EXHIBIT 10.1
EXECUTION COPY
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CREDIT AGREEMENT
among
RBX CORPORATION,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
and
THE CHASE MANHATTAN BANK,
as agent
DATED AS OF DECEMBER 11, 1997
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TABLE OF CONTENTS
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Page
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SECTION 1. DEFINITIONS 1
1.1 Defined Terms 1
1.2 Other Definitional Provisions 17
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS 17
2.1 Commitments 17
2.2 Notes 17
2.3 Procedure for Borrowing 18
2.4 Termination or Reduction of Commitments 18
SECTION 3. LETTERS OF CREDIT 18
3.1 L/C Commitment 18
3.2 Procedure for Issuance of Letters of Credit 19
3.3 Fees, Commissions and Other Charges 19
3.4 L/C Participations 20
3.5 Reimbursement Obligation of the Borrower 20
3.6 Obligations Absolute 21
3.7 Letter of Credit Payments 21
3.8 Application 21
SECTION 4. GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS
OF CREDIT 21
4.1 Interest Rates and Payment Dates 21
4.2 Conversion and Continuation Options 22
4.3 Groups of Loans 22
4.4 Optional and Mandatory Prepayments 22
4.5 Commitment Fees; Agent's Fee; Other Fees 23
4.6 Computation of Interest and Fees 23
4.7 Inability to Determine Interest Rate 24
4.8 Pro Rata Treatment and Payments 24
4.9 Illegality 25
4.10 Requirements of Law 25
4.11 Taxes 26
4.12 Indemnity 28
4.13 Certain Rules Relating to the Payment of Additional
Amounts 28
SECTION 5. REPRESENTATIONS AND WARRANTIES 29
5.1 Financial Condition 29
5.2 No Change; Solvency 30
5.3 Corporate Existence; Compliance with Law 30
5.4 Corporate Power; Authorization; Enforceable Obligations 30
5.5 No Legal Bar 30
5.6 No Material Litigation 31
5.7 No Default 31
5.8 Ownership of Property; Liens 31
5.9 Intellectual Property 31
5.10 No Burdensome Restrictions 31
5.11 Taxes 31
5.12 Federal Regulations 31
5.13 ERISA 31
5.14 Collateral 32
5.15 Investment Company Act; Other Regulations 32
5.16 Subsidiaries 32
5.17 Purpose of Loans 32
5.18 Environmental Matters 32
SECTION 6. CONDITIONS PRECEDENT 33
6.1 Conditions to Initial Loan 33
6.2 Conditions to Each Loan 36
SECTION 7. AFFIRMATIVE COVENANTS 36
7.1 Financial Statements 36
7.2 Certificates; Other Information 37
7.3 Payment of Obligations 38
7.4 Conduct of Business and Maintenance of Existence 38
7.5 Maintenance of Property; Insurance 38
7.6 Inspection of Property; Books and Records; Discussions 39
7.7 Environmental Laws 39
7.8 Landlord Consents 40
7.9 Notices 40
7.10 Additional Collateral 41
SECTION 8. NEGATIVE COVENANTS 41
8.1 Financial Condition Covenants 42
8.2 Limitation on Indebtedness 43
8.3 Limitation on Liens 42
8.4 Limitation on Guarantee Obligations 45
8.5 Limitation on Fundamental Changes 46
8.6 Limitation on Sale of Collateral 46
8.7 Limitation on Dividends 46
8.8 Limitation on Capital Expenditures 47
8.9 Limitation on Investments, Loans and Advances 47
8.10 Limitations on Certain Acquisitions 48
8.11 Limitation on Optional Payments and Modifications
of Debt Instruments 48
8.12 Limitation on Transactions with Affiliates 49
8.13 Intentionally Omitted 49
8.14 Intentionally Omitted 49
8.15 Limitation on Changes in Fiscal Year 49
8.16 Limitation on Negative Pledge Clauses 50
8.17 Limitation on Lines of Business; Creation of
Subsidiaries 50
8.18 Limitation on Bank Accounts 50
SECTION 9. EVENTS OF XXXXXXX 00
XXXXXXX 00. THE AGENT 52
10.1 Appointment 52
10.2 Delegation of Duties 53
10.3 Exculpatory Provisions 53
10.4 Reliance by Agent 53
10.5 Notice of Default 53
10.6 Non-Reliance on Agent and Other Lenders 53
10.7 Indemnification 54
10.8 Agent in Its Individual Capacity 54
10.9 Successor Agent 54
SECTION 11. MISCELLANEOUS 55
11.1 Amendments and Waivers 55
11.2 Notices 55
11.3 No Waiver; Cumulative Remedies 56
11.4 Survival of Representations and Warranties 56
11.5 Payment of Expenses and Taxes 56
11.6 Successors and Assigns; Participations and Assignments 57
11.7 Adjustments; Set-off 58
11.8 Counterparts 59
11.9 Severability 59
11.10 Integration 59
11.11 GOVERNING LAW 59
11.12 Submission To Jurisdiction; Waivers 59
11.13 Acknowledgments 60
11.14 Confidentiality 60
11.15 WAIVERS OF JURY TRIAL 60
11.16 Indemnity 60
11.17 Senior Indebtedness 60
SCHEDULES
1 Commitments and Addresses
1(a) Existing Letters of Credit
1(a)(i) Contract Warehouses
5.1 Disposition of Businesses and Property
5.8 Exceptions to Borrower's Representations in subsection 5.8
5.9 Certain Intellectual Property
5.14 Filing Jurisdictions
5.16 Subsidiaries
6.1(m) Lien Search Locations
8.2(e) Existing Indebtedness
8.3(h) Existing Liens
8.3(i) Permitted Liens
8.4(a) Guarantee Obligations
8.9(c) Existing Investments
8.12 Agreements with Affiliates
EXHIBITS
A Form of Note
B Form of Senior Security Agreement
C Form of Intercreditor Agreement
E Form of Guarantee Agreement
F-1 Form of Opinion of Counsel to Borrower
F-2 Form of Opinion of Local Counsel
F-3 Form of Opinion of Counsel to the Trustee
F-4 Form of Borrowing Base Certificate
G Form of Assignment and Acceptance
I Form of Borrower's Certificate
J Form of Landlord Waiver
T Form of Business Plan
CREDIT AGREEMENT, dated as of December 11, 1997, among
RBX CORPORATION, a Delaware corporation (the "Borrower"), the
several banks and other financial institutions from time to
time parties to this Agreement (the "Lenders"), and THE CHASE
MANHATTAN BANK, a New York banking corporation, as issuing
lender (in such capacity, the "Issuing Lender") and as agent
for the Lenders (in such capacity, the "Agent").
WHEREAS the Borrower is a party to a Credit Agreement dated as of
October 16, 1995 (as amended, supplemented or otherwise modified from time to
time, the "Existing Credit Agreement"), with a syndicate of lenders (the
"Existing Lenders") and Chase (such term and each other capitalized term used
but not defined in this introductory statement having the meanings assigned to
such terms in subsection 1.1) as agent;
WHEREAS the Borrower intends to issue in an offering under Rule 144A
of the Securities Act of 1933, as amended, up to $100,000,000 aggregate
principal amount of its New Notes, which will be secured (a) on a first
priority basis (subject to certain permitted exceptions) by the New Notes
Collateral and (b) on a second priority basis (subject to certain permitted
exceptions) by the Collateral;
WHEREAS the proceeds of the New Notes will be used to repay in full
all amounts due and owing under the Existing Credit Agreement and all
obligations and security interests created thereunder shall be terminated no
later than the Closing Date;
WHEREAS the Borrower has requested that the Lenders make Loans to
the Borrower for working capital and general corporate purposes; and
WHEREAS the Lenders have agreed to make the requested Loans to the
Borrower on the terms and subject to the conditions hereinafter set forth.
Accordingly, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms
shall have the following meanings:
"ABR" or "Alternate Base Rate": for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greatest of (a)
the Prime Rate in effect on such day, (b) the Base CD Rate in effect on such
day plus 1% and (c) the Federal Funds Effective Rate in effect on such day
plus 1/2 of 1%. For purposes hereof: "Prime Rate" shall mean the rate of
interest per annum publicly announced from time to time by the Agent as its
prime rate in effect at its principal office in New York City (the Prime Rate
not being intended to be the lowest rate of interest charged by Chase in
connection with extensions of credit to debtors); "Base CD Rate" shall mean
the sum of (a) the product of (i) the Three-Month Secondary CD Rate and (ii) a
fraction, the numerator of which is one and the denominator of which is one
minus the C/D Reserve Percentage and (b) the C/D Assessment Rate; "Three-Month
Secondary CD Rate" shall mean, for any day, the secondary market rate for
three-month
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certificates of deposit reported as being in effect on such day (or, if such
day shall not be a Business Day, the next preceding Business Day) by the Board
of Governors of the Federal Reserve System (or any successor) (the "Board")
through the public information telephone line of the Federal Reserve Bank of
New York (which rate will, under the current practices of the Board, be
published in Federal Reserve Statistical Release H.15(519) during the week
following such day), or, if such rate shall not be so reported on such day or
such next preceding Business Day, the average of the secondary market
quotations for three-month certificates of deposit of major money center banks
in New York City received at approximately 10:00 A.M., New York City time, on
such day (or, if such day shall not be a Business Day, on the next preceding
Business Day) by the Agent from three New York City negotiable certificate of
deposit dealers of recognized standing selected by it; and "Federal Funds
Effective Rate" shall mean, for any day, the weighted average of the rates on
overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the Agent from three
federal funds brokers of recognized standing selected by it. Any change in
the ABR due to a change in the Prime Rate, the Three-Month Secondary CD Rate
or the Federal Funds Effective Rate shall be effective as of the opening of
business on the effective day of such change in the Prime Rate, the
Three-Month Secondary CD Rate or the Federal Funds Effective Rate,
respectively.
"ABR Loans": Loans the rate of interest applicable to which is based
upon the Alternate Base Rate.
"Account Debtor": as defined in the Senior Security Agreement.
"Accounts": as defined in the Uniform Commercial Code as in effect in the
State of New York; and, with respect to the Borrower and its Subsidiaries, all
such Accounts of such Persons, whether now existing or existing in the future,
including, without limitation, (a) all accounts receivable of such Person
(whether or not specifically listed on schedules furnished to the Agent)
including, without limitation, all accounts created by or arising from all of
such Person's sales of goods or rendition of services made under any of its
trade names, or through any of its divisions, (b) all unpaid rights of such
Person (including rescission, replevin, reclamation and stopping in transit)
relating to the foregoing or arising therefrom, (c) all rights to any goods
represented by any of the foregoing, including returned or repossessed goods,
(d) all reserves and credit balances held by such Person with respect to any
such accounts receivable or Obligors, (e) all letters of credit, guarantees or
collateral for any of the foregoing and (f) all insurance policies or rights
relating to any of the foregoing.
"Accounts Receivable Subsidiary": any wholly owned operating Domestic
Subsidiary of the Borrower.
"Acquired Entity": as defined in the definition of the term
"Consolidated EBITDA".
"Affiliate": 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. For purposes of this definition, "control" of a Person
means the power, directly or indirectly, either to (a) vote 20% or more of the
securities having ordinary voting power for the election of directors of such
Person or (b) direct or cause the direction of the management and policies of
such Person, whether by contract or otherwise.
"Aggregate Outstanding Credit": as to any Lender at any time, an amount
equal to the sum of (a) the aggregate principal amount of all Loans made by
such Lender then outstanding and (b) such Lender's Commitment Percentage of
the L/C Obligations then outstanding.
