EXHIBIT (b)(1)
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$84,000,000 CREDIT FACILITY
CREDIT AGREEMENT
Dated as of August 5, 1999
by and among
WORLDWIDE SPORTS & RECREATION, INC.,
as Borrower
ANTARES CAPITAL CORPORATION
for itself, as a Lender and as Agent for all Lenders
and
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
as Lenders
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TABLE OF CONTENTS
ARTICLE I - THE CREDITS................................................................................ 1
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1.1 Amounts and Terms of Commitments.............................................................. 1
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(a) The Term Loans.......................................................................... 1
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(b) The Revolving Credit.................................................................... 2
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(c) Lender Letters of Credit and Letter of Credit Participation Agreements.................. 2
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1.2 Notes......................................................................................... 3
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1.3 Interest...................................................................................... 4
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1.4 Loan Accounts................................................................................. 5
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1.5 Procedure for Revolving Credit Borrowing...................................................... 5
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1.6 Conversion and Continuation Elections......................................................... 6
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1.7 Optional Prepayments/Permanent Commitment Reductions.......................................... 7
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1.8 Mandatory Prepayments of Loans and Commitment Reductions...................................... 7
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(a) Scheduled Term Loan Payments............................................................ 7
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(b) Revolving Loan.......................................................................... 10
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(c) Asset Dispositions...................................................................... 10
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(d) Issuance of Securities.................................................................. 11
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(e) Excess Cash Flow........................................................................ 11
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(f) Application of Prepayments.............................................................. 11
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1.9 Fees.......................................................................................... 12
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(a) Arrangement and Agent's Fees............................................................ 12
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(b) Commitment Fee.......................................................................... 12
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(c) Letter of Credit Participation Fee...................................................... 12
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1.10 Payments by the Borrower...................................................................... 12
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1.11 Payments by the Lenders to the Agent.......................................................... 13
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1.12 Disbursements of Advances; Settlements Among Agent and Lenders; Payments
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of Interest and Fees; Disgorgement Obligations................................................ 14
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ARTICLE II - CONDITIONS PRECEDENT...................................................................... 15
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2.1 Conditions of Initial Loans................................................................... 15
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(a) Credit Agreement and Notes.............................................................. 15
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(b) Secretary's Certificates; Resolutions; Incumbency....................................... 15
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(c) Articles of Incorporation; By-laws and Good Standing.................................... 16
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(d) Collateral Documents.................................................................... 16
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(e) Legal Opinions.......................................................................... 17
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(f) Payment of Fees......................................................................... 17
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(g) Intentionally Omitted................................................................... 17
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(h) Financial Statements.................................................................... 17
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(i) Insurance Policies...................................................................... 18
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(j) Environmental Review.................................................................... 18
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(k) Due Diligence........................................................................... 18
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(l) Accountants' Review..................................................................... 18
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(m) Insurance Review........................................................................ 18
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(n) Borrowing Base Certificate.............................................................. 18
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(o) Related Transactions.................................................................... 18
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(p) Prior Indebtedness...................................................................... 18
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(q) Other Documents......................................................................... 19
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(r) Merger.................................................................................. 19
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2.2 Conditions to All Borrowings.................................................................. 19
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(a) Notice of Borrowing..................................................................... 19
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(b) Continuation of Representations and Warranties.......................................... 19
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(c) No Existing Default..................................................................... 19
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(d) Subsidiary.............................................................................. 19
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(e) Syndication............................................................................. 20
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ARTICLE III - REPRESENTATIONS AND WARRANTIES........................................................... 20
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3.1 Corporate Existence and Power................................................................. 20
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3.2 Corporate Authorization; No Contravention..................................................... 20
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3.3 Governmental Authorization.................................................................... 21
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3.4 Binding Effect................................................................................ 21
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3.5 Litigation.................................................................................... 21
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3.6 No Default.................................................................................... 22
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3.7 ERISA Compliance.............................................................................. 22
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3.8 Use of Proceeds; Margin Regulations........................................................... 22
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3.9 Title to Properties........................................................................... 23
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3.10 Taxes......................................................................................... 23
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3.11 Financial Condition........................................................................... 23
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3.12 Environmental Matters......................................................................... 23
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3.13 Collateral Documents.......................................................................... 24
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3.14 Regulated Entities............................................................................ 24
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3.15 Solvency...................................................................................... 24
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3.16 Labor Relations............................................................................... 24
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3.17 Copyrights, Patents, Trademarks and Licenses, etc............................................. 25
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3.18 Subsidiaries.................................................................................. 25
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3.19 Brokers' Fees; Transaction Fees............................................................... 25
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3.20 Insurance..................................................................................... 25
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3.21 Full Disclosure............................................................................... 26
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3.22 Year 2000 Issues.............................................................................. 26
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3.23 Subordinated Note Agreement and Recapitalization Agreement.................................... 26
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3.24 Foreign Sales................................................................................. 26
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ARTICLE IV - AFFIRMATIVE COVENANTS..................................................................... 26
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4.1 Financial Statements.......................................................................... 27
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4.2 Certificates; Borrowing Base Certificates; Other Information.................................. 27
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4.3 Notices....................................................................................... 29
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4.4 Preservation of Corporate Existence, Etc...................................................... 31
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4.5 Maintenance of Property....................................................................... 32
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4.6 Insurance..................................................................................... 32
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4.7 Payment of Obligations........................................................................ 32
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4.8 Compliance with Laws.......................................................................... 33
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4.9 Inspection of Property and Books and Records.................................................. 33
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4.10 Use of Proceeds............................................................................... 34
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4.11 Solvency...................................................................................... 34
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4.12 Further Assurances............................................................................ 34
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4.13 Interest Rate Protection...................................................................... 34
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4.14 Foreign Sales................................................................................. 35
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4.15 Merger........................................................................................ 35
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4.16 Intellectual Property......................................................................... 35
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ARTICLE V - NEGATIVE COVENANTS......................................................................... 35
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5.1 Limitation on Liens........................................................................... 35
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5.2 Disposition of Assets......................................................................... 37
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5.3 Consolidations and Mergers.................................................................... 37
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5.4 Loans and Investments......................................................................... 37
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5.5 Limitation on Indebtedness.................................................................... 38
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5.6 Transactions with Affiliates.................................................................. 39
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5.7 Management Fees and Compensation.............................................................. 39
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5.8 Use of Proceeds............................................................................... 40
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5.9 Contingent Obligations........................................................................ 40
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5.10 Compliance with ERISA......................................................................... 40
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5.11 Restricted Payments........................................................................... 41
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5.12 Change in Business............................................................................ 42
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5.13 Change in Structure........................................................................... 42
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5.14 Accounting Changes............................................................................ 42
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5.15 Amendments to Related Agreements and Subordinated Indebtedness................................ 43
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5.16 Intentionally Omitted......................................................................... 43
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5.17 No Negative Pledges........................................................................... 43
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ARTICLE VI - FINANCIAL COVENANTS...................................................................... 43
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6.1 Capital Expenditures.......................................................................... 43
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6.2 Leverage Ratio................................................................................ 44
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6.3 Fixed Charge Coverage Ratio................................................................... 45
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6.4 Interest Coverage Ratio....................................................................... 46
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6.5 Minimum EBITDA................................................................................ 47
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ARTICLE VII - EVENTS OF DEFAULT........................................................................ 49
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7.1 Event of Default.............................................................................. 49
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(a) Non-Payment............................................................................. 49
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(b) Representation or Warranty.............................................................. 49
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(c) Specific Defaults....................................................................... 49
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(d) Other Defaults.......................................................................... 49
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(e) Cross-Default........................................................................... 49
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(f) Insolvency; Voluntary Proceedings....................................................... 50
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(g) Involuntary Proceedings................................................................. 50
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(h) ERISA................................................................................... 50
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(i) Monetary Judgments...................................................................... 50
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(j) Non-Monetary Judgments.................................................................. 51
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(k) Collateral.............................................................................. 51
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(l) Ownership............................................................................... 51
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(m) Invalidity of Subordination Provisions.................................................. 51
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(n) B&L License............................................................................. 52
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7.2 Remedies...................................................................................... 52
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7.3 Rights Not Exclusive.......................................................................... 52
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7.4 Cash Collateral for Letters of Credit......................................................... 52
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ARTICLE VIII - THE AGENT............................................................................... 53
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8.1 Appointment and Authorization................................................................. 53
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8.2 Delegation of Duties.......................................................................... 53
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8.3 Liability of Agent............................................................................ 53
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8.4 Reliance by Agent............................................................................. 54
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8.5 Notice of Default............................................................................. 54
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8.6 Credit Decision............................................................................... 54
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8.7 Indemnification............................................................................... 55
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8.8 Agent in Individual Capacity.................................................................. 56
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8.9 Successor Agent............................................................................... 56
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8.10 Collateral Matters............................................................................ 56
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ARTICLE IX - MISCELLANEOUS............................................................................. 57
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9.1 Amendments and Waivers........................................................................ 57
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9.2 Notices....................................................................................... 58
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9.3 No Waiver; Cumulative Remedies................................................................ 59
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9.4 Costs and Expenses............................................................................ 59
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9.5 Indemnity..................................................................................... 59
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9.6 Marshaling; Payments Set Aside................................................................ 60
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9.7 Successors and Assigns........................................................................ 61
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9.8 Assignments, Participations, etc.............................................................. 61
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9.9 Confidentiality............................................................................... 63
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9.10 Set-off; Sharing of Payments.................................................................. 64
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9.11 Notification of Addresses, Lending Offices, Etc............................................... 64
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9.12 Counterparts.................................................................................. 64
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9.13 Severability.................................................................................. 64
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9.14 Captions...................................................................................... 65
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9.15 Independence of Provisions.................................................................... 65
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9.16 Interpretation................................................................................ 65
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9.17 No Third Parties Benefited.................................................................... 65
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9.18 Governing Law and Jurisdiction................................................................ 65
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9.19 Waiver of Jury Trial.......................................................................... 66
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9.20 Entire Agreement.............................................................................. 66
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ARTICLE X - TAXES, YIELD PROTECTION AND ILLEGALITY..................................................... 67
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10.1 Taxes......................................................................................... 67
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10.2 Illegality.................................................................................... 69
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10.3 Increased Costs and Reduction of Return....................................................... 70
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10.4 Funding Losses................................................................................ 71
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10.5 Inability to Determine Rates.................................................................. 71
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10.6 Reserves on LIBOR Rate Loans.................................................................. 72
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10.7 Certificates of Lenders....................................................................... 72
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10.8 Survival...................................................................................... 72
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10.9 Replacement of Lender in Respect of Increased Costs........................................... 72
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ARTICLE XI - DEFINITIONS............................................................................... 72
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11.1 Defined Terms................................................................................. 72
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11.2 Other Interpretive Provisions................................................................. 90
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(a) Defined Terms........................................................................... 90
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(b) The Agreement........................................................................... 91
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(c) Certain Common Terms.................................................................... 91
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(d) Performance; Time....................................................................... 91
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(e) Contracts............................................................................... 91
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(f) Laws.................................................................................... 91
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11.3 Accounting Principles......................................................................... 91
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SCHEDULES
Schedule 1.1(a) Term Loan A Commitments and Term Loan B Commitments
Schedule 1.1(b) Revolving Loan Commitments
Schedule 3.2 Capitalization
Schedule 3.5 Litigation
Schedule 3.7 ERISA
Schedule 3.17 Intellectual Property
Schedule 4.16 Certain Intellectual Property
Schedule 5.1 Liens
Schedule 5.4 Loans, Advances and Extensions of Credit
Schedule 5.5 Indebtedness
Schedule 5.9 Contingent Obligations
Schedule 11.1 Prior Indebtedness
EXHIBITS
Exhibit 1.8(e) Excess Cash Flow Certificate
Exhibit 4.1(b) Certificate
Exhibit 4.2(b) Compliance Certificate
Exhibit 11.1(a) Borrowing Base Certificate
Exhibit 11.1(b) Notice of Borrowing
Exhibit 11.1(c) Notice of Continuation/Conversion
Exhibit 11.1(d) Revolving Note
Exhibit 11.1(e) Term Note
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CREDIT AGREEMENT
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This CREDIT AGREEMENT (this "Agreement") is entered into as of August 5,
1999, by and among Worldwide Sports & Recreation, Inc., a Delaware corporation
(the "Borrower"), Antares Capital Corporation, a Delaware corporation, as agent
for the several financial institutions from time to time party to this Agreement
(collectively, the "Lenders" and individually each a "Lender") and for itself as
a Lender, and such Lenders.
W I T N E S S E T H:
WHEREAS, the Borrower has requested, and the Lenders have agreed to make
available to the Borrower, a revolving credit facility (including a letter of
credit subfacility) and term loans upon and subject to the terms and conditions
set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties agree as follows:
ARTICLE I - THE CREDITS
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1.1 Amounts and Terms of Commitments.
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(a) The Term Loans.
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(i) Each Lender with a Term Loan A Commitment severally and not jointly
agrees, on the terms and conditions hereinafter set forth, to lend to the
Borrower on the Closing Date the amount set forth opposite such Lender's name in
Schedule 1.1(a) under the heading "Term Loan A Commitment" (such amount being
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referred to herein as such Lender's "Term Loan A Commitment"). Amounts borrowed
under this subsection 1.1(a)(i) are referred to as the "Term Loan A."
(ii) Each Lender with a Term Loan B Commitment severally and not jointly
agrees, on the terms and conditions hereinafter set forth, to lend to the
Borrower on the Closing Date the amount set forth opposite such Lender's name in
Schedule 1.1(a) under the heading "Term Loan B Commitment" (such amount being
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referred to as such Lender's "Term Loan B Commitment"). Amounts borrowed under
this subsection 1.1(a)(ii) are referred to as the "Term Loan B."
(iii) Term Loan A and Term Loan B are sometimes referred to individually
as a "Term Loan" and together as the "Term Loans." Amounts borrowed as a Term
Loan which are repaid or prepaid may not be reborrowed.
(b) The Revolving Credit. Each Lender with a Revolving Loan Commitment
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severally and not jointly agrees, on the terms and conditions hereinafter set
forth, to make Loans to the Borrower (each such Loan, a "Revolving Loan") from
time to time on any Business Day during the period from the Closing Date to the
Revolving Termination Date, in an aggregate amount not to exceed at any time
outstanding the applicable amount set forth opposite the Lender's name in
Schedule 1.1(b) under the heading "Revolving Loan Commitment" (such amount as
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the same may be reduced from time to time pursuant to subsection 1.8(f) hereof
or as a result of one or more assignments pursuant to Section 9.8, being
referred to herein as such Lender's "Revolving Loan Commitment"); provided,
however, that, after giving effect to any Borrowing of Revolving Loans, the
aggregate principal amount of all outstanding Revolving Loans shall not exceed
the Maximum Revolving Loan Balance. As set forth on Schedule 1.1(b), the
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Revolving Loan Commitment is seasonal in nature and fluctuates throughout the
year. Subject to the other terms and conditions hereof, amounts borrowed under
this subsection 1.1(b) may be repaid and reborrowed from time to time. The
"Maximum Revolving Loan Balance" from time to time will be the lesser of:
(i) the "Borrowing Base" (as calculated pursuant to the Borrowing Base
Certificate) in effect from time to time, or
(ii) the Aggregate Revolving Loan Commitment then in effect;
less, in either case, the amount of any Letter of Credit Participation
Liability. If at any time the Revolving Loans exceed the Maximum Revolving Loan
Balance, then Revolving Loans must be repaid within three (3) Business Days in
an amount sufficient to eliminate such excess.
(c) Lender Letters of Credit and Letter of Credit Participation
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Agreements. Subject to the terms and conditions of this Agreement and in
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reliance upon the representations and warranties of Borrower herein set forth,
the Revolving Loan Commitment may, in addition to advances under the Revolving
Loan, be utilized, upon the request of Borrower, for (i) the issuance of letters
of credit by Agent (each such letter of credit, a "Lender Letter of Credit") or
(ii) the issuance of letter of credit participation agreements by Agent (each
such letter of credit participation, a "Letter of Credit Participation
Agreement") to confirm payment to banks (whether or not such banks are Lenders)
which issue letters of credit for the account of Borrower on behalf of each
Lender having a Revolving Loan Commitment (severally and not jointly) according
to such Lender's Revolving Loan Commitment. The aggregate amount of Letter of
Credit Participation Liability with respect to all Lender Letters of Credit and
Letter of Credit Participation Agreements outstanding at any time shall not
exceed $5,000,000.
The Borrower shall be irrevocably and unconditionally obligated forthwith
without presentment, demand, protest or other formalities of any kind, to
reimburse the Agent for any amounts paid by the Agent under any Lender Letter of
Credit or Letter of Credit Participation Agreement. The Borrower hereby
authorizes and directs the Lenders with Revolving Loan Commitments, at the
Agent's option, to make a Revolving Loan in the amount of any payment made by
the Agent with respect to any Lender Letter of Credit or Letter of Credit
Participation
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Agreement. All amounts paid by the Agent with respect to any Lender Letter of
Credit or Letter of Credit Participation Agreement that are not immediately
repaid by Borrower with the proceeds of a Revolving Loan or otherwise shall bear
interest at the interest rate then applicable to Revolving Loans, calculated
using the Base Rate and the Applicable Margin in effect. Agent agrees to provide
Borrower with prompt notice of any payments made by Agent with respect to any
Lender Letter of Credit or Letter of Credit Participation Agreement. Each Lender
agrees to fund its Commitment Percentage of any Revolving Loan made pursuant to
this subsection 1.1(c) and, if no such Revolving Loans are made, each Lender
with a Revolving Loan Commitment agrees to purchase, and shall be deemed to have
purchased, a participation in such Lender Letter of Credit or Letter of Credit
Participation Agreement in an amount equal to its ratable share of such Lender
Letter of Credit or Letter of Credit Participation Agreement based upon the
Revolving Loan Commitments then in effect and each Lender agrees to pay to the
Agent such share of any payments made by the Agent under such Lender Letter of
Credit or Letter of Credit Participation Agreement. The obligations of each
Lender under the preceding two (2) sentences shall be absolute and unconditional
and such remittance shall be made notwithstanding the occurrence or continuation
of an Event of Default or Default or the failure to satisfy any condition set
forth in Section 2.2 hereof.
In addition to all other terms and conditions set forth in this Agreement,
the issuance by Agent of any Lender Letter of Credit or Letter of Credit
Participation Agreement shall be subject to the conditions precedent that the
Lender Letter of Credit, Letter of Credit Participation Agreement or the letter
of credit or written contract for which Borrower requests a Letter of Credit
Participation Agreement shall support a transaction entered into by Borrower in
the Ordinary Course of Business of Borrower and shall be in such form, be for
such amount, and contain such terms as are reasonably satisfactory to Agent.
The expiration date of each Lender Letter of Credit shall be on a date
which is the earlier of (a) one year from its date of issuance, or (b) the
Revolving Termination Date. Each Letter of Credit Participation Agreement shall
provide that the Letter of Credit Participation Agreement terminates and all
demands or claims for payment must be presented by a date certain, which date
will be the earlier of (a) one year from its date of issuance, or (b) the
Revolving Termination Date.
Borrower shall give Agent at least ten (10) Business Days prior notice
specifying the date a Lender Letter of Credit or Letter of Credit Participation
Agreement is to be issued, identifying the beneficiary and describing the nature
of the transactions proposed to be supported thereby. The notice shall be
accompanied by the drawing terms for the Lender Letter of Credit or form of each
letter of credit or other written contract which will be supported by the Letter
of Credit Participation Agreement.
1.2 Notes. (a) The Term Loan A made by each Lender with a Term Loan A
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Commitment shall be evidenced by a Term Note A payable to the order of such
Lender in an amount equal to such Lender's Term Loan A Commitment.
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(b) The Term Loan B made by each Lender with a Term Loan B Commitment
shall be evidenced by a Term Note B payable to the order of such Lender in an
amount equal to such Lender's Term Loan B Commitment.
(c) The Revolving Loans made by each Lender with a Revolving Loan
Commitment shall be evidenced by a Revolving Note payable to the order of such
Lender in an amount equal to such Lender's Revolving Loan Commitment.
1.3 Interest. (a) Subject to subsections 1.3(c) and 1.3(d), each Loan
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shall bear interest on the outstanding principal amount thereof from the date
when made at a rate per annum equal to the LIBOR or the Base Rate, as the case
may be, plus the Applicable Margin, as the same may be adjusted pursuant to the
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provisions of the definition of Applicable Margin. Commencing on August 1,
2000, and continuing thereafter, the Applicable Margin for Loans shall be
subject to adjustment as set forth in the definition of Applicable Margin. The
Agent will with reasonable promptness notify the Borrower and the Lenders of the
effective date and the amount of each such change, provided that any failure to
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do so shall not relieve the Borrower of any liability hereunder or provide the
basis for any claim against the Agent. Each determination of an interest rate
by the Agent shall be conclusive and binding on the Borrower and the Lenders in
the absence of demonstrable error. All computations of fees and interest
payable on LIBOR Rate Loans under this Agreement shall be made on the basis of a
360-day year and actual days elapsed. All computations of interest payable on
Base Rate Loans shall be made on the basis of a 365-366 day year. Interest and
fees shall accrue during each period during which interest or such fees are
computed from the first day thereof to the last day thereof.
(b) Interest on each Loan shall be paid in arrears on each Interest
Payment Date. Interest shall also be paid on the date of any payment or
prepayment of Loans in full, provided, however, interest shall not be required
to be paid for the date of receipt if such payment or prepayment is received by
the Agent prior to 11:00 a.m.(Chicago time).
(c) At the election of the Agent or the Required Lenders while any Event
of Default under subsection 7.1(a) exists or 7.1(c) (due to any failure by
Borrower to perform or observe any term, covenant or agreement contained in
Sections 4.1 or 4.2, or in Article VI), the Borrower shall pay interest (after
as well as before entry of judgment thereon to the extent permitted by law) on
the Obligations, at a rate per annum which is determined by adding two percent
(2.0%) per annum to the Applicable Margin then in effect for such Loans (plus
the LIBOR or Base Rate, as the case may be) and, in the case of Obligations not
subject to an Applicable Margin (other than the fees described in Section 1.9),
at a rate per annum equal to the Base Rate plus two percent (2.0%); provided,
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however, that, on and after the expiration of any Interest Period applicable to
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any LIBOR Rate Loan outstanding on the date of occurrence of such Event of
Default, the principal amount of such Loan shall, during the continuation of
such Event of Default, bear interest at a rate per annum equal to the Base Rate
plus the Applicable Margin plus two percent (2.0%).
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(d) Anything herein to the contrary notwithstanding, the obligations of
the Borrower hereunder shall be subject to the limitation that payments of
interest shall not be required, for any period for which interest is computed
hereunder, to the extent (but only to the extent) that contracting for or
receiving such payment by the respective Lender would be contrary to the
provisions of any law applicable to such Lender limiting the highest rate of
interest which may be lawfully contracted for, charged or received by such
Lender, and in such event the Borrower shall pay such Lender interest at the
highest rate permitted by applicable law.
1.4 Loan Accounts. The Agent, on behalf of the Lenders, shall record on
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its books and records the amount of each Loan made, the interest rate
applicable, all payments of principal and interest thereon and the principal
balance thereof from time to time outstanding. The Agent shall deliver to the
Borrower on a monthly basis a loan statement setting forth such record for the
immediately preceding month. Such record shall, absent demonstrable error, be
conclusive evidence of the amount of the Loans made by the Lenders to the
Borrower and the interest and payments thereon. Any failure to so record or any
error in doing so, or any failure to deliver such loan statement shall not,
however, limit or otherwise affect the obligation of the Borrower hereunder (and
under any Note) to pay any amount owing with respect to the Loans or provide the
basis for any claim against the Agent.
1.5 Procedure for Revolving Credit Borrowing. (a) Each Borrowing under
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the Revolving Loan shall be made upon the Borrower's irrevocable (subject to
Section 10.5 hereof) written notice delivered to the Agent in the form of a
Notice of Borrowing, which notice must be received by the Agent prior to 11:00
a.m. (Chicago time) (i) on the requested Borrowing date in the case of each Base
Rate Loan equal to or less than $3,000,000 and in the case of the initial Loans
to be made on the Closing Date, (ii) on the date which is one (1) Business Day
prior to the requested Borrowing date of each Base Rate Loan in excess of
$3,000,000 but equal to or less than $5,000,000 and (iii) on the day which is
three (3) Business Days prior to the requested Borrowing date in the case of
each LIBOR Rate Loan and each Base Rate Loan in excess of $5,000,000; provided,
that with respect to Loans subsequent to the initial Loans, the Borrower may
give notice of the requested Borrowing to the Agent by telephone call, with such
notice confirmed not later than the following Business Day by delivery to the
Agent of a signed Notice of Borrowing. Such Notice of Borrowing shall specify:
(I) the amount of the Borrowing (which shall be in an aggregate
minimum principal amount of $100,000 and multiples of $50,000 in excess
thereof);
(II) the requested Borrowing date, which shall be a Business Day;
(III) whether the Borrowing is to be comprised of LIBOR Rate Loans or
Base Rate Loans; and
(IV) if the Borrowing is to be LIBOR Rate Loans, the Interest Period
applicable to such Loans.
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provided, however, that with respect to the Borrowing to be made on the Closing
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Date, such Borrowing will consist of Base Rate Loans only and shall remain so
for not less than three (3) Business Days. Thereafter, Borrower may request
that Revolving Loans be made as LIBOR Rate Loans and that Loans be converted to
or continued as LIBOR Rate Loans provided only LIBOR Rate Loans having an
Interest Period of one (1) month shall be permitted during the first sixty (60)
days after the Closing Date.
(b) Upon receipt of the Notice of Borrowing, the Agent will promptly
notify each Lender with a Commitment affected thereby of such Notice and of the
amount of such Lender's Commitment Percentage of the Borrowing.
(c) Unless Agent is otherwise directed in writing by Borrower, the
proceeds of each requested Borrowing after the Closing Date will be made
available to the Borrower by the Agent by wire transfer (or ACH transfer) of
such amount to the Borrower pursuant to the wire transfer instructions specified
on the signature page hereto, or such other wire transfer instructions as are,
from time to time, given to Agent by Borrower in writing.
1.6 Conversion and Continuation Elections. (a) The Borrower may upon
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irrevocable (subject to subsection 10.2(c) and Section 10.5) written notice to
the Agent in accordance with subsection 1.6(b) elect to convert on any Business
Day, any Base Rate Loans into LIBOR Rate Loans or elect to continue on the last
day of the applicable Interest Period any LIBOR Rate Loans having Interest
Periods maturing on such day, in each instance, in whole or in part in an amount
not less than $100,000, or that is in an integral multiple of $50,000 in excess
thereof.
