrower and the
Guarantors may effect workmen's compensation insurance or similar coverage with
respect to operations in any particular state or other jurisdiction through an
insurance fund operated by such state or jurisdiction and may also be a
self-insurer with respect to workmen's compensation and with respect to Borrower
medical benefits under any medical benefit plan of the Borrower or Guarantor.
Contemporaneously with the issuance, renewal, extension or replacement of any
such policy or policies, the Borrower will render to the Agent and the Lenders a
certificate or binder evidencing the same. A description of the material
elements of insurance coverage of the Borrower and the Guarantors as of the
Closing Date is set forth on SCHEDULE 8.3 attached hereto.
(b) All insurance policies required to be maintained hereunder
shall name the Agent on behalf of the Lenders as an additional named insured
(without the Agent or the Lenders being liable for premiums or other costs or
expenses) and as loss payee or insured mortgagee, as appropriate.
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(c) The Borrower shall furnish to the Agent from time to time,
upon request, insurance certificates, in form and substance reasonably
satisfactory to the Agent, evidencing compliance by the Borrower with the terms
of this Section 8.3. The Borrower shall from time to time, upon request, furnish
to the Agent copies of each policy of insurance maintained pursuant to this
Section 8.3.
(d) Within thirty (30) days after the renewal of each such
policy of insurance, the Borrower shall furnish the Agent with evidence
satisfactory to the Agent of the payment of premiums and the reissuance of a
policy continuing insurance in force as required by this Agreement. All such
policies or certificates shall contain a provision that such policies will not
be canceled without at least 30 days' prior written notice by such insurer to
the Agent. In the event the Borrower fail to provide, maintain, keep in force or
deliver and furnish to the Agent the policies of insurance required by this
Section 8.3, the Agent may, but shall not be obligated to, upon prior written
notice to the Borrower procure such insurance or single interest insurance for
such risks covering the Agent's and the Lenders' interest, and the Borrower will
pay all premiums thereon promptly upon demand by the Agent, together with
interest thereon at the highest rate then applicable to the Advances from the
date of expenditure until reimbursement by the Borrower.
(e) All policies of insurance required to be furnished by the
Borrower pursuant to this Section 8.3 shall have attached thereto a lender's
loss payable endorsement or its equivalent, or a loss payable clause, reasonably
acceptable to the Agent.
(f) The Borrower shall observe and comply in all material
respects with the requirements of all policies of insurance required to be
maintained in accordance with this Agreement.
(g) Upon request by the Agent, the Borrower shall furnish to
the Agent a certificate of a duly authorized officer of the Borrower containing
a detailed list of the insurance policies of the Borrower required by or
referred to in this Section 8.3 then outstanding and in force.
Section 8.4. RECORDS, ACCOUNTS AND PLACES OF BUSINESS. The Borrower and
its Subsidiaries shall maintain comprehensive and accurate records and accounts
in accordance with GAAP. The Borrower and its Subsidiaries shall maintain
adequate and proper reserves in accordance with GAAP. The Borrower will provide
Agent with fifteen days' prior written notice of (i) any changes in the places
of business of the Borrower or any of the Guarantors, and (ii) any additional
places of business of the Borrower or Guarantor which may arise hereafter.
Section 8.5. INSPECTION. At any reasonable time and from time to time,
the Borrower shall permit the Agent, the Lenders and any of their agents or
representatives under reasonable circumstances to examine and make copies of and
abstracts from the records and books of
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account of, and visit the properties of, the Borrower and its Subsidiaries and
to discuss the affairs, finances and accounts of the Borrower and its
Subsidiaries with any of the Borrower's executive officers or directors. In
addition, the Borrower shall permit and cooperate with the Agent in conducting
periodic field examination of the operations of the Borrower and its
Subsidiaries.
Section 8.6. CHANGE IN OFFICERS OR DIRECTORS. The Borrower will
promptly notify the Agent in writing if there occurs any change in the senior
officers or directors of the Borrower.
Section 8.7. EXISTENCE AND BUSINESS. Except as permitted by Section 9.6
hereof, the Borrower and each of its Subsidiaries will maintain its corporate
existence and comply in all material respects with all valid and applicable
statutes, rules and regulations. The Borrower and the Guarantors shall continue
to engage primarily in the businesses in which they are engaged on the Closing
Date and/or similar businesses related to the manufacture and distribution of
consumer housewares products.
Section 8.8. USE OF PROCEEDS. Borrower will use the proceeds of the
Revolving Credit Facility for working capital purposes for itself and its
Subsidiaries. The Borrower will not use any of the proceeds of any loans or
Advances made by the Lenders hereunder to purchase or carry "margin stock" (as
defined in Regulation U).
Section 8.9. BORROWER COMMON STOCK; OWNERSHIP OF SUBSIDIARIES.
(a) Borrower will at all times remain a publicly traded
company with its common stock listed for trading on the National Market System
of The National Association of Securities Dealers, Inc. Automated Quotation
System, the New York Stock Exchange or another national securities exchange.
(b) Except to the extent permitted under Sections 9.4 and 9.6
hereof, the Borrower will, and will cause each of its Subsidiaries to, maintain
ownership as constituted on the Closing Date of the issued and outstanding stock
of each of their respective Subsidiaries.
Section 8.10. ADDITIONAL MORTGAGES. The Borrower shall, and shall cause
each of its Subsidiaries which are Guarantors to, promptly after the acquisition
of a fee interest in any real property or a leasehold interest in any real
property which the Lenders reasonably determine is of material value, deliver to
the Agent (i) a mortgage in favor of the Agent, for the benefit of the Lenders,
relating to such real property, (ii) a title insurance policy relating thereto,
(iii) an opinion of counsel as to the enforceability of said mortgage, and (iv)
an endorsement to the Borrower's or such Subsidiary's flood insurance policy, if
any, relating to such real property naming the Agent as loss payee, each of
which shall be in form and content reasonably satisfactory to the Agent.
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ARTICLE 9. NEGATIVE COVENANTS
On and after the date hereof, until all of the Lender Obligations shall
have been paid in full and Borrower shall have no further right to borrow
hereunder, the Borrower covenant and agree as follows:
Section 9.1. RESTRICTIONS ON BORROWED FUNDS INDEBTEDNESS. The Borrower
shall not, and shall not permit any of its Restricted Subsidiaries to, create,
incur, suffer or permit to exist, or assume or guarantee, either directly or
indirectly, or otherwise become or remain liable with respect to, any Borrowed
Funds Indebtedness, except the following:
(a) Borrowed Funds Indebtedness consisting of Lender
Obligations, including the Advances and the Letters of Credit;
(b) Borrowed Funds Indebtedness of the Borrower and its
Restricted Subsidiaries outstanding at the date of this Agreement as set forth
on SCHEDULE 5.23 attached hereto, less, in each case, payments required to be
made in respect of such Borrowed Funds Indebtedness in accordance with the
payment provisions thereof;
(c) Indebtedness of the Borrower and its Restricted
Subsidiaries in respect of purchase money security interests permitted under
Section 9.2(b) hereof in an aggregate principal amount not to exceed $2,000,000
outstanding at any time;
(d) Borrowed Funds Indebtedness of Borrower arising from the
Senior Notes, or from any refinancing or replacement of the Senior Notes;
PROVIDED, HOWEVER, that (i) the aggregate principal amount of such Indebtedness
shall not exceed the then outstanding principal balance of the Senior Notes;
(ii) the periodic installments of interest or fees under such Indebtedness shall
not exceed the periodic installments of interest or fees required under the
Senior Notes; (iii) the final maturity of such Indebtedness shall not be earlier
than the final maturity of the Senior Notes; and (iv) the Average Life of such
Indebtedness shall not be less than the Average Life of the Senior Notes.
(e) Guarantees of the Borrower and their Restricted
Subsidiaries permitted under this Agreement;
(f) Borrowed Funds Indebtedness of Borrower in an amount not
to exceed $5,000,000 incurred in connection with a financing of the ESOP's
purchase or carrying of capital stock of Borrower, provided that simultaneously
with the incurrence of such Indebtedness Borrower makes a loan to the ESOP in a
similar amount evidenced by a promissory note of the ESOP secured by capital
stock of Borrower held by the ESOP;
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(g) Borrowed Funds Indebtedness (i) of the Borrower in respect
of loans by any Subsidiary, (ii) of any Restricted Subsidiary in respect of
loans by the Borrower or any other Subsidiary; and
(h) Additional Subordinated Indebtedness of Borrower.