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"Agreement": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"AIP": American Industrial Partners Capital Fund II, L.P., a Delaware
limited partnership.
"Application": an application, in such form as the Issuing Lender may
specify from time to time, requesting the Issuing Lender to open a Letter of
Credit.
"Assignee": as defined in subsection 11.6(c).
"Assignment and Acceptance": an agreement in the Form of Exhibit G
attached hereto.
"Available Commitment": as to any Lender at any time, an amount equal to
the excess, if any, of (a) the amount of such Lender's Commitment over (b) the
sum of (i) the aggregate unpaid principal amount at such time of all Loans
made by such Lender and (ii) an amount equal to such Lender's Commitment
Percentage of the outstanding L/C Obligations at such time; collectively, as
to all the Lenders, the "Available Commitments".
"Borrowing Base": with respect to the Borrower, an amount equal to the
sum, without duplication, of (i) 80% of Eligible Accounts Receivable, and (ii)
the lower of (a) 25% of Eligible Inventory Value of raw material and 40% of
Eligible Inventory Value of finished goods or (b) $7,000,000. The Borrowing
Base shall be computed monthly in accordance with Section 7.1(d). The
Borrowing Base at any time in effect shall be determined by reference to the
Borrowing Base Certificate most recently delivered hereunder.
"Borrowing Base Certificate": a certificate in the Form of Exhibit F-4
attached hereto.
"Borrowing Date": any Business Day specified in a notice pursuant to
subsection 2.3 or 3.5 as a date on which the Borrower requests the Lenders to
make Loans hereunder.
"Business": as defined in subsection 5.18.
"Business Day": a day other than a Saturday, Sunday or other day on
which commercial banks in New York, New York are authorized or required by law
to close, except that, when used in connection with a Eurodollar Loan with
respect to which the Eurodollar Rate is determined based upon the Telerate
British Bankers Assoc. Interest Settlement Rates Page in accordance with the
definition of Eurodollar Base Rate, the term "Business Day" shall mean any
Business Day on which dealings in foreign currencies and exchange between
banks may be carried on in London, England and New York, New York.
"Capital Expenditures": with respect to any Person for any period, the
sum of the aggregate of all expenditures (whether paid in cash, capitalized as
an asset or accrued as a liability) by such Person and its consolidated
Subsidiaries during such period which, in accordance with GAAP, are or should
be included in "capital expenditures" or similar items reflected in the
consolidated statement of cash flows of such Person, other than (a) that
portion of such expenditures made solely to purchase replacement assets (or
other assets used in the business of the Borrower and its Subsidiaries) with
the proceeds of the disposal of assets in a manner permitted or not
prohibited, as applicable, by this Agreement, (b) that portion of expenditures
made solely from insurance or condemnation proceeds and (c) the acquisition of
all or substantially all of the assets or Capital Stock of any Person or all
or substantially all of the assets of an operating division thereof in a
manner permitted or not prohibited, as applicable, by this Agreement.
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"Capital Stock": any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and
all equivalent ownership interests in a Person (other than a corporation) and
any and all warrants or options to purchase any of the foregoing.
"Cash Equivalents": (a) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having maturities not more than twelve
months from the date of acquisition, (b) U.S. dollar denominated time
deposits, certificates of deposit, Eurodollar time deposits or Eurodollar
certificates of deposit of (i) any domestic commercial bank of recognized
standing having capital and surplus in excess of $100,000,000 or (ii) any
bank, the holding company of which has a short-term commercial paper rating
from S&P at least A-1 or the equivalent thereof or from Xxxxx'x of at least
P-1 or the equivalent thereof (any such bank being an "Approved Lender"), in
each case with maturities of not more than twelve months from the date of
acquisition, (c) commercial paper and variable or fixed rate notes issued by
any Approved Lender (or by the parent company thereof) or any variable rate
notes issued by, or guaranteed by, any domestic corporation rated A-2 (or the
equivalent thereof) or better by S&P or P-2 (or the equivalent thereof) or
better by Xxxxx'x and maturing within twelve months of the date of
acquisition, (d) repurchase agreements with a bank or trust company or
recognized securities dealer having capital and surplus in excess of
$100,000,000 for direct obligations issued by or fully guaranteed by the
United States of America in which the Borrower shall have a perfected first
priority security interest (subject to no other Liens) and having, on the date
of purchase thereof, a fair market value of at least 100% of the amount of
repurchase obligations, and (e) interests in money market mutual funds which
invest solely in assets or securities of the type described in subparagraphs
(a), (b), (c) or (d) hereof.
` "C/D Assessment Rate": for any day as applied to any ABR Loan, the
annual assessment rate in effect on such day which is payable by a member of
the Bank Insurance Fund classified as well-capitalized and within supervisory
subgroup "B" (or a comparable successor assessment risk classification) within
the meaning of 12 C.F.R. subsection 327.3(d) (or any successor provision) to
the Federal Deposit Insurance Corporation (or any successor) for such
Corporation's (or such successor's) insuring time deposits at offices of such
institution in the United States.
"C/D Reserve Percentage": for any day as applied to any ABR Loan, that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board, for determining the maximum reserve requirement for a
Depositary Institution (as defined in Regulation D of the Board) in respect of
new non-personal time deposits in Dollars of $100,000 or more having a
maturity of 30 days or more.
"Change of Control": the occurrence of any of the following events: (a)
prior to an initial public offering by RBX Group or the Borrower, AIP and
Permitted AIP Affiliates shall cease to collectively own directly or
indirectly, and have the power to vote, at least 51% of the issued and
outstanding Capital Stock having ordinary voting power in the election of the
directors of the Borrower, (b) after the completion of an initial public
offering by RBX Group or the Borrower (other than on Form S-8), (i) any Person
or a group (as such term is defined in Section 13(d)(3) of the Securities
Exchange Act) other than AIP and Permitted AIP Affiliates shall directly or
indirectly acquire beneficial ownership (as such term is defined in Rule 13d-3
promulgated under the Securities Exchange Act) of 30% or more of the Capital
Stock having ordinary voting power in the election of the directors of the
Borrower or (ii) any Person or group (as such term is defined in Section
13(d)(3) of the Securities Exchange Act) other than AIP and Permitted AIP
Affiliates shall directly or indirectly acquire beneficial ownership (as so
defined) of a greater percentage of the Capital Stock having ordinary voting
power in the election of the directors of the Borrower than the percentage of
such Capital Stock collectively beneficially owned by AIP and Permitted AIP
Affiliates, (c) there shall occur any "Change of Control", as such term is
defined in the Senior Secured Note Indenture or the Subordinated Note
Indenture, (d) at
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any time prior to an initial public offering by the Borrower, RBX Group shall
cease to beneficially own directly and of record, and have the power to vote,
100% of (i) the outstanding shares of the Borrower's common stock and (ii) the
outstanding shares of Capital Stock having ordinary voting power in the
election of the directors of the Borrower, (e) during any period of two
consecutive calendar years, individuals who at the beginning of such period
constituted the Board of Directors of RBX Group (together with any new
directors whose election by the Board of Directors of RBX Group or whose
nomination for election by the shareholders of RBX Group was approved by a
vote of a majority of the directors then still in office who either were
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the directors of RBX Group then in office, (f) during any period
of two consecutive calendar years, individuals who at the beginning of such
period constituted the Board of Directors of the Borrower (together with any
new directors whose election by the Board of Directors of the Borrower or
whose nomination for election by the shareholders of the Borrower was approved
by a vote of a majority of the directors then still in office who either were
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the directors of the Borrower then in office or (g) at any time,
American Industrial Partners II, L.P. shall cease to be the sole general
partner of AIP.
"Chase": The Chase Manhattan Bank, a New York banking corporation.
"Closing Date": the date on which all the conditions precedent set forth
in subsection 6.1 shall have been satisfied, but in no event after December
22, 1997.
"Code": the Internal Revenue Code of 1986, as amended from time to time.
"Collateral": as defined in the Senior Security Agreement.
"Commercial Letter of Credit": as defined in subsection 3.1.
"Commitment": as to any Lender, its obligation to make Loans to, and/or
issue or participate in Letters of Credit issued on behalf of the Borrower, in
an aggregate amount not to exceed at any one time outstanding the amount set
forth opposite such Lender's name in Schedule 1 under the heading
"Commitment", as such amount may be reduced from time to time as provided
herein; collectively, as to all the Lenders, the "Commitments".
"Commitment Percentage": as to any Lender at any time, the percentage
which (a) the sum of (i) such Lender's then unused Commitments which have not
expired or been terminated plus (ii) such Lender's Loans then outstanding plus
(iii) such Lender's interest in the aggregate L/C Obligations then outstanding
then constitutes of (b) the sum of (i) the aggregate outstanding then unused
Commitments of all the Lenders which have not expired or been terminated plus
(ii) the aggregate Loans of all the Lenders then outstanding plus (iii) the
aggregate L/C Obligations then outstanding (or, if the Commitments have
terminated or expired, the percentage which (a) the sum of (i) such Lender's
then outstanding Loans plus (ii) such Lender's participating interests in the
aggregate L/C Obligations constitutes of (b) the sum of (i) the aggregate
Loans of all the Lenders then outstanding plus (ii) the aggregate L/C
Obligations then outstanding).
"Commitment Period": the period from and including the Closing Date to
but not including the Termination Date (or such earlier date as the
Commitments shall terminate as provided herein).
"Commonly Controlled Entity": an entity, whether or not incorporated,
which is part of a group which includes the Borrower and which is treated as a
single employer under Section 414 of the Code.
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"Consolidated EBIT": of the Borrower and its consolidated Subsidiaries,
for any period, Consolidated Net Income for such period (a) plus, without
duplication and to the extent reflected as a charge in the statement of such
Consolidated Net Income for such period, the sum of (i) Consolidated Interest
Expense and any other interest expense, (ii) total income tax expense (whether
paid, accrued or deferred), (iii) non-cash provisions for reserves for
discontinued operations and (iv) any non-cash, extraordinary losses
(including, whether or not otherwise includible as a separate item in the
statement of such Consolidated Net Income for such period, losses on the
disposition of assets outside of the ordinary course of business) and (b)
minus, to the extent reflected as a credit in the statement of such
Consolidated Net Income for such period, any non-cash, extraordinary gains
(including, whether or not otherwise includible as a separate item in the
statement of such Consolidated Net Income for such period, gains on the
disposition of assets outside of the ordinary course of business).
"Consolidated EBITDA": of the Borrower and its consolidated
Subsidiaries, for any period, Consolidated EBIT (a) plus, without duplication
and to the extent reflected as a charge or expense in the statement of
Consolidated Net Income for such period, depreciation and amortization expense
and all other non-cash expenses or charges for such period, including, without
limitation, any and all accruals necessary for purposes of conforming with
Financial Accounting Standards Board Statement Number 106 and 112 and any
other non-cash charges resulting from the application of purchase accounting
with respect to any acquisition permitted hereunder (b) minus, without
duplication with any other non-cash gains subtracted from Consolidated EBIT or
under this definition of Consolidated EBITDA, to the extent reflected as a
gain in the statement of Consolidated Net Income for such period, all non-cash
gains for such period; provided that (a) to the extent any management fees to
be paid in accordance with the Management Agreement have accrued during such
period but have not been paid in cash, such accrued and unpaid management fees
shall be excluded from the calculation of Consolidated EBITDA and (b) to the
extent that during such period, accrued management fees to be paid in
accordance with the Management Agreement from prior periods are paid in cash,
such payments of management fees shall be deducted in determining Consolidated
EBITDA during the period in which such payments are made. Notwithstanding the
foregoing, for purposes of determining compliance with Subsections 8.1(a) and
(b), if the Borrower shall have acquired all the business or assets of, or all
the stock or other evidences of beneficial ownership of, any Person (an
"Acquired Entity") in a transaction permitted by Section 8.10 during the
period of four consecutive fiscal quarters then being tested, Consolidated
EBITDA with respect to the Borrower and its consolidated Subsidiaries for such
period shall be adjusted on a pro forma basis (pursuant to assumptions
reasonably satisfactory to the Agent) to include the Consolidated EBITDA of
the Acquired Entity as if the Acquired Entity had been acquired on the first
day of such period.