(b) The Borrower shall deliver a Notice of Conversion/Continuation to be
received by the Agent not later than 11:00 a.m. (Chicago time) at least three
(3) Business Days in advance of the requested Conversion Date or continuation
date, specifying:
(i) the proposed Conversion Date or continuation date;
(ii) the aggregate amount of Loans to be converted or renewed; and
(iii) the duration of the requested Interest Period with respect to
the Loans to be converted or continued as LIBOR Rate Loans.
(c) If upon the expiration of any Interest Period applicable to LIBOR Rate
Loans, the Borrower has failed to select timely a new Interest Period to be
applicable to such LIBOR Rate Loans or if any Event of Default shall then exist,
the Borrower shall be deemed to have elected to convert such LIBOR Rate Loans
into Base Rate Loans effective as of the expiration date of such current
Interest Period.
(d) Upon receipt of a Notice of Conversion/Continuation, the Agent will
promptly notify each Lender thereof. In addition, the Agent will, with
reasonable promptness, notify the
6
Borrower and the Lenders of each determination of a LIBOR Rate; provided that
--------
any failure to do so shall not relieve the Borrower of any liability hereunder
or provide the basis for any claim against the Agent. All conversions and
continuations shall be made pro rata according to the respective outstanding
principal amounts of the Loans with respect to which the notice was given held
by each Lender.
(e) Unless the Required Lenders shall otherwise agree, during the
existence of an Event of Default, the Borrower may not elect to have a Loan
converted into or continued as a LIBOR Rate Loan.
(f) Notwithstanding any other provision contained in this Agreement, after
giving effect to any Borrowing, or to any continuation or conversion of any
Loans, there shall not be more than seven (7) different Interest Periods in
effect.
1.7 Optional Prepayments/Permanent Commitment Reductions. (a) Subject to
----------------------------------------------------
Section 10.4, the Borrower may at any time (i) upon at least one (1) Business
Day's written notice to the Agent, prepay the Loans in whole or in part in an
amount greater than $1,000,000 and (ii) prepay the Loans in part in an amount
less than $1,000,000 but greater than or equal to $100,000 without notice, in
each instance, without penalty or premium except as provided in Section 10.4.
Optional partial prepayments of Term Loans shall be applied pursuant to
subsection 1.8(f). Optional partial prepayments in amounts less than $100,000
shall not be permitted.
(b) The notice of any prepayment shall not thereafter be revocable by the
Borrower and the Agent will promptly notify each Lender thereof and of such
Lender's Commitment Percentage of such prepayment. The payment amount specified
in such notice shall be due and payable on the date specified therein, together
with any amounts required to be paid in connection therewith pursuant to Section
10.4.
(c) The Borrower shall have the right from time to time, without fee, cost
or expense, to terminate in whole or permanently reduce ratably in part, the
Aggregate Revolving Loan Commitment, upon at least three (3) Business Days'
prior written notice delivered to the Agent provided that (i) such reduction
shall be in an amount greater than or equal to $2,000,000, (ii) after giving
effect to such reduction the Maximum Revolving Loan Balance exceeds the
aggregate outstanding principal balance of Revolving Loans by not less than
$3,000,000 and (iii) there shall not be more than two (2) reductions within any
twelve (12) month period.
1.8 Mandatory Prepayments of Loans and Commitment Reductions.
--------------------------------------------------------
(a) Scheduled Term Loan Payments. The principal amount of the Term Loan
----------------------------
shall be paid in installments on the dates and in the respective amounts shown
below:
7
Term Loan A
-----------
Date of Payment Amount of Payment
--------------- -----------------
October 31, 1999 $ 625,000
January 31, 2000 625,000
April 30, 2000 625,000
July 31, 2000 625,000
October 31, 2000 750,000
January 31, 2001 750,000
April 30, 2001 750,000
July 31, 2001 750,000
October 31, 2001 875,000
January 31, 2002 875,000
April 30, 2002 875,000
July 31, 2002 875,000
October 31, 2002 1,125,000
January 31, 2003 1,125,000
April 30, 2003 1,125,000
July 31, 2003 1,125,000
October 31, 2003 1,250,000
January 31, 2004 1,250,000
April 30, 2004 1,250,000
July 31, 2004 1,250,000
8
October 31, 2004 1,375,000
January 31, 2005 1,375,000
April 30, 2005 1,375,000
July 31, 2005 1,375,000
Term Loan B
-----------
Date of Payment Amount of Payment
--------------- -----------------
October 31, 1999 $ 62,500
January 31, 2000 62,500
April 30, 2000 62,500
July 31, 2000 62,500
October 31, 2000 62,500
January 31, 2001 62,500
April 30, 2001 62,500
July 31, 2001 62,500
October 31, 2001 62,500
January 31, 2002 62,500
April 30, 2002 62,500
July 31, 2002 62,500
October 31, 2002 62,500
January 31, 2003 62,500
April 30, 2003 62,500
9
July 31, 2003 62,500
October 31, 2003 62,500
January 31, 2004 62,500
April 30, 2004 62,500
July 31, 2004 62,500
October 31, 2004 62,500
January 31, 2005 62,500
April 30, 2005 62,500
July 31, 2005 62,500
October 31, 2005 7,125,000
January 31, 2006 7,125,000
April 30, 2006 7,125,000
July 31, 2006 7,125,000
(b) Revolving Loan. The Borrower shall repay to the Lenders in full
--------------
on the date specified in clause (a) of the definition of "Revolving Termination
Date" the aggregate principal amount of the Revolving Loans outstanding on the
Revolving Termination Date.
(c) Asset Dispositions. If the Borrower or any of its Subsidiaries
------------------
shall at any time or from time to time:
(i) make or agree to make a Disposition; or
(ii) suffer an Event of Loss;
and the aggregate amount of the Net Proceeds received by Borrower and its
Subsidiaries in connection with such Disposition or Event of Loss and all other
Dispositions and Events of Loss occurring during the fiscal year exceeds
$500,000, then (A) the Borrower shall promptly notify the Agent of such proposed
Disposition or Event of Loss (including the amount of the estimated
10
Net Proceeds to be received by the Borrower in respect thereof) and (B) promptly
upon receipt by the Borrower or its Subsidiary of the Net Proceeds of such
Disposition or Event of Loss, the Borrower shall deliver such Net Proceeds to
the Agent for distribution to the Lenders as a prepayment of the Loans, which
prepayment shall be applied in accordance with subsection 1.8(f) hereof.
Notwithstanding the foregoing, such prepayment shall not be required to the
extent the Borrower reinvests the Net Proceeds of such Disposition, or a portion
thereof, in productive assets of a kind then used or usable in the business of
the Borrower, within one hundred eighty (180) days after the date of such
Disposition or enters into a binding commitment thereof within said one hundred
eighty (180) day period and subsequently makes such reinvestment.
(d) Issuance of Securities. Immediately upon the receipt by Borrower
----------------------
or any of its Subsidiaries after the Closing Date of the Net Issuance Proceeds
of the issuance of equity securities or debt securities (other than Net Issuance
Proceeds from (i) the issuance of debt securities in respect of Indebtedness
permitted hereunder and (ii) any Permitted Equity Securities Issuance), Borrower
shall deliver to Agent an amount equal to such proceeds, net of underwriting
discounts associated therewith, for application to the Loans in accordance with
subsection 1.8(f).
(e) Excess Cash Flow. Within five (5) days after the annual financial
----------------
statements are required to be delivered under subsection 4.1(a) hereof, the
Borrower shall deliver to the Agent a written calculation of Excess Cash Flow of
the Borrower for such year in the form of Exhibit 1.8(e) and certified as
correct on behalf of Borrower by a Responsible Officer and concurrently
therewith shall deliver to the Agent, for distribution to the Lenders, an amount
equal to 75% of such Excess Cash Flow, for application to the Loans in
accordance with the provisions of subsection 1.8(e) hereof; provided, however,
in the event the Leverage Ratio (as calculated on Exhibit 4.2(b)) as of the last
day of such year is less than 4.0, such percentage shall be decreased from 75%
to 50%. Excess Cash Flow shall be calculated in the manner set forth in Exhibit
1.8(e).
(f) Application of Prepayments. Any prepayments pursuant to
--------------------------
subsection 1.7, 1.8(c), (d) and (e) shall be applied first to prepay
installments of the Term Loans coming due pro rata against all such scheduled
installments based upon the respective amounts thereof, and then in permanent
reduction of the Revolving Loan, whereupon the Revolving Loan Commitment of each
Lender shall automatically and permanently be reduced by an amount equal to such
Lender's ratable share of the aggregate of principal repaid, effective as of the
earlier of the date that such prepayment is made or the date by which such
prepayment is due and payable hereunder. Notwithstanding the foregoing, at any
time that Term Loan A remains outstanding any Lender holding any portion of Term
Loan B may elect, by notice to Agent and Borrower at least one Business Day
prior to any prepayment of Term Loans required or permitted to be made by
Borrower for the account of such Lender pursuant to this Agreement, to cause all
or a portion of such prepayment to be applied instead to prepay such Lender's
Term Loan A, in which case such prepayment shall be applied in payment of Term
Loan A pro rata against all remaining scheduled installments of Term Loan A. To
the extent permitted by the foregoing sentence, amounts prepaid shall be applied
first to any Base Rate Loans then outstanding and then to outstanding LIBOR Rate
11
Loans with the shortest Interest Periods remaining. Together with each
prepayment under this Section 1.8, the Borrower shall pay any amounts required
pursuant to Section 10.4 hereof.
1.9 Fees.
----
(a) Arrangement and Agent's Fees. The Borrower shall pay to the Agent
----------------------------
for the Agent's own account a closing fee and an agent's fee in the amounts and
at the times set forth in a letter agreement between the Borrower and the Agent
dated of even date herewith (the "Fee Letter").
----------
(b) Commitment Fee. Borrower shall pay to Agent, for the ratable benefit
--------------
of the Lenders having Revolving Loan Commitments, a fee (the "Commitment Fee")
--------------
in an amount equal to
(i) the Aggregate Revolving Loan Commitment, less
(ii) the sum of (x) the average daily balance of all Revolving Loans
outstanding plus (y) the average daily amount of the Letter of Credit
Participation Liability, in each case, during the preceding month,
multiplied by one-half of one percent (0.5%) per annum, such fee to be payable
monthly in arrears on the first day of the month following the date hereof and
the first day of each month thereafter. The Commitment Fee shall accrue at all
times after the Closing Date.
(c) Letter of Credit Participation Fee. Borrower shall pay to Agent, for
----------------------------------
the ratable benefit of the Lenders having Revolving Loan Commitments, fees for
each Lender Letter of Credit and each Letter of Credit Participation Agreement
(the "Letter of Credit Participation Fee") for the period from and including the
----------------------------------
date of issuance of same to and excluding the date of expiration or termination,
equal to the average daily amount of Letter of Credit Participation Liability
multiplied by two and one-half percent (2.50%) per annum; provided, however, at
Agent's or Required Lenders' option, while an Event of Default exists such
percent shall be increased to four and one half percent 4.50% per annum, such
fees to be payable monthly in arrears on the first day of the month following
the date hereof and the first day of each month thereafter. Borrower shall also
reimburse Agent for any and all out-of-pocket fees and expenses, if any, paid by
Agent to the issuer of any letter of credit subject to a Letter of Credit
Participation Agreement.
1.10 Payments by the Borrower. (a) All payments (including prepayments) to
------------------------
be made by the Borrower on account of principal, interest, fees and other
amounts required hereunder shall be made without set-off, recoupment or
counterclaim, shall, except as otherwise expressly provided herein, be made to
the Agent for the ratable account of the Lenders at the address for payment
specified in the signature page hereof in relation to the Agent (or such other
address as Agent may from time to time specify in accordance with Section 9.2),
and shall be made in dollars and in immediately available funds, no later than
11:00 a.m. (Chicago time) on the date due. The
12
Agent will promptly distribute to each Lender its Commitment Percentage (or
other applicable share as expressly provided herein) of such principal,
interest, fees or other amounts, in like funds as received. Any payment which is
received by the Agent later than 11:00 a.m. (Chicago time) shall be deemed to
have been received on the immediately succeeding Business Day and any applicable
interest or fee shall continue to accrue. Borrower hereby authorizes Agent and
each Lender to make a Revolving Loan (which shall be a Base Rate Loan) to pay
(i) interest, principal, agent fees, Commitment Fees and Letter of Credit
Participation Fees, in each instance, on the date due, or (ii) after fifteen
(15) days prior notice to Borrower, other fees, costs or expenses payable by
Borrower or any of its Subsidiaries hereunder or under the other Loan Documents.
(b) Subject to the provisions set forth in the definition of "Interest
Period" herein, if any payment 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 interest or fees, as the case may be.
1.11 Payments by the Lenders to the Agent. (a) Unless the Agent shall have
------------------------------------
received notice from a Lender on the Closing Date or, with respect to each
Borrowing after the Closing Date, at least one (1) Business Day prior to the
date of any proposed Borrowing, that such Lender will not make available to the
Agent as and when required hereunder for the account of the Borrower the amount
of that Lender's Commitment Percentage of the Borrowing, the Agent may assume
that each Lender has made such amount available to the Agent in immediately
available funds on the applicable Borrowing date and the Agent may (but shall
not be so required), in reliance upon such assumption, make available to the
Borrower on such date a corresponding amount. If and to the extent any Lender
shall not have made its full amount available to the Agent in immediately
available funds and the Agent in such circumstances has made available to the
Borrower such amount, that Lender shall on the next Business Day following the
date of such Borrowing make such amount available to the Agent, together with
interest at the Agent's cost of funds for and determined as of each day during
such period. A notice of the Agent submitted to any Lender with respect to
amounts owing under this subsection 1.11(a) shall be conclusive, absent manifest
error. If such amount is so made available, such payment to the Agent shall
constitute such Lender's Loan on the date of Borrowing for all purposes of this
Agreement. If such amount is not made available to the Agent on the next
Business Day following the date of such Borrowing, the Agent shall notify the
Borrower of such failure to fund and, upon demand by the Agent, the Borrower
shall pay such amount to the Agent for the Agent's account, together with
interest thereon for each day elapsed since the date of such Borrowing, at a
rate per annum equal to the interest rate applicable at the time to the Loans
comprising such Borrowing.
(b) The failure of any Lender to make any Loan on any date of Borrowing
shall not relieve any other Lender of any obligation hereunder to make a Loan on
the date of such Borrowing, but no Lender shall be responsible for the failure
of any other Lender to make the Loan to be made by such other Lender on the date
of any Borrowing. Without limiting the generality of the foregoing, each Lender
shall be obligated to fund its Commitment Percentage of any Revolving Loan made
after any acceleration of the Obligations with respect to any draw on
13
any Lender Letter of Credit or any payment made under any Letter of Credit
Participation Agreement.
1.12 Disbursements of Advances; Settlements Among Agent and Lenders;
---------------------------------------------------------------
Payments of Interest and Fees; Disgorgement Obligations. (a) The Revolving Loan
-------------------------------------------------------
balance may fluctuate from day to day through the Agent's disbursement of funds
to, and receipt of funds from, the Borrower. In order to minimize the frequency
of transfers of funds between the Agent and each Lender, Revolving Loan advances
and payments will be settled according to the procedures described in this
Section 1.12. Notwithstanding these procedures, each Lender's obligation to fund
its portion of any advances made by the Agent to the Borrower will commence on
the date such advances are made by the Agent. Such payments will be made by each
Lender without setoff, counterclaim or reduction of any kind.
(b) On the first Business Day of each week, or more frequently (including
daily) if the Agent so elects (each such day being a "Settlement Date"), the
Agent will advise each Lender by telephone or telecopy of the amount of each
such Lender's Commitment Percentage of the Revolving Loan balance as of the
close of business of the Business Day immediately preceding the Settlement Date.
In the event that payments are necessary to adjust the amount of such Lender's
share of the Revolving Loan balance to equal such Lender's Commitment Percentage
of the Revolving Loan Obligations as of any Settlement Date, such Lender will
pay to the Agent, or the Agent will pay to such Lender (as applicable) the
amount necessary in same day funds by wire transfer to the other's account not
later than 2:00 p.m. Chicago time on the Business Day following the Settlement
Date.
(c) Notwithstanding the foregoing and with respect to Borrowings requiring
notice in advance of the Borrowing date, the Agent, at its option, may elect to
require that each Lender provide funds in connection with any requested
Borrowing hereunder on the scheduled Borrowing date, and in such event the Agent
shall advise each Lender by telephone or telecopy of the amount to be funded by
such Lender no later than one (1) Business Day prior to the Borrowing date
applicable thereto, and each such Lender shall pay to the Agent such Lender's
Commitment Percentage of the Borrowing in same day funds by wire transfer to the
Agent's account not later than 10:30 a.m. Chicago time on such Borrowing date.
(d) On the first Business Day of each month (each, an "Interest Settlement
Date"), the Agent will advise each Lender by telephone or telecopy of the amount
of such Lender's Commitment Percentage of interest and fees on each Loan as of
the end of the last day of the immediately preceding month. Provided that such
Lender has made all payments required to be made by it under this Agreement, the
Agent will pay to such Lender, by wire transfer to such Lender's account (as
specified by such Lender on the signature page of this Agreement or the
applicable Assignment and Acceptance) not later than 2:00 p.m. Chicago time on
the next Business Day following the Interest Settlement Date, such Lender's
Commitment Percentage of interest, Commitment Fees and Letter of Credit
Participation Fees, in each instance, received by Agent in the immediately
preceding month.
14
(e) Unless the Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Lenders hereunder that the Borrower
will not make such payment in full as and when required hereunder, the Agent may
assume that the Borrower has made such payment in full to the Agent on such date
in immediately available funds and the Agent may (but shall not be so required),
in reliance upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If the Agent pays
an amount to a Lender under this Agreement in the belief or expectation that a
related payment has been or will be received by the Agent from the Borrower and
such related payment is not received by the Agent, the Agent shall be entitled
to recover such amount from such Lender, and each Lender shall repay to Agent on
demand such amount, together with interest thereon for each day from the date
such amount is distributed to such Lender until the date such Lender repays such
amount to the Agent, at the Agent's cost of funds, without setoff, counterclaim
or deduction of any kind. If the Agent determines at any time that any amount
received by the Agent under this Agreement must be returned to the Borrower or
paid to any other Person pursuant to any solvency, fraudulent conveyance or
similar law or otherwise, then, notwithstanding any other term or condition of
this Agreement, the Agent will not be required to distribute any portion of such
payment to any Lender. In addition, each Lender will repay to the Agent on
demand any portion of such amount that the Agent has distributed to such Lender,
together with interest thereon at such rate, if any, as the Agent is required to
pay to the Borrower or such other Person, without setoff, counterclaim or
deduction of any kind.
ARTICLE II - CONDITIONS PRECEDENT
---------------------------------
2.1 Conditions of Initial Loans. The obligation of each Lender to make
---------------------------
its initial Loan and of the Agent to issue the initial Lender Letter of Credit
or Letter of Credit Participation Agreement hereunder is subject to the
condition that the Agent shall have received on or before the Closing Date all
of the following, in form and substance reasonably satisfactory to the Agent and
each Lender and (except for the Notes and any instruments or documents which are
Pledged Collateral) in sufficient counterparts for each Lender, duly executed by
all parties thereto:
(a) Credit Agreement and Notes. This Agreement executed by the Borrower,
--------------------------
the Agent and each of the Lenders, and the Notes executed by the Borrower;
(b) Secretary's Certificates; Resolutions; Incumbency. A certificate
-------------------------------------------------
of the Secretary or Assistant Secretary of the Borrower, and each Subsidiary of
the Borrower which is a party to any Loan Documents, certifying:
(i) the names and true signatures of the officers of the Borrower
and each such Subsidiary authorized to execute, deliver and perform, as
applicable, this Agreement, and all other Loan Documents to be delivered
hereunder; and
15
(ii) Copies of the resolutions of the board of directors of the
Borrower and each such Subsidiary approving and authorizing the execution,
delivery and performance by the Borrower or such Subsidiary of this
Agreement and the other Loan Documents to be executed or delivered by it
hereunder;
(c) Articles of Incorporation; By-laws and Good Standing. Each of the
----------------------------------------------------
following documents:
(i) the Organization Documents of the Borrower and each Subsidiary
of the Borrower which is party to any Loan Documents, as such Organization
Documents are in effect on the Closing Date, certified by the Secretary of
State (or similar, applicable Governmental Authority) of the state of
incorporation of the Borrower or such Subsidiary as of a recent date, if
and as applicable, all certified by the Secretary or Assistant Secretary of
the Borrower or such Subsidiary as of the Closing Date; and
(ii) a good standing and, if available, tax good standing
certificate for the Borrower and each Subsidiary of the Borrower from the
Secretary of State (or similar, applicable Governmental Authority) of its
state of incorporation and each state where the Borrower or such Subsidiary
is qualified to do business as a foreign corporation as of a recent date;
(d) Collateral Documents. The Collateral Documents, executed by the
--------------------
Borrower or such other Persons party thereto, as applicable, in appropriate form
for recording, where necessary, together with:
(i) all UCC-l financing statements to be filed, registered or
recorded on or after the Closing Date to perfect the security interests of
the Agent, for the benefit of Agent and the Lenders, granted pursuant to
the Collateral Documents, or other evidence reasonably satisfactory to the
Agent that there has been filed, registered or recorded all financing
statements and other filings, registrations and recordings reasonably
necessary and advisable to perfect the Liens of the Agent, for the benefit
of Agent and the Lenders, granted pursuant to the Collateral Documents, in
accordance with applicable law;
(ii) uniform commercial code financing statement, federal and
state tax lien and judgment searches as the Agent shall have reasonably
requested of the Borrower and its Subsidiaries, and such termination
statements or other documents as may be reasonably necessary to confirm
that the Collateral is subject to no other Liens in favor of any Persons
(other than Permitted Liens);
(iii) all certificates and instruments representing the Pledged
Collateral, irrevocable proxies and stock transfer powers executed in blank
or other executed endorsements reasonably satisfactory to the Agent;
16
(iv) evidence that all other actions reasonably necessary or, in
the reasonable opinion of the Agent, desirable to perfect and protect the
Liens created by the Collateral Documents have been taken;
(v) funds sufficient to pay any filing or recording tax or fee in
connection with any and all UCC-1 financing statements and, if applicable,
the Mortgages, all title insurance premiums, documentary stamp or
intangible taxes, recording fees and mortgage taxes payable in connection
with the recording of any Mortgage or filing of any financing statements or
the issuance of the title insurance policies (whether due on the Closing
Date or in the future) including sums due in connection with any future
advances;
(vi) with respect to each parcel of real Property in respect of
which there is delivered a Mortgage, if any, an A.L.T.A. mortgagee policy
of title insurance or a binder issued by a title insurance company
reasonably satisfactory to the Agent insuring (or undertaking to insure, in
the case of a binder) that the Mortgage creates and constitutes a valid
first Lien against such real Property in favor of the Agent, for the
benefit of Agent and the Lenders, subject only to exceptions reasonably
acceptable to the Agent, with such endorsements and affirmative insurance
as the Agent may reasonably request;
(vii) if required by the Agent, flood insurance and earthquake
insurance on terms satisfactory to the Agent;
(viii) current ALTA surveys and surveyor's certification as to all
real Property in respect of which there is delivered a Mortgage, if any,
each in form and substance reasonably satisfactory to the Agent; and
(ix) such consents, estoppels, subordination agreements and other
documents and instruments executed by landlords, tenants and other Persons
party to material contracts relating to any Collateral as to which the
Agent shall be granted a Lien for the benefit of the Lenders, as reasonably
requested by the Agent;
(e) Legal Opinions. Such opinions of counsel to the Borrower and its
--------------
Subsidiaries, and counsel to the seller, in each instance addressed to the Agent
and the Lenders, in form and substance reasonably satisfactory to Agent;
(f) Payment of Fees. The Borrower shall have paid all accrued and unpaid
---------------
fees, costs and expenses to the extent then due and payable on the Closing Date,
together with Attorney Costs of the Agent;
(g) Intentionally Omitted.
---------------------
(h) Financial Statements. Copies of all of the financial statements
--------------------
of the Borrower and its Subsidiaries referred to in Section 3.11 together with a
pro forma balance sheet giving effect
17
to the transactions contemplated hereby and by the Related Agreements, certified
on behalf of Borrower by a Responsible Officer;
(i) Insurance Policies. Standard lenders' loss payable endorsements
------------------
in favor of the Agent with respect to the insurance policies or other
instruments or documents evidencing insurance coverage on the properties of the
Borrower in accordance with Section 4.6 and endorsements to all liability
insurance policies naming the Agent and the Lenders as additional insureds
thereunder;
(j) Environmental Review. An environmental site assessment with respect to
--------------------
any real Property owned or operated by Borrower or any of its Subsidiaries,
dated as of a recent date prior to the Closing Date, prepared by a qualified
firm reasonably acceptable to the Agent and the Lenders, stating, among other
things, that such real property is free from Hazardous Materials and that
operations conducted thereon are in compliance with all Environmental Laws and
showing all costs associated with performing work to remediate contamination
thereat;
(k) Due Diligence. Evidence of completion to the satisfaction of the
-------------
Agent of such investigations, reviews and audits with respect to the Borrower
and the transactions contemplated by the Related Agreements as the Agent or any
Lender may deem appropriate;
(l) Accountants' Review. An accountants' review of the books and records
-------------------
of the Borrower and its Subsidiaries prepared by a "Big Five" accounting firm
selected by the Agent, dated as of a recent date prior to the Closing Date and
otherwise in form and substance reasonably satisfactory to the Agent;
(m) Insurance Review. A review of the Borrower's insurance coverages,
----------------
prepared by a qualified firm reasonably acceptable to the Agent, dated as of a
recent date prior to the Closing Date and otherwise in form and substance
reasonably satisfactory to the Agent;
(n) Borrowing Base Certificate. A duly completed Borrowing Base
--------------------------
Certificate setting forth the Borrowing Base as of a date not more than 30 days
prior to the Closing Date. Not more than $20,000,000 in Revolving Loans shall
be advanced on the Closing Date, and after giving effect to the consummation of
the Related Transactions and funding of the initial Loans, the Maximum Revolving
Loan Balance shall exceed the outstanding principal balance of Revolving Loans
by not less than $10,000,000.
(o) Related Transactions. The Related Transactions shall have closed
--------------------
in the manner contemplated by the Related Agreements and shall otherwise be in
form and substance reasonably satisfactory to the Agent;
(p) Prior Indebtedness. A payoff letter from each lender of any Prior
------------------
Indebtedness in form and substance reasonably satisfactory to the Agent,
together with such UCC-3 termination statements, releases of mortgage Liens and
other instruments, documents and/or agreements
18
necessary or appropriate to terminate any Liens in favor of such lenders
securing Prior Indebtedness which is to be paid off on the Closing Date as the
Agent may reasonably request, duly executed and in form and substance reasonably
satisfactory to the Agent;
(q) Other Documents. Such other approvals, opinions, documents or
---------------
materials as the Agent or any Lender may reasonably request; and
(r) Merger. Evidence of the consummation of the Merger which shall have
------
occurred on or prior to the Closing Date.