Section 9.2. RESTRICTIONS ON LIENS. The Borrower shall not, and shall
not permit any of its Restricted Subsidiaries to, create or incur or suffer to
be created or incurred or to exist any encumbrance, mortgage, pledge, lien,
charge or other security interest of any kind upon any of its property or assets
of any character, whether now owned or hereafter acquired, or transfer any of
such property or assets for the purposes of subjecting the same to the payment
of Indebtedness or performance of any other obligation in priority to payment of
its general creditors, or acquire or agree or have an option to acquire any
property or assets upon conditional sale or other title retention agreement,
device or arrangement (including Capitalized Leases) or suffer to exist for a
period of more than 30 days after the same shall have been incurred (without
posting adequate security therefor) any Indebtedness against it which if unpaid
might by law or upon bankruptcy or insolvency, or otherwise, be given any
priority whatsoever over its general creditors, or sell, assign, pledge or
otherwise transfer for security any of its accounts, contract rights, general
intangibles, or chattel paper (as those terms are defined in the Massachusetts
Uniform Commercial Code) with or without recourse; PROVIDED, HOWEVER, that the
Borrower and the Restricted Subsidiaries may create or incur or suffer to be
created or incurred or to exist:
(a) Existing liens and security interests described in
SCHEDULES 5.14 and 5.15 securing Indebtedness outstanding as of the Closing Date
permitted by Section 9.1(b);
(b) Purchase money security interests (which term shall
include mortgages, conditional sale contracts, Capitalized Leases and all other
title retention or deferred purchase devices) to secure the purchase price of
property acquired hereafter by the Borrower or a Restricted Subsidiary, or to
secure Indebtedness incurred solely for the purpose of financing such
acquisitions; PROVIDED, HOWEVER, that no such purchase money security interest
shall extend to or cover any property other than the property the purchase price
of which is secured thereby, and that the principal amount of Indebtedness
(whether or not assumed) with respect to each item of property subject to such a
security interest shall not exceed the fair value of such item on the date of
its acquisition; and
(c) Permitted Liens.
Nothing contained in this Section 9.2 shall permit the Borrower or any
Restricted Subsidiary to incur any Indebtedness or take any other action or
permit to exist any other condition to exist which would be in contravention of
any other provision of this Agreement.
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Section 9.3. INVESTMENTS. The Borrower shall not, and shall not permit
any of their Restricted Subsidiaries to, have outstanding or hold or acquire or
make or commit itself to acquire or make any Investment, including, without
limitation, any Investment in any Affiliate, except the following:
(a) Investments having a maturity of less than one year
from the date thereof in:
(i) commercial paper rated P-2 or better by
Xxxxx'x Investors Service, Inc., or A-2 or better by Standard & Poor's
Corporation or similarly rated by any successor to either of such
rating services;
(ii) certificates of deposit or eurodollar
deposits of any Lender or certificates of deposit or eurodollar
deposits of commercial banks organized in the United States or Canada
having capital and surplus in excess of $500,000,000 and whose
short-term debt is rated AA or better by Standard & Poor's Corporation
or Aa2 or better by Xxxxx'x Investors Service, Inc., or similarly rated
by any successor to either of such rating services;
(iii) obligations of the United States government
or any agency thereof which are backed by the full faith and credit of
the United States and which mature not more than one year from the date
of acquisition thereof; or
(iv) repurchase agreements with a term of three
months or less which (A) are entered into with (x) any Lender or (y)
any commercial bank organized in the United States or Canada having
capital and surplus in excess of $500,000,000 and whose short-term debt
is rated AA or better by Standard & Poor's Corporation or Aa2 or better
by Xxxxx'x Investor Service, Inc., or similarly rated by any successor
to either of such rating services, or (z) any nationally recognized
member firm of the New York Stock Exchange, (B) are secured by a fully
perfected Lien in any obligation of the types described in clauses (i)
through (iii) above, and (C) has a market value at the time such
repurchase agreement is entered into of not less than 100% of the
repurchase obligation of such Lender (or other commercial bank)
thereunder.
PROVIDED, that to the extent that any such Investment is evidenced by a
"certificated security" or an "instrument" (as defined in the Uniform Commercial
Code in effect in the Commonwealth of Massachusetts), such instrument shall
promptly be delivered and pledged to the Agent, for the benefit of the Lenders
pursuant to a pledge agreement in form reasonably satisfactory to the Agent;
(b) Investments consisting of loans and advances to employees
of the Borrower or any Restricted Subsidiary not exceeding $500,000 in the
aggregate at any time outstanding and having a maturity of not greater than one
year;
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(c) Investments permitted in accordance with Section 9.6
hereof;
(d) Investments consisting of securities received by the
Borrower or any Restricted Subsidiary as a creditor in a bankruptcy,
reorganization or other insolvency proceeding;
(e) Investments held by the Borrower or any Restricted
Subsidiary that would not otherwise be permitted hereunder, which are
Investments of not more than $100,000 individually and not more than $1,000,000
in the aggregate (in each case valued at cost);
(f) The Intercompany Payables and other Investments in
Borrower and in Restricted Subsidiaries (provided, however, that in the case of
any non-cash Investment the Agent retains a first priority perfected security
interest in the applicable property);
(g) Investments of the Borrower and their Restricted
Subsidiaries existing as of the Closing Date as set forth on SCHEDULE 9.3
attached hereto;
(h) Investments consisting of non-cash proceeds of Asset
Dispositions permitted under Section 9.4 hereof in an aggregate principal amount
not to exceed $2,000,000 at any time, provided that in the case of any Asset
Disposition the Borrower or Restricted Subsidiary grants to the Agent, for the
benefit of the Lenders, a perfected, first-priority security interest in such
non-cash proceeds, and shall have assigned to the Agent, for the benefit of the
Lenders, any collateral security granted to the Borrower or Restricted
Subsidiary to secure payment or performance by the obligor of its obligations
with respect to such non-cash proceeds; and
(i) Restricted Investments as and to the extent permitted
under Section 9.9(g).
The Borrower shall not, and shall not permit any of their Restricted
Subsidiaries to, make any Investment permitted by this Section 9.3 unless
immediately after such Investment there would exist no Default.
Notwithstanding anything to the contrary contained herein, in no event
shall the Borrower or Subsidiary, directly or indirectly, acquire any further
beneficial interest in (including stock, partnership interest or other
securities of), or make any loan, advance, capital contribution to, or transfer
any property or assets to, any of the Inactive Subsidiaries unless it becomes a
Restricted Subsidiary.
Section 9.4. ASSET DISPOSITIONS. (a) The Borrower shall not, and shall
not permit any of their Restricted Subsidiaries to, enter into, effect or
consummate any Asset Disposition;
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PROVIDED, HOWEVER, that the Borrower and its Restricted Subsidiaries may enter
into an Asset Disposition involving aggregate consideration of $5,000,000 or
less so long as: (i) the Borrower or Restricted Subsidiary receives Net Proceeds
equal to at least the fair value of the assets subject to the Asset Disposition,
and (ii) the Net Proceeds payable to the Borrower or Restricted Subsidiary in
respect of the Asset Disposition are applied to repay the Advances other than
Letters of Credit, if any are outstanding.
(b) In the case of any Asset Disposition involving aggregate
consideration in excess of $5,000,000, the Borrower and its Subsidiaries may
enter into such an Asset Disposition so long as: (i) the applicable Borrower or
Restricted Subsidiary shall receive Net Proceeds equal to at least the fair
value of the assets subject to the Asset Disposition, (ii) based upon the
historical operating results of the Borrower and its Restricted Subsidiaries for
the four most recently ended fiscal quarters as set forth in the consolidating
financial statements delivered by the Borrower to the Lenders pursuant to
Sections 6.1 and 6.2, and after giving effect to all previous Asset Dispositions
consummated during such period, no Default would have occurred under Article 7
hereof, (iii) the consummation of such Asset Disposition will not, in the sole
(but reasonable) judgment of the Majority Lenders, have a Material Adverse
Effect, (iv) concurrently with the consummation of any such Asset Disposition
(other than an Asset Disposition relating to the stock or assets of an
Unrestricted Subsidiary), the Net Proceeds payable to the Borrower or Restricted
Subsidiary in respect of the Asset Disposition are applied in accordance with
Article 4 hereof to repay the Advances incurred by such Borrower or, in the case
of Net Proceeds payable to a Restricted Subsidiary to repay the Advances
incurred by its corporate parent, and the Borrower or Restricted Subsidiary
grants to the Agent, for the benefit of the Lenders, a perfected, first-priority
security interest in any non-cash proceeds of such Asset Disposition, and
assigns to the Agent, for the benefit of the Lenders, any collateral security
granted to the Borrower or Restricted Subsidiary to secure payment or
performance by the obligor of its obligations with respect to such non-cash
proceeds, (v) that prior to such Asset Disposition no Default has occurred and
is continuing or would, after giving effect to such Asset Disposition, occur,
and (vi) at least five (5) Business Days prior to the consummation of such Asset
Disposition, the Borrower shall have delivered to the Agent and the Lenders a
certificate, executed by the Chief Executive Officer, Chief Financial Officer or
Treasurer of the Borrower, setting forth, in reasonable detail, the calculation
required under subsection (b)(ii) of this Section 9.4, and certifying to the
effect of clauses (i) through (v) of Section 9.4(b), and (vii) based upon such
certificate, the Agent, at the direction of the Majority Lenders, shall have
acknowledged that the conditions described in clauses (i) through (v) above
shall have been satisfied. If in the case of any Asset Disposition the Majority
Lenders shall disagree with the method or results of the calculation prepared by
the Borrowers with respect to the Section 9.4(b)(ii), and the parties are unable
to resolve such disagreement in a manner satisfactory to the Borrowers and the
Majority Lenders, then the parties hereto agree to submit the calculation
required under Section 9.4(b)(ii) with respect to such Asset Disposition to an
independent third-party accounting firm of nationally recognized standing
(having no relationship with any party) selected by the parties, for
determination of the applicable calculation, which determination shall be
binding on the parties.