"Consolidated Funded Indebtedness": of the Borrower and its consolidated
Subsidiaries, at the date of determination thereof, all Indebtedness (other
than liabilities under any Interest Rate Agreement with a Lender) of the
Borrower and its consolidated Subsidiaries which by its terms matures more
than one year after the date of incurrence, and any such Indebtedness maturing
within one year from such date which is renewable or extendable at the option
of the obligor to a date more than one year from such date (including, in any
event, the Loans).
"Consolidated Interest Expense": with respect to the Borrower and its
consolidated Subsidiaries, for any period, the amount of cash interest expense
of the Borrower, determined on a consolidated basis in accordance with GAAP,
for such period on its Indebtedness. Notwithstanding the foregoing, for
purposes of determining compliance with Subsection 8.1(a), if the borrower
shall have acquired an Acquired Entity in a transaction permitted by Section
8.10 during the period of four consecutive fiscal quarters then being tested,
Consolidated Interest Expense with respect to the Borrower and its
consolidated Subsidiaries for such period shall be adjusted on a pro forma
basis (pursuant to assumptions reasonably satisfactory to the Agent) to
include the Consolidated Interest Expense of the Acquired Entity as if the
Acquired Entity had been acquired on the first day of such period.
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"Consolidated Interest Expense Ratio": with respect to the Borrower and
its consolidated Subsidiaries for any period, the ratio of (a) Consolidated
EBITDA for such period to (b) Consolidated Interest Expense for such period.
"Consolidated Net Income": for any period of determination, net income
of the Borrower and its consolidated Subsidiaries, determined on a
consolidated basis in accordance with GAAP (but excluding any one-time fees
and expenses incurred in connection with the Refinancing).
"Consolidated Senior Funded Indebtedness": of the Borrower and its
consolidated Subsidiaries, at the date of determination thereof, Consolidated
Funded Indebtedness of the Borrower and its consolidated Subsidiaries at such
date, other than any such Indebtedness that is by its terms subordinated to
the prior payment of any interest on, principal of or other amounts payable in
respect of any other Indebtedness of the Borrower of its consolidated
Subsidiaries.
"Contractual Obligation": as to any Person, any provision of any
material security issued by such Person or of any material agreement,
instrument or other undertaking to which such Person is a party or by which it
or any of its property is bound.
"CSI": Chase Securities Inc.
"Default": any of the events specified in Section 9, whether or not any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"Dollars" and "$": dollars in lawful currency of the United States of
America.
"Domestic Subsidiary": a Subsidiary that is organized under the laws of
any state of the United States or any territory thereof or the District of
Columbia.
"Earn-Out Agreement": the Earn-Out Agreement dated as of the date of the
Ensolite Transaction, by and between Uniroyal Technology Corporation and
Rubatex, entered into in connection with the Ensolite Transaction.
"Eligible Accounts Receivable": at the time of any determination
thereof, all Accounts that satisfy the following criteria at the time of
creation and continue to meet the same at the time of such determination: (i)
have been invoiced and represent the bona fide sale and delivery from the
Borrower or the Accounts Receivable Subsidiaries to the purchaser of
merchandise or services, in each case in the ordinary course of business of
the Borrower or the Accounts Receivable Subsidiaries in connection with its
trade operations and (ii) are not ineligible for inclusion in the calculation
of the Borrowing Base pursuant to any of clauses (a) through (o) below or
otherwise deemed by the Agent in good faith to be ineligible for inclusion in
the calculation of the Borrowing Base as described below. Without limiting
the foregoing, to qualify as an Eligible Account Receivable, an Account shall
indicate as sole payee and as sole remittance party the Borrower or any of the
Accounts Receivable Subsidiaries. In determining the amount to be so
included, the face amount of Accounts shall be reduced by, without
duplication, to the extent not reflected in such face amount, (i) the amount
of all accrued and actual returns, discounts, claims, credits or credits
pending, charges, price adjustments, freight or finance charges or other
allowances (including any amount that the Borrower or the Accounts Receivable
Subsidiaries, as applicable, may be obligated to rebate to a customer pursuant
to the terms of any agreement or understanding (written or oral)), (ii) the
aggregate amount of all reserves, limits and deductions provided for in this
definition and elsewhere in this Agreement and (iii) the aggregate amount of
all cash received in respect of Accounts but not yet applied by the Borrower
or the applicable Domestic Subsidiary to reduce the amount of the Accounts.
Standards of eligibility may be fixed from time to time solely by the Agent in
the exercise of its reasonable judgment, with any
8
changes in such standards to be effective 10 days after delivery of notice
thereof to the Borrower. Unless otherwise approved from time to time in
writing by the Agent, no Account shall be an Eligible Account Receivable if,
without duplication:
(a) the Borrower or the Accounts Receivable Subsidiaries do not
have sole lawful and absolute title to such Account; or
(b) it arises out of a sale made by the Borrower or the Accounts
Receivable Subsidiaries to an employee, officer, agent, director,
stockholder, or Affiliate of the Borrower or any of the Accounts
Receivable Subsidiaries ; or
(c) (i) it is unpaid more than 90 days from the date of invoice
or 60 days from the due date or (ii) it has been written off the books
of the Borrower or the Accounts Receivable Subsidiaries or has been
otherwise designated on such books as uncollectible; or
(d) more than 50% in face amount of all Accounts of the same
Account Debtor are ineligible pursuant to clause (c) above; or
(e) the Account Debtor (i) is a creditor of any Loan Party, (ii)
has or has asserted a right of set-off against any Loan Party (unless
such Account Debtor has entered into a written agreement reasonably
acceptable to the Agent to waive such set-off rights) or (iii) has
disputed its liability (whether by chargeback or otherwise) or made
any claim with respect to the Account or any other Account of any Loan
Party which has not been resolved, in each case, without duplication,
to the extent of the amount owed by such Loan Party to the Account
Debtor, the amount of such actual or asserted right of set-off, or the
amount of such dispute or claim, as the case may be; or
(f) the Account Debtor is insolvent or the subject of any
bankruptcy case or insolvency proceeding of any kind; or
(g) the Account is not payable in Dollars or the Account Debtor
is either not incorporated under the laws of the United States of
America, any state thereof or the District of Columbia or is located
outside or has its principal place of business or substantially all of
its assets outside the United States, except to the extent the Account
is supported by an irrevocable letter of credit reasonably
satisfactory to the Agent (as to form, substance and issuer) and
assigned to and directly drawable by the Agent; or
(h) the sale to the Account Debtor is on a xxxx-and-hold,
guaranteed sale, sale-and-return, ship-and-return, sale on approval,
extended terms or consignment or other similar basis or made pursuant
to any other agreement providing for repurchase or return of any
merchandise which has been claimed to be defective or otherwise
unsatisfactory; or
(i) the Account Debtor is the United States of America or any
department, agency or instrumentality thereof, unless the Borrower or
the relevant Accounts Receivable Subsidiary, duly assigns its rights
to payment of such Account to the Agent pursuant to the Assignment of
Claims Act of 1940, as amended, which assignment and related documents
and filings shall be in form and substance reasonably satisfactory to
the Agent; or
(j) the goods giving rise to such Account have not been shipped
and title has not been transferred to the Account Debtor, or the
Account represents a progress-billing or otherwise does not represent
a completed sale; for purposes hereof, "progress-billing" means any
invoice for goods sold or leased or services rendered under a contract
or agreement pursuant to which the
9
Account Debtor's obligation to pay such invoice is conditioned upon
the Borrower's or the Accounts Receivable Subsidiaries' completion of
any further performance under the contract or agreement; or
(k) the Account does not comply in all material respects with
the requirements of all applicable laws and regulations, whether
Federal, state or local, including without limitation the Federal
Consumer Credit Protection Act, the Federal Truth in Lending Act and
Regulation Z of the Board; or
(l) the Account is subject to any adverse security deposit,
retainage or other similar advance made by or for the benefit of the
Account Debtor, in each case to the extent thereof; or
(m) (i) it is not subject to a valid and perfected first
priority Lien in favor of the Agent for the benefit of the Secured
Parties, subject to no other Liens other than the Liens (if any)
permitted by the Loan Documents or (ii) it does not otherwise conform
in all material respects to the representations and warranties
contained in the Loan Documents relating to Accounts; or
(n) as to all or any part of such Account, a check, promissory
note, draft, trade acceptance or other Instrument for the payment of
money has been received, presented for payment and returned
uncollected for any reason; or
(o) the Account is not payable directly to (i) the Collateral
Proceeds Account (as defined in the Lockbox Assignment Agreement) or
(ii) a Collection Deposit Account or Lockbox (as defined in the
Lockbox Assignment Agreement).
In determining the aggregate amount of Accounts from the same Account
Debtor that are unpaid more than 90 days from the date of invoice or more than
60 days from the due date pursuant to clause (c) above, there shall be
excluded the amount of any net credit balances relating to Accounts with
invoice dates more than 90 days prior to the date of determination or more
than 60 days from the due date.
"Eligible Inventory": at the time of any determination thereof, without
duplication, all Inventory at the time of such determination that are not
ineligible for inclusion in the calculation of the Borrowing Base pursuant to
any of clauses (a) through (i) below or otherwise deemed by the Agent in good
faith to be ineligible for inclusion in the calculation of the Borrowing Base
as described below. Without limiting the foregoing, to qualify as "Eligible
Inventory" no person other than the Borrower or a Domestic Subsidiary, as
applicable, shall have any direct or indirect ownership interest or title to
such Inventory and no person other than the Borrower or a Domestic Subsidiary,
as applicable, shall be indicated on any purchase order or invoice with
respect to such Inventory as having or purporting to have an interest therein.
Standards of eligibility may be fixed from time to time solely by the Agent in
the exercise of its reasonable judgment, with any changes in such standards to
be effective 10 days after delivery of notice thereof to the Borrower. Unless
otherwise from time to time approved in writing by the Agent, no Inventory
shall be deemed Eligible Inventory if, without duplication:
(a) the Borrower or a Domestic Subsidiary does not have sole
and good, valid and unencumbered title thereto (except for Liens
expressly permitted by Section 8.3); or
(b) it is not located in the United States; or
(c) it is not located on property owned or leased by the
Borrower or a Domestic Subsidiary or in a contract warehouse, in each
case, specified on Schedule 1(a)(i), and, except as otherwise approved
by the Agent, covered by an agreement reasonably satisfactory in form
10
and substance to the Agent covering the Agent's access to such
Inventory and waiving the lessor's or contract warehouseman's Liens
therein and segregated or otherwise separately identifiable from goods
of all others, if any, stored on the premises; or
(d) in the case of raw materials it is other than rubber, nylon
fabric and mylar; or
(e) in the case of finished goods inventory, those items that
are in the curing process, or those items that are not in a readily
saleable form; or
(f) it is packing or shipping materials or maintenance
supplies; or
(g) it is not subject to a valid and perfected first priority
Lien in favor of the Agent for the benefit of the Secured Parties
(except for Liens expressly permitted by Section 8.3); or
(h) it is goods returned or rejected by such person's customers
or goods in transit to third parties (other than to warehouse sites
described in clause (c) above); or
(i) it is inactive, experimental, work-in-progress, seconds or
thirds or is obsolete or slow-moving or unmerchantable, or does not
otherwise conform to the representations and warranties contained in
the Loan Documents.