2.2 Conditions to All Borrowings. The obligation of each Lender to make
----------------------------
any Loan and of the Agent to issue any Lender Letter of Credit or Letter of
Credit Participation Agreement, or to continue or convert any Loan hereunder, is
subject to the satisfaction of the following conditions precedent on the
relevant Borrowing or continuation or conversion date:
(a) Notice of Borrowing or Continuation/Conversion. The Agent shall
----------------------------------------------
have received (with, in the case of the initial Loan only, a copy for each
Lender) a Notice of Borrowing or a Notice of Continuation/Conversion, as
applicable, in accordance with Section 1.5 or Section 1.6;
(b) Continuation of Representations and Warranties. The representations
----------------------------------------------
and warranties made by the Borrower contained in Article III shall be true and
correct in all material respects on and as of such Borrowing, or continuation or
conversion date with the same effect as if made on and as of such Borrowing or
continuation or conversion date (except to the extent such representations and
warranties (i) expressly refer to an earlier date, in which case they shall be
true and correct in all material respects as of such earlier date, or (ii) are
not true and correct due to events or conditions, the occurrence or existence of
which are not prohibited by this Agreement or the other Loan Documents and which
do not, in and of themselves, constitute a Default or an Event of Default);
(c) No Existing Default. (i) In the case of a Borrowing, no Default or
-------------------
Event of Default shall exist or shall result from such Borrowing or (ii) in
the case of a continuation or conversion of any Loan, no Event of Default shall
exist or shall result from such continuation or conversion;
(d) Subsidiary. Borrower shall have pledged the stock or other equity
----------
interest of each of its Subsidiaries to the Agent, for the benefit of Agent and
the Lenders, and shall have delivered, or caused to be delivered, to the Agent
the items described in subsection 2.1(d)(iii) and, to the extent not previously
delivered, the items described in subsections 2.1(b) and 2.1 (c), with respect
to each such Subsidiary. In addition, each such Subsidiary shall have
guaranteed the Obligations and shall have granted to the Agent, for the benefit
of Agent and the Lenders, a security interest in all of such Subsidiary's
property to secure such guaranty; and
19
(e) Syndication. Borrower, Agent, the Lenders and such other persons as
-----------
Agent may request shall have executed and delivered such amendments, as
necessary, in accordance with the Fee Letter.
Each Notice of Borrowing and Notice of Continuation/Conversion submitted by the
Borrower hereunder shall constitute a representation and warranty by the
Borrower hereunder, as of the date of each such notice or application and as of
the date of each Borrowing or continuation or conversion, as applicable, that
the conditions in Section 2.2 are satisfied.
ARTICLE III - REPRESENTATIONS AND WARRANTIES
--------------------------------------------
The Borrower represents and warrants to the Agent and each Lender that the
following are, and after giving effect to the Related Transactions will be,
true, correct and complete:
3.1 Corporate Existence and Power. The Borrower and each of its
-----------------------------
Subsidiaries:
(a) is a corporation, limited liability company or limited partnership, as
applicable, duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or formation, as applicable;
(b) has the power and authority and all governmental licenses,
authorizations, consents and approvals to (i) own its assets, carry on its
business and (ii) execute, deliver, and perform its obligations under, the Loan
Documents and the Related Agreements to which it is a party;
(c) is duly qualified as a foreign corporation, limited liability company
or limited partnership, as applicable, and licensed and in good standing, under
the laws of each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification or license;
and
(d) is in compliance with all Requirements of Law;
except, in each case referred to in clause (b)(i), (c) or clause (d), to the
extent that the failure to do so could not reasonably be expected to have a
Material Adverse Effect.
3.2 Corporate Authorization; No Contravention. (a) The execution, delivery
-----------------------------------------
and performance by the Borrower of this Agreement, and Borrower and its
Subsidiaries of any other Loan Document and Related Agreement to which such
Person is party, have been duly authorized by all necessary action, and do not
and will not:
(i) contravene the terms of any of that Person's Organization
Documents;
20
(ii) conflict with or result in any breach or contravention of,
or the creation of any Lien under, any document evidencing any material
Contractual Obligation to which such Person is a party or any order,
injunction, writ or decree of any Governmental Authority to which such
Person or its Property is subject, except to the extent that such breach
would not reasonably be expected to have either individually or in the
aggregate, a Material Adverse Effect;
(iii) violate any material Requirement of Law in any material
respect.
(b) Schedule 3.2 sets forth, both prior to and after giving effect to
------------
the Related Transactions including without limitation, the consummation of the
Merger, the authorized equity securities of Borrower and its Subsidiaries. All
issued and outstanding equity securities of Borrower and its Subsidiaries are
duly authorized and validly issued, fully paid, non-assessable, and free and
clear of all Liens other than, with respect to the equity securities of
Subsidiaries of Borrower, those in favor of Agent, for the benefit of Agent and
Lenders, and such securities were issued in compliance with all applicable state
and federal laws concerning the issuance of securities. All of the issued and
outstanding equity securities of Borrower is owned by the Persons and in the
amounts set forth on Schedule 3.2. Except as set forth on Schedule 3.2, there
------------ ------------
are no pre-emptive or other outstanding rights, options, warrants, conversion
rights or other similar agreements or understandings for the purchase or
acquisition of any shares of capital stock or other securities of any such
entity.
3.3 Governmental Authorization. No approval, consent, exemption,
--------------------------
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, the Borrower or
any of its Subsidiaries of this Agreement, any other Loan Document or Related
Agreement except (a) for recordings and filings in connection with the Liens
granted to the Agent under the Collateral Documents, (b) those obtained or made
on or prior to the Closing Date and (c) in the case of any Related Agreement,
those which, if not obtained or made, could not reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect.
3.4 Binding Effect. This Agreement and each other Loan Document and
--------------
Related Agreement to which the Borrower or any of its Subsidiaries is a party
constitute the legal, valid and binding obligations of the Borrower and each
Subsidiary which is a party thereto, enforceable against such Person in
accordance with their respective terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, fraudulent conveyance or similar laws
affecting the enforcement of creditors' rights generally or by equitable
principles relating to enforceability.
3.5 Litigation. Except as specifically disclosed in Schedule 3.5, there
---------- ------------
are no actions, suits, proceedings, claims or disputes pending, or to the best
knowledge of the Borrower, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, against the Borrower, or its
Subsidiaries or any of their respective Properties which:
21
(a) purport to affect or pertain to this Agreement, any other
Loan Document or Related Agreement, or any of the transactions contemplated
hereby or thereby; or
(b) if determined adversely to Borrower or any of its Subsidiaries,
could reasonably be expected to result in equitable relief or monetary
judgment(s), individually or in the aggregate, in excess of $500,000.
No injunction, writ, temporary restraining order or any order of any nature has
been issued by any court or other Governmental Authority purporting to enjoin or
restrain the execution, delivery or performance of this Agreement, any other
Loan Document or any Related Agreement, or directing that the transactions
provided for herein or therein not be consummated as herein or therein provided.
3.6 No Default. No Default or Event of Default exists or would result
----------
from the incurring of any Obligations by the Borrower or the grant or perfection
of the Agent's Liens on the Collateral. Neither the Borrower nor any of its
Subsidiaries is in default under or with respect to any Contractual Obligation
in any respect which, individually or together with all such defaults, could
reasonably be expected to have a Material Adverse Effect or that would, if such
default had occurred after the Closing Date, create an Event of Default under
subsection 7.1(e).
3.7 ERISA Compliance. (a) Schedule 3.7 lists all Qualified Plans and
---------------- ------------
Multiemployer Plans. Borrower and each of its Subsidiaries is in compliance in
all material respects with all requirements of each Plan, and each Plan complies
in all material respects, and is operated in compliance in all material
respects, with all applicable provisions of law. Borrower is not aware, after
due inquiry, of any item of non-compliance which could potentially result in the
loss of Plan qualification or tax-exempt status, or give rise to a material
excise tax or other penalty imposed by a Governmental Authority. No material
proceeding, claim, lawsuit and/or investigation is pending concerning any Plan.
All required contributions have been and will be made in accordance with the
provisions of each Qualified Plan and Multiemployer Plan, and with respect to
Borrower or any ERISA Affiliate, there are, have been and will be no material
Unfunded Pension Liabilities or Withdrawal Liabilities.
(b) No ERISA Event has occurred or is expected to occur with respect to
any Qualified Plan, Multiemployer Plan or Plan.
(c) Members of the Controlled Group currently comply and have complied in
all material respects with the notice and continuation coverage requirements of
Section 4980B of the Code.
3.8 Use of Proceeds; Margin Regulations. The proceeds of the Loans are
-----------------------------------
intended to be and shall be used solely for the purposes set forth in and
permitted by Section 4.10, and are intended to be and shall be used in
compliance with Section 5.8. Neither the Borrower nor any
22
of its Subsidiaries is generally engaged in the business of purchasing or
selling Margin Stock or extending credit for the purpose of purchasing or
carrying Margin Stock.
3.9 Title to Properties. The Borrower and each of its Subsidiaries have
-------------------
good record and marketable title in fee simple to, or valid leasehold interests
in, all real Property necessary or used in the ordinary conduct of their
respective businesses, except for Permitted Liens. As of the Closing Date, the
Property of the Borrower and its Subsidiaries is subject to no Liens, other than
Permitted Liens.
3.10 Taxes. The Borrower and its Subsidiaries have filed all Federal and
-----
other material tax returns and reports required to be filed, and have paid all
Federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their Properties, income or assets
otherwise due and payable, except those which are being contested in good faith
by appropriate proceedings diligently prosecuted and for which adequate reserves
have been provided in accordance with GAAP and no notice of Lien has been filed
or recorded. There is no proposed tax assessment against the Borrower or any of
its Subsidiaries which would, if the assessment were made, have a Material
Adverse Effect.
3.11 Financial Condition. (a) Each of (i) the audited consolidated balance
-------------------
sheet of the Borrower and its Subsidiaries dated December 31, 1998, and the
related audited consolidated statements of income or operations, shareholders'
equity and cash flows for the fiscal year ended on that date and (ii) the
unaudited interim consolidated balance sheet of Borrower and its Subsidiaries
dated May 31, 1999 and the related unaudited consolidated statements of income,
shareholders' equity and cash flows for the three months then ended:
(x) were prepared in accordance with GAAP consistently applied
throughout the respective periods covered thereby, except as otherwise
expressly noted therein, subject to, in the case of the unaudited interim
financial statements, normal year-end adjustments and the lack of footnote
disclosures; and
(y) present fairly the consolidated financial condition of the
Borrower and its Subsidiaries as of the dates thereof and results of
operations for the periods covered thereby.
(b) Since December 31, 1998, here has been no Material Adverse Effect.
(c) Borrower and its Subsidiaries have no Indebtedness other than
Indebtedness permitted pursuant to Section 5.5 and have no Contingent
Obligations other than Contingent Obligations permitted pursuant to Section 5.9.
3.12 Environmental Matters. (a) The on-going operations of the Borrower
---------------------
and each of its Subsidiaries comply in all respects with all Environmental Laws,
except such non-compliance
23
which could not (if enforced in accordance with applicable law) reasonably be
expected to result in a Material Adverse Effect.
(b) The Borrower and each of its Subsidiaries have obtained all licenses,
permits, authorizations and registrations required under any Environmental Law
("Environmental Permits") and necessary for their respective ordinary course
---------------------
operations, all such Environmental Permits are in good standing, and the
Borrower and each of its Subsidiaries are in compliance with all material terms
and conditions of such Environmental Permits, except where the failure to obtain
or to be in compliance with such Environmental Permits could not reasonably be
expected to result in material liability to Borrower or any of its Subsidiaries
and could not reasonably be expected to result in a Material Adverse Effect.
(c) None of the Borrower, any of its Subsidiaries or any of their
respective present Property or operations, is subject to any outstanding written
order from or agreement with any Governmental Authority, nor subject to any
judicial or docketed administrative proceeding, respecting any Environmental
Law, Environmental Claim or Hazardous Material.
(d) There are no Hazardous Materials or other conditions or circumstances
existing with respect to any Property, or arising from operations prior to the
Closing Date, of the Borrower or any of its Subsidiaries that would reasonably
be expected to result in a Material Adverse Effect. In addition, neither the
Borrower nor any of its Subsidiaries has any underground storage tanks (i) that
are not properly registered or permitted under applicable Environmental Laws, or
(ii) that are leaking or disposing of Hazardous Materials.
3.13 Collateral Documents. All representations and warranties of the
--------------------
Borrower, any of its Subsidiaries contained in the Collateral Documents are true
and correct in all material respects.
3.14 Regulated Entities. None of the Borrower, any Person controlling the
------------------
Borrower, or any Subsidiary of the Borrower, is (a) an "investment company"
within the meaning of the Investment Company Act of 1940; or (b) subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, any state public utilities code, or any
other Federal or state statute or regulation limiting its ability to incur
Indebtedness.
3.15 Solvency. The Borrower, individually, is and the Borrower and its
--------
Subsidiaries, on a consolidated basis, are, Solvent.
3.16 Labor Relations. There are no strikes, lockouts or other labor
---------------
disputes against the Borrower or any of its Subsidiaries, or, to the best of the
Borrower's knowledge, threatened against or affecting the Borrower or any of its
Subsidiaries, in any case which would reasonably be expected to have a Material
Adverse Effect and no significant unfair labor practice complaint is pending
against the Borrower or any of its Subsidiaries or, to the best knowledge of the
24
Borrower, threatened against any of them before any Governmental Authority in
any case which could reasonably be expected to have a Material Adverse Effect.
3.17 Copyrights, Patents, Trademarks Licenses, etc. Schedule 3.17
--------------------------------------------- -------------
identifies all United States and foreign patents, trademarks, service marks,
trade names and copyrights, and all registrations and applications for
registration thereof and all licenses thereof, owned or held by Borrower or any
of its Subsidiaries on the Closing Date after giving effect to the Related
Transactions, and identifies the jurisdictions in which such registrations and
applications have been filed. Except as otherwise disclosed in Schedule 3.17, as
-------------
of the Closing Date, Borrower and its Subsidiaries are the sole beneficial
owners of, or have the right to use, free from any restrictions, claims, rights
encumbrances or burdens, the intellectual property identified on Schedule 3.17
-------------
and all other processes, designs, formulas, computer programs, computer software
packages, trade secrets, inventions, product manufacturing instructions,
technology, research and development, know-how and all other intellectual
property that are necessary for the operation of Borrower's and its
Subsidiaries' businesses as being operated on the Closing Date after giving
effect to the Related Transactions. Each patent, trademark, service xxxx, trade
name, copyright and license listed on Schedule 3.17 is in full force and effect
-------------
except to the extent the failure to be in effect will not and could not
reasonably be expected to have a Material Adverse Effect. Except as set forth in
Schedule 3.17, to the best knowledge of Borrower, as of the Closing Date (a)
-------------
none of the present or contemplated products or operations of Borrowers or its
Subsidiaries infringes any patent, trademark, service xxxx, trade name,
copyright, license of intellectual property or other right owned by any other
Person, and (b) there is no pending or threatened claim or litigation against or
affecting Borrower or any of its Subsidiaries contesting the right of any of
them to manufacture, process, sell or use any such product or to engage in any
such operation except for claims and/or litigation which will not and could not
reasonably be expected to have a Material Adverse Effect. None of the trademark
registrations set forth on Schedule 3.17 is an "intent-to-use" registration.
3.18 Subsidiaries. The Borrower has no Subsidiaries or equity investments
------------
in any other corporation or entity other than those specifically disclosed in
Schedule 3.2.
------------
3.19 Brokers' Fees; Transaction Fees. Neither the Borrower nor any of its
-------------------------------
Subsidiaries has any obligation to any Person in respect of any finder's,
broker's or investment banker's fee in connection with the transactions
contemplated hereby.
3.20 Insurance. The Borrower and its Subsidiaries and their respective
---------
Properties are insured with financially sound and reputable insurance companies
which are not Affiliates of the Borrower, in such amounts, with such deductibles
and covering such risks as are customarily carried by companies engaged in
similar businesses and owning similar Properties in localities where the
Borrower or such Subsidiary operates. A true and complete listing of such
insurance, including issuers, coverages and deductibles, has been provided to
the Agent.
25
3.21 Full Disclosure. None of the representations or warranties made by
---------------
the Borrower or any of its Subsidiaries in the Loan Documents as of the date
such representations and warranties are made or deemed made, and none of the
statements contained in each exhibit, report, statement or certificate furnished
by or on behalf of the Borrower or any of its Subsidiaries in connection with
the Loan Documents (including the offering and disclosure materials, if any,
delivered by or on behalf of the Borrower to the Lenders prior to the Closing
Date), contains any untrue statement of a material fact or omits any material
fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they are made, not materially
misleading as of the time when made or delivered.
3.22 Year 2000 Issues. Borrower has reviewed its operations and those of
----------------
its Subsidiaries with a view to assessing whether its businesses, or the
businesses of any of its Subsidiaries, will be vulnerable to a Year 2000 Problem
and has a reasonable basis to believe that no Year 2000 Problem exists. Borrower
shall take all actions necessary and commit adequate resources to assure that
its computer-based and other systems (and those of all Subsidiaries) are able to
effectively process data, including dates before, on or after January 1, 2000,
without experiencing any Year 2000 Problem that could cause a Material Adverse
Effect. At the request of Agent, Borrower will provide Agent with assurances and
substantiations (including, but not limited to, the results of internal or
external audit reports) reasonably acceptable to Agent as to the capability of
Borrower and its Subsidiaries to conduct its and their businesses and operations
before, on and after January 1, 2000 without experiencing a Year 2000 Problem.
"Year 2000 Problem" means any significant risk that computer hardware, software
or equipment containing embedded microchips essential to the business or
operations of Borrower or any of its Subsidiaries will not, in the case of dates
or time periods occurring after December 31, 1999, function at least as
effectively and reliably as in the case of times or time periods occurring
before January 1, 2000, including the making of accurate leap year calculations.
3.23 Subordinated Note Agreement and Recapitalization Agreement. As of the
----------------------------------------------------------
date hereof, each of the representations and warranties contained in the
Subordinated Note Agreement and Recapitalization Agreement is true, correct, and
complete in all material respects and is hereby incorporated herein by reference
thereto with the same effect as though set forth herein.
3.24 Foreign Sales. Foreign Sales of Borrower and its Subsidiaries do not
-------------
exceed 15% of aggregate sales of Borrower and its Subsidiaries as of the Closing
Date.
ARTICLE IV - AFFIRMATIVE COVENANTS
----------------------------------
The Borrower covenants and agrees that, so long as any Lender shall have
any Commitment hereunder, or any Loan or other Obligation (other than contingent
indemnification Obligations to the extent no claim giving rise thereto has been
asserted) shall remain unpaid or unsatisfied, unless the Required Lenders waive
compliance in writing:
26
4.1 Financial Statements. The Borrower shall maintain, and shall cause
--------------------
each of its Subsidiaries to maintain, a system of accounting established and
administered in accordance with sound business practices to permit the
preparation of financial statements in conformity with GAAP (provided that
monthly financial statements shall not be required to have footnote disclosure
and are subject to normal year-end adjustments). The Borrower shall deliver to
the Agent and each Lender in form and detail reasonably satisfactory to the
Agent and the Required Lenders:
(a) as soon as available, but not later than one hundred and five (105)
days after the end of each fiscal year, a copy of the audited consolidated
balance sheet of the Borrower as at the end of such year and the related
consolidated statements of income or operations, shareholders' equity and cash
flows for such fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, and accompanied by the opinion of any "Big
Five" or other nationally-recognized independent public accounting firm
reasonably acceptable to the Agent which report shall state that such
consolidated financial statements present fairly in all material respects the
financial position for the periods indicated in conformity with GAAP applied on
a basis consistent with prior years. Such opinion shall not be qualified or
limited because of a restricted or limited examination by such accountant of any
material portion of the Borrower's or any Subsidiary's records; and
(b) as soon as available, but not later than thirty (30) days after
the end of each fiscal month of each year, a copy of the unaudited consolidated
and consolidating balance sheets of the Borrower and each of its Subsidiaries,
and the related consolidated and consolidating statements of income,
shareholders' equity and cash flows as of the end of such month and for the
portion of the fiscal year then ended, all certified on behalf of Borrower by an
appropriate Responsible Officer, in the form of Exhibit 4.1(b), as being
complete and correct and fairly presenting, in accordance with GAAP, the
financial position and the results of operations of the Borrower and the
Subsidiaries, subject to normal year-end adjustments and absence of footnote
disclosure.
4.2 Certificates; Borrowing Base Certificates; Other Information. The
------------------------------------------------------------
Borrower shall furnish to the Agent and each Lender:
(a) simultaneously, with Borrower's delivery of reports, statements and
other information required to be delivered pursuant to the Subordinated Note
Agreement, the Borrower shall deliver to the Agent copies of such reports,
statements and other information, without duplication with that which has been
delivered to Agent in accordance with the terms hereof;
(b) concurrently with the delivery of the financial statements referred to
in subsection 4.1(a) above, and the monthly financial statements required to be
delivered pursuant to subsection 4.1(b) for the months of October 1999, January
2000, April 2000 and the last month of each calendar quarter thereafter,
commencing June 2000, a fully and properly completed Compliance Certificate in
the form of Exhibit 4.2(b), certified on behalf of Borrower by a Responsible
Officer;
27
(c) promptly after the same are sent, copies of all financial statements
and reports which the Borrower sends to its shareholders generally; and promptly
after the same are filed, copies of all financial statements and regular,
periodic or special reports which the Borrower may make to, or file with, the
Securities and Exchange Commission or any successor or similar Governmental
Authority and copies of any orders in any proceedings to which the Borrower or
any of its Subsidiaries is a party, issued by any governmental agency, foreign,
Federal or state, having jurisdiction over the Borrower or any of its
Subsidiaries;
(d) as soon as available and in any event within fifteen (15) days after
the end of each calendar month, and at such other times as the Agent may
require, a Borrowing Base Certificate, certified on behalf of Borrower by a
Responsible Officer, setting forth the Borrowing Base of Borrower as at the end
of the most-recently ended fiscal month or as at such other date as the Agent
may reasonably require concurrently with the delivery of the financial
statements pursuant to subsection 4.1(b);
(e) together with each delivery of financial statements pursuant to
subsection 4.1(a) and (b): (i) to the extent prepared by Borrower or its
management, a management report, in reasonable detail, signed by the chief
financial officer of the Borrower, describing the operations and financial
condition of the Borrower and its Subsidiaries for the month and the portion of
the fiscal year then ended (or for the fiscal year then ended in the case of
annual financial statements), and (ii) a report setting forth in comparative
form the corresponding figures for the corresponding periods of the previous
fiscal year and the corresponding figures from the most recent projections for
the current fiscal year delivered pursuant to subsection 4.2(g) and discussing
the reasons for any significant variations;
(f) upon the request of the Agent, at any time if an Event of Default
shall have occurred and be continuing but otherwise not more often than once a
year, the Borrower will obtain and deliver to the Agent a report of an
independent collateral auditor satisfactory to the Agent with respect to the
Accounts and Inventory, which report shall indicate whether or not the
information set forth in the Borrowing Base Certificate most recently delivered
is accurate and complete in all material respects;
(g) as soon as available and in any event no later than thirty (30) days
subsequent to each fiscal year of each fiscal year of the Borrower, projections
of the Borrower's (and its Subsidiaries') consolidated and consolidating
financial performance for the forthcoming fiscal year on a month by month basis;
(h) annually, concurrently with the Borrower's delivery of the projections
under subsection 4.2(g), the Borrower shall supplement in writing and deliver to
the Agent revisions of and supplements to the Schedules hereto related to
Article III hereof to the extent necessary to disclose new or changed facts or
circumstances after the Closing Date; provided that delivery or receipt of such
--------
subsequent disclosure shall not constitute a waiver by the Agent or any Lender
or a cure of any Default or Event of Default resulting in connection with the
matters disclosed;
28
(i) promptly upon receipt thereof, copies of any reports submitted by the
Borrower's certified public accountants in connection with each annual, interim
or special audit or review of any type of the financial statements or internal
control systems of the Borrower made by such accountants, including any comment
letters submitted by such accountants to management of the Borrower in
connection with their services;
(j) from time to time, if the Agent in good faith determines that
obtaining appraisals is necessary in order for the Agent or any Lender to comply
with applicable laws or regulations, and at any time if an Event of Default
shall have occurred and be continuing, the Agent may, or may require the
Borrower to, in either case at the Borrower's expense, obtain appraisals in form
and substance and from appraisers reasonably satisfactory to the Agent stating
the then current fair market value of all or any portion of the real or personal
property of the Borrower or any of its Subsidiaries;
(k) within the period provided in subsection 4.1(a) above, a certificate
of the accountants who render an opinion with respect to such financial
statements, stating that they have reviewed this Agreement and stating further
whether, in making their audit, such accountants have become aware of any
Defaults or Event of Default under any of the terms or provisions of this
Agreement insofar as any such terms or provisions pertain to or involve
accounting matters or determinations, and if any such condition or event then
exists, specifying the nature and period of existence thereof;
(l) (i) written notice of any payment made in respect of Subordinated
Indebtedness Liabilities (as defined in the Subordinated Note
Agreement), such notice to be provided within thirty (30) days
after the date on which such payment is made;
(ii) written notice of any change of address of any Subordinated
Noteholder, within ten (10) days of Borrower receipt of notice
of such change; and
(iii) written notice of any transfer of a Subordinated Note, including
the name and address of the transferee within ten (10) days of
Borrower's receipt of notice of such transfer.
(m) promptly, such additional business, financial, corporate affairs and
other information as the Agent may from time to time reasonably request.