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In connection with any Asset Disposition permitted under this Section
9.4, the Agent and the Lenders agree, at the Borrower's sole expense, to take
all such actions as are reasonably required to release the liens granted under
the Security Documents on the assets subject to such Asset Disposition
including, without limitation, the execution of appropriate U.C.C. releases and
terminations and discharges of mortgages.
Section 9.5. ASSUMPTIONS, GUARANTEES, ETC. The Borrower shall not, and
shall not permit any of its Restricted Subsidiaries to, enter into any Guaranty,
except for (i) the Guaranty Agreements, (ii) Guarantees of the Lender
Obligations, (iii) Guarantees by Borrower for general purposes not to exceed
$5,000,000 (iv) Guarantees by Subsidiaries of the Senior Notes and any
Indebtedness permitted under Section 9.1(d) as refinancing or replacement of the
Senior Notes, and (v) a Guaranty by Borrower of Indebtedness of the ESOP
incurred by the ESOP in order to purchase, own or carry capital stock of
Borrower, provided that the maximum aggregate principal amount to which such
Guaranty relates shall not exceed $5,000,000.
Section 9.6. MERGERS AND ACQUISITIONS. The Borrower shall not, and
shall not permit any of their Restricted Subsidiaries to, enter into any merger
or consolidation with, or acquire all or substantially all of the assets or
stock of, any Person, or sell, assign, lease or otherwise dispose of (whether in
one transaction or in a series of transactions) all or substantially all of its
assets (whether now owned or hereafter acquired) to any Person, except for:
(a) The acquisition by the Borrower or Restricted Subsidiary
(for purposes of this definition, the "Acquiror") of all or substantially all of
the assets or stock of another Person (including, without limitation,
acquisition by merger), PROVIDED THAT (i) prior to the consummation of such
acquisition Borrower has delivered to the Agent and the Lenders a certificate to
the effect that no Default has then occurred and continues to exist or would,
after giving effect to such acquisition, occur, which certificate shall be
accompanied by consolidated and consolidating financial statements of the
Acquiror prepared on a pro forma basis after giving effect to such acquisition,
(ii) simultaneously with the consummation of such acquisition any new Subsidiary
arising as a result of or in connection with such acquisition shall enter into a
Guaranty substantially in the form of the Guaranty Agreements and the Acquiror
and such new Subsidiary shall grant to the Agent and the Lenders a first
priority security interest in the assets and/or stock so acquired, provided,
however, that the requirement to enter into a Guaranty and grant such security
interest shall not apply to any new Subsidiary whose assets have a fair market
value of $50,000 or less or any new Subsidiary which is an Unrestricted
Subsidiary, (iii) the aggregate purchase price does not exceed $20,000,000; and
(iv) there are no Advances, other than Letters of Credit, outstanding under this
Agreement at the time of such acquisition.
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(b) Mergers of the Borrower or a Guarantor with and into any
other Borrower or Guarantor, PROVIDED, HOWEVER, that the surviving corporation
shall be the Borrower or Guarantor;
(c) Asset Dispositions permitted under Section 9.4 hereof; and
(d) Restricted Investments permitted under Section 9.9(g).
Section 9.7. PAYMENT OF OBLIGATIONS. The Borrower shall not, and shall
not permit any Restricted Subsidiary to, fail to make payment of principal or
interest or any other amount due with respect to (i) any Lender Obligations, or
(ii) any other Indebtedness in an outstanding principal amount greater than
$2,000,000, beyond the period of grace provided with respect thereto; or fail to
perform or observe any other material agreement to which the Borrower or any of
its Restricted Subsidiaries is a party or by which the Borrower or any
Restricted Subsidiary or any of their respective properties are bound or
affected; PROVIDED, HOWEVER, that with respect to any Indebtedness other than
Lender Obligations and any agreements other than Lender Agreements, the Borrower
and its Restricted Subsidiaries may refuse to make any payment or refuse to
perform or observe any covenant or agreement, the validity or application of
which is being contested in good faith by appropriate proceedings, if such
refusal or failure could not, in the sole (but reasonable) judgment of the
Majority Lenders, result in a Material Adverse Effect, or if:
(a) The Borrower or Restricted Subsidiary has set aside
reserves deemed by the independent certified public accountants of the Borrower
to be adequate for the payment, performance or observance of the Indebtedness or
agreement or provision so contested;
(b) Such contest could not result in the loss of any rights or
properties of the Borrower or Restricted Subsidiary, which loss would have a
Material Adverse Effect; and
(c) Such failure to pay or perform does not otherwise
constitute a Default hereunder or under any other Lender Agreement.
Section 9.8. ERISA. The Borrower shall not, and shall not permit any of
its Subsidiaries to:
(a) At any time while the Borrower or Subsidiary maintains a
Pension Plan subject to Section 412 of the Code, (i) permit any accumulated
funding deficiency to occur with respect to such Pension Plan, (ii) not comply
in all material respects with the provisions of ERISA and the Code which are
applicable to the Pension Plans, or (iii) permit circumstances to exist under
which the lien provided for in Section 4068 of ERISA would attach to the assets
of the Borrower or Subsidiary as a result of the voluntary or involuntary
termination of a Pension Plan and a subsequent failure of the Borrower or
Subsidiary to pay termination liability to the Pension Benefit Guaranty
Corporation.
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(b) At any time while the Borrower or Subsidiary participates
in a Multiemployer Pension Plan, voluntarily incur withdrawal liability pursuant
to Section 4201 of ERISA; PROVIDED that all amounts of potential withdrawal
liability (as hereinafter defined) pursuant to Section 4201 of ERISA (whether or
not an assessment has been issued by a Multiemployer Pension Plan and whether or
not any liability therefor should be disclosed on the Borrower's balance sheet
in accordance with GAAP) with respect to the Borrower, the Subsidiaries and any
Control Group Person (as such term is defined in ERISA) shall be deemed to be
outstanding Indebtedness of the Borrower or Subsidiary for all purposes of this
Agreement. For purposes of the preceding sentence, the Borrower; any, Subsidiary
or any Control Group Person shall at any point in time have a "potential
withdrawal liability," with respect to a Multiemployer Pension Plan to which the
Borrower, Subsidiary or Control Group Person contributes, in an amount equal to
the liability which would be imposed under Section 4201 of ERISA if the
Borrower, Subsidiary or Control Group Person withdrew from such Multiemployer
Pension Plan in a complete withdrawal at such point in time; PROVIDED, HOWEVER,
that such "potential withdrawal liability" at any time shall not be greater than
the withdrawal liability as set forth in the most recent notice or letter
received from the Multiemployer Pension Plan by the Borrower, Subsidiary or
Control Group Person setting forth the amount of withdrawal liability which
would be incurred upon a complete withdrawal by the Borrower, Subsidiary or
Control Group Person; and FURTHER PROVIDED that such "potential withdrawal
liability" shall be considered to be zero until the Borrower, Subsidiary or
Control Group Person has received such a notice or letter setting forth the
amount of withdrawal liability which would be incurred upon a complete
withdrawal of the Borrower, Subsidiary or Control Group Person. During the
period in which the Borrower, Subsidiary or any Control Group Person makes
contributions to a Multiemployer Pension Plan, the Borrower, Subsidiary or
Control Group Person shall request the Multiemployer Pension Plan to notify the
Borrower, Subsidiary or Control Group Person on an annual basis of the amount of
withdrawal liability which would be incurred upon a complete withdrawal of the
Borrower, Subsidiary or Control Group Person and shall pay any reasonable fee
required by the Multiemployer Pension Plan to perform such calculation.