"Eligible Inventory Value": of any Person shall mean at the time of any
determination thereof the lower of cost (less any appropriate revaluation
reserves or reserve for obsolete Inventory and any profits accrued in
connection with transfers of Inventory between any Loan Party and its
Subsidiaries or between Subsidiaries of any Loan Party) or fair market value
of the Eligible Inventory at such time, in Dollars, determined in accordance
with the standard cost method of accounting less, in the event variances under
the standard cost method (i) are capitalized, favorable variances shall be
deducted from Eligible Inventory Value, and unfavorable variances shall not be
added to Eligible Inventory Value, and (ii) are expensed, a reserve shall be
determined as appropriate in order to adjust the standard cost of Eligible
Inventory value to approximate actual cost.
"Ensolite Transaction": the acquisition by Rubatex of substantially all
the assets of Ensolite, a division of Uniroyal Technology Corporation.
"Environmental Laws": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements of
Law regulating, relating to or imposing liability or standards of conduct
concerning protection of human health or the environment, as now or may at any
time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as amended
from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates (expressed
as a decimal fraction) of reserve requirements in effect on such day
(including, without limitation, basic, supplemental, marginal and emergency
reserves under any regulations of the Board of Governors of the Federal
Reserve System or other Governmental Authority having jurisdiction with
respect thereto) dealing with reserve requirements prescribed for eurocurrency
funding (currently referred to as "Eurocurrency Liabilities" in Regulation D
of such Board) maintained by a member bank of such System.
"Eurodollar Base Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum determined by the
Agent to be the arithmetic mean (rounded to the nearest 1/100th of 1%) of the
offered rates for U.S. dollar deposits with a term comparable to the
11
applicable Interest Period that appears on the Telerate British Bankers Assoc.
Interest Settlement Rates Page (as defined below) at approximately 11:00 a.m.,
London time, on the second full Business Day preceding the first day of such
Interest Period; provided, however, that if there shall at any time no longer
exist a Telerate British Bankers Assoc. Interest Settlement Rates Page (or if,
on any day, no such rates shall so appear), "Eurodollar Base Rate" shall mean,
with respect to each day during each Interest Period pertaining to a
Eurodollar Loan, the rate per annum equal to the rate at which Chase is
offered Dollar deposits at or about 10:00 A.M., New York City time, two
Business Days prior to the beginning of such Interest Period in the interbank
eurodollar market where the eurodollar and foreign currency and exchange
operations in respect of its Eurodollar Loans are then being conducted for
delivery on the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to the amount of its Eurodollar
Loan to be outstanding during such Interest Period. "Telerate British Bankers
Assoc. Interest Settlement Rates Page" shall mean the display designated as
Page 3750 on the Teleratesystem Incorporated service (or such other page as
may replace such page on such service for the purpose of displaying the rates
at which Dollar deposits are offered by leading banks in the London interbank
deposit market).
"Eurodollar Loans": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upward to the nearest 1/100th
of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Event of Default": any of the events specified in Section 9, provided
that all applicable requirements for the giving of notice, the lapse of time,
or both, have been satisfied.
"Existing Credit Agreement": that certain Credit Agreement, dated as of
October 16, 1995, as amended, among RBX Group, Inc., the Borrower, certain
commercial lending institutions named as lenders therein and Chase, as agent
for the lenders thereunder.
"Existing Credit Facilities": the credit facilities under the Existing
Credit Agreement.
"Existing Letter of Credit": each letter of credit that (a) was issued
or deemed issued under the Existing Credit Agreement and (b) is listed on
Schedule 1(a).
"Extension of Credit": as to any Lender, the making of a Loan by such
Lender or the issuance of, or participation in, a Letter of Credit by such
Lender.
"Financing Lease": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance with
GAAP to be capitalized on a balance sheet of the lessee and, for the purposes
of this Agreement, the amount of such obligations at any time shall be the
capitalized amount thereof at such time determined in accordance with GAAP.
"Foreign Subsidiary": a Subsidiary that is not organized under the laws
of any state of the United States or territory thereof or the District of
Columbia.
"GAAP": with respect to the covenants contained in subsection 8.1 and
all defined terms relating thereto, generally accepted accounting principles
in the United States of America in effect on the
12
Closing Date and, for all other purposes under this Agreement, generally
accepted accounting principles in the United States of America in effect from
time to time.
"Governmental Authority": any nation or government, any state or other
political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Group of Loans": the collective reference to Eurodollar Loans the then
current Interest Periods with respect to all of which begin on the same date
and end on the same later date (whether or not such Loans shall originally
have been made on the same day).
"Guarantee Agreement": the Guarantee Agreement to be executed and
delivered by each Domestic Subsidiary substantially in the form of Exhibit E,
as the same may be amended, supplemented or otherwise modified from time to
time.
"Guarantee Obligation": as to any Person (the "guaranteeing person"),
any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to induce
the creation of which the guaranteeing person has issued a reimbursement,
counterindemnity or similar obligation, in either case guaranteeing or in
effect guaranteeing any Indebtedness, leases, dividends or other obligations
(the "primary obligations") of any other third Person (the "primary obligor")
in any manner, whether directly or indirectly, including, without limitation,
any such obligation of the guaranteeing person, whether or not contingent, (i)
to purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (A) for the
purchase or payment of any such primary obligation or (B) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment
of such primary obligation or (iv) otherwise to assure or hold harmless the
owner of any such primary obligation against loss in respect thereof;
provided, however, that the term "Guarantee Obligation" shall not include
endorsements of instruments for deposit or collection in the ordinary course
of business. The amount of any Guarantee Obligation of any guaranteeing
person shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the instrument
embodying such Guarantee Obligation, unless such primary obligation and the
maximum amount for which such guaranteeing person may be liable are not stated
or determinable, in which case the amount of such Guarantee Obligation shall
be such guaranteeing person's maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.
"Indebtedness": of any Person at any date, without duplication (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services which, in accordance with GAAP, would be
required to be shown as a liability on the face of a balance sheet of such
Person on such date (other than trade liabilities, accrued expenses and
liabilities and deferred payments to employees or former employees for
services rendered, in each case to the extent incurred in the ordinary course
of business and payable in accordance with customary practices), (b) any other
indebtedness of such Person which is evidenced by a note, bond, debenture or
similar instrument, (c) all obligations of such Person under Financing Leases,
(d) all net liabilities of such Person in respect of Interest Rate Agreements,
currency or commodity hedging transactions, swaps or similar derivative
transactions, (e) all obligations of such Person in respect of bankers'
acceptances issued or created for the account of such Person, (f) all
obligations of such Person in respect of letters of credit issued for the
account of such Person and (g) all indebtedness or obligations of the types
referred to in the preceding clauses (a) through (f) secured by any Lien on
any property owned by such Person to the
13
extent attributable to such Person's interest in such property, even though
such Person has not assumed or otherwise become liable for the payment thereof
but excluding customer deposits and interest payable thereon in the ordinary
course of business. Notwithstanding the foregoing, "Indebtedness" shall not
include any obligation of Rubatex pursuant to the Earn-Out Agreement between
Uniroyal Technology Corporation and Rubatex, entered into in connection with
the Ensolite Transaction.
"Insolvency": with respect to any Multiemployer Plan, the condition that
such Multiemployer Plan is insolvent within the meaning of Section 4245 of
ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intercreditor Agreement": the Intercreditor Agreement to be executed
and delivered by the Borrower, each Domestic Subsidiary, the Trustee and the
Agent, substantially in the form of Exhibit C, as the same may be amended,
supplemented or otherwise modified from time to time.
"Interest Payment Date": (a) as to any ABR Loan, the last day of each
March, June, September and December to occur while such Loan is outstanding,
(b) as to any Eurodollar Loan having an Interest Period of three months or
less, the last day of such Interest Period, (c) as to any Eurodollar Loan
having an Interest Period longer than three months, (i) each day which is
three months and a whole multiple thereof after the first day of such Interest
Period and (ii) the last day of such Interest Period and (d) as to any Loan,
(i) the Termination Date and (ii) any date upon which the Commitments have
been terminated and the Loans have been paid in full.
"Interest Period": with respect to any Eurodollar Loan:
(a) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Eurodollar
Loan and ending one, two, three or six months (or nine months, to the
extent funds are available for such nine-month period) thereafter, as
selected by the Borrower in its notice of borrowing or notice of
conversion, as the case may be, given with respect thereto; and
(b) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Eurodollar Loan and
ending one, two, three or six months (or nine months, to the extent
funds are available for such nine-month period) thereafter, as
selected by the Borrower by irrevocable notice to the Agent not less
than three Business Days prior to the last day of the then current
Interest Period with respect thereto;
provided that, all of the foregoing provisions relating to Interest Periods
are subject to the following:
(i) if any Interest Period pertaining to a Eurodollar Loan would
otherwise end on a day that is not a Business Day, such 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;
(ii) any Interest Period that would otherwise extend beyond the
Termination Date shall (for all purposes other than subsection 4.12)
end on the Termination Date or such date of final payment, as the case
may be;
(iii) any Interest Period pertaining to a Eurodollar Loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the
14
calendar month at the end of such Interest Period) shall end on the
last Business Day of a calendar month; and
(iv) the Borrower shall select Interest Periods so as not to
require a scheduled payment of any Eurodollar Loan during an Interest
Period for such Loan.
"Interest Rate Agreement": any interest rate protection agreement,
interest rate future, interest rate option, interest rate cap or other
interest rate hedge arrangement to or under which the Borrower is a party or a
beneficiary on the date hereof or becomes a party or a beneficiary after the
date hereof that contains terms and conditions reasonably satisfactory to the
Agent.
"Inventory": as defined in the Uniform Commercial Code as in effect in
the State of New York; and, with respect to the Borrower and its Subsidiaries,
all such Inventory (other than supplies) of the Borrower and its Subsidiaries,
including, without limitation: (a) all finished goods, parts, components,
assemblies and materials used or consumed in the Borrower's or such
Subsidiary's businesses; (b) all goods, wares and merchandise, finished or
unfinished, held for sale; and (c) all goods returned to or repossessed by the
Borrower or such Subsidiary.
"Junior Security Agreement": the Security Agreement dated as of December
11, 1997, among the Borrower, the Subsidiary Guarantors party thereto and the
Trustee.
"Law Change": as defined in Section 4.11.
"L/C Commitment": $5,000,000.
"L/C Fee Payment Date": with respect to any Letter of Credit, the last
day of each March, June, September and December occurring after the date of
issuance thereof and prior to the expiration thereof.
"L/C Obligations": at any time, an amount equal to the sum of (a) the
aggregate then undrawn and unexpired amount of the then outstanding Letters of
Credit and (b) the aggregate amount of drawings under Letters of Credit which
have not then been reimbursed pursuant to subsection 3.5(a).
"L/C Participants": the collective reference to all the Lenders other
than the Issuing Lender.
"Lender": has the meaning set forth in the preamble and includes any
assignee of a Lender pursuant to subsection 11.6(c).
"Letters of Credit": (a) letters of credit issued by the Issuing Lender
pursuant to subsection 3.1(a) and (b) the Existing Letters of Credit.
"Leverage Ratio": with respect to the Borrower and its consolidated
Subsidiaries on each particular date of determination set forth in subsection
8.1(b), the ratio of (a) Consolidated Funded Indebtedness on such date to (b)
Consolidated EBITDA for the most recent four fiscal quarters ending on or
prior to such date.