4.3 Notices. The Borrower shall promptly notify the Agent and each
-------
Lender of any of the following, promptly (and in no event later than five (5)
Business Days after a Responsible Officer becoming aware thereof):
29
(a) the occurrence or existence of any Default or Event of Default, or any
event or circumstance that foreseeably will become a Default or Event of
Default, under any of Sections 5.1, 5.2, 5.3, 5.4, 5.5, 5.9, 5.11 or Article VI;
(b) any breach or non-performance of, or any default under, any
Contractual Obligation of the Borrower or any of its Subsidiaries, or any
violation of, or non-compliance with, any Requirement of Law (in each case,
after the expiration of all applicable notice, grace and cure periods), which
would reasonably be expected to result, either individually or in the aggregate,
in a Material Adverse Effect, including a description of such breach, non-
performance, default, violation or non-compliance and the steps, if any, the
Borrower or such Subsidiary has taken, is taking or proposes to take in respect
thereof;
(c) any dispute, litigation, investigation, proceeding or suspension which
may exist at any time between the Borrower or any of its Subsidiaries and any
Governmental Authority which would reasonably be expected to result, either
individually or in the aggregate, in a Material Adverse Effect;
(d) the commencement of, or any material development in, any litigation or
proceeding affecting the Borrower or any Subsidiary (i) in which the amount of
damages claimed is $500,000 (or its equivalent in another currency or
currencies) or more, (ii) in which injunctive or similar relief is sought and
which, if adversely determined, would reasonably be expected to have a Material
Adverse Effect, or (iii) in which the relief sought is an injunction or other
stay of the performance of this Agreement, any Loan Document or any Related
Agreement;
(e) any of the following if the same would reasonably be expected to have
a Material Adverse Effect: (i) any enforcement, cleanup, removal or other
governmental or regulatory actions instituted, completed or threatened against
the Borrower or any of its Subsidiaries or any of their respective Properties
pursuant to any applicable Environmental Laws, (ii) any other Environmental
Claims, and (iii) any environmental or similar condition on any real property
adjoining the property of the Borrower or any Subsidiary that would reasonably
be anticipated to cause Borrower's or any of its Subsidiaries' property or any
part thereof to be subject to any material restrictions on the ownership,
occupancy, transferability or use of such property under any Environmental Laws;
(f) any of the following if the same would reasonably be expected to have
a Material Adverse Effect, together with a copy of any notice with respect to
such event that may be required to be filed with a Governmental Authority and
any notice delivered by a Governmental Authority to the Borrower or any member
or its Controlled Group with respect to such event:
(i) an ERISA Event;
(ii) the adoption of any new Qualified Plan that is subject to Title
IV of ERISA or Section 412 of the Code by any member of the Controlled
Group;
30
(iii) the adoption of any amendment to a Qualified Plan that is
subject to Title IV of ERISA or Section 412 of the Code, if such amendment
results in a material increase in benefits or unfunded liabilities; or
(iv) the commencement of contributions by any member of the
Controlled Group to any Qualified Plan that is subject to Title IV of ERISA
or Section 412 of the Code;
(g) any Material Adverse Effect subsequent to the date of the most recent
audited financial statements of the Borrower delivered to the Lenders pursuant
to this Agreement;
(h) any material change in accounting policies or financial reporting
practices by the Borrower or any of its Subsidiaries;
(i) any labor controversy resulting in or threatening to result in any
strike, work stoppage, boycott, shutdown or other labor disruption against or
involving the Borrower or any of its Subsidiaries if the same could reasonably
be expected to have a Material Adverse Effect; and
(j) the creation, establishment or acquisition of any Subsidiary.
Each notice pursuant to this Section shall be accompanied by a written statement
by a Responsible Officer on behalf of Borrower setting forth details of the
occurrence referred to therein, and stating what action the Borrower proposes to
take with respect thereto and at what time.
4.4 Preservation of Corporate Existence, Etc. The Borrower shall, and
-----------------------------------------
shall cause each of its Subsidiaries to:
(a) preserve and maintain in full force and effect its corporate existence
and good standing under the laws of its state or jurisdiction of incorporation
except, with respect to Subsidiaries, in connection with transactions permitted
by Section 5.3;
(b) preserve and maintain in full force and effect all rights, privileges,
qualifications, permits, licenses and franchises necessary in the normal conduct
of its business except in connection with transactions permitted by Section 5.3
and sales of assets permitted by Section 5.2 and except as could not reasonably
be expected to have a Material Adverse Effect;
(c) use its reasonable efforts, in the Ordinary Course of Business, to
preserve its business organization and preserve the goodwill and business of the
customers, suppliers and others having material business relations with it; and
(d) preserve or renew all of its registered trademarks, trade names and
service marks, the non-preservation of which could reasonably be expected to
have a Material Adverse Effect.
31
4.5 Maintenance of Property. The Borrower shall maintain, and shall cause
-----------------------
each of its Subsidiaries to maintain, and preserve all its Property which is
used or useful in its business in good working order and condition, ordinary
wear and tear excepted and make all necessary repairs thereto and renewals and
replacements thereof except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.
4.6 Insurance. The Borrower shall maintain, and shall cause each of its
---------
Subsidiaries to maintain, with financially sound and reputable independent
insurers, insurance with respect to its Properties and business against loss or
damage of the kinds customarily insured against by Persons engaged in the same
or similar business, of such types and in such amounts as are customarily
carried under similar circumstances by such other Persons, including workers'
compensation insurance, public liability and property and casualty insurance,
which amounts shall not be reduced by the Borrower or any of its Subsidiaries in
the absence of thirty (30) days' prior notice to the Agent and business
interruption insurance in an amount not less than projected EBITDA (EBITDA is
computed in the manner set forth in Exhibit 4.2(b)) for a period of not less
than six months and, in any event, in an amount not less than $10,000,000. All
property damage and casualty insurance shall name the Agent as loss
payee/mortgagee, all liability insurance shall name the Agent and the Lenders as
additional insureds and all business interruption insurance shall name Agent as
assignee. Upon request of the Agent or any Lender, the Borrower shall furnish
the Agent, with sufficient copies for each Lender, at reasonable intervals (but
not more than once per calendar year) a certificate of a Responsible Officer on
behalf of Borrower (and, if requested by the Agent, any insurance broker of the
Borrower) setting forth the nature and extent of all insurance maintained by the
Borrower and its Subsidiaries in accordance with this Section 4.6. Unless
Borrower provides Agent with evidence of the insurance coverage required by this
Agreement, Agent may purchase insurance at Borrower's expense to protect Agent's
and Lenders' interests in Borrower's and its Subsidiaries' properties. This
insurance may, but need not, protect Borrower's and its Subsidiaries' interests.
The coverage that Agent purchases may not pay any claim that Borrower or any
Subsidiary makes or any claim that is made against Borrower or any Subsidiary in
connection with said property. Borrower may later cancel any insurance purchased
by Agent, but only after providing Agent with evidence that Borrower has
obtained insurance as required by this Agreement. If Agent purchases insurance,
Borrower will be responsible for the costs of that insurance, including interest
and any other charges Agent may impose in connection with the placement of
insurance, until the effective date of the cancellation or expiration of the
insurance. The costs of the insurance may be added to the Obligations. The costs
of the insurance may be more than the cost of insurance Borrower may be able to
obtain on its own.
4.7 Payment of Obligations. The Borrower shall, and shall cause its
----------------------
Subsidiaries to, pay, discharge and perform as the same shall become due and
payable or required to be performed, all their respective obligations and
liabilities, including:
(a) all tax liabilities, assessments and governmental charges or levies
upon it or its properties or assets, unless the same are being contested in good
faith by appropriate proceedings
32
diligently prosecuted which stay the enforcement of any Lien and for which
adequate reserves in accordance with GAAP are being maintained by the Borrower
or such Subsidiary;
(b) all lawful claims which, if unpaid, would by law become a Lien upon
its Property unless the same are being contested in good faith by appropriate
proceedings diligently prosecuted which stay the imposition or enforcement of
the Lien and for which adequate reserves in accordance with GAAP are being
maintained by Borrower;
(c) (i) all Indebtedness evidenced by Subordinated Notes, as and when due
and payable, but subject to any subordination provisions contained herein and/or
in any instrument or agreement evidencing such Indebtedness and (ii) all other
Indebtedness, as and when due and payable, but subject to any subordination
provisions contained herein and/or in any instrument or agreement evidencing
such other Indebtedness except where the failure to pay would not reasonably be
expected to have a Material Adverse Effect; and
(d) the performance of all obligations under any Contractual Obligation to
which Borrower or any of its Subsidiaries is bound, or to which it or any of its
properties is subject, including the Related Agreements, except where the
failure to perform would not reasonably be expected to have a Material Adverse
Effect.
4.8 Compliance with Laws. The Borrower shall comply, and shall cause
--------------------
each of its Subsidiaries to comply, in all material respects, with all
Requirements of Law of any Governmental Authority having jurisdiction over it or
its business (including, without limitation, all Environmental Laws), except (a)
such as may be contested in good faith by appropriate proceedings diligently
prosecuted without risk of loss of any Collateral, (b) as to which a bona fide
dispute exists, (c) for which appropriate reserves have been established on the
Borrower's financial statements and (d) where the failure to comply could not
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.
4.9 Inspection of Property and Books and Records. The Borrower shall
--------------------------------------------
maintain and shall cause each of its Subsidiaries to maintain proper books of
record and account, in which full, true and correct entries in conformity with
GAAP consistently applied shall be made of all financial transactions and
matters involving the assets and business of the Borrower and such Subsidiaries.
The Borrower shall permit, and shall cause each of its Subsidiaries to permit,
representatives and independent contractors of the Agent (at the expense of the
Borrower not to exceed one (1) time per year unless an Event of Default has
occurred and is continuing), and any Lender (at such Lender's expense unless an
Event of Default shall have occurred and be continuing) which may accompany
Agent, to visit and inspect any of their respective Properties, to examine their
respective corporate, financial and operating records, and make copies thereof
or abstracts therefrom, and to discuss their respective affairs, finances and
accounts with their respective directors, officers, and independent public
accountants, at such reasonable times during normal business hours and as often
as may be reasonably desired, upon reasonable advance notice to the Borrower;
provided, however, when an Event of Default exists the Agent or any Lender
-------- -------
33
may do any of the foregoing at the expense of the Borrower at any time during
normal business hours and without advance notice.
4.10 Use of Proceeds. The Borrower shall use the proceeds of the Loans
---------------
solely as follows: (a) fund the Merger, (b) pay costs and expenses of the
Related Transactions and costs and expenses required to be paid pursuant to
subsection 2.1, and (c) for working capital and other general corporate purposes
not in contravention of any Requirement of Law and not in violation of this
Agreement, including, but not limited to, refinancing existing debt and
financing certain Capital Expenditures.
4.11 Solvency. The Borrower, individually, and the Borrower and its
--------
Subsidiaries, on a consolidated basis, shall at all times be Solvent.
4.12 Further Assurances. (a) The Borrower shall ensure that all written
------------------
information, exhibits and reports furnished to the Agent or the Lenders do not
and will not contain any untrue statement of a material fact and do not and will
not omit to state any material fact or any fact necessary to make the statements
contained therein not misleading in light of the circumstances in which made,
and will promptly disclose to the Agent and the Lenders and correct any defect
or error that may be discovered therein or in any Loan Document or in the
execution, acknowledgment or recordation thereof.
(b) Promptly upon request by the Agent, the Borrower shall (and shall
cause any of its Subsidiaries to) take such additional actions as the Agent may
reasonably require from time to time in order: (i) to carry out more effectively
the purposes of this Agreement or any other Loan Document; (ii) to subject to
the Liens created by any of the Collateral Documents any of the Properties,
rights or interests covered by any of the Collateral Documents; (iii) to perfect
and maintain the validity, effectiveness and priority of any of the Collateral
Documents and the Liens intended to be created thereby; and (iv) to better
assure, convey, grant, assign, transfer, preserve, protect and confirm to the
Agent and Lenders the rights granted or now or hereafter intended to be granted
to the Agent and the Lenders under any Loan Document or under any other document
executed in connection therewith. Without limiting the generality of the
foregoing and except as otherwise approved in writing by Agent and Required
Lenders, Borrower shall cause each of its Subsidiaries to guaranty the
Obligations and to cause each such Subsidiary to grant to Agent, for the benefit
of Agent and Lenders, a security interest in all of such Subsidiary's property
to secure such guaranty. Furthermore and except as otherwise approved in
writing by Lenders, Borrower shall pledge the stock or other equity interest of
each of its Subsidiaries to Agent, for the benefit of Agent and Lenders, to
secure the Obligations. In connection with each pledge of stock or other equity
interests, Borrower shall deliver, or cause to be delivered, to Agent, the items
described in subsection 2.1(d)(iii), if applicable.
4.13 Interest Rate Protection. Within ninety (90) days of the Closing
------------------------
Date, the Borrower shall enter into Rate Contracts providing protection against
fluctuations in interest rates with one or more financial institutions
reasonably satisfactory to Agent with respect to at least 50% of the
34
amount of the Aggregate Term Loan Commitment on the date hereof, which
agreements shall provide for not less than a three (3) year term and containing
such other terms as are customary and are reasonably satisfactory to the Agent.
4.14 Foreign Sales. In the event, Foreign Sales of Borrower and its
-------------
Subsidiaries exceeds 15% of aggregate sales of Borrower and its Subsidiaries,
Borrower covenants and agrees to (i) grant to Agent, for the benefit of Lenders
upon Agent's reasonable request therefor, a security interest in foreign assets
of Borrower and its Subsidiaries (i.e., assets located outside the United States
----
of America or Canada, which shall be governed by the provisions of Section
4.12), including copyrights, patents, trademarks, and licenses, and shall take
such additional actions as Agent may reasonably require to grant to the Agent
and Lenders such rights granted in foreign assets and to perfect the security
interests of the Agent, for the benefit of Agent and the Lenders, in accordance
with the applicable law and (ii) provide to Agent prompt written notice of such
event together with such other information as Agent may reasonably request with
respect thereto.
4.15 Merger. Borrower shall cause the Merger to occur on the Closing Date
------
and shall comply with the provisions of subsection 5.3.
4.16 Intellectual Property. Borrower covenants and agrees to (a) use
---------------------
commercially reasonable efforts to obtain and record as soon as reasonably
possible releases of all Liens encumbering intellectual property identified on
Schedule 4.16, and, if obtained, to provide evidence thereto to Agent; and
(b) cause to be recorded, as soon as reasonably possible but in no event
later than 90 days after the Closing Date, assignments from B&L to Bushnell of
intellectual property identified in the intellectual property searches delivered
by Borrower to Agent as being owned by B&L which were previously to have been
assigned to Bushnell, and to provide evidence thereof to Agent.
ARTICLE V - NEGATIVE COVENANTS
------------------------------
The Borrower covenants and agrees that, so long as any Lender shall
have any Commitment hereunder, or any Loan or other Obligation (other than
contingent indemnification Obligations to the extent no claim giving rise
thereto has been asserted) shall remain unpaid or unsatisfied, unless the
Required Lenders waive compliance in writing:
5.1 Limitation on Liens. The Borrower shall not, and shall not suffer or
-------------------
permit any of its Subsidiaries to, directly or indirectly, make, create, incur,
assume or suffer to exist any Lien upon or with respect to any part of its
Property, whether now owned or hereafter acquired, other than the following
("Permitted Liens"):
---------------
35
(a) any Lien existing on the Property of the Borrower or its Subsidiaries
on the Closing Date and set forth in Schedule 5.1 securing Indebtedness
------------
outstanding on such date and permitted by Section 5.5(c), including replacement
Liens on the Property currently subject to such Liens;
(b) any Lien created under any Loan Document;
(c) Liens for taxes, fees, assessments or other governmental charges (i)
which are not delinquent or remain payable without penalty, or (ii) the non-
payment thereof is permitted by Section 4.7, provided that, in respect of this
--------
clause (ii), all such Liens secure claims in the aggregate at any time
outstanding for Borrower and its Subsidiaries not exceeding $100,000;
(d) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other similar Liens arising in the Ordinary Course of Business
which are not delinquent for more than ninety (90) days or remain payable
without penalty or which are being contested in good faith and by appropriate
proceedings diligently prosecuted, which proceedings have the effect of
preventing the forfeiture or sale of the Property subject thereto and for which
adequate reserves in accordance with GAAP are being maintained;
(e) Liens (other than any Lien imposed by ERISA) consisting of pledges or
deposits required in the Ordinary Course of Business in connection with workers'
compensation, unemployment insurance and other social security legislation or to
secure the performance of tenders, statutory obligations, surety, stay, customs
and appeals bonds, bids, leases, governmental contract, trade contracts,
performance and return of money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money) or to secure liability to
insurance carriers;
(f) Liens consisting of judgment or judicial attachment liens, provided
that the enforcement of such Liens is effectively stayed and all such Liens
secure claims in the aggregate at any time outstanding for the Borrower or its
Subsidiaries do not exceed $500,000;
(g) easements, rights-of-way, zoning and other restrictions, minor defects
or other irregularities in title, and other similar encumbrances incurred in the
Ordinary Course of Business which, in the aggregate, are not substantial in
amount, and which do not in any case materially detract from the value of the
Property subject thereto or interfere in any material respect with the ordinary
conduct of the businesses of the Borrower and its Subsidiaries;
(h) Liens on any Property acquired or held by the Borrower or its
Subsidiaries in the Ordinary Course of Business, securing Indebtedness incurred
or assumed for the purpose of financing (or refinancing) all or any part of the
cost of acquiring such Property and permitted under subsection 5.5(d); provided
--------
that (i) any such Lien attaches to such Property concurrently with or within
----
twenty (20) days after the acquisition thereof, (ii) such Lien attaches solely
to the Property so acquired in such transaction, and (iii) the principal amount
of the debt secured thereby does not exceed 100% of the cost of such Property;
36
(i) Liens securing Capital Lease Obligations permitted under subsection
5.5(d);
(j) any interest or title of a lessor or sublessor under any lease
permitted by this Agreement;
(k) Liens arising from precautionary UCC financing statements filed under
any lease permitted by this Agreement; and
(l) Liens arising solely by virtue of any statutory or common law
provision relating to banker's liens, rights of set-off or similar rights and
remedies as to deposit accounts or other funds maintained with a creditor
depository institution.
5.2 Disposition of Assets. The Borrower shall not, and shall not suffer
---------------------
or permit any of its Subsidiaries to, directly or indirectly, sell, assign,
lease, convey, transfer or otherwise dispose of (whether in one or a series of
transactions) any Property (including accounts and notes receivable, with or
without recourse) or enter into any agreement to do any of the foregoing,
except, in each instance, to the extent permitted under the Subordinated Note
Agreement:
(a) dispositions of inventory, or used, worn-out or surplus equipment, all
in the Ordinary Course of Business;
(b) dispositions not otherwise permitted hereunder which are made for fair
market value and the mandatory prepayment in the amount of the Net Proceeds of
such disposition is made as provided in subsection 1.8; provided, that (i) at
--------
the time of any disposition, no Event of Default shall exist or shall result
from such disposition, (ii) the aggregate sales price from such disposition
shall be paid in cash, and (iii) the aggregate value of all assets so sold by
the Borrower and its Subsidiaries, together, shall not exceed in any fiscal year
$1,000,000 and; (iv) after giving effect to such disposition, Borrower is in
compliance on a proforma basis with the covenants set forth in Article 6,
recomputed for the most recent month for which financial statements have been
delivered; and
(c) mergers, consolidations and dispositions permitted by Section 5.3.
5.3 Consolidations and Mergers. The Borrower shall not, and shall not
--------------------------
suffer or permit any of its Subsidiaries to, merge, consolidate with or into, or
convey, transfer, 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 or in favor of any Person, except upon not less
than five (5) Business Days prior written notice to Agent, any Subsidiary of the
Borrower may merge with, or dissolve or liquidate into, a Wholly-Owned
Subsidiary of Borrower, provided that such Wholly-Owned Subsidiary shall be the
--------
continuing or surviving corporation.
5.4 Loans and Investments. The Borrower shall not and shall not suffer or
---------------------
permit any of its Subsidiaries to (i) purchase or acquire, or make any
commitment therefor, any capital stock,
37
equity interest, or any obligations or other securities of, or any interest in,
any Person, including the establishment or creation of a Subsidiary, or (ii)
make or commit to make any Acquisitions, or any other acquisition of all or
substantially all of the assets of another Person, or of any business or
division of any Person, including without limitation, by way of merger,
consolidation or other combination or (iii) make or commit to make any advance,
loan, extension of credit or capital contribution to or any other investment in,
any Person including any Affiliate of the Borrower (the items described in
clauses (i), (ii) and (iii) are referred to as "Investments"), except for:
(a) Investments in cash and Cash Equivalents;
(b) extensions of credit by the Borrower to any of its Wholly-Owned
Subsidiaries provided the obligations of each obligor shall be evidenced by
notes, which notes shall be pledged to Agent, for the benefit of Agent and
Lenders, and have such other terms as Agent may reasonably require;
(c) loans and advances to employees in the Ordinary Course of Business not
to exceed $200,000 in the aggregate at any time outstanding;
(d) reasonable travel, relocation and similar advance to officers and
employees of Borrower made in the Ordinary Course of Business;
(e) loans and advances to customers, distributors and sales
representatives of Borrower in the Ordinary Course of Business, not to exceed
$200,000 at any one time outstanding;
(f) loans, advances and extensions of credit existing on the date hereof
and listed in Schedule 5.4 attached hereto and made a part hereof; and
(g) non-cash loans and advances to employees of Borrower used to acquire
stock of Borrower.
5.5 Limitation on Indebtedness. The Borrower shall not, and shall not
--------------------------
suffer or permit any of its Subsidiaries to, create, incur, assume, suffer to
exist, or otherwise become or remain directly or indirectly liable with respect
to, any Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement;
(b) Indebtedness consisting of Contingent Obligations described in clause
(i) of the definition thereof and permitted pursuant to Section 5.9;
(c) Indebtedness existing on the Closing Date and set forth in Schedule
--------
5.5 including extensions and refinancings thereof which do not increase the
---
principal amount of such Indebtedness as of the date of such extension or
refinancing;
38
(d) Indebtedness not to exceed $2,000,000 in the aggregate at any time
outstanding, consisting of Capital Lease Obligations or secured by Liens
permitted by subsection 5.1(h);
(e) unsecured intercompany Indebtedness permitted pursuant to Section
5.4(b);
(f) other unsecured Indebtedness not exceeding in the aggregate at any
time outstanding $500,000;
(g) Subordinated Indebtedness not to exceed the principal amount of
$22,800,000 evidenced by the Subordinated Notes; and
(h) Indebtedness not to exceed the principal amount of $5,000,000, as the
same may be increased as the result of the accrual of interest, evidenced by the
Seller Notes.
5.6 Transactions with Affiliates. The Borrower shall not, and shall not
----------------------------
suffer or permit any of its Subsidiaries to, enter into any transaction with any
Affiliate of the Borrower or of any such Subsidiary, except:
(a) as expressly permitted by this Agreement; or
(b) in the Ordinary Course of Business and pursuant to the reasonable
requirements of the business of the Borrower or such Subsidiary;
and, in the case of clause (b), upon fair and reasonable terms no less favorable
to the Borrower or such Subsidiary than would obtain in a comparable arm's-
length transaction with a Person not an Affiliate of the Borrower or such
Subsidiary and which are disclosed in writing to Agent.
5.7 Management Fees and Compensation. The Borrower shall not, and shall
--------------------------------
not permit any of its Subsidiaries to pay any management, consulting or similar
fees to any Affiliate of the Borrower or to any officer, director or employee of
the Borrower or any of its Subsidiaries or any Affiliate of the Borrower except,
in each instance to the extent permitted under the Subordinated Note Agreement
(a) payment of reasonable compensation to officers and employees for actual
services rendered to Borrower and its Subsidiaries in the Ordinary Course of
Business, (b) payment of directors' fees and reimbursement of actual out-of-
pocket expenses incurred in connection with attending board of director meetings
not to exceed in the aggregate, with respect to all such items, $100,000 in any
fiscal year of Borrower, (c) payment on the Closing Date of a transaction fee to
the WPP Group in the amount of $1,000,000 in the aggregate, (d) a transaction
fee to the WPP Group in the amount of one percent of cash equity contributed to
Borrower after the Closing Date, payable from such cash equity proceeds and (e)
annual management fee to Wind Point Investors, L.L.C. and/or Wind Point
Investors IV, L.P., in the aggregate amount of $360,000 payable in equal
quarterly installments on the 15th day of each January, April, July and October;
provided, however, that no such fees described in clause (e) shall be paid
during any period while any Default or Event of Default under subsection 7.1(a)
or 7.1(c) (due to any failure
39
by Borrower to perform or observe any term, covenant or agreement contained in
Article VI) has occurred and is continuing or would arise as a result of such
payment.
5.8 Use of Proceeds. The Borrower shall not and shall not suffer or permit
---------------
any of its Subsidiaries to use any portion of the Loan proceeds, directly or
indirectly, to purchase or carry Margin Stock or repay or otherwise refinance
Indebtedness of the Borrower or others incurred to purchase or carry Margin
Stock, or otherwise in any manner which is in contravention of any Requirement
of Law or in violation of this Agreement.
5.9 Contingent Obligations. The Borrower shall not, and shall not suffer
----------------------
or permit any of its Subsidiaries to, create, incur, assume or suffer to exist
any Contingent Obligations except in respect of the Obligations and except:
(a) endorsements for collection or deposit in the Ordinary Course of
Business;
(b) Rate Contracts entered into in the Ordinary Course of Business with
Agent's prior written consent not to be unreasonably withheld or pursuant to
Section 4.13;
(c) Contingent Obligations of the Borrower and its Subsidiaries existing
as of the Closing Date and listed in Schedule 5.9, including extension and
------------
renewals thereof which do not increase the amount of such Contingent Obligations
as of the date of such extension or renewal;
(d) Contingent Obligations incurred in the Ordinary Course of Business
with respect to surety and appeal bonds, performance bonds and other similar
obligations;
(e) Contingent Obligations arising under indemnity agreements to title
insurers to cause such title insurers to issue to Agent title insurance
policies;
(f) Contingent Obligations arising with respect to customary
indemnification obligations in favor of (i) sellers in connection with
Acquisitions permitted hereunder and (ii) purchasers in connection with
dispositions permitted under subsection 5.2(b); and
(g) Contingent Obligations in favor of Subordinated Noteholders evidenced
by subordinated Subsidiary Guaranty Agreements executed and delivered pursuant
to the Subordinated Note Agreement provided in the event a Subsidiary of
Borrower is released of its obligations under the corresponding guaranty
executed and delivered such Subsidiary in favor of Agent and Lenders, such
Subsidiary shall be released of its obligations under the Subsidiary Guaranty
Agreement.
5.10 Compliance with ERISA. The Borrower shall not, and shall not suffer or
---------------------
permit any of its Subsidiaries to:
40
(a) terminate any Plan subject to Title IV of ERISA so as to result in any
material liability to the Borrower;
(b) permit to exist any ERISA Event or any other event or condition, which
would reasonably be expected to have a Material Adverse Effect;
(c) make a complete or partial withdrawal (within the meaning of ERISA
Section 4201) from any Multiemployer Plan so as to result in any material
liability to the Borrower;
(d) enter into any new Plan or modify any existing Plan so as to increase
its obligations thereunder which would reasonably be expected to have a Material
Adverse Effect; or
(e) permit the present value of all nonforfeitable accrued benefits under
any Plan (using the actuarial assumptions utilized by the PBGC upon termination
of a Plan) materially to exceed the fair market value of Plan assets allocable
to such benefits, all determined as of the most recent valuation date for each
such Plan.