Section 9.9. RESTRICTED PAYMENTS AND RESTRICTED INVESTMENTS. The
Borrower shall not, and shall not permit any of its Restricted Subsidiaries to,
make any Restricted Payment, except for the following:
(a) Regularly scheduled payments of principal and interest
required to be paid in respect of (i) Subordinated Indebtedness, which payments
are permitted to be paid and retained by the holder of such Subordinated
Indebtedness by the subordination provisions applicable thereto, and (ii) other
Borrowed Funds Indebtedness expressly permitted under this Agreement;
(b) Payments in respect of Borrowed Funds Indebtedness in
connection with the refinancing of such Indebtedness which is permitted under
this Agreement;
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(c) Restricted Payments by a Subsidiary to its corporate
parent which is the Borrower or a Restricted Subsidiary;
(d) Distributions by the Borrower or any Subsidiary payable
solely in shares of capital stock of the Borrower or Subsidiary, as the case may
be;
(e) Restricted Payments by Borrower in an aggregate amount of
up to $1,500,000 in respect of (i) redemptions of stock required to be made
under the Restricted Stock Plans, (ii) redemptions of stock required to be made
under the Stock Option Plans to the extent of the proceeds of the exercise of
options by option holders thereunder, (iii) redemptions by Borrower of shares of
its Preferred Stock held by the ESOP, as and to the extent required under
Borrower's Certificate of Incorporation as in effect on the Closing Date, and
(iv) repurchases by Borrower of shares of its common stock and the transfer of
such shares to the ESOP, or the funding of cash by Borrower to the ESOP;
(f) So long as no Default has occurred and is continuing or
would, after giving effect to such Distribution, occur, dividends by Woodstream
on its preferred stock in an aggregate principal amount not to exceed $30,000 in
any calendar year; and
(g) So long as no Default has occurred and is continuing or
would, after giving effect to the making of such Restricted Payment or
Restricted Investment, occur, additional Restricted Payments and/or Restricted
Investments in an aggregate amount not to exceed $5,000,000 less amounts paid
under (e) and (f) of this Section 9.9 in any fiscal year.
Section 9.10. TRANSACTIONS WITH AFFILIATES. Except for transactions
with Affiliates expressly permitted by Sections 9.3, 9.4, 9.5, 9.6 and 9.9, the
Borrower will not, and will not permit any of their Restricted Subsidiaries to,
sell or transfer any assets to, or purchase or acquire any assets of, or
otherwise engage in any transaction with, any of their respective Affiliates,
except in the ordinary course of business and upon fair and reasonable terms
comparable to those the Borrower or Subsidiary could obtain or could become
entitled to in an arm's-length transaction with a Person who was not an
Affiliate.
Section 9.11. RESTRICTIONS ON NEGATIVE PLEDGES. The Borrower shall not,
and shall not permit any of its Restricted Subsidiaries to, create or incur or
agree, consensually or otherwise, to the terms of, any negative pledge or other
agreement restricting the granting of liens with respect to its properties and
assets or the properties and assets of its Restricted Subsidiaries.
Section 9.12. FISCAL YEAR END. The Borrower will not change its fiscal
year end without the prior written consent of the Agent, which consent will not
be unreasonably withheld.
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Section 9.13. AMENDMENTS TO CERTAIN AGREEMENTS. Neither the Borrower
nor any of its Subsidiaries shall agree to any amendment to the terms and
provisions of the Senior Notes relating to an increase in fees or interest rates
thereunder, any increase in principal or interest payment amounts or total
principal amounts thereunder, an acceleration of the maturity thereof or the
scheduled dates of principal and interest or payments thereof, or any change to
the financial covenants or other material covenants contained therein making
such covenants more restrictive to the Borrower or its Subsidiaries, as the case
may be.
Section 9.14. INACTIVE SUBSIDIARIES. In the event that any Inactive
Subsidiary shall obtain any assets with a fair market value in excess of
$50,000, or shall commence to transact business in any material manner, the
Borrower will cause the corporate parent of such Inactive Subsidiary to pledge
the capital stock of such Subsidiary to the Agent and the Lenders, and will
cause such Subsidiary to enter into a Guaranty substantially in the form of the
Guaranty Agreements, and to grant to the Agent and the Lenders a first priority
security interest in the assets of such Subsidiary.
ARTICLE 10. EVENTS OF DEFAULT AND REMEDIES
Section 10.1. EVENTS OF DEFAULT. Each of the following events shall be
deemed to be Events of Default hereunder:
(a) The Borrower shall fail to make any payment in respect of
(i) the principal of any of the Lender Obligations as the same shall become due,
whether at the stated payment dates or by acceleration or otherwise, or (ii)
interest or fees on or in respect of any of the Lender Obligations as the same
shall become due, and such failure to pay interest or fees shall continue for a
period of five (5) days.
(b) The Borrower shall fail to perform or observe any of the
terms, covenants, conditions or provisions of Article 8 hereof and such failure
shall continue for a period of ten (10) days after any executive officer of the
Borrower knows or in the exercise of reasonable care should have known of the
occurrence of such failure.
(c) The Borrower shall fail to perform or observe (i) any of
the terms, covenants, conditions or provisions to be performed or observed by
the Borrower under Article 7 or Article 9 of this Agreement, or (ii) any of the
other terms, covenants, conditions or provisions of this Agreement and the other
Lender Agreements, and such failure shall continue for a period of 10 days.
(d) Any representation or warranty of the Borrower herein or
in any other Lender Agreement or any amendment to any thereof shall have been
materially false or misleading at the time made or intended to be effective and
continues to be materially false or misleading.
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(e) The Borrower or any Restricted Subsidiary shall fail
to make any payment on account of Borrowed Funds Indebtedness with a
then-outstanding principal amount of $2,000,000 or more when such payment is due
after the expiration of any applicable grace periods (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise), or shall fail
to perform or observe any provision of any agreement or instrument relating to
such Indebtedness, and such failure shall permit the holder thereof to
accelerate or demand payment of such Indebtedness.
(f) The Borrower or any Restricted Subsidiary shall be
involved in financial difficulties as evidenced:
(1) by its commencement of a voluntary case under
Title 11 of the United States Code as from time to time in effect, or
by its authorizing, by appropriate proceedings of its board of
directors or other governing body, the commencement of such a voluntary
case;
(2) by its filing an answer or other pleading
admitting or failing to deny the material allegations of a petition
filed against it commencing an involuntary case under said Title 11, or
seeking, consenting to or acquiescing in the relief therein provided,
or by its failing to controvert timely the material allegations of any
such petition;
(3) by the entry of an order for relief in any
involuntary case commenced under said Title 11;
(4) by its seeking relief as a debtor under any
applicable law, other than said Title 11, of any jurisdiction relating
to the liquidation or reorganization of debtors or to the modification
or alteration of the rights of creditors, or by its consenting to or
acquiescing in such relief;
(5) by the entry of an order by a court of competent
jurisdiction (i) finding it to be bankrupt or insolvent, (ii) ordering
or approving its liquidation, reorganization or any modification or
alteration of the rights of its creditors, or (iii) assuming custody
of, or appointing a receiver or other custodian for all or a
substantial part of its property and such order shall not be vacated or
stayed on appeal or otherwise stayed within 60 days;
(6) by the filing of a petition against the Borrower
or any Restricted Subsidiary under said Title 11 which shall not be
vacated within 30 days; or
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(7) by its making an assignment for the benefit of,
or entering into a composition with, its creditors, or appointing or
consenting to the appointment of a receiver or other custodian for all
or a substantial part of its property.
(g) There shall have occurred a final judgment against
the Borrower or any Restricted Subsidiary in any court for an amount in excess
of $1,000,000, and from which no appeal has been taken or with respect to which
all appeal periods have expired, unless such judgment is, to the Lenders'
satisfaction, insured against in full or shall have been satisfied by the date
on which all appeal periods shall have expired.
(h) Any Security Document shall at any time after its
execution and delivery and for any reason (except as a result of action of the
Lenders) cease (i) to create a valid and perfected first priority security
interest in and to the property purported to be subject to such Security
Document, or (ii) to be in full force and effect, or shall be declared null and
void, or the validity or enforceability thereof shall be contested or denied by
the Borrower or Subsidiary.
(i) Any Guarantor shall notify the Agent or the Lender of
its intention to terminate its obligations under the Guaranty Agreement to which
it is a party, or the Borrower shall notify the Agent or the Lenders of its
intention to terminate its obligations under Article 10 hereof, or any such
Guaranty Agreement or Guaranty shall otherwise cease to be in full force and
effect, or shall be declared null and void, or the validity or enforceability
thereof shall be contested or denied by the applicable Guarantor or Borrower.
(j) A Change in Control shall be deemed to have occurred.
(k) Any "Event of Default" under any other Lender
Agreement shall have occurred.
Section 10.2. REMEDIES. Upon the occurrence and during the continuance
of an Event of Default, in each and every case, the Agent and the Lenders may
proceed to protect and enforce their rights by suit in equity, action at law
and/or other appropriate proceeding either for specific performance of any
covenant or condition contained in this Agreement or any other Lender Agreement
or in any instrument delivered to the Agent or the Lenders pursuant hereto or
thereto, or in aid of the exercise of any power granted in this Agreement, any
Lender Agreement or any such instrument, and (unless there shall have occurred
an Event of Default under Section 10.1(f), in which case the unpaid balance of
all Lender Obligations shall automatically become due and payable) the Agent
may, at the direction of the Majority Lenders (or, in the case of an Event of
Default under Section 10.1(a), with the written consent of any Lender), by
notice in writing to the Borrower declare all or any part of the unpaid balance
of the Lender Obligations then outstanding to be forthwith due and payable,
whereupon such unpaid balance or part thereof shall become so due and payable
without presentation, protest or further demand or notice of any kind, all of
which are hereby
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expressly waived, and the Agent and the Lenders may proceed to enforce payment
of such balance or part thereof in such manner as they may elect, including
without limitation by the exercise of the rights of the Lenders under the
Security Documents.