"Lien": any mortgage, pledge, hypothecation, assignment, security
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or security arrangement (including, without limitation, any
conditional sale or other title retention agreement and any Financing Lease
having substantially the same economic effect as any of the foregoing).
"Loans": as defined in subsection 2.1.
15
"Loan Documents": this Agreement, the Notes, the Applications, the
Intercreditor Agreement, the Guarantee Agreement and the Security Documents.
"Loan Parties": the Borrower, the Subsidiaries and any new Subsidiary
that complies with the terms and provisions of subsection 8.17(b);
individually, a "Loan Party".
"Lockbox Account": each lockbox and related demand deposit account that
is the subject of a Lockbox Assignment Agreement and each other lockbox and/or
related demand deposit account maintained by the Borrower or any Domestic
Subsidiary; collectively, the "Lockbox Accounts".
"Lockbox Assignment Agreement": the Lockbox Assignment Agreement, to be
executed by the Borrower and each Domestic Subsidiary with a Lockbox Account,
in favor of the Agent, for the ratable benefit of the Lenders, in form and
substance reasonably acceptable to the Agent and the Borrower, as each may be
amended, supplemented or otherwise modified from time to time.
"Lockbox Bank": each bank at which the Borrower or any Domestic
Subsidiary maintains a Lockbox Account.
"Management Agreement": the Management Services Agreement dated as of
the Closing Date, among RBX Group, the Borrower, certain of the Subsidiaries
and American Industrial Partners, a Delaware general partnership.
"Material Adverse Effect": a material adverse effect on (a) the
business, assets, operations, property or condition (financial or otherwise)
of the Borrower and its Subsidiaries taken as a whole, (b) the ability of the
Borrower and its Subsidiaries, taken as a whole, to consummate the Refinancing
or perform their obligations under the Loan Documents, (c) the validity or
enforceability of this Agreement, any of the Notes or any of the other Loan
Documents or (d) the rights or remedies of the Agent or the Lenders hereunder
or thereunder.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined as such in or
regulated under or which could give rise to liability under any Environmental
Law, including, without limitation, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
"Multiemployer Plan": a Plan which is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"New Notes": any and all Indebtedness evidenced by the Senior Secured
Note Indenture (and the notes and guarantees issued thereunder) relating to
the Borrower's 12% Senior Secured Notes due 2003 (whether designated Series A
or Series B) in an aggregate principal amount of $100,000,000.
"New Notes Collateral": the "Primary Collateral" as defined in the
Senior Secured Note Indenture as in effect as the date hereof.
"Non-Excluded Taxes": as defined in subsection 4.11.
"Note": as defined in subsection 2.2.
"Obligations": as defined in the Security Agreement.
16
"Obligor": any purchaser of goods or services or other Person obligated
to make payment to the Borrower or a Subsidiary in respect of a purchase of
such goods or services.
"Participant": as defined in subsection 11.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA.
"Permitted AIP Affiliates": any Affiliate of AIP (including for this
purpose any partner, officer or director of AIP, RBX Group or the Borrower or
any person which is in control of or under common control with AIP, but not
including any person which is controlled by AIP other than RBX Group or the
Borrower).
"Person": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"Plan": an employee pension benefit plan which is covered by Title IV of
ERISA or subject to the minimum funding standards of Section 412 of the Code
and in respect of which the Borrower or a Commonly Controlled Entity is (or,
if such plan were terminated at such time, would under Section 4069 of ERISA
be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Properties": as defined in subsection 5.18.
"Pro Forma Balance Sheet": as defined in subsection 5.1(b).
"Pro Forma Date": as defined in subsection 5.1(b).
"RBX Group": RBX Group, Inc., a Delaware corporation.
"Refinancing": the collective reference to the actions taken, or to be
taken, by or on behalf of RBX Group, the Borrower and any of the Subsidiaries,
in connection with the repayment of all the outstanding borrowings under the
Existing Credit Agreement and the termination thereof.
"Register": as defined in subsection 11.6(d).
"Regulation U": Regulation U of the Board of Governors of the Federal
Reserve System as in effect from time to time.
"Reimbursement Obligations": the obligation of the Borrower to reimburse
the Issuing Lender pursuant to subsection 3.5(a) for amounts drawn under
Letters of Credit.
"Reorganization": with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of
ERISA.
"Reportable Event": any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg.
subsection 2615 or any successor regulation thereto.
"Required Lenders": at any time, Lenders the Commitment Percentages of
which aggregate at least 51%.
17
"Required Release Lenders": at any time, Lenders the Commitment
Percentages of which aggregate at least 100%.
"Requirement of Law": as to any Person, the certificate of incorporation
and by-laws or other organizational or governing documents of such Person, and
any law, treaty, rule or regulation or determination of an arbitrator or a
court or other Governmental Authority, in each case applicable to or binding
upon such Person or any of its material property or to which such Person or
any of its material property is subject.
"Responsible Officer": as to any Person, any of the following officers
of such Person: the chief executive officer, the president or any vice
president of such Person and, with respect to financial matters, the chief
financial officer, the treasurer, the controller or any assistant treasurer or
assistant controller of such Person.
"Rubatex": Rubatex Corporation, a Delaware corporation.
"SEC": the Securities and Exchange Commission or any successor or
analogous Governmental Authority.
"Securities Exchange Act": the Securities Exchange Act of 1934, as
amended.
"Securities Purchase Agreement": the Securities Purchase Agreement dated
as of December 11, 1997, among the Borrower, Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation and CSI.
"Security Documents": the collective reference to the Senior Security
Agreement and any other agreements entered into by the Borrower after the date
hereof for purposes of providing collateral security or credit support for the
Loans.
"Senior Leverage Ratio": with respect to the Borrower and its
consolidated Subsidiaries on the particular date of determination set forth in
subsection 8.11(a), the ratio of (a) Consolidated Senior Funded Indebtedness
on such date to (b) consolidated EBITDA for the most recent four fiscal
quarters ending on or prior to such date.
"Senior Secured Note Indenture": the Indenture dated as of December 11,
1997 between the Borrower and the Trustee, as amended from time to time in
accordance with subsection 8.11.
"Senior Secured Initial Note Offering Memorandum": the Offering
Memorandum dated December 5, 1997, relating to the issuance of the New Notes.
"Senior Security Agreement": the Senior Security Agreement to be
executed and delivered by the Borrower, the Domestic Subsidiaries and the
Agent, substantially in the form of Exhibit B, as the same may be amended,
supplemented or otherwise modified from time to time.
"Significant Subsidiary": any Subsidiary of the Borrower whose
consolidated assets at any one time shall be greater than or equal to 5% of
the consolidated assets of the Borrower.
"Single Employer Plan": any Plan which is covered by Title IV of ERISA,
but which is not a Multiemployer Plan.
"Solvent": with respect to any Person on a particular date, that on such
date, (a) the fair value of the property of such Person is greater than the
total amount of liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair salable value of the assets
of such
18
Person is not less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and matured, (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 an unreasonably small amount of
capital.
"Standby Letter of Credit": as defined in subsection 3.1.
"Subordinated Note Indenture": the Indenture dated as of October 16,
0000 xxxxxxx xxx Xxxxxxxx xxx Xxxxxx Xxxxxx Trust Company, as trustee, as
amended from time to time in accordance with subsection 8.11.
"Subordinated Notes": any and all Indebtedness evidenced by the
Subordinated Note Indenture (and the notes and guarantees issued thereunder)
relating to the Borrower's 11.25% Senior Subordinated Notes due 2005
(regardless of designation as to series) in an aggregate principal amount of
$100,000,000.
"Subordinated Seller Notes": the subordinated unsecured notes of RBX
Group issued to Uniroyal Technology Corporation in connection with the
Ensolite Transaction.
"Subsidiary": as to any Person, a corporation, partnership or other
entity of which shares of stock or other ownership interests having ordinary
voting power (other than stock or such other ownership interests having such
power only by reason of the happening of a contingency) to elect a majority of
the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or
both, by such Person. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a
Subsidiary or Subsidiaries of the Borrower.
"Termination Date": the fifth anniversary of the Closing Date.
"Transferee": as defined in subsection 11.6(f).
"Trustee": State Street Bank and Trust Company, as trustee under
the Senior Secured Note Indenture, and its successors and assigns in such
capacity.
"Type": as to any Loan, its nature as an ABR Loan or a Eurodollar Loan.
"Uniform Customs: the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No.
500, as the same may be amended from time to time.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have such defined meanings
when used in the Notes, any of the other Loan Documents or any certificate or
other document made or delivered pursuant hereto or thereto.
(b) As used herein and in the Notes and any other Loan Document, and
any certificate or other document made or delivered pursuant hereto or
thereto, accounting terms relating to the Borrower and its Subsidiaries not
defined in subsection 1.1 and accounting terms partly defined in subsection
1.1, to the extent not defined, shall have the respective meanings given to
them under GAAP.
19
(c) The words "hereof", "herein" and "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 Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Commitments. (a) Subject to the terms and conditions hereof,
each Lender severally agrees to make loans ("Loans") to the Borrower from time
to time during the Commitment Period in an aggregate principal amount at any
one time outstanding which, when added to such Lender's Commitment Percentage
of the then outstanding L/C Obligations, does not exceed the lesser of (i) the
amount of such Lender's Commitment and (ii) such Lender's Commitment
Percentage of the Borrowing Base in effect at such time. During the
Commitment Period, the Borrower may use the Commitments by borrowing,
prepaying the Loans in whole or in part, and reborrowing, all in accordance
with the terms and conditions hereof, and/or having the Issuing Lender issue
Letters of Credit, having such Letters of Credit expire undrawn upon or if
drawn upon, reimbursing the Issuing Lender for such drawing, and having the
Issuing Lender issue new Letters of Credit.
(b) The Loans may from time to time be (i) Eurodollar Loans, (ii)
ABR Loans or (iii) a combination thereof, as determined by the Borrower and
notified to the Agent in accordance with subsections 2.3 and 4.2, provided
that no Loan shall be made as a Eurodollar Loan after the day that is one
month prior to the Termination Date.
2.2 Notes. The Loans made by each Lender shall be evidenced by a
promissory note of the Borrower, substantially in the form of Exhibit A, with
appropriate insertions as to payee, date and principal amount (each, as
amended, supplemented, replaced or otherwise modified from time to time, a
"Note"), payable to the order of such Lender and in a principal amount equal
to the lesser of (a) the amount set forth opposite such Lender's name in
Schedule 1 under the heading "Commitment" and (b) the aggregate unpaid
principal amount of all Loans made by such Lender. Each Lender is hereby
authorized to record the date, Type and amount of each Loan made by such
Lender, each continuation thereof, each conversion of all or a portion thereof
to another Type, the date and amount of each payment or prepayment of
principal thereof and, in the case of Eurodollar Loans, the length of each
Interest Period and Eurodollar Rate with respect thereto, on its internal
books and records and/or on the schedule annexed to and constituting a part of
its Note, and any such recordation on such schedule shall constitute prima
facie evidence of the accuracy of the information so recorded, provided that
the failure by any Lender to make any such recordation or any error in such
recordation shall not affect the obligations of the Borrower under this
Agreement or the Notes. Each Note shall (x) be dated the date hereof, (y) be
stated to mature on the Termination Date and (z) provide for the payment of
interest in accordance with subsection 4.1.