5.11 Restricted Payments. The Borrower shall not, and shall not suffer or
-------------------
permit any of its Subsidiaries to, (i) declare or make any dividend payment or
other distribution of assets, properties, cash, rights, obligations or
securities on account of any shares of any class of its capital stock,
partnership interests, membership interests or other equity securities, (ii)
purchase, redeem or otherwise acquire for value any shares of its capital stock,
partnership interests, membership interests or other equity securities or any
warrants, rights or options to acquire such shares, interests or securities now
or hereafter outstanding or (iii) make any payment or prepayment of principal
of, premium, if any, interest, redemption, exchange, purchase, retirement,
defeasance, sinking fund or similar payment with respect to, Subordinated
Indebtedness (the items described in clauses (i), (ii) and (iii) are referred to
as "Restricted Payments"); except that any Wholly-Owned Subsidiary of the
Borrower may declare and pay dividends to the Borrower or any Wholly-Owned
Subsidiary of the Borrower, and except that the Borrower may in each instance in
(b), (c), (d) or (e) below, to the extent permitted under the Subordinated Note
Agreement:
(a) declare and make dividend payments or other distributions payable
solely in its common stock;
(b) redeem from management stockholders shares of Borrower common stock or
warrants or options to acquire any such shares provided all of the following
conditions are satisfied:
(i) no Default or Event of Default has occurred and is continuing or
would arise as a result of such redemption;
41
(ii) after giving effect to such redemption, Borrower is in
compliance on a pro forma basis with the covenants set forth in
Article 6, recomputed for the most recent quarter for which
financial statements have been delivered;
(iii) the aggregate redemptions permitted (x) in any fiscal year of
Borrower shall not exceed $500,000 and (y) during the term of
this Agreement shall not exceed $2,000,000; and
(iv) after giving effect to such redemption, the Maximum Revolving
Loan Balance exceeds the aggregate outstanding principal
balance of Revolving Loans by not less than $3,000,000;
(c) make regularly scheduled payments of interest with respect to
Subordinated Indebtedness evidenced by Subordinated Notes and Seller Notes
provided no Default or Event of Default has occurred and is continuing or would
arise as a result of such payment;
(d) redeem stock in accordance with Sections 1.1 and/or 1.2 of the WSR
Stockholders Agreement provided the aggregate redemptions permitted during the
term of this Agreement pursuant to Sections 1.1 and 1.2 of the WSR Stockholders
Agreement shall not exceed $310,000; and
(e) issue common stock of Borrower in connection with the exercise of
warrants initially issued to Subordinated Noteholders.
5.12 Change in Business. The Borrower shall not, and shall not permit any
------------------
of its Subsidiaries to, engage in any material line of business substantially
different from those lines of business carried on by it on the date hereof.
5.13 Change in Structure. Except as expressly permitted under Section 5.3,
-------------------
the Borrower shall not and shall not permit any of its Subsidiaries to, make any
material changes in its equity capital structure (including in the terms of its
outstanding stock), or amend its certificate of incorporation or by-laws in a
manner adverse to, or which would reasonably be expected to be adverse to, Agent
or any Lender or which would, or would be reasonably expected to, adversely
affect Borrower's or any of its Subsidiaries' ability to perform their
respective Obligations hereunder or under the other Loan Documents unless
required by law.
5.14 Accounting Changes. The Borrower shall not, and shall not suffer or
------------------
permit any of its Subsidiaries to, make any significant change in accounting
treatment or reporting practices, except as required by GAAP, or change the
fiscal year of the Borrower or of any of its consolidated Subsidiaries.
42
5.15 Amendments to Related Agreements and Subordinated Indebtedness.
--------------------------------------------------------------
(a) The Borrower shall not and shall not permit any of its
Subsidiaries, to (i) amend, supplement, waive or otherwise modify any provision
of, the Related Agreements in a manner adverse to Agent or Lenders or which
would reasonably be expected to have a Material Adverse Effect, or (ii) take or
fail to take any action under the Related Agreements that could reasonably be
expected to have a Material Adverse Effect.
(b) Borrower shall not and shall not permit any of its Subsidiaries
directly or indirectly to change or amend the terms of any Subordinated
Indebtedness if the effect of such amendment is to: (i) increase the interest
rate on such Indebtedness (excluding the application of the original default
rate of interest); (ii) shorten or accelerate the dates upon which payments of
principal or interest are due on such Indebtedness; (iii) change any event of
default or add or make more restrictive any covenant with respect to such
Indebtedness; (iv) change the prepayment provisions of such Indebtedness; (v)
change the subordination provisions thereof (or the subordination terms of any
guaranty thereof); or (vi) change or amend any other term if such change or
amendment would materially increase the obligations of the obligor or confer
additional material rights on the holder of such Indebtedness in a manner
adverse to Borrower, any of its Subsidiaries, Agent or Lenders.
(c) Borrower shall not and shall not permit any of its Subsidiaries
to amend or otherwise modify the B&L License Agreement in a manner materially
adverse to Borrower or any of its Subsidiaries.
5.16 Intentionally Omitted.
---------------------
5.17 No Negative Pledges. Borrower will not, and will not permit any of its
-------------------
Subsidiaries, directly or indirectly, to create or otherwise cause or suffer to
exist or become effective any consensual restriction or encumbrance of any kind
on the ability of any such Subsidiary to pay dividends or make any other
distribution on any of such Subsidiary's equity securities or to pay fees,
including management fees, or make other payments and distributions to Borrower
or any of its Subsidiaries.
ARTICLE VI - FINANCIAL COVENANTS
--------------------------------
The Borrower covenants and agrees that, so long as any Lender shall have
any Commitment hereunder, or any Loan or other Obligation (other than contingent
indemnification Obligations to the extent no claim giving rise thereto has been
asserted) shall remain unpaid or unsatisfied, unless the Required Lenders waive
compliance in writing:
6.1 Capital Expenditures. The Borrower and its Subsidiaries shall not make
--------------------
or commit to make Capital Expenditures for any calendar year (or shorter period)
set forth below to exceed
43
the amount set forth in the table below (the "Capital Expenditure Limitation")
with respect to such calendar year (or shorter period):
Fiscal Period Capital Expenditure Limitation
------------- ------------------------------
August 1, 1999 through
December 31, 1999 $1,050,000
Calendar Year 2000 2,000,000
Calendar Year 2001 3,000,000
Calendar Year 2002 3,500,000
Each calendar year thereafter 4,000,000
"Capital Expenditures" shall be calculated in the manner set forth in Exhibit
4.2(b).
6.2 Leverage Ratio. The Borrower shall not permit its Leverage Ratio
--------------
determined as of any date set forth below for the twelve months then ended to be
greater than the maximum ratio set forth in the table below opposite such date:
Date Maximum Leverage Ratio
---- ----------------------
October 31, 1999 6.1
January 31, 2000 6.0
April 30, 2000 5.9
June 30, 2000 5.8
September 30, 2000 5.7
December 31, 2000 5.6
March 31, 2001 5.5
June 30, 2001 5.25
September 30, 2001 5.0
December 31, 2001 4.75
44
March 31, 2002 4.6
June 30, 2002 4.4
September 30, 2002 4.3
December 31, 2002 4.1
March 31, 2003 4.0
June 30, 2003 3.8
September 30, 2003 3.6
December 31, 2003 3.4
March 31, 2004 3.2
Last day of each calendar quarter
thereafter 3.0
"Leverage Ratio" shall be calculated in the manner set forth in Exhibit 4.2(b).
6.3 Fixed Charge Coverage Ratio. (a) The Borrower shall not permit its
---------------------------
Fixed Charge Coverage Ratio determined for any period set forth below to be less
than the minimum ratio set forth in the table below opposite such date:
Date Minimum Fixed Charge Ratio
---- --------------------------
August 1, 1999 through
October 31, 1999 1.05
August 1, 1999 through
January 31, 2000 1.05
August 1, 1999 through
April 30, 2000 1.05
August 1, 1999 through
June 30, 2000 1.05
45
(b) The Borrower shall not permit its Fixed Charge Coverage Ratio
determined as of the last day of any calendar quarter set forth below for the
twelve months then ended to be less than the minimum ratio set forth in the
table below opposite such date:
Date Minimum Fixed Coverage Ratio
---- ----------------------------
Calendar quarter ending
September 30, 2000 1.05
Each calendar quarter commencing
December 31, 2000 and ending
December 31, 2001 1.1
Each calendar quarter commencing
March 31, 2002 and ending
December 31, 2002 1.15
Each calendar quarter thereafter 1.2
"Fixed Charge Coverage Ratio" shall be calculated in the manner set forth in
Exhibit 4.2(b).
6.4 Interest Coverage Ratio. (a) The Borrower shall not permit its
-----------------------
Interest Coverage Ratio determined for any period set forth below to be less
than the minimum ratio set forth in the table below opposite such period:
Period Ending Minimum Interest Coverage Ratio
------------- -------------------------------
August 1, 1999 through
October 31, 1999 1.6
August 1, 1999 through
January 31, 2000 1.6
August 1, 1999 through
April 30, 2000 1.6
August 1, 1999 through
June 30, 2000 1.6
(b) The Borrower shall not permit its Interest Coverage Ratio determined
as of the last day of any calendar quarter set forth below for the twelve months
then ended to be less than the minimum ratio set forth in the table below
opposite such date:
46
Period Ending Minimum Interest Coverage Ratio
------------- -------------------------------
September 30, 2000 1.75
December 31, 2000 1.75
March 31, 2001 1.75
June 30, 2001 1.75
September 30, 2001 1.85
December 31, 2001 1.85
March 31, 2002 2.0
June 30, 2002 2.0
September 30, 2002 2.25
December 31, 2002 2.25
March 31, 2003 2.25
June 30, 2003 2.25
Each calendar quarter
thereafter 2.50
"Interest Coverage Ratio" shall be calculated in the manner set forth in Exhibit
4.2(b).
6.5 Minimum EBITDA. (a) Borrower shall not permit EBITDA for any period
--------------
set forth below to be less than the amount set forth below for such period:
Period Minimum EBITDA
------ --------------
August 1, 1999 through
October 31, 1999 $ 6,000,000
August 1, 1999 through
January 31, 2000 9,500,000
47
August 1, 1999 through
April 30, 2000 10,750,000
August 1, 1999 through
June 30, 2000 12,500,000
(b) The Borrower shall not permit EBITDA for the twelve month period
ending on last of any calendar quarter set forth below to be less than the
amount set forth below for such period:
Period Minimum EBITDA
------ --------------
September 30, 2000 $14,750,000
December 31, 2000 15,125,000
March 31, 2001 15,500,000
June 30, 2001 16,000,000
September 30, 2001 17,000,000
December 31, 2001 18,000,000
March 31, 2002 18,250,000
June 30, 2002 19,000,000
September 30, 2002 20,000,000
December 31, 2002 20,750,000
March 31, 2003 21,750,000
June 30, 2003 22,500,000
September 30, 2003 23,250,000
December 31, 2003 23,750,000
March 31, 2004 24,000,000
June 30, 2004 24,500,000
48
September 30, 2004 25,000,000
Each calendar quarter
thereafter 26,000,000
ARTICLE VII - EVENTS OF DEFAULT
-------------------------------
7.1 Event of Default. Any of the following shall constitute an "Event of
---------------- --------
Default":
-------
(a) Non-Payment. The Borrower fails to pay, (i) when and as required to be
-----------
paid herein, any amount of principal of any Loan, including after maturity of
the Loans, whether by acceleration or otherwise, (ii) within five (5) days after
the same shall become due, any interest on any Loan, provided, however, such
five (5) day grace period shall only apply and be available not more than two
(2) times within any twelve (12) month period, or (iii) within five (5) days
after the same shall become due, any fee or any other amount payable hereunder
or pursuant to any other Loan Document; or
(b) Representation or Warranty. Any representation or warranty by the
--------------------------
Borrower or any of its Subsidiaries made or deemed made herein, in any Loan
Document, or which is contained in any certificate, document or financial or
other statement by the Borrower, any of its Subsidiaries, or their respective
Responsible Officers, furnished at any time under this Agreement, or in or under
any Loan Document, shall prove to have been incorrect in any material respect on
or as of the date made or deemed made; or
(c) Specific Defaults. The Borrower fails to perform or observe any term,
-----------------
covenant or agreement contained in Sections 4.1, 4.2(b), 4.2(d), 4.2(l), 4.6,
4.9, 4.13, 4.14 or Article V or Article VI hereof; or
(d) Other Defaults. The Borrower or any of its Subsidiaries fails to
--------------
perform or observe any other term, covenant or agreement contained in this
Agreement or any Loan Document, and such default shall continue unremedied for a
period of thirty (30) days after the date upon which written notice thereof is
given to the Borrower by the Agent or Required Lenders; or
(e) Cross-Default. The Borrower or any of its Subsidiaries (i) fails to
-------------
make any payment in respect of any Indebtedness (other than the Obligations) or
Contingent Obligation having an aggregate principal amount (including undrawn
committed or available amounts and including amounts owing to all creditors
under any combined or syndicated credit arrangement) of more than $1,000,000
when due (whether by scheduled maturity, required prepayment, acceleration,
demand, or otherwise) and such failure continues after the applicable grace or
notice period, if any, specified in the document relating thereto on the date of
such failure; or (ii) fails to perform or observe any other condition or
covenant, or any other event shall occur or condition exist, under any agreement
or instrument relating to any such Indebtedness or Contingent
49
Obligation, if the effect of such failure, event or condition is to cause, or to
permit the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Indebtedness (or a trustee or agent on behalf of such
holder or holders or beneficiary or beneficiaries) to cause such Indebtedness to
be declared to be due and payable prior to its stated maturity, or such
Contingent Obligation to become payable or cash collateral in respect thereof to
be demanded; or
(f) Insolvency; Voluntary Proceedings. The Borrower or any of its
---------------------------------
Subsidiaries (i) ceases or fails to be Solvent, (ii) generally fails to pay, or
admits in writing its inability to pay, its debts as they become due, subject to
applicable grace periods, if any, whether at stated maturity or otherwise; (iii)
voluntarily ceases to conduct its business in the ordinary course; (iv)
commences any Insolvency Proceeding with respect to itself; or (v) takes any
action to effectuate or authorize any of the foregoing; or
(g) Involuntary Proceedings. (i) Any involuntary Insolvency Proceeding is
-----------------------
commenced or filed against the Borrower or any Subsidiary of the Borrower, or
any writ, judgment, warrant of attachment, execution or similar process, is
issued or levied against a substantial part of the Borrower's or any of its
Subsidiaries' Properties, and any such proceeding or petition shall not be
dismissed, or such writ, judgment, warrant of attachment, execution or similar
process shall not be released, vacated or fully bonded within sixty (60) days
after commencement, filing or levy; (ii) the Borrower or any of its Subsidiaries
admits the material allegations of a petition against it in any Insolvency
Proceeding, or an order for relief (or similar order under non-U.S. law) is
ordered in any Insolvency Proceeding; or (iii) the Borrower or any of its
Subsidiaries acquiesces in the appointment of a receiver, trustee, custodian,
conservator, liquidator, mortgagee in possession (or agent therefor), or other
similar Person for itself or a substantial portion of its Property or business;
or
(h) ERISA. (i) A member of the Controlled Group shall fail to pay when
-----
due, after the expiration of any applicable grace period, any installment
payment with respect to its Withdrawal Liability under a Multiemployer Plan;
(ii) a member of the Controlled Group shall fail to satisfy its contribution
requirements under Section 412(c)(11) of the Code, whether or not it has sought
a waiver under Section 412(d) of the Code; (iii) the occurrence of an ERISA
Event; (iv) a Plan that is intended to be qualified under Section 401(a) of the
Code shall lose its qualification; (v) any member of the Controlled Group
engages in or otherwise becomes liable for a non-exempt prohibited transaction;
(vi) a violation of section 404 or 405 of ERISA or the exclusive benefit rule
under section 401(a) of the Code; (vii) any member of the Controlled Group is
assessed a tax under section 4980B of the Code or incurs a liability under
Section 601 et seq of ERISA; and, the occurrence of any such event listed in
clauses (i) through (vii), or the occurrence of any combination of events listed
in clauses (i) through (vii) results in, or could reasonably be expected to
result in, a Material Adverse Effect or result in exposure to Borrower in an
amount in excess of $1,000,000; or
(i) Monetary Judgments. One or more judgments, non-interlocutory
------------------
orders, decrees or arbitration awards shall be entered against the Borrower or
any of its Subsidiaries involving in
50
the aggregate a liability (to the extent not covered by independent third-party
insurance) as to any single or related series of transactions, incidents or
conditions, of $500,000 or more, and the same shall remain unsatisfied,
unvacated, undischarged and unstayed pending appeal for a period of thirty (30)
days after the entry thereof; or
(j) Non-Monetary Judgments. Any non-monetary judgment, order or
----------------------
decree shall be rendered against the Borrower or any of its Subsidiaries, or
Borrower or any of its Subsidiaries shall lose export privileges, in any such
instance which does or would reasonably be expected to have a Material Adverse
Effect, and there shall be any period of ten (10) consecutive days during which
a stay of enforcement of such judgment or order, by reason of a pending appeal
or otherwise, shall not be in effect; or
(k) Collateral. Any material provision of any Collateral Document
----------
shall for any reason cease to be valid and binding on or enforceable against the
Borrower or any Subsidiary of the Borrower party thereto or the Borrower or any
Subsidiary of the Borrower shall so state in writing or bring an action to limit
its obligations or liabilities thereunder; or any Collateral Document shall for
any reason (other than pursuant to the terms thereof) cease to create a valid
security interest in the Collateral purported to be covered thereby or such
security interest shall for any reason (other than the failure of the Agent to
take any action within its control) cease to be a perfected and first priority
security interest subject only to Permitted Liens; or
(l) Ownership. (i) prior to a Qualifying Initial Public Offering, WPP
---------
Group at any time ceases to maintain in the aggregate a direct or indirect
beneficial equity interest in the Borrower at least equal to 40% of the
aggregate equity interests of Borrower, or (ii) subsequent to a Qualifying
Initial Public Offering, WPP Group at any time ceases to maintain in the
aggregate a direct or indirect beneficial equity interest in the Borrower at
least equal to 33% of the aggregate equity interests of Borrower, (iii) prior to
a Qualifying Initial Public Offering, WPP Group (a) fails to own beneficially,
directly or indirectly, capital stock representing voting control of the
Borrower or (b) at any time ceases to have the right, either through the
ownership of voting securities or by contract, to designate or approve a
majority (or such greater percentage as shall constitute control) of the members
of the board of directors of Borrower, or (iv) Wind Point ceases to have a cash
equity investment in Borrower of at least $22,750,000, in each instance, in (i),
(ii), (iii) and (iv) free and clear of all Liens, rights, options, warrants or
other similar agreements or understandings, other than Liens in favor of Agent,
for the benefit of Agent and Lenders; or (v) a Change of Control (as defined in
the Subordinated Note Agreement) occurs; or
(m) Invalidity of Subordination Provisions. The subordination
--------------------------------------
provisions of any agreement or instrument governing any Subordinated
Indebtedness shall for any reason be revoked or invalidated, or otherwise cease
to be in full force and effect in any material respect, or any Person shall
contest in any manner the validity or enforceability thereof or deny that it has
any further liability or obligation thereunder, or the Obligations shall for any
reason shall not have the priority contemplated by this Agreement or such
subordination provisions; or
51
(n) B&L License. The B&L License Agreement shall have terminated or
-----------
otherwise be in full force and effect unless Borrower shall have demonstrated to
the reasonable satisfaction of Agent and Required Lenders that Borrower would be
in compliance on a proforma basis (i.e., without giving effect to EBITDA
----
attributable to "Licensed Products" (as defined in the B&L License Agreement))
with each of the financial covenants set forth in Sections 6.2, 6.3, 6.4 and 6.5
(i) for each of the 4 most recent financial covenant testing dates, and (ii) on
a prospective basis, based on the projections most recently delivered to Agent,
and agreed to by Agent and Required Lenders in their sole discretion, as being
reasonable, for each of the next 4 financial covenant testing dates (assuming
for such purpose no change in financial performance if such projections do not
extend to the entire period covered by the next 4 financial covenant testing
dates).
7.2 Remedies. Upon the occurrence and during the continuance of any
--------
Event of Default, the Agent may, and shall at the request of the Required
Lenders:
(a) declare all or any portion of the Commitment of each Lender to make
Loans or issue Lender Letters of Credit or Letter of Credit Participation
Agreements to be terminated, whereupon such Commitments shall forthwith be
terminated;
(b) declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable;
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower; and
(c) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents or applicable law;
provided, however, that upon the occurrence of any event specified in
-------- -------
subsections 7.1(f) and (g) above (in the case of clause (i) of paragraph (g)
upon the expiration of the 60-day period mentioned therein), the obligation of
Lender to make Loans and the obligation of Agent to issue Lender Letters of
Credit and Letter of Credit Participation Agreements shall automatically
terminate and the unpaid principal amount of all outstanding Loans and all
interest and other amounts as aforesaid shall automatically become due and
payable without further act of the Agent or any Lender.
7.3 Rights Not Exclusive. The rights provided for in this Agreement and
--------------------
the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.
7.4 Cash Collateral for Letters of Credit. If an Event of Default has
-------------------------------------
occurred and is continuing or this Agreement shall be terminated for any reason,
then the Agent may, and upon request of Lenders holding at least sixty six and
two-thirds percent (66-2/3%) of the Revolving
52
Loan Commitments shall, demand (which demand shall be deemed to have been
delivered automatically upon any acceleration of the Loans and other obligations
hereunder pursuant to Section 7.2 hereof), and Borrower shall thereupon deliver
to the Agent, to be held for the benefit of the Agent and the Lenders entitled
thereto, an amount of cash equal to the amount of Letter of Credit Participation
Liability (determined in accordance with subsection 1.1(c) hereof) as additional
collateral security for Borrower's Obligations in respect of any outstanding
Lender Letter of Credit and Letter of Credit Participation Agreement. The Agent
may at any time apply any or all of such cash and cash collateral to the payment
of any or all of Borrower's Obligations in respect of any Lender Letters of
Credit or Letter of Credit Participation Agreements. Pending such application,
the Agent may (but shall not be obligated to) invest the same in an interest
bearing account in the Agent's name, for the benefit of the Agent and the
Lenders entitled thereto, under which deposits are available for immediate
withdrawal, at such bank or financial institution as the Agent may, in its
discretion, select.
ARTICLE VIII - THE AGENT
------------------------
8.1 Appointment and Authorization. Each Lender hereby irrevocably
-----------------------------
appoints, designates and authorizes the Agent to take such action on its behalf
under the provisions of this Agreement and each other Loan Document and to
exercise such powers and perform such duties as are expressly delegated to it by
the terms of this Agreement or any other Loan Document, together with such
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary contained elsewhere in this Agreement or in any other Loan
Document, the Agent shall not have any duties or responsibilities, except those
expressly set forth herein, nor shall the Agent have or be deemed to have any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Agent.
8.2 Delegation of Duties. The Agent may execute any of its duties under
--------------------
this Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
8.3 Liability of Agent. None of the Agent-Related Persons shall (i) be
------------------
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document (except for its own
gross negligence or willful misconduct), or (ii) be responsible in any manner to
any of the Lenders for any recital, statement, representation or warranty made
by the Borrower or any Subsidiary or Affiliate of the Borrower, or any officer
thereof, contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this Agreement or any
other Loan Document, or for the value of any Collateral or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any
53
other Loan Document, or for any failure of the Borrower or any other party to
any Loan Document to perform its obligations hereunder or thereunder. No Agent-
Related Person shall be under any obligation to any Lender to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or any other Loan Document, or to inspect
the Properties, books or records of the Borrower or any of the Borrower's
Subsidiaries or Affiliates.
8.4 Reliance by Agent. The Agent shall be entitled to rely, and shall be
-----------------
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile or telephone message,
statement or other document or conversation believed by it to be genuine and to
have been signed, sent or made by the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel to the Borrower), independent
accountants and other experts selected by the Agent. The Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Lenders (or, where an action or waiver need only be approved by the Required
Lenders, by the Required Lenders) as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement or
any other Loan Document in accordance with a request or consent of the Lenders
(or, where an action or waiver need only be approved by the Required Lenders, by
the Required Lenders) and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Lenders.
8.5 Notice of Default. The Agent shall not be deemed to have knowledge
-----------------
or notice of the occurrence of any Default or Event of Default, except with
respect to defaults in the payment of principal, interest and fees required to
be paid to the Agent for the account of the Lenders, unless the Agent shall have
received written notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". In the event that the Agent receives such a
notice, the Agent shall give notice thereof to the Lenders. The Agent shall take
such action with respect to such Default or Event of Default as shall be
requested by the Required Lenders in accordance with Article VII; provided,
--------
however, that unless and until the Agent shall have received any such request,
-------
the Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable or in the best interest of the Lenders.
8.6 Credit Decision. Each Lender expressly acknowledges that none of the
---------------
Agent-Related Persons has made any representation or warranty to it and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Borrower and its Subsidiaries shall be deemed to constitute any representation
or warranty by the Agent to any Lender. Each Lender represents to the Agent that
it has, independently and without reliance upon the Agent and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, prospects, operations, property,
financial and other condition and
54
creditworthiness of the Borrower and its Subsidiaries, and all applicable bank
regulatory laws relating to the transactions contemplated thereby, and made its
own decision to enter into this Agreement and extend credit to the Borrower
hereunder. Each Lender also represents that it will, independently and without
reliance upon the Agent and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of the Borrower. Except for notices,
reports and other documents expressly herein required to be furnished to the
Lenders by the Agent, the Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or
creditworthiness of the Borrower which may come into the possession of the
Agent.
8.7 Indemnification. Whether or not the transactions contemplated hereby
---------------
shall be consummated, upon demand therefor the Lenders shall indemnify the Agent
(to the extent not reimbursed by or on behalf of the Borrower and without
limiting the obligation of the Borrower to do so), ratably from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses and disbursements of any kind whatsoever which
may at any time (including at any time following the repayment of the Loans and
the termination or resignation of the Agent) be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of this
Agreement or any document contemplated by or referred to herein or the
transactions contemplated hereby or thereby or any action taken or omitted
by the Agent under or in connection with any of the foregoing; provided,
--------
however, that no Lender shall be liable for the payment to the Agent of any
-------
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
Agent's gross negligence or willful misconduct. In addition, each Lender shall
reimburse the Agent upon demand for its ratable share of any costs or out-of-
pocket expenses (including Attorney Costs) 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, any other Loan Document, or any document contemplated by or
referred to herein to the extent that the Agent is not reimbursed for such
expenses by or on behalf of the Borrower. Without limiting the generality of
the foregoing, if the Internal Revenue Service or any other Governmental
Authority of the United States or other jurisdiction asserts a claim that the
Agent did not properly withhold tax from amounts paid to or for the account of
any Lender (because the appropriate form was not delivered, was not properly
executed, or because such Lender failed to notify the Agent of a change in
circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason) such Lender shall indemnify the Agent
fully for all amounts paid, directly or indirectly, by the Agent as tax or
otherwise, including penalties and interest, and including any taxes imposed by
any jurisdiction on the amounts payable to the Agent under this Section 8.7,
together with all related costs and expenses (including
55
Attorney Costs). The obligation of the Lenders in this Section 8.7 shall survive
the payment of all Obligations hereunder.