Section 10.3. SETOFF.
(a) In addition to, and without limitation of, any rights of
the Agent or the Lenders under applicable law, upon the occurrence of an Event
of Default, any Indebtedness from the Agent or any Lender to the Borrower or
Guarantor (including all account balances, whether provisional or final and
whether or not collected or available) may be offset and applied toward the
payment of the Lender Obligations then due and owing to the Lenders. The
Borrower agree that any holder of a participation in the Lender Obligations may,
to the fullest extent permitted by law, exercise all its rights of payment with
respect to such participation as if such holder were the direct creditor of the
Borrower in the amount of the participation.
(b) Subject to the provisions of applicable law, in the event
of a bankruptcy, receivership or similar proceeding with respect to any Lender,
all cash of the Borrower and the Guarantors on deposit with or held by such
Lender shall automatically, and without any further action, be deemed to be a
prepayment of the Advances owing to such Lender. Each of the Lenders, the Agent
and the Borrower agrees that the provisions of Article 4 hereof (including,
without limitation Section 4.6, but excluding, however, Section 4.7) shall not
apply to any such prepayment. The Borrower and the Guarantors agree that no
Lender, nor any of its successors or assigns (including, without limitation, any
trustee in bankruptcy or receiver) shall have any liability to the Borrower or
the Guarantors if this provision is for any reason determined or deemed to be
unenforceable in whole or in part.
Section 10.4. CASH DEPOSITS TO SUPPORT OUTSTANDING LETTERS OF CREDIT.
In case any Event of Default shall have occurred and be continuing, and whether
or not the Lenders shall have accelerated the maturity of the Lender
Obligations, the Agent may, or at the request of the Majority Lenders shall,
require the Borrower, upon one day's notice, to deposit cash with the Agent in
an amount equal to one hundred five percent (105%) of the outstanding face
amount of each Letter of Credit outstanding as of such date, according to such
terms as the Agent shall reasonably require.
Section 10.5. APPLICATION OF PROCEEDS. Notwithstanding anything to the
contrary contained herein and in the Security Documents, in the event that
following the occurrence and during the continuance of any Event of Default, the
Agent or any Lender receives any monies on account of the Lender Obligations
from the Borrower, or Guarantor, from the proceeds of Collateral or otherwise,
such monies shall be distributed for application as follows:
(a) FIRST, to the payment of or the reimbursement of the Agent
for or in respect of all costs, expenses, disbursements and losses incurred or
sustained by the Agent in
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connection with the collection of such monies by the Agent, or in connection
with the exercise, protection or enforcement by the Agent of any of the rights,
remedies, powers and privileges of the Agent and/or the Lenders under this
Agreement or any other Lender Agreements;
(b) SECOND, to the payment of all interest, including interest
on overdue amounts, and late charges, then due and payable with respect to the
Advances and any outstanding Reimbursement Amounts;
(c) THIRD, to the payment of the outstanding principal balance
of the Revolving Credit Commitments, allocated among the Lenders in proportion
to their respective Revolving Credit Commitments;
(d) FOURTH, to any other outstanding Lender Obligations,
allocated among the Lenders in proportion to their respective interests in such
Lender Obligations; and
(e) FIFTH, the excess, if any, shall be returned to the
Borrower or to such other Persons as are entitled thereto.
ARTICLE 11. WAIVERS; CONSENTS; AMENDMENTS; REMEDIES
Section 11.1. ACTIONS BY LENDERS. Except as otherwise expressly set
forth in any particular provision of this Agreement, any consent or approval
required or permitted by this Agreement or in any other Lender Agreement to be
given by the Lenders, including under Section 11.2, may be given, and any term
or condition of this Agreement or of any Lender Agreement may be amended, and
the performance or observance by the Borrower of any term of this Agreement or
any other Lender Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively) with, but only with, the
written consent of the Majority Lenders; PROVIDED, HOWEVER, that without the
written consent of all of the Lenders:
(a) no reduction in principal, interest rates, Revolving
Credit Commitment Fee, Letter of Credit Commitment Fee or any other fee relating
to the Revolving Credit Commitments or the Advances shall be made;
(b) no extension or postponement of the stated time of payment
of the principal amount of, interest on, or Revolving Credit Commitment Fee,
Letter of Credit Commitment Fee or any other fee relating to the Revolving
Credit Commitments or the Advances shall be made;
(c) no increase in the amount, or extension of the term, of
the Revolving Credit Commitments beyond those provided for hereunder and no
extension of the Revolving Credit Termination Date shall be made;
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(d) no release of any portion of the collateral for the Lender
Obligations having a fair market value in excess of $1,000,000 in any calendar
year shall be made, other than a release in connection with an Asset Disposition
permitted by Section 9.4 hereof or approved by Majority Lenders;
(e) no change in the definition of "Majority Lenders" shall be
made; and
(f) no change in the language of this Section 11.1 shall be
made.
Section 11.2. ACTIONS BY BORROWER. No delay or omission on the Agent's
or the Lenders' part in exercising their rights and remedies against the
Borrower or any other interested party shall constitute a waiver. A breach by
the Borrower of its obligations under this Agreement may be waived only by a
written waiver executed by the Agent, acting with the consent of the Majority
Lenders. The waiver of the Borrower's breach in one or more instances shall not
constitute or otherwise be an implicit waiver of subsequent breaches. To the
extent permitted by applicable law, the Borrower hereby agrees to waive, and
does hereby absolutely and irrevocably waive (a) all presentments, demands for
performance, notices of nonperformance, protests, notices of protest and notices
of dishonor in connection with any of the Indebtedness evidenced by the Notes,
(b) any requirement of diligence or promptness on the Agent's or on the Lenders'
part in the enforcement of their rights under the provisions of this Agreement
or any other Lender Agreement, and (c) any and all notices of every kind and
description which may be required to be given by any statute or rule of law with
respect to its liability (i) under this Agreement or in respect of the
Indebtedness evidenced by the Notes or any other Lender Obligation or (ii) under
any other Lender Agreement, except as may be expressly provided under such
Agreement. No course of dealing between the Borrower, the Agent and the Lenders
shall operate as a waiver of any of the Agent's or the Lenders' rights under
this Agreement or any other Lender Agreement or with respect to any of the
Lender Obligations. This Agreement shall be amended only by a written instrument
executed by the Borrower, the Agent and the Majority Lenders making explicit
reference to this Agreement. The Agent's and the Lenders' rights and remedies
under this Agreement and under all subsequent agreements between or among the
Borrower and the Agent and/or the Lenders shall be cumulative and any rights and
remedies expressly set forth herein shall be in addition to, and not in
limitation of, any other rights and remedies which may be applicable to the
Agent and the Lenders in law or at equity.
ARTICLE 12. SUCCESSORS AND ASSIGNS
Section 12.1. GENERAL. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns, except that (a) no Borrower may assign its rights or obligations under
this Agreement, and (b) each Lender may assign its rights in this Agreement only
as set forth below in this Article 12.
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Section 12.2. ASSIGNMENTS.
(a) ASSIGNMENTS. In compliance with applicable laws with
respect to such assignment and with the prior written consent of the Agent and
the Borrower, which consents will not be unreasonably withheld, a Lender may
assign to one or more financial institutions (each a "Successor Lender") a
proportionate part of its rights and obligations in connection with this
Agreement, its Notes and the related Lender Agreements, and each such Successor
Lender shall assume such rights and obligations pursuant to an Assignment and
Assumption Agreement in the form of EXHIBIT L attached hereto duly executed by
such Successor Lender and such Lender. Any assignment under this Section 12.2(a)
shall be in a minimum amount of $10,000,000. In connection with any assignment
under this Section 12.2(a) there shall be paid to the Agent by the assigning
Lender or the Successor Lender an administrative processing fee in the amount of
$3,000. Notwithstanding the foregoing provisions of this Section 12.2(a),
without obligating Fleet to purchase any additional Commitments hereunder, Fleet
agrees that it shall at all times hold Revolving Credit Commitments greater than
those held by any other individual Lender as of the date of any assignment by
Fleet.
(b) ASSIGNMENT PROCEDURES. In the event of an assignment under
Section 12.2(a), upon execution and delivery of an Assignment and Assumption
Agreement at least five (5) Business Days prior to the proposed assignment date,
and payment by such assignee to the assignor making such assignment of an amount
equal to the purchase price agreed between such Lender and such assignee, such
assignee shall become party to this Agreement as a signatory hereto and shall
have all the rights and obligations of a Lender under this Agreement and the
other Lender Agreements with an interest therein as set forth in such Assignment
and Assumption Agreement, and such assignor making such assignment shall be
released from its obligations hereunder to a corresponding extent, and no
further consent or action by any party shall be required. Upon the consummation
of any such assignment, the assignor, the Successor Lender and the Borrower
shall make appropriate arrangements so that, if required, new Notes are issued
to the Successor Lender and replacement Notes are issued to the assignor in
principal amounts reflecting their respective revised interests.