2.3 Procedure for Borrowing. The Borrower may borrow under the
Commitments during the Commitment Period on any Business Day, provided that
the Borrower shall give the Agent irrevocable notice (which notice must be
received by the Agent prior to 12:00 Noon, New York City time, (a) at least
one Business Day prior to the Closing Date, with respect to the borrowings to
take place, if any, on the Closing Date, which borrowings shall be ABR Loans
only, and (b) with respect to any subsequent borrowings, at least (i) three
Business Days prior to the requested Borrowing Date, if all or any part of the
requested Loans are to be initially Eurodollar Loans, or (ii) on the same
Business Day of any requested Borrowing Date, in all other cases), specifying
(A) the amount to be borrowed, (B) the requested Borrowing Date, (C) whether
the borrowing is to be of Eurodollar Loans, ABR Loans or a combination thereof
and (D) if the borrowing is to be entirely or partly of Eurodollar Loans, the
respective amounts of each such Type of Loan and the
20
respective lengths of the initial Interest Periods therefor. Each borrowing
shall be in an amount equal to (a) in the case of ABR Loans, except any ABR
Loan to be used solely to pay a like amount of outstanding Reimbursement
Obligations, $500,000 or integral multiples of $250,000 in excess thereof (or,
if the then Available Commitments are less than $500,000, such lesser amount)
and (b) in the case of Eurodollar Loans, $1,000,000 or integral multiples of
$250,000 in excess thereof. Upon receipt of any such notice from the
Borrower, the Agent shall promptly notify each Lender thereof. Except as
otherwise provided in Section 3.5(b), each Lender will make the amount of its
pro rata share of each borrowing of Loans available to the Agent for the
account of the Borrower at the office of the Agent specified in subsection
11.2 prior to 12:00 Noon, New York City time, on the Borrowing Date requested
by the Borrower in Dollars and in funds immediately available to the Agent.
Such borrowing will then promptly be made available to the Borrower on such
date by the Agent crediting the account of the Borrower on the books of such
office with the aggregate of the amounts made available to the Agent by the
Lenders and in like funds as received by the Agent.
2.4 Termination or Reduction of Commitments. The Borrower shall
have the right, upon not less than three Business Days' notice to the Agent,
to terminate the Commitments or, from time to time, to reduce the amount of
the Commitments, provided that no such termination or reduction shall be
permitted if, after giving effect thereto and to any prepayments of the Loans
made on the effective date thereof, the aggregate principal amount of the
Loans then outstanding, when added to the sum of the then outstanding L/C
Obligations, would exceed the Commitments then in effect. Any such reduction
shall be in an amount equal to $500,000 or a whole multiple in excess thereof
and shall reduce permanently the Commitments then in effect.
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and conditions
hereof, the Issuing Lender, in reliance on the agreements of the other Lenders
set forth in subsection 3.4(a), agrees to issue Letters of Credit for the
account of the Borrower on any Business Day during the Commitment Period in
such form as may be approved from time to time by the Issuing Lender, provided
that the Issuing Lender shall not issue any Letter of Credit if, after giving
effect to such issuance, (i) the L/C Obligations would exceed the L/C
Commitment or (ii) the Aggregate Outstanding Credit of any Lender would exceed
its Commitment. Each Letter of Credit shall (i) be denominated in Dollars and
shall be either (x) a standby letter of credit issued to support obligations
of the Borrower or its Subsidiaries, contingent or otherwise, which finance
the working capital and business needs of the Borrower or its Subsidiaries
incurred in the ordinary course of its respective business (a "Standby Letter
of Credit"), or (y) a commercial letter of credit in respect of the purchase
of goods or services by the Borrower or any of its Subsidiaries in the
ordinary course of its respective business (a "Commercial Letter of Credit"),
(ii) expire no later than the Termination Date, and (iii) expire no later than
365 days after its date of issuance, in the case of Standby Letters of Credit,
or 180 days after its date of issuance, in the case of Commercial Letters of
Credit. The Borrower, the Issuing Lender and the Lenders agree that the
Existing Letters of Credit shall be deemed issued hereunder on the Closing
Date and no longer outstanding under the Existing Credit Agreement.
(b) Each Letter of Credit shall be subject to the Uniform Customs
and, to the extent not inconsistent therewith, the laws of the State of New
York.
(c) The Issuing Lender shall not at any time issue any Letter of
Credit hereunder if such issuance would conflict with, or cause the Issuing
Lender or any L/C Participant to exceed any limits imposed by, any applicable
Requirement of Law.
3.2 Procedure for Issuance of Letters of Credit. The Borrower may
from time to time request that the Issuing Lender issue a Letter of Credit by
delivering to the Issuing Lender, at its address for notices
21
specified herein, an Application therefor, completed to the reasonable
satisfaction of the Issuing Lender, and such other certificates, documents and
other papers and information as the Issuing Lender may reasonably request.
Upon receipt of any Application, the Issuing Lender will process such
Application and the certificates, documents and other papers and information
delivered to it in connection therewith in accordance with its customary
procedures and shall promptly issue the Letter of Credit requested thereby
(but in no event shall the Issuing Lender be required to issue any Letter of
Credit earlier than three Business Days after its receipt of the Application
therefor and all such other certificates, documents and other papers and
information relating thereto) by issuing the original of such Letter of Credit
to the beneficiary thereof or as otherwise may be agreed by the Issuing Lender
and the Borrower. Promptly following the issuance thereof, the Issuing Lender
shall furnish a copy of such Letter of Credit to the Borrower and notify each
of the Lenders of such issuance. Any Letter of Credit may be issued by the
Issuing Lender through its Affiliate, Chase Manhattan Bank Delaware, and, in
the event of any such issuance, all references herein and in the other Loan
Documents to the term "Issuing Lender" shall, with respect to any such Letter
of Credit, be deemed to refer to Chase Manhattan Bank Delaware in such
capacity, as the context shall require.
3.3 Fees, Commissions and Other Charges. (a) The Borrower shall
pay to the Agent, for the account of the Issuing Lender, a fronting fee with
respect to each Commercial and Standby Letter of Credit in an amount equal to
.375% per annum, calculated on the basis of a 360 day year, of the face amount
of such Letter of Credit. Such fronting fee shall be payable in arrears on
each L/C Fee Payment Date.
(b) The Borrower shall pay to the Agent, for the account of the
Issuing Lender and the L/C Participants, a letter of credit commission with
respect to each Letter of Credit, computed for the period from the date of
issuance of such Letter of Credit to the date of the immediately succeeding
L/C Fee Payment Date and for each quarterly period thereafter (or, in the case
of the final such payment, from the final L/C Fee Payment Date to the date of
expiration of such Letter of Credit) at the rate equal to 2.50% per annum
calculated on the basis of a 360 day year, on the aggregate amount available
to be drawn under such Letter of Credit on the date on which such commission
is calculated. Such commissions shall be payable in arrears on each L/C Fee
Payment Date.
(c) In addition to the foregoing fees and commissions, the Borrower
shall pay or reimburse the Issuing Lender for such normal and customary costs
and expenses as are incurred or charged by the Issuing Lender in issuing,
effecting payment under, amending or otherwise administering any Letter of
Credit.
(d) The Agent shall, promptly following its receipt thereof,
distribute to the Issuing Lender and the L/C Participants all fees and
commissions received by the Agent for their respective accounts pursuant to
this subsection.
3.4 L/C Participations. (a) The Issuing Lender irrevocably agrees
to grant and hereby grants to each L/C Participant, and, to induce the Issuing
Lender to issue Letters of Credit hereunder, each L/C Participant irrevocably
agrees to accept and purchase and hereby accepts and purchases from the
Issuing Lender, on the terms and conditions hereinafter stated, for such L/C
Participant's own account and risk an undivided interest equal to such L/C
Participant's Commitment Percentage (determined on the date of issuance of the
relevant Letter of Credit) in the Issuing Lender's obligations and rights
under each Letter of Credit issued hereunder and the amount of each draft paid
by the Issuing Lender thereunder. Each L/C Participant unconditionally and
irrevocably agrees with the Issuing Lender that, if a draft is paid under any
Letter of Credit for which the Issuing Lender is not reimbursed in full by the
Borrower in accordance with subsection 3.5(a), such L/C Participant shall pay
to the Issuing Lender upon demand at the Issuing Lender's address for notices
specified herein an amount equal to such L/C Participant's Commitment
Percentage of the amount of such draft, or any part thereof, which is not so
reimbursed.
(b) If any amount required to be paid by any L/C Participant to the
Issuing Lender pursuant to subsection 3.4(a) in respect of any unreimbursed
portion of any payment made by the Issuing Lender under
22
any Letter of Credit is paid to the Issuing Lender within three Business Days
after the date such payment is due, such L/C Participant shall pay to the
Issuing Lender on demand an amount equal to the product of (i) such amount,
times (ii) the daily average Federal Funds Effective Rate, as quoted by the
Issuing Lender, during the period from and including the date such payment is
required to the date on which such payment is immediately available to the
Issuing Lender, times (iii) a fraction the numerator of which is the number of
days that elapse during such period and the denominator of which is 360. If
any such amount required to be paid by any L/C Participant pursuant to
subsection 3.4(a) is not in fact made available to the Issuing Lender by such
L/C Participant within three Business Days after the date such payment is due,
the Issuing Lender shall be entitled to recover from such L/C Participant, on
demand, such amount with interest thereon calculated from such due date
through the third Business Day after such due date at the rate specified in
clause (ii) above, and thereafter at the rate per annum applicable to ABR
Loans hereunder. A certificate of the Issuing Lender submitted to any L/C
Participant with respect to any amounts owing under this subsection shall be
conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has made payment
under any Letter of Credit and has received from any L/C Participant its pro
rata share of such payment in accordance with subsection 3.4(a), the Issuing
Lender receives any payment related to such Letter of Credit (whether directly
from the Borrower or otherwise, including proceeds of Collateral applied
thereto by the Issuing Lender), or any payment of interest on account thereof,
the Issuing Lender will, if such payment is received prior to 1:00 P.M., New
York City time, on a Business Day, distribute to such L/C Participant its pro
rata share thereof prior to the end of such Business Day and otherwise the
Issuing Lender will distribute such payment (together with interest thereon
based on the Federal Funds Effective Rate) on the next succeeding Business
Day; provided, however, that in the event that any such payment received by
the Issuing Lender shall be required to be returned by the Issuing Lender,
such L/C Participant shall return to the Issuing Lender the portion thereof
previously distributed by the Issuing Lender to it.
3.5 Reimbursement Obligation of the Borrower. (a) The Borrower
agrees to reimburse the Issuing Lender, upon receipt of notice from the
Issuing Lender of the date and amount of a draft presented under any Letter of
Credit and paid by the Issuing Lender, for the amount of (i) such draft so
paid and (ii) any taxes (as provided in subsection 4.11(a)), processing fees,
processing charges or other similar costs or expenses incurred by the Issuing
Lender in connection with such payment. Each such payment shall be made to
the Issuing Lender, at its address for notices specified herein in Dollars and
in immediately available funds, on the date on which the Borrower receives
such notice, if received prior to 11:00 A.M., New York City time, on a
Business Day, and otherwise on the next succeeding Business Day.
(b) Subject to the terms and conditions hereof, each Lender agrees
to make a Loan to the Borrower (which Loans shall be made as ABR Loans) in an
amount equal to such Lender's Commitment Percentage of the amount referred to
in the first sentence of subsection 3.5(a), provided that the Borrower shall
give the Agent irrevocable notice (which notice must be received by the Agent
prior to 12:00 Noon, New York City time) on the requested Borrowing Date
specifying the amount to be borrowed. Upon receipt of any such notice from
the Borrower, the Agent shall promptly notify each Lender thereof. Each
Lender will make the amount of its pro rata share of such borrowing available
to the Agent for the account of the Borrower at the office of the Agent
specified in subsection 11.2 prior to 3:00 P.M., New York City time, on such
Borrowing Date in Dollars and in funds immediately available to the Agent.