8.8 Agent in Individual Capacity. Antares and its Affiliates may make
----------------------------
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory or other business with the Borrower and its Subsidiaries and
Affiliates as though Antares were not the Agent hereunder and without notice to
or consent of the Lenders. With respect to its Loans, Antares shall have the
same rights and powers under this Agreement as any other Lender and may exercise
the same as though it were not the Agent, and the terms "Lender" and "Lenders"
shall include Antares in its individual capacity.
8.9 Successor Agent. The Agent may resign as Agent upon thirty (30) days'
---------------
prior notice to the Lenders and to Borrower. If the Agent shall resign as Agent
under this Agreement, the Required Lenders shall appoint from among the Lenders
a successor agent for the Lenders reasonably acceptable to Borrower, provided,
however, consent of Borrower is not required if an Event of Default has occurred
and is continuing. If no successor agent is appointed prior to the effective
date of the resignation of the Agent, the Agent may thereupon appoint a
successor agent from among the Lenders reasonably acceptable to Borrower. Upon
the acceptance of its appointment as successor agent hereunder, such successor
agent shall succeed to all the rights, powers and duties of the retiring Agent
and the term "Agent" shall mean such successor agent and the retiring Agent's
appointment, powers and duties as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Article VIII and
Sections 9.4 and 9.5 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement. If no
successor agent has accepted appointment as Agent by the date which is thirty
(30) days following a retiring Agent's notice of resignation (or, if later, ten
(10) days after the date upon which the Agent designates a successor agent), the
retiring Agent's resignation shall nevertheless thereupon become effective and
the Lenders shall perform all of the duties of the Agent hereunder until such
time, if any, as the Required Lenders appoint a successor agent as provided for
above.
8.10 Collateral Matters.
------------------
(a) The Agent is authorized (but not required) on behalf of all the
Lenders, without the necessity of any notice to or further consent from the
Lenders, from time to time to take any action with respect to any Collateral or
the Collateral Documents which may be necessary to perfect and maintain
perfected the security interest in and Liens upon the Collateral granted
pursuant to the Collateral Documents.
(b) The Lenders irrevocably authorize the Agent, at its option and in its
discretion, to release any Lien granted to or held by the Agent upon any
Collateral:
56
(i) upon termination of the Commitments and payment in full of
all Loans and all other Obligations then payable under this Agreement and
under any other Loan Document;
(ii) constituting Property sold or to be sold or disposed of as
part of or in connection with any disposition permitted hereunder;
(iii) consisting of an instrument evidencing Indebtedness or of
any other debt instrument, if the indebtedness evidenced thereby has been
paid in full; or
(iv) if approved, authorized or ratified in writing by the
Required Lenders or all the Lenders, as the case may be, as provided in
subsection 9.1(f).
Upon request by the Agent at any time, the Lenders will confirm in writing the
Agent's authority to release particular types or items of Collateral pursuant to
this subsection 8.10(b).
(c) Each Lender agrees with and in favor of each other Lender (which
agreement shall not be for the benefit of the Borrower or any of its
Subsidiaries) that the Borrower's obligation to such Lender under this Agreement
and the other Loan Documents shall be equally and ratably secured by any real
property and/or other collateral now or hereafter securing any obligations of
the Borrower or any of its Subsidiaries to such Lender, whether or not the same
constitutes Collateral hereunder.
ARTICLE IX - MISCELLANEOUS
--------------------------
9.1 Amendments and Waivers. No amendment or waiver of any provision of
----------------------
this Agreement or any other Loan Document, and no consent with respect to any
departure by the Borrower therefrom, shall be effective unless the same shall be
in writing and signed by the Required Lenders, the Borrower and acknowledged by
the Agent, and then such waiver shall be effective only in the specific instance
and for the specific purpose for which given; provided, however, that no such
-------- -------
waiver, amendment, or consent shall, unless in writing and signed by all the
Lenders, the Borrower and acknowledged by the Agent, do any of the following:
(a) increase or extend the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to subsection 7.2(a)) or subject any Lender to
any additional obligations;
(b) postpone or delay any date fixed for, or waive, any payment of
principal, interest, fees or other amounts due to the Lenders (or any of them)
hereunder or under any Loan Document (other than any postponement or delay of
any date fixed for any mandatory prepayment of the Loans pursuant to subsection
1.8(c), 1.8(d), 1.8(e) or 1.8(g));
57
(c) reduce the principal of, or the rate of interest specified herein or
the amount of interest payable in cash specified herein on any Loan, or of any
fees or other amounts payable hereunder or under any Loan Document;
(d) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Loans which shall be required for the Lenders or any of
them to take any action hereunder;
(e) amend this Section 9.1 or the definition of Required Lenders or any
provision providing for consent or other action by all Lenders; or
(f) discharge any Subsidiary from their respective Obligations under
the Loan Documents, or release all or substantially all of the Collateral except
as otherwise may be provided in this Agreement or the other Loan Documents;
and, provided further, that no amendment, waiver or consent shall, unless in
-------- -------
writing and signed by the Agent in addition to the Required Lenders or all the
Lenders, as the case may be, affect the rights or duties of the Agent under this
Agreement or any other Loan Document.
9.2 Notices. (a) All notices, requests and other communications provided
-------
for hereunder shall be in writing (including, unless the context expressly
otherwise provides, by facsimile transmission) and mailed by certified or
registered mail, faxed or delivered by personal or overnight delivery, to the
address or facsimile number specified for notices on the applicable signature
page hereof; or, if directed to the Borrower or the Agent, to such other address
as shall be designated by such party in a written notice to each of the other
parties hereto given in compliance herewith, or, if directed to any other party
hereto, to such other address as shall be designated by such party in a written
notice given in compliance herewith to the Borrower and the Agent.
(b) All such notices, requests and communications shall be effective (i)
if delivered in person, when delivered, (ii) if delivered by telecopy, on the
date of transmission if transmitted on a Business Day before 4:00 p.m. Chicago
Time, otherwise on the next Business Day, (iii) if delivered by overnight
courier, one (1) Business Day after delivery to the courier properly addressed
and (iv) if mailed, upon the third Business Day after the date deposited into
the U.S. Mail, certified or registered; except that notices pursuant to Article
I shall not be effective until actually received by the Agent.
(c) The Borrower acknowledges and agrees that any agreement of the Agent
and the Lenders in Article I hereof to receive certain notices by telephone and
facsimile is solely for the convenience and at the request of the Borrower. The
Agent and the Lenders shall be entitled to rely on the authority of any Person
purporting to be a Person authorized by the Borrower to give such notice and the
Agent and the Lenders shall not have any liability to the Borrower or other
Person on account of any action taken or not taken by the Agent or the Lenders
in reliance upon
58
such telephonic or facsimile notice. The obligation of the Borrower to repay the
Loans shall not be affected in any way or to any extent by any failure by the
Agent and the Lenders to receive written confirmation of any telephonic or
facsimile notice or the receipt by the Agent and the Lenders of a confirmation
which is at variance with the terms understood by the Agent and the Lenders to
be contained in the telephonic or facsimile notice.
9.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay
------------------------------
in exercising, on the part of the Agent or any Lender, any right, remedy, power
or privilege hereunder, shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege.
9.4 Costs and Expenses. Whether or not the transactions contemplated
------------------
hereby shall be consummated, the Borrower shall pay or reimburse:
(a) Antares (including in its capacity as Agent) within fifteen (15) days
after demand (except as otherwise provided in subsection 2.1(f)) for all
reasonable out-of-pocket costs and expenses incurred by Antares (including in
its capacity as Agent) in connection with the development, preparation,
syndication, delivery, administration and execution of, and any amendment,
supplement, waiver or modification to (in each case, whether or not
consummated), this Agreement, any Loan Document and any other documents prepared
in connection herewith or therewith, and the consummation of the transactions
contemplated hereby and thereby, including the Attorney Costs incurred by
Antares (including in its capacity as Agent) with respect thereto;
(b) pay or reimburse each Lender and the Agent within five (5) Business
Days after demand for all out-of-pocket costs and expenses incurred by them in
connection with the enforcement, attempted enforcement, or preservation of any
rights or remedies during the existence of an Event of Default (including in
connection with any "workout" or restructuring regarding the Loans, and
including in any Insolvency Proceeding or appellate proceeding) under this
Agreement, any other Loan Document, and any such other documents, including
Attorney Costs, incurred by the Agent and/or any Lender; and
(c) pay or reimburse Agent within five (5) Business Days after demand for
all out-of-pocket appraisal, audit, environmental inspection and review
(including the allocated cost of such internal services), search and filing
costs, fees and expenses, incurred or sustained by Agent in connection with the
matters referred to under subsections (a) and (b) of this Section 9.4.
9.5 Indemnity. Whether or not the transactions contemplated hereby shall
---------
be consummated, the Borrower shall indemnify, defend and hold harmless each
Lender, the Agent and each of their respective officers, directors, employees,
counsel, agents and attorneys-in-fact (each, an "Indemnified Person") from and
------------------
against any and all liabilities, obligations, losses,
59
damages, penalties, actions, judgments, suits, costs, charges, expenses or
disbursements (including Attorney Costs):
(a) of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement and any
other Loan Documents, or the transactions contemplated hereby and thereby, and
with respect to any investigation, litigation or proceeding (including any
Insolvency Proceeding or appellate proceeding) related to this Agreement or the
Loans or the use of the proceeds thereof, whether or not any Indemnified Person
is a party thereto; and
(b) which may be incurred by or asserted against such Indemnified Person
in connection with or arising out of any pending or threatened investigation,
litigation or proceeding, or any action taken by any Person, with respect to any
Environmental Claim arising out of or related to any Property of Borrower or any
of its Subsidiaries;
(all the foregoing, collectively, the "Indemnified Liabilities"); provided, that
----------------------- --------
the Borrower shall have no obligation hereunder to any Indemnified Person with
respect to Indemnified Liabilities to the extent arising from the gross
negligence or willful misconduct of such Indemnified Person.
No action taken by legal counsel chosen by the Agent or any Lender in
defending against any investigation, litigation or proceeding or requested
remedial, removal or response action shall vitiate or any way impair the
Borrower's obligation and duty hereunder to indemnify and hold harmless the
Agent and each Lender. In no event shall any site visit, observation, or testing
by the Agent or any Lender (or any contractee of the Agent or any Lender) be
deemed a representation or warranty that Hazardous Materials are or are not
present in, on, or under, the site, or that there has been or shall be
compliance with any Environmental Law. Neither the Borrower nor any other Person
is entitled to rely on any site visit, observation, or testing by the Agent or
any Lender. Neither the Agent nor any Lender owes any duty of care to protect
the Borrower or any other Person against, or to inform the Borrower or any other
party of, any Hazardous Materials or any other adverse condition affecting any
site or Property. Neither the Agent nor any Lender shall be obligated to
disclose to the Borrower or any other Person any report or findings made as a
result of, or in connection with, any site visit, observation, or testing by the
Agent or any Lender.
The obligations in this Section 9.5 shall survive payment of all other
Obligations. At the election of any Indemnified Person, the Borrower shall
defend such Indemnified Person using legal counsel reasonably satisfactory to
such Indemnified Person in such Person's sole discretion, at the sole cost and
expense of the Borrower. All amounts owing under this Section 9.5 shall be paid
within thirty (30) days after demand.
9.6 Marshaling; Payments Set Aside. Neither the Agent nor any Lender
------------------------------
shall be under any obligation to marshal any assets in favor of the Borrower or
any other Person or against or in payment of any or all of the Obligations. To
the extent that the Borrower makes a payment or
60
payments to the Agent or any Lender, or the Agent or any Lender enforces its
Liens or exercises its rights of setoff, and such payment or payments or the
proceeds of such enforcement or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Agent in its
discretion) to be repaid to a trustee, receiver or any other party in connection
with any Insolvency Proceeding, or otherwise, then:
(a) to the extent of such recovery the Obligation or part thereof
originally intended to be satisfied shall be revived and continued in full force
and effect as if such payment had not been made or such enforcement or setoff
had not occurred; and
(b) each Lender severally agrees to pay to the Agent upon demand its
ratable share of the total amount so recovered from or repaid by the Agent.
9.7 Successors and Assigns. The provisions of this Agreement shall be
----------------------
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns; provided that any assignment by any Lender
--------
shall be subject to the provisions of Section 9.8 hereof, and provided further
-------- -------
that the Borrower may not assign or transfer any of its rights or obligations
under this Agreement without the prior written consent of the Agent and each
Lender.
9.8 Assignments, Participations, etc. (a) Any Lender may, with the
---------------------------------
written consent of Agent, and the written consent of Borrower, which consent of
Borrower shall not be unreasonably withheld and shall not be required if an
Event of Default has occurred and is continuing, at any time assign and delegate
to one or more Eligible Assignees (provided that no written consent of the Agent
or Borrower shall be required in connection with any assignment and delegation
by a Lender to an Eligible Assignee that is an Affiliate of such Lender) (each
an "Assignee") all, or any ratable part of all, of the Loans, the Commitments
--------
and the other rights and obligations of such Lender hereunder, in a minimum
amount of $5,000,000 or, if less, the entire Commitment of such Lender;
provided, however, that the Borrower and the Agent may continue to deal solely
-------- -------
and directly with such Lender in connection with the interest so assigned to an
Assignee until:
(i) written notice of such assignment, together with payment
instructions, addresses and related information with respect to the
Assignee, shall have been given to the Borrower and the Agent by such
Lender and the Assignee;
(ii) such Lender and its Assignee shall have delivered to the
Borrower and the Agent an Assignment and Acceptance in form and substance
reasonably satisfactory to Agent, such Lender and its Assignee (an
"Assignment and Acceptance"); and
-------------------------
(iii) the assignor Lender or the Assignee has paid to the Agent a
processing fee in the amount of $3,500.
61
(b) From and after the date that the Agent notifies the assignor Lender
that the Agent has received and provided its consent with respect to an executed
Assignment and Acceptance and payment of the above-referenced processing fee:
(i) the Assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it
pursuant to such Assignment and Acceptance, shall have the rights and
obligations of a Lender under this Agreement and the other Loan Documents;
and
(ii) the assignor Lender shall, to the extent that rights and
obligations hereunder and under the other Loan Documents have been assigned
by it pursuant to such Assignment and Acceptance, relinquish its rights and
be released from its obligations under the Loan Documents.
(c) Immediately upon the making of the processing fee payment to the Agent
in respect of the Assignment and Acceptance, this Agreement shall be deemed to
be amended to the extent, but only to the extent, necessary to reflect the
addition of the Assignee and the resulting adjustment of the Commitments arising
therefrom. The Commitment allocated to each Assignee shall reduce such
Commitment of the assigning Lender to the same extent.
(d) Any Lender may at any time sell to one or more commercial banks or
other Persons not Affiliates of the Borrower (a "Participant") participating
-----------
interests in any Loans, the Commitment of that Lender and the other interests of
that Lender (the "Originating Lender") hereunder and under the other Loan
------------------
Documents; provided, however, that:
-------- -------
(i) the Originating Lender's obligations under this Agreement shall
remain unchanged;
(ii) the Originating Lender shall remain solely responsible for the
performance of such obligations;
(iii) the Borrower and the Agent shall continue to deal solely and
directly with the Originating Lender in connection with the Originating
Lender's rights and obligations under this Agreement and the other Loan
Documents; and
(iv) no Lender shall transfer or grant any participating interest
under which the Participant shall have rights to approve any amendment to,
or any consent or waiver with respect to, this Agreement or any other Loan
Document, except to the extent such amendment, consent or waiver would
require unanimous consent of the Lenders as described in the first proviso
----- -------
to Section 9.1.
62
In the case of any such participation, the Participant shall not have any rights
under this Agreement, or any of the other Loan Documents, and all amounts
payable by the Borrower hereunder shall be determined as if such Lender had not
sold such participation.
(e) Notwithstanding any other provision contained in this Agreement or any
other Loan Document to the contrary, any Lender may assign all or any portion of
the Loans held by it to any Federal Reserve Lender or the United States Treasury
as collateral security pursuant to Regulation A of the Federal Reserve Board and
any Operating Circular issued by such Federal Reserve Lender, provided that any
--------
payment in respect of such assigned Loans made by the Borrower to or for the
account of the assigning or pledging Lender in accordance with the terms of this
Agreement shall satisfy the Borrower's obligations hereunder in respect to such
assigned Loans to the extent of such payment. No such assignment shall release
the assigning Lender from its obligations hereunder.
9.9 Confidentiality. Each of the Agent and the Lenders shall maintain in
---------------
confidence in accordance with its customary procedures for handling confidential
information, all written information that Borrower or any of its Subsidiaries,
or any of their authorized representatives, furnishes to the Agent or any Lender
on a confidential basis clearly marked as such ("Confidential Information"),
------------------------
other than any such Confidential Information that becomes generally available to
the public other than as a result of a breach by the Agent or any Lender of its
obligations hereunder or that is or becomes available to the Agent or such
Lender from a source other than Borrower or any of its Subsidiaries, or any of
their authorized representatives, and that is not, to the actual knowledge of
the recipient thereof, subject to obligations of confidentiality with respect
thereto; provided, however, that the Agent and each Lender shall in any event
--------
have the right to deliver copies of any such documents, and to disclose any such
information, to:
(a) its directors, officers, trustees, partners, employees, agents,
attorneys and professional consultants;
(b) any other Lender and any successor Agent;
(c) any Person to which such Lender offers to sell any Loan or any part
thereof or interest or participation therein (provided such Person agrees to
--------
keep such information confidential on the terms set forth in this Section 9.9);
(d) any federal or state regulatory authority or examiner, or any
insurance industry association, regulating or having jurisdiction over the Agent
or such Lender; and
(e) any other Person to which such delivery or disclosure may be
necessary or appropriate (i) in compliance with any applicable law, rule,
regulation or order, (ii) in response to any subpoena or other legal process or
informal investigative demand, (iii) in connection with any litigation to which
the Agent or such Lender is a party, or (iv) in connection with the enforcement
of the rights and remedies of the Agent or the Lenders under this Agreement and
the
63
other Loan Documents at any time when an Event of Default shall have occurred
and be continuing.
9.10 Set-off; Sharing of Payments. In addition to any rights and remedies
----------------------------
now or hereafter granted under applicable law, and not by way of limitation of
any such rights or remedies at any time and from time to time, upon the
occurrence and during the continuance of any Event of Default, each Lender is
hereby authorized by the Borrower, with reasonably prompt subsequent notice to
the Borrower or to any other Person (any prior or contemporaneous notice being
hereby expressly waived by the Borrower) to set off and to appropriate and to
apply any and all:
(a) balances held by such Lender at any of its offices for the account of
the Borrower or any of its Subsidiaries (regardless of whether such balances are
then due to the Borrower or any of its Subsidiaries); and
(b) other Property at any time held or owing by such Lender to or for the
credit or for the account of the Borrower or any of its Subsidiaries; against
and on account of any and all Obligations which are not paid when due; except
that no Lender shall exercise such right without the prior written consent of
the Agent. Any Lender having a right to set off shall purchase for cash (and the
other Lenders shall sell) participations in each such other Lender's pro rata
share of the Obligations as would be necessary to cause such Lender to share the
benefit of such right of set-off with each other Lender in accordance with their
respective pro rata shares of the Obligations. The Borrower agrees, to the
fullest extent permitted by law, that (i) any Lender may exercise its right to
set off with respect to amounts in excess of its pro rata share of the
Obligations and may sell participations to other Lenders, and (ii) any Lender so
purchasing a participation in the Obligations held by other Lenders may exercise
all rights of setoff, bankers' lien, counterclaim or similar rights with respect
to such participation as fully as if such Lender were a direct holder of
Obligations in the amount of such participation. The Borrower hereby grants to
each Lender a security interest in all such deposits and other Property, whether
now existing or hereafter arising, held by each Lender for the purposes set
forth herein.
9.11 Notification of Addresses, Lending Offices, Etc. Each Lender shall
-----------------------------------------------
notify the Agent in writing of any changes in the address to which notices to
the Lender should be directed, of addresses of its Lending Office, of payment
instructions in respect of all payments to be made to it hereunder and of such
other administrative information as the Agent shall reasonably request.
9.12 Counterparts. This Agreement may be executed by one or more of the
------------
parties to this Agreement in any number of separate counterparts, each of which,
when so executed, shall be deemed an original, and all of said counterparts
taken together shall be deemed to constitute but one and the same instrument. A
set of the copies of this Agreement signed by all the parties shall be lodged
with each of the Borrower and the Agent.
9.13 Severability. The illegality or unenforceability of any provision of
------------
this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the
64
legality or enforceability of the remaining provisions of this Agreement or any
instrument or agreement required hereunder.
9.14 Captions. The captions and headings of this Agreement are for
--------
convenience of reference only and shall not affect the interpretation of this
Agreement.
9.15 Independence of Provisions. The parties acknowledge that this
--------------------------
Agreement and other Loan Documents may use several different limitations, tests
or measurements to regulate the same or similar matters, and that such
limitations, tests and measurements are cumulative and must each be performed,
except as expressly stated to the contrary in this Agreement.
9.16 Interpretation. This Agreement is the result of negotiations among
--------------
and has been reviewed by counsel to the Agent, the Borrower and other parties,
and is the product of all parties hereto. Accordingly, this Agreement and the
other Loan Documents shall not be construed against the Lenders or the Agent
merely because of the Agent's or Lenders' involvement in the preparation of such
documents and agreements.
9.17 No Third Parties Benefited. This Agreement is made and entered into
--------------------------
for the sole protection and legal benefit of the Borrower, the Lenders and the
Agent, and their permitted successors and assigns, and no other Person shall be
a direct or indirect legal beneficiary of, or have any direct or indirect cause
of action or claim in connection with, this Agreement or any of the other Loan
Documents. Neither the Agent nor any Lender shall have any obligation to any
Person not a party to this Agreement or other Loan Documents.
9.18 Governing Law and Jurisdiction.
------------------------------
(A) THIS AGREEMENT AND EACH NOTE SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE INTERNAL LAWS AND DECISIONS OF THE STATE OF ILLINOIS,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES; PROVIDED THAT THE AGENT AND THE
LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(B) BORROWER HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN
CHICAGO IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN
DOCUMENTS AND BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF
SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND
IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT
IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF AGENT OR ANY
LENDER TO BRING PROCEEDINGS AGAINST BORROWER IN THE COURTS OF ANY OTHER
JURISDICTION. ANY JUDICIAL PROCEEDING BY
65
BORROWER AGAINST AGENT OR ANY LENDER OR ANY AFFILIATE THEREOF INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO,
ILLINOIS.
(C) BORROWER DESIGNATES AND APPOINTS CT CORPORATION SYSTEM AND SUCH
OTHER PERSONS AS MAY HEREAFTER BE SELECTED BY BORROWER WHICH IRREVOCABLY AGREE
IN WRITING TO SO SERVE AS ITS AGENT TO RECEIVE ON ITS BEHALF SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY
ACKNOWLEDGED BY BORROWER TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT.
A COPY OF ANY SUCH PROCESS SO SERVED SHALL BE MAILED BY REGISTERED MAIL TO
BORROWER AT ITS ADDRESS PROVIDED IN SUBSECTION 9.2 EXCEPT THAT UNLESS OTHERWISE
PROVIDED BY APPLICABLE LAW, ANY FAILURE TO MAIL SUCH COPY SHALL NOT AFFECT THE
VALIDITY OF SERVICE OF PROCESS. IF ANY AGENT APPOINTED BY BORROWER REFUSES TO
ACCEPT SERVICE, BORROWER HEREBY AGREES THAT SERVICE UPON IT BY MAIL SHALL
CONSTITUTE SUFFICIENT NOTICE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
9.19 Waiver of Jury Trial. THE BORROWER, THE LENDERS AND THE AGENT EACH
--------------------
WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST
ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT
CLAIMS, OR OTHERWISE. THE BORROWER, THE LENDERS AND THE AGENT EACH AGREE THAT
ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A
JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR
RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO
ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART,
TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS.
9.20 Entire Agreement; Release. This Agreement, together with the other
-------------------------
Loan Documents, embodies the entire agreement and understanding among the
Borrower, the Lenders and the Agent, and supersedes all prior or contemporaneous
Agreements and understandings of such Persons, oral or written, relating to the
subject matter hereof and thereof, except for the fee letter referenced in
subsection 1.9(a), and any prior arrangements made with respect to the
66
payment by the Borrower of (or any indemnification for) any fees, costs or
expenses payable to or incurred (or to be incurred) by or on behalf of the Agent
or the Lenders. Execution of this Agreement by the Borrower constitutes a full,
complete and irrevocable release of any and all claims which the Borrower may
have at law or in equity in respect of all prior discussions and understandings,
oral or written, relating to the subject matter of this Agreement and the other
Loan Documents. Neither Agent nor any Lender shall be liable to Borrower or any
other Person on any theory of liability for any special, indirect, consequential
or punitive damages.
ARTICLE X - TAXES, YIELD PROTECTION AND ILLEGALITY
--------------------------------------------------
10.1 Taxes. (a) Subject to subsection 10.1(g), any and all payments by
the Borrower to each Lender or the Agent under this Agreement shall be made free
and clear of, and without deduction or withholding for, any and all present or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Lender and the
Agent, such taxes (including income taxes or franchise taxes) as are imposed on
or measured by each Lender's net income by the jurisdiction under the laws of
which such Lender or the Agent, as the case may be, is organized or maintains a
Lending Office or any political subdivision thereof (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes").
-----
(b) In addition, the Borrower shall pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
other Loan Documents (hereinafter referred to as "Other Taxes").
-----------
(c) Subject to subsection 10.1(g), the Borrower shall indemnify and
hold harmless each Lender and the Agent for the full amount of Taxes or Other
Taxes (including any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 10.1) paid by the Lender or the Agent and any
liability (including penalties, interest, additions to tax and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. Payment under this indemnification shall be made
within thirty (30) days from the date the Lender or the Agent makes written
demand therefor.
(d) If the Borrower shall be required by law to deduct or withhold any
Taxes or Other Taxes from or in respect of any sum payable hereunder to any
Lender or the Agent, then, subject to subsection 10.1(g):
(i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to
additional sums payable under this Section 10.1) such Lender or the Agent,
as the case may be, receives an amount equal to the sum it would have
received had no such deductions been made;
67
(ii) the Borrower shall make such deductions; and
(iii) the Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law.
(e) Within thirty (30) days after the date of any payment by the
Borrower of Taxes or Other Taxes, the Borrower shall furnish to the Agent the
original or a certified copy of a receipt evidencing payment thereof, or other
evidence of payment satisfactory to the Agent.