(c) REGISTER. The Agent shall maintain a register (the
"Register") for the recordation of (i) the names and addresses of the Successor
Lenders which assume rights and obligations pursuant to an assignment hereunder,
(ii) the interests of each Lender, and (iii) the amounts of the Advances owing
to each Lender from time to time and the amounts of participations purchased by
Lenders in Letters of Credit pursuant to Section 2.11 from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, the Agent and the Lenders may treat each Person whose name is
registered therein for all purposes as a party to this Agreement. The Register
shall be available for inspection by the Borrower or any Lenders at any
reasonable time and from time to time upon reasonable prior notice.
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(d) FURTHER ASSURANCES. The Borrower shall sign such documents
and take such other actions from time to time reasonably requested by the Agent
or a Lender to enable any assignee to share in the benefits and rights created
by the Lender Agreements.
(e) ASSIGNMENTS TO FEDERAL RESERVE BANK AND AFFILIATES. Any
Lender at any time may assign all or any portion of its rights under this
Agreement and its Notes to a Federal Reserve Bank. No such assignment shall
release the transferor Lender from its obligations hereunder. Any Lender may at
any time assign all or a portion of its rights under this Agreement and its
Notes, in a minimum amount of $500,000, to any affiliate of such Lender which is
wholly-owned by the same bank holding company parent.
Section 13.3. PARTICIPATIONS. Any Lender may at any time grant or offer
to grant to one or more financial institutions ("Credit Participants")
participating interests in its rights and obligations in this Agreement, its
Notes and the related Lender Agreements, and each such Credit Participant shall
acquire such participation subject to the terms set forth below.
(a) AMOUNT. Each such participation shall be in a minimum
amount of $5,000,000.
(b) PROCEDURE. Each Lender granting such participation shall
comply with all applicable laws with respect to such transfer and shall remain
responsible for the performance of its obligations hereunder and under the other
Lender Agreements and shall retain the sole right and responsibility to exercise
its rights and to enforce the obligations of the Borrower hereunder and under
the other Lender Agreements, including the right to consent to any amendment,
modification or waiver of any provision of any Lender Agreement, except for the
matters referred to in Section 11.1 requiring the consent of all Lenders, which
may require consent of each participant.
(c) DEALING WITH LENDERS. The Borrower shall continue to deal
solely and directly with the Lenders in connection with their rights and
obligations under this Agreement and the other Lender Agreements.
(d) RIGHTS OF PARTICIPANTS. The Borrower agrees that each
Credit Participant shall, to the extent provided in its participation
instrument, be entitled to the benefits of Sections 2.6, 2.8, 2.9, 2.10 and
14.11, and the setoff rights in Section 10.3 with respect to its participating
interest; provided, however, that no Credit Participant shall be entitled to
receive any greater payment under such Sections than the Lender granting such
participation would have been entitled to receive with respect to the interests
transferred.
(e) AFFILIATES. Notwithstanding the provisions of Section
12.3(a), a Lender may at any time grant participations in its rights and
obligations herein to its affiliates in minimum amounts of $500,000; provided,
however, that in the event of such grant, all other provisions of this Section
12.3 shall apply.
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(f) CONSENT OF AGENT; NOTICE TO BORROWER. Promptly following
the grant of any participation, the Lender granting such participation shall
notify the Agent and the Borrower thereof.
ARTICLE 13. THE AGENT
Section 13.1. AUTHORIZATION AND ACTION.
(a) Each Lender hereby appoints and authorizes the Agent to
take such action on its behalf and to exercise such powers under this Agreement
and the other Lender Agreements as are delegated to the Agent by the terms
hereof and thereof, together with such powers as are reasonably incidental
thereto. As to any matters not expressly provided for by this Agreement and the
other Lender Agreements (including, without limitation, enforcement or
collection of the Notes), the Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Lenders, and such instructions shall be binding
upon all Lenders; PROVIDED, HOWEVER, that the Agent shall not be required to
take any action which exposes the Agent to liability or which is contrary to
this Agreement or the other Lender Agreements or applicable law. Subject to the
foregoing provisions and to the other provisions of this Article 13, the Agent
shall, on behalf of the Lenders: (i) execute the Security Documents on behalf of
the Lenders; (ii) hold and apply any and all Collateral, and the proceeds
thereof, at any time received by it, in accordance with the provisions of the
Security Documents and this Agreement; (iii) exercise any and all rights, powers
and remedies of the Lenders under this Agreement or any of the Security
Documents, including the giving of any consent or waiver or the entering into of
any amendment, subject to the provisions of Section 11.1; (iv) at the direction
of the Lenders, execute, deliver and file UCC financing statements, mortgages,
deeds of trust, lease assignments and other such agreements in respect of the
Collateral, and possess instruments included in the Collateral on behalf of the
Lenders; and (v) in the event of acceleration of the Borrower's Indebtedness
hereunder, act at the direction of the Lenders to exercise the rights of the
Lenders hereunder and under the Security Documents.
(b) The relationship between the Agent and each of the Lenders
is that of an independent contractor. The use of the term "Agent" is for
convenience only and is used to describe, as a form of convention, the
independent contractual relations between the Agent and each of the Lenders.
Nothing contained in this Agreement or any other Lender Agreement shall be
construed to create an agency, trust or other fiduciary relationship between the
Agent and any of the Lenders.
(c) As an independent contractor empowered by the Lenders to
exercise certain rights and perform certain duties and responsibilities
hereunder and under the other
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Lender Agreements, the Agent is nevertheless a "representative" of the Lenders,
as that term is defined in Article 1 of the Uniform Commercial Code, for purpose
of actions for the benefit of the Lenders and the Agent with respect to all
collateral security and guaranties contemplated by the Lender Agreements. Such
actions include the designation of the Agent as "secured party", "mortgagee" or
the like on all financing statements and other documents and instruments,
whether recorded or otherwise, relating to the attachment, perfection, priority
or enforcement of any security interests, mortgages or deeds of trust in
collateral security intended to secure the payment or performance of any of the
Lender Obligations.
Section 13.2. EMPLOYEES AND AGENTS. The Agent may exercise its powers
and execute its duties by or through employees or agents and shall be entitled
to take, and to rely on, advice of counsel concerning all matters pertaining to
its rights and duties under this Agreement and the other Lender Agreements. The
Agent may utilize the services of such Persons as the Agent in its sole
discretion may reasonably determine, and all reasonable fees and expenses of any
such Persons shall be paid by the Borrower.
Section 13.3. AGENT'S RELIANCE, ETC. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable to the Lenders for any
action taken or omitted to be taken by it or them under or in connection with
this Agreement or the other Lender Agreements, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, the Agent: (i) may treat the payee of any Note as the holder thereof
until the Agent receives written notice of the assignment or transfer thereof
signed by such payee and in form satisfactory to the Agent; (ii) may consult
with legal counsel, independent public accountants and other experts selected by
it and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts; (iii) makes no warranty or representations to any Lender and shall not
be responsible to any Lender for any statements, warranties or representations
made in or in connection with this Agreement or the other Lender Agreements;
(iv) shall not have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of this Agreement or the
other Lender Agreements on the part of the Borrower or any other Person or to
inspect the property (including the books and records) of the Borrower or any of
its Subsidiaries; (v) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement or the other Lender Agreements or any other instrument or
document furnished pursuant hereto or thereto; and (vi) shall incur no liability
under or in respect of this Agreement or the other Lender Agreements by acting
upon any notice, consent, certificate or other instrument or writing (which may
be by telecopy, telegram, cable or telex) believed by it to be genuine and
signed or sent by the proper party or parties.
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Section 13.4. PAYMENTS.
(a) A payment by the Borrower to the Agent hereunder or any of
the other Lender Agreements, for the account of any Lender, shall constitute a
payment to such Lender. The Agent agrees promptly to distribute to each Lender
such Lender's PRO RATA share of payments received by the Agent for the account
of the Lenders except as otherwise expressly provided herein or in any of the
other Lender Agreements.
(b) If in the opinion of the Agent the distribution of any
amount received by it in such capacity hereunder, under the Notes or under any
of the other Lender Agreements might involve it in liability, it may refrain
from making such distribution until its right to make distribution shall have
been adjudicated by a court of competent jurisdiction. If a court of competent
jurisdiction shall adjudge that any amount received and distributed by the Agent
is to be repaid, each Person to whom any such distribution shall have been made
shall either repay to the Agent its proportionate share of the amount so
adjudged to be repaid or shall pay over the same in such manner and to such
Persons as shall be determined by such court.