Such borrowing will then be made available to the Borrower by the Agent
crediting the account of the Borrower on the books of such office with the
aggregate of the amounts made available to the Agent by the Lenders and in
like funds as received by the Agent.
(c) Interest shall be payable on any and all amounts remaining
unpaid by the Borrower under this subsection 3.5, (i) from the date the draft
presented under the affected Letter of Credit is paid to the date on which the
Borrower is required to pay such amounts pursuant to paragraph (a) above at
the rate which
23
would then be payable on any outstanding ABR Loans and (ii) thereafter until
payment in full at the rate which would be payable on any outstanding ABR
Loans which were then overdue.
3.6 Obligations Absolute. (a) The Borrower's obligations under
this Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any set-off, counterclaim or defense to
payment which the Borrower may have or have had against the Issuing Lender or
any beneficiary of a Letter of Credit.
(b) The Borrower also agrees with the Issuing Lender that the
Issuing Lender shall not be responsible for, and the Borrower's Reimbursement
Obligations under subsection 3.5(a) shall not be affected by, among other
things, (i) absent gross negligence of the Issuing Lender, the validity or
genuineness of documents or of any endorsements thereon, even though such
documents shall in fact prove to be invalid, fraudulent or forged, (ii) any
dispute between or among the Borrower and any beneficiary of any Letter of
Credit or any other party to which such Letter of Credit may be transferred or
(iii) any claims whatsoever of the Borrower against any beneficiary of such
Letter of Credit or any such transferee.
(c) The Issuing Lender shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit, except
for errors or omissions caused by the Issuing Lender's gross negligence or
willful misconduct.
(d) The Borrower agrees that any action taken or omitted by the
Issuing Lender under or in connection with any Letter of Credit or the related
drafts or documents, if done in the absence of gross negligence or willful
misconduct and in accordance with the standards of care specified in the
Uniform Commercial Code of the State of New York, shall be binding on the
Borrower and shall not result in any liability of the Issuing Lender to the
Borrower.
3.7 Letter of Credit Payments. If any draft shall be presented for
payment under any Letter of Credit, the Issuing Lender shall promptly notify
the Borrower of the date and amount thereof. The responsibility of the
Issuing Lender to the Borrower in connection with any draft presented for
payment under any Letter of Credit shall, in addition to any payment
obligation expressly provided for in such Letter of Credit, be limited to
determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are in conformity with
such Letter of Credit, provided that this paragraph shall not relieve the
Issuing Lender of any liability resulting from the gross negligence or willful
misconduct of the Issuing Lender, or otherwise affect any defense or other
right that the Borrower may have as a result of any such gross negligence or
willful misconduct.
3.8 Application. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the
provisions of this Section 3, the provisions of this Section 3 shall apply.
SECTION 4. GENERAL PROVISIONS APPLICABLE TO
LOANS AND LETTERS OF CREDIT
4.1 Interest Rates and Payment Dates. (a) Each Eurodollar Loan
shall bear interest for each day during each Interest Period with respect
thereto on the unpaid principal amount thereof at a rate per annum equal to
the Eurodollar Rate determined for such day plus 2.50%.
(b) Each ABR Loan shall bear interest for each day that it is
outstanding on the unpaid principal amount thereof at a rate per annum equal
to the ABR for such day plus 1.50%.
24
(c) If all or a portion of (i) the principal amount of any Loan,
(ii) any interest payable thereon or (iii) any commitment fee, any additional
commitment fee or other amount payable hereunder shall not be paid when due
(whether at the stated maturity, by acceleration or otherwise), such overdue
amount shall bear interest at a rate per annum which is (A) 2% above the rate
which would then be payable from the date of such nonpayment until paid in
full (both before and after judgment) or (B) if no rate would then be payable,
3.50% above the ABR.
(d) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to paragraph (c) of this
subsection shall be payable from time to time on demand.
(e) It is the intention of the parties hereto to comply strictly
with applicable usury laws; accordingly, it is stipulated and agreed that the
aggregate of all amounts which constitute interest under applicable usury
laws, whether contracted for, charged, taken, reserved, or received, in
connection with the indebtedness evidenced by this Agreement or the Notes, or
any other document relating or referring hereto or thereto, now or hereafter
existing, shall never exceed under any circumstance whatsoever the maximum
amount of interest allowed by applicable usury laws.
4.2 Conversion and Continuation Options. (a) The Borrower may
elect from time to time to convert outstanding Loans from Eurodollar Loans to
ABR Loans by giving the Agent at least two Business Days' prior irrevocable
notice of such election, provided that any such conversion of Eurodollar Loans
may only be made on the last day of an Interest Period with respect thereto.
The Borrower may elect from time to time to convert outstanding Loans from ABR
Loans to Eurodollar Loans by giving the Agent at least three Business Days'
prior irrevocable notice of such election. Each notice pursuant to this
subsection 4.2 shall be irrevocable and shall refer to this Agreement and
specify (i) the identity and amount of the Loan that the Borrower requests be
converted or continued, (ii) whether such Loan is to be converted to or
continued as a Eurodollar or an ABR Loan, (iii) if such notice requests a
conversion, the date of such conversion (which shall be a Business Day) and
(iv) if such Borrowing is to be converted to or continued as a Eurodollar
Loan, the Interest Period with respect thereto. Upon receipt of any such
notice the Agent shall promptly notify each affected Lender thereof. All or
any part of outstanding Eurodollar Loans and ABR Loans may be converted as
provided herein, provided that (i) no Loan may be converted into a Eurodollar
Loan when any Default or Event of Default has occurred and is continuing and
the Agent or the Required Lenders have given notice to the Borrower that no
such conversions may be made and (ii) no Loan may be converted into a
Eurodollar Loan after the date that is one month prior to the Termination
Date.
(b) Any Eurodollar Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving notice to the Agent of the length of the next Interest Period
to be applicable to such Loans, determined in accordance with the applicable
provisions of the term "Interest Period" set forth in subsection 1.1, provided
that no Eurodollar Loan may be continued as such (i) when any Default or Event
of Default has occurred and is continuing and the Agent or the Required
Lenders have given notice to the Borrower that no such continuations may be
made or (ii) after the date that is one month prior to the Termination Date,
and provided, further, that if the Borrower shall fail to give any required
notice as described above in this paragraph, such Loans shall be automatically
converted to ABR Loans on the last day of such then expiring Interest Period.
4.3 Groups of Loans. All borrowings, payments, conversions and
continuations of Loans hereunder and all selections of Interest Periods
hereunder shall be in such amounts and be made pursuant to such elections so
that, after giving effect thereto, the aggregate principal amount of the
Eurodollar Loans comprising each Group of Loans shall be equal to $1,000,000
or integral multiples of $250,000 in excess thereof so that there shall not be
more than three Groups of Loans at any one time outstanding.
4.4 Optional and Mandatory Prepayments. (a) The Borrower may at
any time and from time to time prepay the Loans, in whole or in part, without
premium or penalty, upon at least three Business Days'
25
irrevocable notice to the Agent in the case of Eurodollar Loans and on the
same Business Day in the case of ABR Loans, specifying the date and amount of
prepayment and whether the prepayment is of Eurodollar Loans, ABR Loans or a
combination thereof, and, in each case if a combination thereof, the amount
allocable to each, provided that, Eurodollar Loans shall be prepaid at the end
of the Interest Period applicable thereto only. Upon the receipt of any such
notice the Agent shall promptly notify each affected Lender thereof. If any
such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein, together with any amounts payable
pursuant to subsection 4.12. Partial prepayments of all other Loans and the
Letters of Credit shall be applied first, to payment of any Reimbursement
Obligations then outstanding, second, to payment of the Loans then outstanding
and last, to cash collateralize any outstanding L/C Obligations on terms
reasonably satisfactory to the Agent. Partial prepayments of Loans shall be
in an aggregate principal amount equal to the lesser of (A) $1,000,000 or
integral multiples of $100,000 in excess thereof except as required under
subsection 4.4(b) or (B) the aggregate unpaid principal amount of the Loans
and outstanding L/C Obligations with respect to which payment is being made.
(b) If at any time during the Commitment Period, the Aggregate
Outstanding Credit with respect to all of the Lenders exceeds the aggregate
Commitments then in effect, the Borrower shall, without notice or demand, make
a payment (without regard to the minimum payment requirements set forth in
subsection 4.4(a)) in the amount of such excess which payment shall be applied
first, to payment of any Reimbursement Obligations then outstanding, second,
to payment of the Loans then outstanding, and last, to cash collateralize any
outstanding Letter of Credit on terms reasonably satisfactory to the Agent.
The application of prepayments of Loans referred to in the preceding sentence
shall be made first to ABR Loans and second to Eurodollar Loans.
(c) If on any date the sum of the outstanding Loans and L/C
Obligations exceeds the Borrowing Base in effect on such date, the Borrower
shall on such date apply an amount equal to such excess, first to prepay the
then-outstanding Loans and second, to the extent of any remaining excess
(after the prepayment of the Loans), to cash-collateralize or replace the L/C
Obligations, by depositing, in an account with the Agent, in the name of the
Agent and for the benefit of the Lenders, an amount in cash equal to such
remaining excess.
(d) All amounts owing pursuant to Loans outstanding and
unreimbursed drawings under Letters of Credit shall become due and payable on
the Termination Date.
4.5 Commitment Fees; Agent's Fee; Other Fees. (a) The Borrower
agrees to pay to the Agent for the account of each Lender, a commitment fee
for the period from and including the Closing Date to but excluding the
Termination Date, computed at the rate of 0.50% per annum on the average daily
amount of the Available Commitment of such Lender during the period for which
payment is due, payable quarterly in arrears on the last day of each March,
June, September and December and on the Termination Date or such earlier date
as the Commitments shall terminate as provided herein, commencing on the first
such day to occur after the Closing Date.
(b) The Borrower agrees to pay to the Agent for the account of each
Lender with respect to each fiscal year (or shorter period beginning on the
Closing Date or ending on the date the Commitments terminate), an additional
commitment fee for such period, computed at the rate of 0.50% per annum of the
excess, if any, of (i) 50% of the average Commitment (whether used or unused)
of such Lender during such period over (ii) the average of the Aggregate
Outstanding Credit of such Lender during such period. The additional
commitment fee shall be payable within 15 days after the end of each fiscal
year of the Borrower and on the date of the termination of the Commitments.
(c) The Borrower shall pay all fees and expenses required to be
paid pursuant to the Fee Letter, dated November 19, 1997, among Chase, CSI and
the Borrower in the amounts and on the dates set forth therein.
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4.6 Computation of Interest and Fees. (a) Interest (other than
interest based on the Prime Rate) and shall be calculated on the basis of a
360-day year for the actual days elapsed; and commitment fees, additional
commitment fees and interest based on the Prime Rate shall be calculated on
the basis of a 365- (or 366-, as the case may be) day year for the actual days
elapsed. The Agent shall as soon as practicable notify the Borrower and the
affected Lenders of each determination of a Eurodollar Rate. Any change in
the interest rate on a Loan resulting from a change in the ABR, the
Eurocurrency Reserve Requirements, the C/D Assessment Rate or the C/D Reserve
Percentage shall become effective as of the opening of business on the day on
which such change becomes effective. The Agent shall as soon as practicable
notify the Borrower and the affected Lenders of the effective date and the
amount of each such change in interest rate.