(f) Each Lender that is not a citizen or resident of the United States
of America, a corporation, partnership or other entity created or organized in
or under the laws of the United States (or any jurisdiction thereof), or any
estate or trust that is subject to federal income taxation regardless of the
source of its income (a "Non-U.S. Lender") shall deliver to the Borrower and the
Agent two copies of each U.S. Internal Revenue Service Form 1001 or Form 4224,
or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest", a Form W-8, or any subsequent versions thereof
or successors thereto (and, if such Non-U.S. Lender delivers a Form W-8, a
certificate representing that such Non-U.S. Lender is not a "bank" for purposes
of Section 881(c) of the Code, is not a 10-percent shareholder (within the
meaning of Section 871(h)(3)(B) of the Code) of Borrower and is not a controlled
foreign corporation related to Borrower (within the meaning of Section 864(d)(4)
of the Code)), properly completed and duly executed by such Non-U.S. Lender
claiming complete exemption from, or a reduced rate of, U.S. federal withholding
tax on all payments by Borrower under this Agreement and the other Loan
Documents. Such forms shall be delivered by each Non-U.S. Lender on or before
the date it becomes a party to this Agreement. In addition, each Non-U.S.
Lender shall deliver such forms promptly upon the obsolescence or invalidity of
any form previously delivered by such Non-U.S. Lender. Each Non-U.S. Lender
shall promptly notify the Borrower at any time it determines that it is no
longer in a position to provide any previously delivered certificate to the
Borrower (or any other form of certification adopted by the U.S. taxing
authorities for such purpose). Notwithstanding any other provision of this
subsection, a Non-U.S. Lender shall not be required to deliver any form pursuant
to this subsection that such Non-U.S. Lender is not legally able to deliver.
(g) The Borrower will not be required to pay any additional amounts in
respect of United States Federal income tax pursuant to subsection 10.1(d) to
any Lender for the account of any Lending Office of such Lender:
(i) if the obligation to pay such additional amounts would not
have arisen but for a failure by such Lender to comply with its obligations
under subsection 10.1(f) in respect of such Lending Office;
(ii) if such Lender shall have delivered to the Borrower a Form
1001 and/or Form 4224 in respect of such Lending Office pursuant to
subsection 10.1(f), and such
68
Lender shall not at any time be entitled to exemption from deduction or
withholding of United States Federal income tax in respect of payments by
the Borrower hereunder for the account of such Lending Office for any
reason other than a change in United States law, treaty or regulations or
in the official interpretation of such law or regulations by any
governmental authority charged with the interpretation or administration
thereof (whether or not having the force of law) after the date of delivery
of such Form 1001 and/or Form 4224; or
(iii) if the Lender shall have delivered to the Borrower a Form W-8
in respect of such Lending Office pursuant to Subsection 10.1(f), and such
Lender shall not at any time be entitled to exemption from deduction or
withholding of United States Federal income tax in respect of payments by
the Borrowers hereunder for the account of such Lending Office for any
reason other than a change in the United States law or regulations or any
applicable tax treaty or regulations or in the official interpretation of
any such law, treaty or regulations by any governmental authority charged
with the interpretation or administration thereof (whether or not having
the force of law) after the date of delivery of such Form W-8.
(h) If, at any time, the Borrower requests any Lender to deliver any
forms or other documentation pursuant to subsection 10.1(f), then the Borrower
shall, on demand of such Lender through the Agent, reimburse such Lender for any
costs and expenses (including Attorney Costs) reasonably incurred by such Lender
in the preparation or delivery of such forms or other documentation.
(i) If the Borrower is required to pay additional amounts to any
Lender or the Agent pursuant to subsection 10.1(d), then such Lender shall use
its reasonable best efforts (consistent with legal and regulatory restrictions)
to change the jurisdiction of its Lending Office so as to eliminate any such
additional payment by the Borrower which may thereafter accrue if such change in
the judgment of such Lender is not otherwise disadvantageous to such Lender.
10.2 Illegality. (a) If after the date hereof any Lender shall determine
that the introduction of any Requirement of Law, or any change in any
Requirement of Law or in the interpretation or administration thereof, has made
it unlawful, or that any central bank or other Governmental Authority has
asserted that it is unlawful, for any Lender or its Lending Office to make LIBOR
Loans, then, on notice thereof by the Lender to the Borrower through the Agent,
the obligation of that Lender to make LIBOR Rate Loans shall be suspended until
the Lender shall have notified the Agent and the Borrower that the circumstances
giving rise to such determination no longer exists.
(b) Subject to clause (c) below, if a Lender shall determine that it
is unlawful to maintain any LIBOR Rate Loan, the Borrower shall prepay in full
all LIBOR Rate Loans of that Lender then outstanding, together with interest
accrued thereon, either on the last day of the Interest Period thereof if the
Lender may lawfully continue to maintain such LIBOR Rate Loans
69
to such day, or immediately, if the Lender may not lawfully continue to maintain
such LIBOR Rate Loans, together with any amounts required to be paid in
connection therewith pursuant to Section 10.4.
(c) If the obligation of any Lender to make or maintain LIBOR Rate
Loans has been terminated, the Borrower may elect, by giving notice to the
Lender through the Agent that all Loans which would otherwise be made by any
such Lender as LIBOR Rate Loans shall be instead Base Rate Loans.
(d) Before giving any notice to the Agent pursuant to this Section
10.2, the affected Lender shall designate a different Lending Office with
respect to its LIBOR Rate Loans if such designation will avoid the need for
giving such notice or making such demand and will not, in the judgment of the
Lender, be illegal or otherwise disadvantageous to the Lender.
10.3 Increased Costs and Reduction of Return. (a) If any Lender shall
---------------------------------------
determine that, due to either (i) the introduction of or any change in or in the
interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law) made, in the case of clause (i) or (ii)
subsequent to the date hereof, there shall be any increase in the cost to such
Lender of agreeing to make or making, funding or maintaining any LIBOR Rate
Loans, then the Borrower shall be liable for, and shall from time to time,
within 30 days of demand therefor by such Lender (with a copy of such demand to
the Agent), pay to the Agent for the account of such Lender, additional amounts
as are sufficient to compensate such Lender for such increased costs.
(b) If any Lender shall have determined that:
(i) the introduction of any Capital Adequacy Regulation;
(ii) any change in any Capital Adequacy Regulation;
(iii) any change in the interpretation or administration of any
Capital Adequacy Regulation by any central bank or other Governmental
Authority charged with the interpretation or administration thereof; or
(iv) compliance by the Lender (or its Lending Office) or any
corporation controlling the Lender, with any Capital Adequacy Regulation;
affects the amount of capital required or expected to be maintained by the
Lender or any corporation controlling the Lender and (taking into consideration
such Lender's or such corporation's policies with respect to capital adequacy
and such Lender's desired return on capital) determines that the amount of such
capital is increased as a consequence of its Commitment(s), loans, credits or
obligations under this Agreement, then, within 30 days of demand of such Lender
(with a copy to the Agent), the Borrower shall upon demand pay to the Lender,
from time to time
70
as specified by the Lender, additional amounts sufficient to compensate the
Lender for such increase.
10.4 Funding Losses. The Borrower agrees to reimburse each Lender and to
--------------
hold each Lender harmless from any loss or expense which the Lender may sustain
or incur as a consequence of:
(a) the failure of the Borrower to make any payment or mandatory
prepayment of principal of any LIBOR Rate Loan (including payments made after
any acceleration thereof);
(b) the failure of the Borrower to borrow, continue or convert a Loan
after the Borrower has given (or is deemed to have given) a Notice of Borrowing
or a Notice of Conversion/ Continuation;
(c) the failure of the Borrower to make any prepayment after the Borrower
has given a notice in accordance with Section 1.7;
(d) the prepayment (including pursuant to Section 1.8) of a LIBOR Rate
Loan on a day which is not the last day of the Interest Period with respect
thereto; or
(e) the conversion pursuant to Section 1.6 of any LIBOR Rate Loan to a
Base Rate Loan on a day that is not the last day of the applicable Interest
Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its LIBOR Rate Loans hereunder or from fees
payable to terminate the deposits from which such funds were obtained. Solely
for purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 10.4 and under subsection 10.3(a): each LIBOR Rate Loan made by a
Lender (and each related reserve, special deposit or similar requirement) shall
be conclusively deemed to have been funded at the LIBOR used in determining the
interest rate for such LIBOR Rate Loan by a matching deposit or other borrowing
in the interbank eurodollar market for a comparable amount and for a comparable
period, whether or not such LIBOR Rate Loan is in fact so funded.
10.5 Inability to Determine Rates. If the Agent shall have determined in
----------------------------
good faith that for any reason adequate and reasonable means do not exist for
ascertaining the LIBOR for any requested Interest Period with respect to a
proposed LIBOR Rate Loan or that the LIBOR applicable pursuant to subsection
1.3(a) for any requested Interest Period with respect to a proposed LIBOR Rate
Loan does not adequately and fairly reflect the cost to the Lenders of funding
such Loan, the Agent will forthwith give notice of such determination to the
Borrower and each Lender. Thereafter, the obligation of the Lenders to make or
maintain LIBOR Rate Loans hereunder shall be suspended until the Agent revokes
such notice in writing. Upon receipt of such notice, the Borrower may revoke any
Notice of Borrowing or Notice of Conversion/Continuation then submitted by it.
If the Borrower does not revoke such notice, the Lenders shall make,
71
convert or continue the Loans, as proposed by the Borrower, in the amount
specified in the applicable notice submitted by the Borrower, but such Loans
shall be made, converted or continued as Base Rate Loans.
10.6 Reserves on LIBOR Rate Loans. The Borrower shall pay to each Lender,
----------------------------
as long as such Lender shall be required under regulations of the Federal
Reserve Board to maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency funds or deposits (currently known as
"Eurocurrency liabilities"), additional costs on the unpaid principal amount of
each LIBOR Rate Loan equal to actual costs of such reserves allocated to such
Loan by the Lender (as determined by the Lender in good faith, which
determination shall be conclusive absent demonstrable error), payable on each
date on which interest is payable on such Loan provided the Borrower shall have
received at least fifteen (15) days' prior written notice (with a copy to the
Agent) of such additional interest from the Lender. If a Lender fails to give
notice fifteen (15) days prior to the relevant Interest Payment Date, such
additional interest shall be payable fifteen (15) days from receipt of such
notice.
10.7 Certificates of Lenders. Any Lender claiming reimbursement or
-----------------------
compensation pursuant to this Article X shall deliver to the Borrower (with a
copy to the Agent) a certificate setting forth in reasonable detail the amount
payable to the Lender hereunder and such certificate shall be conclusive and
binding on the Borrower in the absence of manifest error.
10.8 Survival. The agreements and obligations of the Borrower in this
--------
Article X shall survive the payment of all other Obligations.
10.9 Replacement of Lender in Respect of Increased Costs. Within
---------------------------------------------------
forty-five (45) days after receipt by the Borrower of written notice and demand
from any Lender (an "Affected Lender") for payment of additional costs as
provided in subsections 10.1, 10.3 and 10.6, the Borrower may, at its option,
notify the Agent and such Affected Lender of the Borrower's intention to obtain,
at the Borrower's expense, a replacement Lender ("Replacement Lender") for such
Affected Lender, which Replacement Lender shall be reasonably satisfactory to
the Agent. In the event the Borrower obtains a Replacement Lender within ninety
(90) days following notice of its intention to do so, the Affected Lender shall
sell and assign its Loans and Commitments to such Replacement Lender, provided
--------
that the Borrower has reimbursed such Affected Lender for its increased costs
for which it is entitled to reimbursement under this Agreement through the date
of such sale and assignment.
ARTICLE XI - DEFINITIONS
------------------------
11.1 Defined Terms. The following terms are defined in the Sections or
-------------
subsections referenced opposite such terms:
"Affected Lender" 10.9
72
"Assignee" 9.8(a)
"Assignment and Acceptance" 9.8(a)(ii)
"Borrower" Preamble
"Borrowing Base" 1.1(b)
"Capital Expenditures" Exhibit 4.2(b)
"Commitment Fee" 1.9(b)
"Confidential Information" 9.9
"EBITDA" Exhibit 4.2(b)
"Event of Default" 7.1
"Excess Cash Flow" Exhibit 1.8(d)
"Fixed Charge Coverage Ratio" Exhibit 4.2(b)
"Form 1001" 10.1(f)
"Form 4224" 10.1(f)
"Indemnified Person" 9.5
"Indemnified Liabilities" 9.5
"Interest Coverage Ratio" Exhibit 4.2(b)
"Interest Settlement Date" 1.12(d)
"Lender" Preamble
"Lender Letter of Credit" 1.1(c)
"Letter of Credit Participation Agreement" 1.1(c)
"Letter of Credit Participation Fee" 1.9(b)
"Letter of Credit Participation Fee Ratio" 1.12(d)
"Leverage Ratio" Exhibit 4.2(b)
"Maximum Revolving Loan Balance" 1.1(b)
"Originating Lender" 9.8
"Other Taxes" 10.1(b)
"Participant" 9.8(d)
"Permitted Liens" 5.1
"Restricted Payments" 5.11
"Replacement Lender" 10.9
"Revolving Loan Commitment" 1.1(b)
"Revolving Loan" 1.1(b)
"Settlement Date" 1.12(b)
"Taxes" 10.1(a)
"Term Loan" 1.1(a)
"Term Loan Commitment" 1.1(a)
"Year 2000 Problem" 3.22
In addition to the terms defined elsewhere in this Agreement, the following
terms have the following meanings:
"Account" means, as at any date of determination, all "accounts" (as such
term is defined in the UCC) of the Borrower, including, without limitation, the
unpaid portion of the obligation
73
of a customer of the Borrower in respect of Inventory purchased by and shipped
to such customer and/or the rendition of services by the Borrower, as stated on
the respective invoice of the Borrower, net of any credits, rebates or offsets
owed to such customer.
"Account Debtor" means the customer of the Borrower who is obligated on or
under an Account.
"Acquisition" means any transaction or series of related transactions for
the purpose of or resulting, directly or indirectly, in (a) the acquisition of
all or substantially all of the assets of a Person, or of any business or
division of a Person, (b) the acquisition, of in excess of fifty percent (50%)
of the capital stock, partnership interests or equity of any Person or otherwise
causing any Person to become a Subsidiary of the Borrower, or (c) a merger or
consolidation or any other combination with another Person.
"Affiliate" means, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, by contract or otherwise. Without
limitation, any director, executive officer or beneficial owner of five percent
(5%) or more of the equity of a Person shall for the purposes of this Agreement,
be deemed to control the other Person. Notwithstanding the foregoing, neither
the Agent nor any Lender shall be deemed an "Affiliate" of the Borrower or of
any Subsidiary of the Borrower.
"Agent" means Antares in its capacity as agent for the Lenders hereunder,
and any successor agent.
"Agent-Related Persons" means Antares and any successor agent arising under
Section 8.9, together with their respective Affiliates, and the officers,
directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.
"Aggregate Commitment" means the combined Commitments of the Lenders, which
shall initially be in the amount of $84,000,000, as such amount may be reduced
from time to time pursuant to this Agreement.
"Aggregate Revolving Loan Commitment" means the combined Revolving Loan
Commitments of the Lenders, which shall initially be in the amount of
$30,000,000, as such amount may be reduced from time to time pursuant to this
Agreement.
"Aggregate Term Loan Commitment" means the combined Term Loan A Commitments
and the combined Term Loan B Commitments of the Lenders, which shall initially
be in the amount of $54,000,000, as such amount may be reduced from time to time
pursuant to this Agreement.
74
"Aggregate Term Loan A Commitment" means the combined Term Loan A
Commitments of the Lenders, which shall initially be in the amount of
$24,000,000, as such amount may be reduced from time to time pursuant to this
Agreement.
"Aggregate Term Loan B Commitment" means the combined Term Loan B
Commitments of the Lenders, which shall initially be in the amount of
$30,000,000, as such amount may be reduced from time to time pursuant to this
Agreement.
"Antares" means Antares Capital Corporation, a Delaware corporation, acting
in its capacity as agent for the Lenders hereunder.
"Applicable Margin" means (a) for the period from the Closing Date through
July 31, 2000, (i) the Revolving Loan Commitment and the Term Loan A with
respect to Base Rate Loans, 1.50%, and with respect to LIBOR Rate Loans, 2.75%,
and (ii) the Term Loan B with respect to the Base Rate Loans, 2.00%, and with
respect to LIBOR Rate Loans, 3.25% and (b) commencing August 1, 2000, with
respect to LIBOR Rate Loans and Base Rate Loans, respectively, the applicable
LIBOR margin or Base Rate margin in effect from time to time determined based on
the applicable Leverage Ratio then in effect pursuant to the appropriate column
under the table below:
Revolving Loan and Term Loan A
LIBOR Base Rate
Leverage Ratio Margin Margin
-------------- ------ ------
4.5 to 1.0 or
greater 2.75% 1.50%
4.0 to 1.0 or
greater, but less
than 4.5 to 1.0 2.50% 1.25%
less than 4.0 to 1.0 2.25% 1.00%
Term Loan B
LIBOR Base Rate
Leverage Ratio Margin Margin
-------------- ------ ------
75
4.5 to 1.0 or
greater 3.25% 2.00%
4.0 to 1.0 or
greater, but less
than 4.5 to 1.0 3.00% 1.75%
less than 4.0 to 1.0 3.00% 1.75%
The Applicable Margin shall be adjusted from time to time upon delivery to the
Agent of the financial statements for June, September, December and March
required to be delivered pursuant to Section 4.1 hereof accompanied by a written
calculation of the Leverage Ratio certified on behalf of Borrower by a
Responsible Officer as of the end of the calendar quarter for which such
financial statements are delivered. The first adjustment shall occur August 1,
2000 based on Leverage Ratio for the twelve month period ending June 30, 2000.
If such calculation indicates that the Applicable Margin shall increase or
decrease, then on the first day of the month following the date of delivery of
such financial statements and written calculation the Applicable Margin shall be
adjusted in accordance therewith; provided, however, that if Borrower shall fail
-------- -------
to deliver any such financial statements for any such fiscal month by the date
required pursuant to Section 4.1, then, at Agent's election, effective as of the
first day of the month following the end of the fiscal month during which such
financial statements were to have been delivered, and continuing through the
first day of the month following the date (if ever) when such financial
statements and such written calculation are finally delivered, the Applicable
Margin shall be conclusively presumed to equal the highest Applicable Margin
specified in the pricing table set forth above.
"Attorney Costs" means and includes all reasonable fees and disbursements
of any law firm or other external counsel, the allocated cost of internal legal
services and all disbursements of internal counsel.
"B & L" means Bausch & Lomb Incorporated, a New York corporation.
"B & L License Agreement" means that certain license agreement by and
between B & L and Bushnell dated January 1, 1999, as the same may be amended,
restated, supplemented or otherwise modified from time to time as permitted
herein.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11
U.S.C. (S)101, et seq.), as amended and in effect from time to time and the
-------
regulations issued from time to time thereunder.
"Base Rate" means, for any day, a rate of interest equal to the rate of
interest which is identified as the "Prime Rate" and normally published in the
Money Rates section of The Wall
--------
76
Street Journal (or, if such rate ceases to be so published, as quoted from such
--------------
other generally available and recognizable source as the Agent may select).
"Base Rate Loan" means a Loan that bears interest based on the Base Rate.
"Borrowing" means a borrowing hereunder consisting of Loans made to the
Borrower on the same day by the Lenders pursuant to Article I.
"Borrowing Base Certificate" means a certificate of the Borrower, in
substantially the form of Exhibit 11.1(a) hereto, duly completed as of a date
---------------
acceptable to the Agent in its sole discretion.
"Bushnell" means Bushnell Corporation, a Delaware corporation.
"Bushnell Canada" means Bushnell Corporation of Canada, an Ontario
corporation.
"Business Day" means any day other than a Saturday, Sunday or other day on
which commercial banks in Chicago, Illinois or New York, New York are authorized
or required by law to close and, if the applicable Business Day relates to any
---
LIBOR Rate Loan, a day on which dealings are carried on in the London interbank
market.
"Capital Adequacy Regulation" means any guideline, request or directive of
any central bank or other Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in each case, regarding
capital adequacy of any Lender or of any corporation controlling a Lender.
"Capital Lease" means any leasing or similar arrangement which, in
accordance with GAAP, is classified as a capital lease.
"Capital Lease Obligations" means all monetary obligations of the Borrower
or any of its Subsidiaries under any Capital Leases.
"Cash Equivalents" means: (a) securities issued or fully guaranteed or
insured by the United States Government or any agency thereof having maturities
of not more than twelve (12) months from the date of acquisition; (b)
certificates of deposit, time deposits, repurchase agreements, reverse
repurchase agreements, or bankers' acceptances, having in each case a tenor of
not more than twelve (12) months, issued by any Lender, or by any U.S.
commercial bank or any branch or agency of a non-U.S. bank licensed to conduct
business in the U.S. having combined capital and surplus of not less than
$100,000,000; (c) commercial paper of an issuer rated at least A-2 by Standard &
Poor's Corporation or P-2 by Xxxxx'x Investors Service Inc. and in either case
having a tenor of not more than 270 days; (d) investments in money market mutual
funds having assets in excess of $1,000,000,000.00 or more substantially all of
the assets are comprised of securities of the types described in clauses (a)
through (c) above.
77
"Closing Date" means the date on which all conditions precedent set forth
in Section 2.1 are satisfied or waived by the Agent and all Lenders and the
initial Loan has been funded pursuant to the terms hereof.
"Code" means the Internal Revenue Code of 1986, and regulations promulgated
thereunder.
"Collateral" means all property and interests in property and proceeds
thereof now owned or hereafter acquired by the Borrower, WSR or any other Person
as debtor and their respective Subsidiaries in or upon which a Lien now or
hereafter exists in favor of any Lender or the Agent for the benefit of the
Lenders, whether under this Agreement or under any other documents executed by
any such Persons and delivered to the Agent.
"Collateral Documents" means, collectively, the Security Agreements, the
Mortgages, the Guaranties, the Pledge Agreements, the Negative Pledge Agreement
and all other security agreements, patent and trademark assignments, lease
assignments, guarantees and other similar agreements, and all amendments,
restatements, modifications or supplements thereof or thereto, by or between any
one or more of, the Borrower or its Subsidiaries and any Lender or the Agent for
the benefit of the Lenders now or hereafter delivered to the Lenders or the
Agent pursuant to or in connection with the transactions contemplated hereby,
and all financing statements (or comparable documents now or hereafter filed in
accordance with the UCC or comparable law) against, the Borrower or its
Subsidiaries as debtor in favor of any Lender or the Agent for the benefit of
the Lenders, as secured party.
"Commitment" means, for each Lender, the sum of its Revolving Loan
Commitment and Term Loan A Commitment and Term Loan B Commitment.
"Commitment Percentage" means, as to any Lender, the percentage equivalent
of such Lender's Revolving Loan Commitment, Term Loan A Commitment or Term Loan
B Commitment divided by the Aggregate Revolving Loan Commitment or Aggregate
Term Loan A Commitment or Aggregate Term Loan B Commitment, as applicable.
"Contingent Obligation" means, as to any Person, any direct or indirect
liability, contingent or otherwise, of that Person: (i) with respect to any
indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the primary
effect thereof, is to provide assurance to the obligee of such liability that
such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto; (ii) with
respect to any letter of credit issued for the account of that Person or as to
which that Person is otherwise liable for reimbursement of drawings; (iii) under
any Rate Contracts; (iv) to make take-or-pay or similar payments if required
regardless of nonperformance by any other party or parties to an agreement; or
(v) for the obligations of another through any agreement to purchase, repurchase
or otherwise acquire such obligation or any property
78
constituting security therefor, to provide funds for the payment or discharge of
such obligation or to maintain the solvency, financial condition or any balance
sheet item or level of income of another Person. The amount of any Contingent
Obligation shall be equal to the amount of the obligation so guaranteed or
otherwise supported or, if not a fixed and determined amount, the maximum amount
so guaranteed or supported.
"Contractual Obligations" means, as to any Person, any provision of any
security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument, document or agreement to
which such Person is a party or by which it or any of its property is bound.
"Controlled Group" means the Borrower and all Persons (whether or not
incorporated) under common control or treated as a single employer with the
Borrower pursuant to Section 414(b), (c), (m) or (o) of the Code.
"Conversion Date" means any date on which the Borrower converts a Base Rate
Loan to a LIBOR Rate Loan or a LIBOR Rate Loan to a Base Rate Loan.
"Default" means any event or circumstance which, with the giving of notice,
the lapse of time, or both, would (if not cured or otherwise remedied during
such time) constitute an Event of Default.
"Disposition" means (a) the sale, lease (as lessor), conveyance or other
disposition of Property, other than sales or other dispositions expressly
permitted under subsection 5.2(a) and (b) the sale or transfer by the Borrower
or any Subsidiary of the Borrower of any equity securities issued by any
Subsidiary of the Borrower and held by such transferor Person.
"Dollars", "dollars" and "$" each mean lawful money of the United States of
America.
"Eligible Assignee" means any of: (a) a commercial bank organized under the
laws of the United States, or any State thereof; (b) a commercial bank organized
under the laws of any other country; (c) a finance company, insurance company or
other financial institution or fund which is engaged in making, purchasing or
otherwise investing in commercial loans for its own account in the ordinary
course of its business; (d) a trust, limited or general partnership, limited
liability company, corporation or other limited purpose entity formed for the
purpose of effecting a securitization of, among other things, the Loans.
"Environmental Claims" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for release or injury
to the environment or threat to public health, personal injury (including
sickness, disease or death), property damage, natural resources damage, or
otherwise alleging liability or responsibility for damages (punitive or
otherwise), cleanup, removal, remedial or response costs, restitution, civil or
criminal penalties, injunctive relief, or
79
other type of relief, resulting from or based upon the presence, placement,
discharge, emission or release (including intentional and unintentional,
negligent and non-negligent, sudden or non-sudden, accidental or non-accidental,
placement, spills, leaks, discharges, emissions or releases) of any Hazardous
Material at, in, or from Property, whether or not owned by the Borrower.
"Environmental Laws" means all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authorities, in each case
relating to environmental, health, safety and land use matters; including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, the Clean Air Act, the Federal Water Pollution Control
Act of 1972, the Solid Waste Disposal Act, the Federal Resource Conservation and
Recovery Act, the Toxic Substances Control Act, the Emergency Planning and
Community Right-to-Know Act.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
under common control with the Borrower within the meaning of Section 414(b),
414(c) or 414(m) of the Code.