(c) Notwithstanding anything to the contrary contained in this
Agreement or any of the other Lender Agreements, any Lender that fails (i) to
make available to the Agent its PRO RATA share of any Revolving Credit Advance
or (ii) to comply with the provisions of Section 4.6 with respect to making
dispositions and arrangements with the other Lenders, where such Lender's share
of any payment received, whether by setoff or otherwise, is in excess of its PRO
RATA share of such payments due and payable to all of the Lenders, in each case
to the full extent required by the provisions of this Agreement, shall be deemed
delinquent (a "Delinquent Lender") until such time as such delinquency is
satisfied. A Delinquent Lender shall be deemed to have assigned any and all
payments due to it from the Borrower, whether on account of outstanding
Advances, interest, fees or otherwise, to the remaining nondelinquent Lenders
for application to, and reduction of, their respective PRO RATA shares of all
outstanding Advances. The Delinquent Lender hereby authorizes the Agent to
distribute such payments to the nondelinquent Lenders in proportion to their
respective PRO RATA shares of all outstanding Advances. A Delinquent Lender
shall be deemed to have satisfied in full a delinquency when and if, as a result
of application of the assigned payments to all outstanding Advances of the
nondelinquent Lenders, the Lenders' respective PRO RATA shares of all
outstanding Advances have returned to those in effect immediately prior to such
delinquency and without giving effect to the nonpayment causing such
delinquency.
Section 13.5. FLEET AND AFFILIATES. With respect to its Revolving
Credit Commitment hereunder, Fleet shall have the same rights and powers under
this Agreement and the other Lender Agreements as any other Lender and may
exercise the same as though it were not the Agent; and the term "Lender" or
"Lender(s)" shall, unless otherwise expressly indicated, include Fleet in its
individual capacity. Fleet and its Affiliates may lend money to, and generally
engage in any kind of business with, the Borrower, any of its Subsidiaries and
any
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Person who may do business with or own securities of Borrower or any such
Subsidiary, all as if Fleet were not the Agent and without any duty to account
therefor to the Lenders.
Section 13.6. LENDER CREDIT DECISION. Each Lender acknowledges that it
has, independently and without reliance upon the Agent or any other Lender and
based on the financial statements referred to in Section 5.9 and such other
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 Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
Section 13.7. INDEMNIFICATION OF AGENT. Each Lender agrees to indemnify
the Agent (to the extent that the Agent is not reimbursed by the Borrower),
ratably according to its Revolving Credit Commitment Percentage, 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 the
Agent in any way relating to or arising out of this Agreement or any other
Lender Agreement or any action taken or omitted by the Agent in such capacity
under this Agreement, PROVIDED that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Agent's gross
negligence or wilful misconduct. Without limitation of the foregoing, each
Lender agrees to reimburse the Agent promptly upon demand for its ratable share
of any out-of-pocket expenses (including counsel fees) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement and each other Lender Agreement, to the
extent that the Agent is not reimbursed for such expenses by the Borrower.
Section 13.8. SUCCESSOR AGENT. Except as provided below, the Agent may
resign at any time by giving written notice thereof to the Lenders and the
Borrower. Upon any such resignation, the Lenders shall have the right to appoint
a successor Agent which shall be reasonably acceptable to the Borrower. If no
successor Agent shall have been so appointed by the Lenders (other than the
resigning Agent) and shall have accepted such appointment, within thirty (30)
days after the retiring Agent's giving notice of resignation, then the retiring
Agent may, on behalf of the Lenders, appoint a successor Agent, which shall be a
commercial bank or financial institution organized under the laws of the United
States of America or of any state thereof and having a combined capital and
surplus of at least $50,000,000 and which shall be reasonably acceptable to the
Borrower. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations under
this Agreement and the other Lender Agreements. After any retiring Agent's
resignation hereunder as Agent, the provisions
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of this Article 13 shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Agent under this Agreement and the other Lender
Agreements.
Section 13.9. COLLATERAL SECURITY. The Agent acknowledges to the
Lenders that it is acting in an agency capacity hereunder and that the security
interest in the Collateral granted under the Security Documents secures the
Lender Obligations owing to all of the Lenders. Notwithstanding anything to the
contrary contained herein or in the Security Documents, the Agent and the
Lenders agree, as among themselves, that the Agent shall not, without the
consent of the Majority Lenders, make any sale or disposition of the Collateral
pursuant to any of the Security Documents. The Agent will be reimbursed or
properly indemnified by the Lenders in the event the Agent is requested by the
Lenders to take or omit to take any action with respect to the Collateral (any
such reimbursement or indemnification to be PRO RATA as provided in Section
13.7). The Agent shall have the right to retain counsel to advise it as to any
action or decision with respect to the Collateral and its and the Lenders'
rights and obligations with respect thereto, and shall be reimbursed by the
Lenders for the cost of the same (to the extent the Agent is not reimbursed by
the Borrower) prior to distributing any of the Collateral or any proceeds
thereof.
Section 13.10. NOTIFICATION OF DEFAULTS. Each Lender hereby agrees that
upon learning of the existence of a Default it shall promptly notify the Agent
thereof. The Agent hereby agrees that upon receipt of any notice under this
Section 13.10 it shall promptly notify the other Lenders of the existence of
such Default.
Section 13.11. AMENDMENT OF ARTICLE 13. The Borrower hereby agrees that
the foregoing provisions of this Article 13 constitute an agreement among the
Agent and the Lenders (and the Agent and the Lenders acknowledge that except for
the provisions of Section 13.8, the Borrower is not a party to or bound by such
foregoing provisions) and that any and all of the provisions of this Article 13
may be amended at any time by the Lenders without the consent or approval of, or
notice to, the Borrower (other than the requirement of notice to the Borrower of
the resignation of the Agent).
ARTICLE 14. MISCELLANEOUS
Section 14.1. LIMITATION OF LIABILITY; INDEMNIFICATION. Any instrument
made by or transferred from the Borrower and released or endorsed by any Lender
is without recourse against the Lenders, and the Borrower agree that the Lenders
are not responsible for the accuracy or authenticity of any such document. The
Borrower agrees that neither the Agent nor the Lenders have responsibility for
any of the debts of the Borrower, including, without limitation, claims for
wages or claims for payment for material supplied to the Borrower. The Borrower
shall defend the Agent and the Lenders against all claims that the Agent and/or
the Lenders are responsible for any matter referred to in this Article 14.1. The
Borrower shall indemnify the Agent and the Lenders and hold the Agent and the
Lenders harmless in respect to all such claims.
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Section 14.2. CONFIDENTIALITY. The Agent and the Lenders agree that
they will not disclose any information provided to them by the Borrower pursuant
to Sections 6.11 or 6.12 without the prior consent of the Borrower, which
consent will not be unreasonably withheld, except for disclosure (i) to the
Agent's or the Lenders' legal counsel, accountants and other professional
advisors, (ii) to regulatory officials in their official capacities, (iii) as
required by law, regulation or legal process or (iv) in connection with any
legal proceeding to which either of the Agent or any Lender is a party. The
Agent and the Lenders agree to hold any other confidential information which
they may receive from the Borrower pursuant to this Agreement in confidence,
except for disclosure (i) as permitted under the next succeeding sentence, (ii)
to legal counsel, accountants, and other professional advisors to the Agent or
the Lenders, (iii) to regulatory officials in their official capacities, (iv) as
required by law, regulation, or legal process, and (v) in connection with any
legal proceeding to which the Agent or any Lender is a party. The Borrower
authorizes the Agent and the Lenders to disclose to any purchaser or prospective
purchaser of an interest in any Lender Obligations any financial or other
information pertaining to the Borrower, after five Business Days written notice
to the Borrower, and the Agent and the Lenders agree, upon the reasonable
request of the Borrower, not to disclose such information to any Person to which
the Borrower reasonably objects (other than a Person controlled by or under
common control with any Lender and its successors and assigns), it being
understood, however, that the Lenders may provide any Affiliate with such
information without prior notice to the Borrower. The Agent and the Lenders
agree to inform any such purchaser or prospective purchaser of their obligations
pursuant to this Section 14.2 and to obtain the written agreement of such
purchaser or prospective purchaser to be similarly bound and deliver such
agreement to the Borrower.
Section 14.3. SURVIVAL OF REPRESENTATIONS. All representations and
warranties of the Borrower contained in this Agreement shall survive the
execution of this Agreement and the delivery of the Notes and the making of the
loans and Advances herein contemplated.
Section 14.4. GOVERNMENTAL REGULATION. Anything contained in this
Agreement to the contrary notwithstanding, neither the Agent nor any Lender
shall be obligated to extend credit to the Borrower in violation of any
limitation or prohibition provided by any applicable statute or regulation.