"ERISA Event" means (a) a Reportable Event with respect to a Qualified Plan
or a Multiemployer Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate
from a Qualified Plan subject to Section 4063 of ERISA during a plan year in
which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA);
(c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from
a Multiemployer Plan; (d) the filing of a notice of intent to terminate, the
treatment of a plan amendment as a termination under Section 4041 or 4041A of
ERISA or the commencement of proceedings by the PBGC to terminate a Qualified
Plan or Multiemployer Plan subject to Title IV of ERISA; (e) a failure by the
Borrower or any member of the Controlled Group to make required contributions to
a Qualified Plan or Multiemployer Plan; (f) an event or condition which might
reasonably be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Qualified
Plan or Multiemployer Plan; (g) the imposition of any liability under Title IV
of ERISA, other than PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon the Borrower or any ERISA Affiliate; (h) an application for a
funding waiver or an extension of any amortization period pursuant to Section
412 of the Code with respect to any Plan; (i) a non-exempt prohibited
transaction occurs with respect to any Plan for which the Borrower or any
Subsidiary of the Borrower may be directly or indirectly liable; or (j) a
violation of the applicable requirements of Section 404 or 405 of ERISA or the
exclusive benefit rule under Section 401(a) of the Code by any fiduciary or
disqualified person with respect to any Plan for which the Borrower or any
member of the Controlled Group may be directly or indirectly liable.
80
"Event of Loss" means, with respect to any Property, any of the following:
(a) any loss, destruction or damage of such Property; (b) any pending or
threatened institution of any proceedings for the condemnation or seizure of
such Property or for the exercise of any right of eminent domain; or (c) any
actual condemnation, seizure or taking, by exercise of the power of eminent
domain or otherwise, of such Property, or confiscation of such Property or the
requisition of the use of such Property.
"Exchange Act" means the Securities and Exchange Act of 1934, and
regulations promulgated thereunder.
"Federal Reserve Board" means the Board of Governors of the Federal Reserve
System, or any entity succeeding to any of its principal functions.
"Foreign Sales" means, without duplication, the aggregate of all sales by
Borrower or any of its Subsidiaries to an Account Debtor located outside the
United States of America or Canada and sales by Subsidiaries of Borrower which
are not organized under the laws of a jurisdiction located in the United States
or Canada.
"GAAP" means generally accepted accounting principles set forth from time
to time in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the accounting
profession), which are applicable to the circumstances as of the date of
determination.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"Guaranties" means, collectively, (i) the Guaranty, dated as of even date
herewith, in form and substance reasonably acceptable to Agent and Lenders, made
by Xxxx and Xxxx Sports in favor of the Agent, for the benefit of Agent and
Lenders, (ii) the Guaranty, dated as of even date herewith, in form and
substance reasonably acceptable to Agent and Lenders, made by Bushnell and Old
WSR in favor of the Agent, for the benefit of Agent and Lenders and (iii) the
Guaranty dated as of even date herewith in form and substance reasonably
acceptable to Agent and Lenders, made by Bushnell Canada in favor of Agent, for
the benefit of Agent and Lenders.
"Hazardous Materials" means all those substances which are regulated by, or
which may form the basis of liability under, any Environmental Law.
"Indebtedness" of any Person means, without duplication: (a) all
indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of
81
property or services (other than trade payables entered into in the Ordinary
Course of Business); (c) all reimbursement or payment obligations with respect
to letters of credit, surety bonds and other similar instruments; (d) all
obligations evidenced by notes, bonds, debentures or similar instruments,
including obligations so evidenced incurred in connection with the acquisition
of property, assets or businesses; (e) all indebtedness created or arising under
any conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to Property acquired by the Person (even
though the rights and remedies of the seller or bank under such agreement in the
event of default are limited to repossession or sale of such property); (f) all
Capital Lease Obligations; (g) all indebtedness referred to in clauses (a)
through (f) above secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any Lien upon or
in Property (including accounts and contracts rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
indebtedness; and (h) all Contingent Obligations described in clause (i) of the
definition thereof in respect of indebtedness or obligations of others of the
kinds referred to in clauses (a) through (g) above.
"Insolvency Proceeding" means (a) any case, action or proceeding before any
court or other Governmental Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors, or (b) any general assignment for the benefit of creditors,
composition, marshalling of assets for creditors, or other, similar arrangement
in respect of its creditors generally or any substantial portion of its
creditors; in each case (a) and (b) undertaken under U.S. Federal, State or
foreign law, including the Bankruptcy Code.
"Interest Payment Date" means, (a) with respect to any LIBOR Rate Loan
(other than a LIBOR Rate Loan having an Interest Period of six (6) months) the
last day of each Interest Period applicable to such Loan, (b) with respect to
any LIBOR Rate Loan having an Interest Period of six (6) months, the last day of
each three (3) month interval, and (c) with respect to Base Rate Loans, the
first day of each calendar month.
"Interest Period" means, with respect to any LIBOR Rate Loan, the period
commencing on the Business Day the Loan is disbursed or continued or on the
Conversion Date on which the Loan is converted to the LIBOR Rate Loan and ending
on the date one, two, three or six months thereafter, as selected by the
Borrower in its Notice of Borrowing or Notice of Conversion/Continuation;
provided that:
--------
(a) if any Interest Period pertaining to a LIBOR Rate Loan would
otherwise end on a day which is not a Business Day, that Interest Period
shall be extended to the next succeeding Business Day unless the result of
such extension would be to carry such Interest Period into another calendar
month, in which event such Interest Period shall end on the immediately
preceding Business Day;
(b) any Interest Period pertaining to a LIBOR Rate Loan that begins
on the last Business Day of a calendar month (or on a day for which there
is no numerically
82
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of the calendar month at the end of such
Interest Period;
(c) no Interest Period for any Term Loan shall extend beyond the last
scheduled payment date therefor and no Interest Period for any Revolving
Loan shall extend beyond the Revolving Termination Date; and
(d) no Interest Period applicable to a Term Loan or portion thereof
shall extend beyond any date upon which is due any scheduled principal
payment in respect of the Term Loans unless the aggregate principal amount
of Term Loans represented by Base Rate Loans or by LIBOR Rate Loans having
Interest Periods that will expire on or before such date is equal to or in
excess of the amount of such principal payment.
"Inventory" means all of the "inventory" (as such term is defined in the
UCC) of the Borrower, including, but not limited to, all merchandise, raw
materials, parts, supplies, work-in-process and finished goods intended for
sale, together with all the containers, packing, packaging, shipping and similar
materials related thereto, and including such inventory as is temporarily out of
the Borrower's custody or possession, including inventory on the premises of
others and items in transit.
"Lending Office" means, with respect to any Lender, the office or offices
of the Lender specified as its "Lending Office" opposite its name on the
applicable signature page hereto, or such other office or offices of the Lender
as it may from time to time notify the Borrower and the Agent.
"Letter of Credit Participation Liability" means, as to each Lender Letter
of Credit and each Letter of Credit Participation Agreement, all reimbursement
obligations and all other liabilities of Borrower or any of its Subsidiaries to
Agent and the Lenders in connection with the Lender Letter of Credit with
respect to the transaction for which the Letter of Credit Participation
Agreement was issued, whether contingent or otherwise, including with respect to
any letter of credit: (a) the amount available to be drawn or which may become
available to be drawn; (b) without duplication, all amounts which have been paid
or made available by the issuing bank or by the Agent under such Lender Letters
of Credit or Letter of Credit Participation Agreement, in each instance, to the
extent not reimbursed; and (c) all unpaid interest, fees and expenses incurred
in connection therewith.
"LIBOR" means, for each Interest Period, the offered rate per annum for
deposits of Dollars for the applicable Interest Period that appears on Telerate
Page 3750 as of 11:00 A.M. (London, England time) two (2) Business Days prior to
the first day in such Interest Period. If no such offered rate exists, such
rate will be the rate of interest per annum, as determined by the Agent (rounded
upwards, if necessary, to the nearest 1/16 of 1%) at which deposits of Dollars
in immediately available funds are offered at 11:00 A.M. (London, England time)
two (2) Business Days prior to the first day in such Interest Period by major
financial institutions reasonably
83
satisfactory to the Agent in the London interbank market for such Interest
Period for the applicable principal amount on such date of determination.
"LIBOR Rate Loan" means a Loan that bears interest based on LIBOR.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, charge or deposit arrangement, encumbrance, lien (statutory or
other) or preference, priority or other security interest or preferential
arrangement of any kind or nature whatsoever (including those created by,
arising under or evidenced by any conditional sale or other title retention
agreement, the interest of a lessor under a Capital Lease, any financing lease
having substantially the same economic effect as any of the foregoing, or the
filing of any financing statement naming the owner of the asset to which such
lien relates as debtor, under the UCC or any comparable law) and any contingent
or other agreement to provide any of the foregoing, but not including the
interest of a lessor under a lease which is not a Capital Lease.
"Loan" means an extension of credit by a Lender to the Borrower pursuant to
Article I hereof, and may be a Base Rate Loan or a LIBOR Rate Loan.
"Loan Documents" means this Agreement, the Notes, the Fee Letter, the
Collateral Documents and all documents delivered to the Agent in connection
therewith.
"Margin Stock" means "margin stock" as such term is defined in Regulation
T, U or X of the Federal Reserve Board.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, or financial
condition of the Borrower or the Borrower and its Subsidiaries taken as a whole;
(b) a material impairment of the ability of the Borrower or any of its
Subsidiaries to perform in any material respect its obligations under any Loan
Document and avoid any Event of Default; or (c) a material adverse effect upon
(i) the legality, validity, binding effect or enforceability of any Loan
Document, or (ii) the perfection or priority of any Lien granted to the Lenders
or to the Agent for the benefit of the Lenders under any of the Collateral
Documents.
"Merger" means the merger of Borrower with and into WSR with Borrower as
the continuing or surviving corporation.
"Mortgage" means any deed of trust, mortgage or other document creating a
Lien on real property or any interest in real property.
"Multiemployer Plan" means a "multiemployer plan" (within the meaning of
Section 4001(a)(3) of ERISA) and to which Borrower or any member of the
Controlled Group makes, is making, or is obligated to make contributions or,
during the preceding three calendar years, has made, or been obligated to make,
contributions.
84
"Negative Pledge Agreement" means the Negative Pledge Agreement, dated as
of even date herewith, in form and substance reasonably acceptable to Agent and
Lenders, made by the WPP Group Borrower in favor of the Agent, for the benefit
of Lenders.
"Net Issuance Proceeds" means, in respect of any issuance of debt or
equity, cash proceeds and non-cash proceeds received or receivable in connection
therewith, net of reasonable out-of-pocket costs and expenses paid or incurred
in connection therewith in favor of any Person not an Affiliate of the Borrower.
"Net Proceeds" means proceeds in cash, checks or other cash equivalent
financial instruments (including Cash Equivalents) as and when received by the
Person making a Disposition, net of: (a) the direct costs relating to such
Disposition excluding amounts payable to the Borrower or any Affiliate of the
Borrower, (b) sale, use or other transaction taxes paid or payable as a result
thereof, and (c) amounts required to be applied to repay principal, interest and
prepayment premiums and penalties on Indebtedness secured by a Lien on the asset
which is the subject of such Disposition. "Net Proceeds" shall also include
proceeds paid on account of any Event of Loss net of (i) all money actually
applied to repair or reconstruct the damaged property or property affected by
the condemnation or taking, (ii) all of the costs and expenses reasonably
incurred in connection with the collection of such proceeds, award or other
payments, and (iii) any amounts retained by or paid to parties having superior
rights to such proceeds, awards or other payments.
"Note" means any Revolving Note or Term Note and "Notes" means all such
Notes.
"Notice of Borrowing" means a notice given by the Borrower to the Agent
pursuant to Section 1.5, in substantially the form of Exhibit 11.1(b) hereto.
---------------
"Notice of Conversion/Continuation" means a notice given by the Borrower to
the Agent pursuant to Section 1.6, in substantially the form of Exhibit 11.1(c)
---------------
hereto.
"Obligations" means all Loans, and other Indebtedness, advances, debts,
liabilities, obligations, covenants and duties owing by the Borrower to any
Lender, the Agent, or any other Person required to be indemnified, that arises
under any Loan Document, whether or not for the payment of money, whether
arising by reason of an extension of credit, loan, guaranty, indemnification or
in any other manner, whether direct or indirect (including those acquired by
assignment), absolute or contingent, due or to become due, now existing or
hereafter arising and however acquired.
"Old WSR" means Old WSR, Inc., a Delaware corporation.
"Ordinary Course of Business" means, in respect of any transaction
involving the Borrower or any Subsidiary of the Borrower, the ordinary course of
such Person's business, as conducted
85
by any such Person in accordance with past practice and undertaken by such
Person in good faith and not for purposes of evading any covenant or restriction
in any Loan Document.
"Organization Documents" means, (a) for any corporation, the certificate or
articles of incorporation, the bylaws, any certificate of determination or
instrument relating to the rights of preferred shareholders of such corporation,
any shareholder rights agreement, and all applicable resolutions of the board of
directors (or any committee thereof) of such corporation, (b) for any
partnership, the partnership agreement and, if applicable, certificate of
limited partnership or (c) for any limited liability company, the operating
agreement and articles or certificate of formation.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any of its principal functions under ERISA.
"Permitted Equity Securities Issuance" shall mean (i) the issuance of stock
of Borrower upon exercise of (a) the warrants issued to Subordinated Noteholders
in connection with the Subordinated Loan Documents and (b) the Seller Warrants,
(ii) the sale of equity securities of Borrower to employees, officers and
directors of Borrower (as permitted herein), (iii) the issuance of securities
issued in connection with corporate partnering transactions in the Ordinary
Course of Business and (iv) the sale of preferred stock of Borrower in
satisfaction of all or a portion of the "Future Preferred Commitment" under and
pursuant to the Purchase Agreement dated August __, 1999 among Borrower, Wind
Point, Antares and certain other stockholders of Borrower, as in effect on the
Closing Date.
"Person" means an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture or Governmental Authority.
"Plan" means an employee benefit plan (as defined in Section 3(3) of ERISA)
which the Borrower or any member of the Controlled Group sponsors or maintains
or to which the Borrower or any member of the Controlled Group makes, is making
or is obligated to make contributions.
"Pledge Agreement" means, collectively, (i) that certain the Pledge
Agreement, dated as of even date herewith, in form and substance reasonably
acceptable to Agent and Lenders, made by Borrower in favor of the Agent, for the
benefit of the Lenders and (ii) that certain Pledge Agreement, dated as of even
date herewith, in form and substance reasonably acceptable to Agent and Lenders,
made by Subsidiaries of Borrower and Xxxx in favor of the Agent, for the benefit
of the Lenders.
"Pledged Collateral" has the meaning specified in the Pledge Agreement.
"Prior Indebtedness" means the indebtedness and obligations specified on
Schedule 11.1 hereto.
-------------
86
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, and whether tangible or intangible.
"Qualified Plan" means a pension plan (as defined in Section 3(2) of ERISA)
intended to be tax-qualified under Section 401(a) of the Code and which any
member of the Controlled Group sponsors, maintains, or to which it makes, is
making or is obligated to make contributions, or in the case of a multiple
employer plan (as described in Section 4064(a) of ERISA) has made contributions
at any time during the immediately preceding period covering at least five (5)
plan years, but excluding any Multiemployer Plan.
"Qualifying Initial Public Offering" means an initial public offering of
any securities of Borrower pursuant to an effective registration statement under
the Securities Act of 1933, as amended, in which the gross proceeds received by
Borrower are $35,000,000 or more.
"Rate Contracts" means swap agreements (as such term is defined in Section
101 of the Bankruptcy Code) and any other agreements or arrangements designed to
provide protection against fluctuations in interest or currency exchange rates.
"Recapitalization Agreement" means that certain Agreement and Plan of
Merger and Recapitalization dated as of June 1, 1999 by and among WPP, Borrower,
WSR, Excorp Holdings Limited and Pacific Investments (BVI), Limited.
"Related Agreements" means, collectively, the Recapitalization Agreement,
Subordinated Note Agreement, the Subordinated Notes, Seller Notes and the other
agreements, executed in connection with the recapitalization of Borrower and the
Merger.
"Related Transactions" means the transactions contemplated by the Related
Agreements and includes, without limitation, the recapitalization of Borrower,
the Merger and the funding of the Subordinated Indebtedness.
"Reportable Event" means, as to any Plan, (a) any of the events set forth
in Section 4043(b) of ERISA or the regulations thereunder, other than any such
event for which the 30-day notice requirement under ERISA has been waived in
regulations issued by the PBGC, (b) a withdrawal from a Plan described in
Section 4063 of ERISA, or (c) a cessation of operations described in Section
4062(e) of ERISA.
"Required Lenders" means at any time (a) Lenders then holding at least
sixty six and two-thirds percent (66-2/3%) of the sum of the Aggregate Revolving
Loan Commitment then in effect plus the aggregate unpaid principal balance of
the Term Loans then outstanding, or (b) if the Revolving Loan Commitments have
been terminated, Lenders then having at least sixty six and two-thirds percent
(66-2/3%) of the aggregate unpaid principal amount of Loans then outstanding.
87
"Requirement of Law" means, as to any Person, any law (statutory or
common), ordinance, treaty, rule, regulation, order, policy, other legal
requirement or determination of an arbitrator or of a Governmental Authority, in
each case applicable to or binding upon the Person or any of its property or to
which the Person or any of its property is subject.
"Responsible Officer" means the chief executive officer or the president of
the Borrower, or any other officer having substantially the same authority and
responsibility; or, with respect to compliance with financial covenants or
delivery of financial information, the chief financial officer or the treasurer
of the Borrower, or any other officer having substantially the same authority
and responsibility.
"Revolving Note" means a promissory note of the Borrower payable to the
order of a Lender and otherwise substantially the form of Exhibit 11.1(d)
---------------
hereto, evidencing indebtedness of the Borrower under the Revolving Loan
Commitment of such Lender.
"Revolving Termination Date" means the earlier to occur of: (a) July 30,
2005; and (b) the date on which the Aggregate Revolving Loan Commitment shall
terminate in accordance with the provisions of this Agreement.
"SEC" means the Securities and Exchange Commission, or any entity
succeeding to any of its principal functions.
"Security Agreements" means, collectively, (i) the Security Agreement,
dated as of even date herewith, in form and substance reasonably satisfactory to
Agent and Lenders, made by Borrower in favor of the Agent for the benefit of
Lenders, (ii) the Security Agreement, dated as of even date herewith, in form
and substance reasonably acceptable to Agent and Lenders, made by the Xxxx and
Xxxx Sports in favor of the Agent for the benefit of Lenders, (iii) the Security
Agreement, dated as of even date herewith, in form and substance reasonably
acceptable to Agent and Lenders, made by Bushnell and Old WSR in favor of Agent,
for the benefit of Agent and Lenders and (iv) those two (2) Security Agreements,
dated as of even date herewith in form and substance reasonably acceptable to
Agent and Lenders, made by Bushnell Canada in favor of Agent, for the benefit of
Agent and Lenders.
"Seller Note" means the Non-Negotiable Subordinated Promissory Note issued
by Borrower to Excorp Holdings Limited, in the aggregate principal amount of
$5,000,000, as the same may be increased as the result of the accrual of
interest.
"Seller Warrants" means warrants issued to Sellers pursuant to the Seller
Notes.
"Solvent" means, as to any Person at any time, that (a) the fair value of
the Property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(31) of the Bankruptcy Code and, in the alternative, for purposes of the
Uniform
88
Fraudulent Transfer Act; (b) such Person is able to realize upon its Property
and pay its debts and other liabilities (including disputed, contingent and
unliquidated liabilities) as they mature in the normal course of business; (c)
such Person does not intend to, and does not believe that it will, incur debts
or liabilities beyond such Person's ability to pay as such debts and liabilities
mature; and (d) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person's
property would constitute unreasonably small capital.
"Subordinated Indebtedness" means the Indebtedness described on Schedule
5.5 and all other Indebtedness of Borrower or any of its Subsidiaries which is
subordinated in right of payment to the Obligations including without
limitation, Indebtedness evidenced by Subordinated Notes and Seller Notes.
"Subordinated Loan Documents" means the Subordinated Note Agreement,
Subordinated Notes, the Warrants and Subsidiary Guaranty Agreements issued under
and pursuant to the Subordinated Note Agreement.
"Subordinated Note Agreement" means Note Agreement dated as of even date
herewith between Borrower and Subordinated Noteholders.
"Subordinated Noteholders" means The Northwestern Mutual Life Insurance
Company, its successors and assigns and each other holder of Subordinated Notes
from time to time.
"Subordinated Notes" means, collectively, the 12% Senior Subordinated Notes
issued by Borrower to Subordinated Noteholders, in the original aggregate
principal amount of $22,800,000.
"Subsidiary" of a Person means any corporation, association, limited
liability company, partnership, joint venture or other business entity of which
more than fifty percent (50%) of the voting stock or other equity interests (in
the case of Persons other than corporations), is owned or controlled directly or
indirectly by the Person, or one or more of the Subsidiaries of the Person, or a
combination thereof.
"Term Note A" means a promissory note of the Borrower payable to the order
of a Lender, in substantially the form of Exhibit 11.1(e)(i) hereto, evidencing
------------------
the indebtedness of the Borrower to such Lender resulting from the Term Loan A
made to the Borrower by such Lender.
"Term Note B" means a promissory note of the Borrower payable to the order
of a Lender, in substantially the form of Exhibit 11.1(e)(ii) hereto, evidencing
-------------------
the indebtedness of the Borrower to such Lender resulting from the Term Loan B
made to the Borrower by such Lender.
"UCC" means the Uniform Commercial Code as in effect from time to time in
the State of Illinois.
89
"Unfunded Pension Liabilities" means the excess of a Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Plan's assets, determined in accordance with the assumptions used by the Plan's
actuaries for funding the Plan pursuant to section 412 for the applicable plan
year.
"United States" and "U.S." each means the United States of America.
"Xxxx" means Xxxx Corporation, a New York corporation.
"Xxxx Sports" means Xxxx Sports, Inc., a New York corporation.
"Wholly-Owned Subsidiary" means any corporation in which (other than
directors' qualifying shares required by law) 100% of the capital stock of each
class having ordinary voting power, and 100% of the capital stock of every other
class, in each case, at the time as of which any determination is being made, is
owned, beneficially and of record, by the Borrower, or by one or more of the
other Wholly-Owned Subsidiaries, or both.
"Withdrawal Liabilities" means, as of any determination date, the aggregate
amount of the liabilities, if any, pursuant to Section 4201 of ERISA if the
Controlled Group made a complete withdrawal from all Multiemployer Plans and any
increase in contributions pursuant to Section 4243 of ERISA.
"WPP" means Wind Point Partners III, L.P. and Wind Point Partners IV, L.P.,
each a Delaware limited partnership.
"WPP Group" means WPP and Wind Point III Executive Advisor Partners, L.P.
and Wind Point IV Executive Advisor Partners, L.P., each a Delaware limited
partnership.
"WSR" means WSR Acquisition Co., Inc., a Delaware corporation.
"WSR Stockholders Agreement" means that certain Stockholders Agreement by
and among Borrower, WPP Group, Excorp Holdings Limited, a corporation organized
under the laws of Hong Kong, Pacific Investment (BVI) Ltd., a British Islands
corporation, Xxxxxx Xxxxxxx, an individual, Managers (as defined therein) and
Other Stockholders (as defined therein).
11.2 Other Interpretive Provisions.
-----------------------------
(a) Defined Terms. Unless otherwise specified herein or therein, all terms
-------------
defined in this Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto. The meaning of
defined terms shall be equally applicable to the singular and plural forms of
the defined terms. Terms (including uncapitalized terms) not otherwise defined
herein and that are defined in the UCC shall have the meanings therein
described.
90
(b) The Agreement. The words "hereof", "herein", "hereunder" and words of
-------------
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; and subsection,
section, schedule and exhibit references are to this Agreement unless otherwise
specified.
(c) Certain Common Terms. The term "documents" includes any and all
--------------------
instruments, documents, agreements, certificates, indentures, notices and other
writings, however evidenced. The term "including" is not limiting and means
"including without limitation."
(d) Performance; Time. Whenever any performance obligation hereunder
-----------------
(other than a payment obligation) shall be stated to be due or required to be
satisfied on a day other than a Business Day, such performance shall be made or
satisfied on the next succeeding Business Day. In the computation of periods of
time from a specified date to a later specified date, the word "from" means
"from and including"; the words "to" and "until" each mean "to but excluding",
and the word "through" means "to and including." If any provision of this
Agreement refers to any action taken or to be taken by any Person, or which such
Person is prohibited from taking, such provision shall be interpreted to
encompass any and all means, direct or indirect, of taking, or not taking, such
action.
(e) Contracts. Unless otherwise expressly provided herein, references to
---------
agreements and other contractual instruments, including this Agreement and the
other Loan Documents, shall be deemed to include all subsequent amendments,
thereto, restatements thereof and other modifications and supplements thereto
which are in effect from time to time, but only to the extent such amendments
and other modifications are not prohibited by the terms of any Loan Document.
(f) Laws. References to any statute or regulation are to be construed as
----
including all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting the statute or regulation.
11.3 Accounting Principles. (a) Unless the context otherwise clearly
---------------------
requires, all accounting terms not expressly defined herein shall be construed,
and all financial computations required under this Agreement shall be made, in
accordance with GAAP, consistently applied.
(b) References herein to "fiscal year", "fiscal quarter" and "fiscal
month" refer to such fiscal periods of the Borrower.
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(c) If any change in GAAP results in a change in the calculation of the
financial covenants or interpretation of related provisions of this Agreement or
any other Loan Document, then the Borrower, the Agent and the Lenders agree to
amend such provisions of this Agreement so as to equitably reflect such changes
in GAAP with the desired result that the criteria for evaluating the Borrower's
financial condition shall be the same after such change in GAAP as if such
change had not been made, provided that, notwithstanding any other provision of
this Agreement, the Required Lenders' agreement to any amendment of such
provisions shall be sufficient to bind all Lenders.
[Balance of page intentionally left blank; signature page follows.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their duly authorized officers as of the day and
year first above written.
Address for Wire Transfers: WORLDWIDE SPORTS & RECREATION, INC.
_______________________ By:_____________________________________
_______________________ B. Xxxxxx Xxxxxxx
_______________________ President
_______________________
Borrower's FEIN: 00-0000000
Address for notices:
0000 Xxxx
Xxxxxxxx Xxxx, Xxxxxx 00000
Attn: Chief Executive Officer and Chief
Financial Officer
Facsimile: (000) 000-0000
Copies to:
Wind Point Partners
Xxx Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx XxxXxxxx and Xxxxx Xxxxxxxxx
Facsimile: (000) 000-0000
Wind Point Partners
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
ANTARES CAPITAL CORPORATION,
as Agent and as a Lender
By:___________________________________
Title: __________________ Director
Address for notices:
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Portfolio Manager
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Address for payments:
Antares Capital Corporation
Account # 4070-6016
Citibank N.A., NY
ABA # 000000000
Reference: Worldwide Sports
Please advise Xxx Xxxxxxxxx at
(000) 000-0000 upon receipt
Schedule 1.1(a)
Term Loan Commitments
Term Loan A Commitment $24,000,000
----------------------
Antares Capital Corporation
Term Loan B Commitment $30,000,000
----------------------
Antares Capital Corporation
Schedule 1.1(b)
Revolving Loan Commitments
Period Amount
------ ------
Antares Capital Corporation April 1 - January 31 $30,000,000
February 1 - March 31 $13,000,000