Section 14.5. NOTICES. Unless specified otherwise, all notices and
other communications made or required to be given pursuant to this Agreement
shall be in writing and shall be mailed by United States mail, postage prepaid,
or delivered by hand or by nationally-recognized overnight courier service, or
sent by telegraph, telex or electronic facsimile transmission, confirmed in
writing, addressed to the parties hereto at its address indicated below or at
any other address as any party shall from time to time designate in writing to
the other parties hereto:
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(a) If to the Agent, as follows:
Fleet National Bank
Xxx Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx, Vice President
Telefax: (000) 000-0000
With a copy to:
Xxxxxxx, Procter & Xxxx LLP
Exchange Place
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Attention: Xxx X. Xxxxxxxxx, P.C.
Telefax: (000) 000-0000
(b) If to any Lender, at the address set forth below such
Lender's name on an execution page to this Agreement.
(c) If to the Borrower, at:
Ekco Group, Inc.
00 Xxxx Xxxxx Xxxx
Xxxxxx, Xxx Xxxxxxxxx 00000
Attention: Xxxxxx X. XxXxxxxxxx, Executive
Vice President
Telefax: (000) 000-0000
With copies to:
Xx. Xxxxx Xxxxxxx, Treasurer
Ekco Group, Inc.
00 Xxxx Xxxxx Xxxx
Xxxxxx, Xxx Xxxxxxxxx 00000
Telefax: (000) 000-0000
Xxxxxxx X. Xxxxxxxxx, Esq.
Executive Vice President and
General Counsel
Ekco Group, Inc.
00 Xxxx Xxxxx Xxxx
Xxxxxx, Xxx Xxxxxxxxx 00000
Telefax: (000) 000-0000
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and
Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telefax: (000) 000-0000
Any notice so addressed shall be deemed to have been given (i) when
delivered by hand, (ii) three Business Days after deposited in the United States
mails, registered or certified mail, postage prepaid, (iii) one Business Day
after deposit with a nationally-recognized overnight courier or delivery
service, and (iv) when sent by telex, telegraph or electronic facsimile
transmission, answer back received.
Section 14.6. ENTIRE AGREEMENT. This Agreement and the documents and
other materials contemplated hereby constitute the entire agreement of the
Borrower, the Agent and the Lenders and express their entire understanding with
respect to credit advanced or to be advanced by the Lenders to the Borrower.
Section 14.7. GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement
shall be governed by and construed and enforced under the internal laws (and not
the law of conflicts) of The Commonwealth of Massachusetts, but giving effect to
federal laws applicable to national banks. The Borrower and Lender hereby
irrevocably submits to the non-exclusive jurisdiction of any United States
federal or Massachusetts state court sitting in Boston in any action or
proceeding arising out of or relating to any Lender Agreements and the Borrower
hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in any such court.
Section 14.8. HEADINGS. Section headings in this Agreement are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of this Agreement.
Section 14.9. COUNTERPARTS. This Agreement and amendments to it may be
executed in several counterparts, each of which shall be an original. The
several counterparts shall constitute a single Agreement.
Section 14.10. EXPENSES; INDEMNIFICATION.
(a) The Borrower shall reimburse (i) the Agent for the
reasonable cost of field examinations, and (ii) the Agent and the Lenders for
any reasonable costs and out-of-pocket expenses (including reasonable attorneys'
fees and time charges of attorneys for the Agent and the Lenders) paid or
incurred by the Lenders in connection with the preparation,
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review, execution, delivery, administration, amendment, modification,
administration or syndication of this Agreement and any of the other Lender
Agreements and related instruments and documents, and the Borrower shall
reimburse the Agent and the Lenders for any reasonable costs and out-of-pocket
expenses (including reasonable attorneys' fees and time charges of attorneys for
the Agent or the Lenders) paid or incurred by any of them in connection with the
collection and enforcement of this Agreement and any of the other Lender
Agreements and related instruments and documents; PROVIDED, HOWEVER, that prior
to the occurrence of an Event of Default hereunder, the Borrower shall not be
responsible for the cost of more than three (3) field examinations during any 12
month period (limited to two (2) if there has been no Advances other than
Letters of Credit during such period), for the cost of any single field
examination in excess of $10,000, or for more than one set of counsel for the
Agent and the Lenders.
(b) Without limitation of any other obligation or liability of
the Borrower or right or remedy of the Agent or the Lenders contained herein,
the Borrower hereby covenants and agrees to indemnify and hold the Agent, the
Lenders, and the shareholders, directors, agents, officers, partners,
subsidiaries and affiliates of the Agent and the Lenders, harmless from and
against any and all damages, losses, settlement payments, obligations,
liabilities, claims, including, without limitation, claims for finder's or
broker's fees, actions or causes of action, and reasonable costs and expenses
incurred, suffered, sustained or required to be paid by any such indemnified
party in each case by reason of or resulting from any claim relating to the
transactions contemplated hereby, other than any such claims which arise as a
result of the gross negligence or willful misconduct of the Agent, the Lenders
or any such indemnified party. Promptly upon receipt by any indemnified party
hereunder of notice of the commencement of any action against such indemnified
party for which a claim is to be made against the Borrower hereunder, such
indemnified party shall notify the Borrower in writing of the commencement
thereof, although the failure to provide such notice shall not affect the
indemnification rights of any such indemnified party hereunder to the extent
such indemnified party demonstrates to the reasonable satisfaction of the
Borrower that such failure to provide notice does not prejudice the Borrower in
its defense of such claim. The Borrower shall have the right, at their option
upon notice to the indemnified parties, to defend any such matter at their own
expense and with their own counsel, except as provided below, which counsel must
be reasonably acceptable to the indemnified parties. The indemnified party shall
cooperate with the Borrower in the defense of such matter. The indemnified party
shall have the right to employ separate counsel and to participate in the
defense of such matter at its own expense. In the event that (a) the employment
of separate counsel by an indemnified party has been authorized in writing by
the Borrower, (b) the Borrower has failed to assume the defense of such matter
within twenty (20) days of notice thereof from the indemnified party or (c) the
named parties to any such action (including impleaded parties) include any
indemnified party who has been advised in writing by counsel that there may be
one or more legal defenses available to it or prospective bases for liability
against it, which are different from those available to or against the Borrower,
then the Borrower shall not have the right to assume the defense of such matter
with respect to such indemnified party. The indemnified party shall not
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compromise or settle any such matter without the written consent of the
Borrower, which consent shall not be unreasonably withheld or delayed. The
Borrower shall not compromise or settle any such matter against an indemnified
party without the written consent of the indemnified party, which consent shall
not be unreasonably withheld or delayed.
Section 14.11. SEVERABILITY OF PROVISIONS. Any provision in any Lender
Agreement that is held to be inoperative, unenforceable, or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or
invalid without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Lender Agreements are
declared to be severable.
Section 14.12. NONLIABILITY OF LENDERS. The relationship between the
Borrower and the Lenders shall be solely that of borrower and lender. Neither
the Agent nor any Lender shall have any fiduciary responsibilities to the
Borrower. The Agent and the Lenders undertake no responsibility to the Borrower
to review or inform the Borrower of any matter in connection with any phase of
the Borrower's business or operations.
Section 14.13. WAIVER OF JURY TRIAL. THE AGENT, THE LENDERS AND THE
BORROWER AGREE THAT NONE OF THEM NOR ANY OF THEIR RESPECTIVE ASSIGNEES OR
SUCCESSORS SHALL (A) SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM
OR ANY OTHER ACTION BASED UPON OR ARISING OUT OF, THIS AGREEMENT, THE NOTES, ANY
LENDER AGREEMENT, ANY RELATED INSTRUMENTS, ANY COLLATERAL OR THE DEALINGS OR THE
RELATIONSHIP BETWEEN OR AMONG ANY OF THEM, OR (B) SEEK TO CONSOLIDATE ANY SUCH
ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN
WAIVED. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY THE AGENT,
THE LENDERS AND THE BORROWER, AND THESE PROVISIONS SHALL BE SUBJECT TO NO
EXCEPTIONS. NONE OF THE AGENT, THE LENDERS OR THE BORROWER HAS AGREED WITH OR
REPRESENTED TO THE OTHERS THAT THE PROVISIONS OF THIS PARAGRAPH WILL NOT BE
FULLY ENFORCED IN ALL INSTANCES.
IN WITNESS WHEREOF, the Borrower, the Agent and the Lenders have caused
this Credit Agreement to be executed by their duly authorized officers as of the
date first above written.
BORROWER:
EKCO GROUP, INC.
By:
----------------------------------------
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Name: Xxxxx X. Xxxxxxx
Title: Treasurer
AGENT:
FLEET NATIONAL BANK, as Agent
By:
----------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
LENDERS:
FLEET NATIONAL BANK
By:
----------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
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Address: Fleet National Bank
Xxx Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxx, Vice President
Telefax: (000) 000-0000
Revolving Credit Commitment Percentage: 100%
Revolving Credit Commitments: $35,000,000
The undersigned parties to the Original Credit Agreement consent to
this amended and Restated Credit Agreement:
EKCO HOUSEWARES, INC.
By:
----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Treasurer
EKCO CONSUMER PLASTICS, INC.
(f/k/a Frem Corporation)
By:
----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Treasurer
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