(b) Each determination of an interest rate by the Agent pursuant to
any provision of this Agreement shall be conclusive and binding on the
Borrower and the Lenders in the absence of manifest error. The Agent shall,
at the request of the Borrower, deliver to the Borrower a statement showing in
reasonable detail the calculations used by the Agent in determining any
interest rate pursuant to subsection 4.1, excluding any Eurodollar Base Rate
which is based upon the Telerate British Bankers Assoc. Interest Settlement
Rates Page and any ABR which is based upon the Prime Rate.
4.7 Inability to Determine Interest Rate. If prior to the first
day of any Interest Period (a) the Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower, absent
manifest error) that, by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period or (b) the Agent shall have received
notice from the Required Lenders that the Eurodollar Rate determined or to be
determined for such Interest Period will not adequately and fairly reflect the
cost to such Lenders (as conclusively certified by such Lenders) of making or
maintaining their affected Loans during such Interest Period, the Agent shall
give telecopy or telephonic notice (confirmed in writing) thereof to the
Borrower and the Lenders as soon as practicable thereafter. If such notice is
given (a) any Eurodollar Loans requested to be made on the first day of such
Interest Period shall be made as ABR Loans, (b) any Loans that were to have
been converted on the first day of such Interest Period to or continued as
Eurodollar Loans shall be converted to or continued as ABR Loans and (c) any
outstanding Eurodollar Loans shall be converted, on the first day of such
Interest Period, to ABR Loans. Until such notice has been withdrawn by the
Agent, no further Eurodollar Loans shall be made or continued as such, nor
shall the Borrower have the right to convert ABR Loans to Eurodollar Loans.
4.8 Pro Rata Treatment and Payments. (a) Each borrowing of Loans
by the Borrower from the Lenders shall be made, each payment by the Borrower
on account of any commitment fee or additional commitment fee hereunder shall
be allocated by the Agent, and any reduction of the Commitments of the Lenders
shall be allocated by the Agent, pro rata according to the respective
Commitment Percentages of the Lenders. Each payment (including each
prepayment) by the Borrower in respect of principal of and interest on any
Loans shall be allocated by the Agent pro rata according to the respective
outstanding principal amounts of such Loans then held by the Lenders. All
payments (including prepayments) to be made by the Borrower hereunder and
under any Notes, whether in respect of principal, interest, fees or otherwise,
shall be made without set off or counterclaim and shall be made prior to 1:00
P.M., New York City time, on the due date thereof to the Agent, for the
account of the Lenders holding such Notes, at the Agent's office specified in
subsection 11.2, in Dollars and in immediately available funds. Payments
received by the Agent after such time on such date shall be deemed to have
been received on the next succeeding Business Day (and, with respect to
payments of principal, interest thereon shall be payable at the then
applicable rate). The Agent shall distribute such payments to such Lenders,
if any such payment is received prior to 1:00 P.M., New York City time, on a
Business Day, in like funds as received prior to the end of such Business Day
and otherwise the Agent shall distribute such payment to such Lenders on the
next succeeding Business Day. If any payment hereunder (other than payments
on the Eurodollar Loans) becomes due and payable on a day other than a
Business Day, the maturity of such payment shall be extended to the next
succeeding Business Day, and, with respect to payments of principal, interest
thereon
27
shall be payable at the then applicable rate during such extension. If any
payment on a Eurodollar Loan becomes due and payable on a day other than a
Business Day, the maturity of such payment shall be extended to the next
succeeding Business Day (and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension)
unless the result of such extension would be to extend such payment into
another calendar month, in which event such payment shall be made on the
immediately preceding Business Day.
(b) Unless the Agent shall have been notified in writing by any
Lender prior to a borrowing that such Lender will not make the amount that
would constitute its Commitment Percentage of such borrowing available to the
Agent, the Agent may assume that such Lender is making such amount available
to the Agent, and the Agent may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. If such amount is not made
available to the Agent by the required time on the Borrowing Date therefor,
such Lender shall pay to the Agent, on demand, such amount with interest
thereon at a rate equal to the daily average Federal Funds Effective Rate for
the period until such Lender makes such amount immediately available to the
Agent. A certificate of the Agent submitted to any Lender with respect to any
amounts owing under this subsection shall be conclusive in the absence of
manifest error. If such Lender's Commitment Percentage of such borrowing is
not made available to the Agent by such Lender within three Business Days of
such Borrowing Date, (i) the Agent shall notify the Borrower of the failure of
such Lender to make such amount available to the Agent and the Agent shall
also be entitled to recover such amount with interest thereon through the
third Business Day after such Borrowing Date at the Federal Funds Effective
Rate, and thereafter at the rate per annum applicable to ABR Loans hereunder,
on demand, from the Borrower and (ii) then the Borrower may, without waiving
any rights it may have against such Lender, borrow a like amount on an
unsecured basis from any commercial bank for a period ending on the date upon
which such Lender does in fact make such borrowing available, provided that at
the time such borrowing is made and at all times while such amount is
outstanding the Borrower would be permitted to borrow such amount pursuant to
subsection 2.1 of this Agreement.
(c) The failure of any Lender to make the Loan to be made by it on
any Borrowing Date shall not relieve any other Lender of its obligation, if
any, hereunder to make its Loan on such Borrowing Date.
4.9 Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation
or application thereof occurring after the date hereof shall make it unlawful
for any Lender to make or maintain Eurodollar Loans as contemplated by this
Agreement, (a) such Lender shall promptly give written notice of such
circumstances to the Borrower and the Agent (which notice shall be withdrawn
whenever such circumstances no longer exist), (b) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such
and convert ABR Loans to Eurodollar Loans shall forthwith be canceled and,
until such time as it shall no longer be unlawful for such Lender to make or
maintain Eurodollar Loans, such Lender shall then have a commitment only to
make ABR Loans when a Eurodollar Loan is requested and (c) such Lender's Loans
then outstanding as Eurodollar Loans, if any, shall be converted automatically
to ABR Loans on the respective last days of the then current Interest Periods
with respect to such Loans or within such earlier period as required by law.
If any such conversion of a Eurodollar Loan occurs on a day which is not the
last day of the then current Interest Period with respect thereto, the
Borrower shall pay to such Lender such amounts, if any, as may be required
pursuant to subsection 4.12(c).
4.10 Requirements of Law. (a) If the adoption of or any change in
any Requirement of Law or in the interpretation or application thereof
applicable to any Lender, or compliance by any Lender with any request or
directive (whether or not having the force of law) from any central bank or
other Governmental Authority, in each case made subsequent to the date hereof
(or, if later, the date on which such Lender becomes a Lender):
(i) shall subject such Lender to any tax of any kind whatsoever
with respect to any Letter of Credit, any Application or any
Eurodollar Loans made by it or its obligation to make Eurodollar
Loans,
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or change the basis of taxation of payments to such Lender in
respect thereof (except for Non-Excluded Taxes covered by subsection
4.11 and taxes measured by or imposed upon the overall net income of
such Lender or its applicable lending office, branch, or any affiliate
thereof, or franchise tax (imposed in lieu of such net income tax));
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Eurodollar Rate
hereunder; or
(iii) shall impose on such Lender any other condition (excluding
any tax of any kind whatsoever);
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting
into, continuing or maintaining Eurodollar Loans or issuing or participating
in Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, upon notice to the Borrower from such Lender,
through the Agent, in accordance herewith, the Borrower shall promptly pay
such Lender, upon its demand, any additional amounts necessary to compensate
such Lender for such increased cost or reduced amount receivable; provided,
however, that the Borrower may elect to convert the Eurodollar Loans made by
such Lender hereunder to ABR Loans by giving the Agent at least one Business
Day's notice of such election, in which case the Borrower shall promptly pay
to such Lender, upon demand, without duplication, such amounts, if any, as may
be required pursuant to subsection 4.12(c). If any Lender becomes entitled to
claim any additional amounts pursuant to this subsection, it shall provide
prompt notice thereof to the Borrower, through the Agent, certifying (x) that
one of the events described in this paragraph (a) has occurred and describing
in reasonable detail the nature of such event, (y) as to the increased cost or
reduced amount resulting from such event and (z) as to the additional amount
demanded by such Lender and a reasonably detailed explanation of the
calculation thereof. Such a certificate as to any additional amounts payable
pursuant to this subsection submitted by such Lender, through the Agent, to
the Borrower shall be conclusive in the absence of manifest error. This
covenant shall survive the termination of this Agreement and the payment of
the Notes and all other amounts payable hereunder.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any
Governmental Authority, in each case, made subsequent to the date hereof (or,
if later, the date on which such Lender becomes a Lender), does or shall have
the effect of reducing the rate of return on such Lender's or such
corporation's capital as a consequence of its obligations hereunder or under
any Letter of Credit to a level below that which such Lender or such
corporation could have achieved but for such change or compliance (taking into
consideration such Lender's or such corporation's policies with respect to
capital adequacy) by an amount deemed by such Lender to be material, then from
time to time, within ten Business Days after submission by such Lender to the
Borrower (with a copy to the Agent) of a written request therefor certifying
(i) that one of the events described in this paragraph (b) has occurred and
describing in reasonable detail the nature of such event, (ii) as to the
reduction of the rate of return on capital resulting from such event and (iii)
as to the additional amount or amounts demanded by such Lender and a
reasonably detailed explanation of the calculation thereof, the Borrower shall
pay to such Lender such additional amount or amounts as will compensate such
Lender for such reduction. This covenant shall survive the termination of
this Agreement and the payment of the Notes and all other amounts payable
hereunder.
4.11 Taxes. (a) Except as provided below in this subsection, all
payments made by the Borrower under this Agreement and the Notes to the Agent
or any Lender shall be made free and clear of,
29
and without deduction or withholding for or on account of, any present or
future income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, by any Governmental
Authority, excluding taxes, levies, imposts, duties, charges, fees, deductions
or withholdings measured by or imposed upon the net income of any Lender or
its applicable lending office, or any branch or affiliate thereof, and
excluding all franchise taxes, taxes on doing business or taxes measured by or
in respect of capital or net worth imposed on any Lender or its applicable
lending office, or any branch or affiliate thereof, in each case, imposed,
levied, collected, withheld or assessed: (i) by the jurisdiction under the
laws of which such Lender, applicable lending office, branch or affiliate is
organized or is located, or in which its principal executive office is
located, or in which it is doing business, or any nation within which such
jurisdiction is located or any political subdivision thereof; or (ii) by
reason of any connection between the jurisdiction imposing such tax, levy,
impost, duty, charge, fee, deduction or withholding and such Lender,
applicable lending office, branch or affiliate other than a connection arising
solely from such Lender having executed, delivered or performed its
obligations, or received payment under or enforced, this Agreement or the
Notes. If any such non-excluded taxes, levies, imposts, duties, charges,
fees, deductions or withholdings ("Non-Excluded Taxes") are required to be
withheld from any amounts payable to the Agent or any Lender hereunder or
under the Notes, the Borrower shall deduct or withhold the full amount of such
Non-Excluded Taxes and pay such Non-Excluded Taxes to the relevant taxing
authority or other authority in accordance with applicable law and increase
the amounts so payable to the Agent or such Lender to the extent necessary to
yield to the Agent or such Lender (after payment of all Non-Excluded Taxes)
interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement and the Notes; provided, however, that the
Borrower shall be entitled to deduct, withhold and pay any Non-Excluded Taxes
and shall not be required to increase any such amounts payable to the Agent or
any Lender (i) if such Lender fails to comply with the requirements of
paragraph (b) of this subsection or (ii) unless the obligation to pay such
increased amounts would not have arisen but for a change in statute,
regulation or treaty or any judicial or administrative interpretation thereof
occurring after the date the Lender becomes a Lender (or in the case of a
Lender which is an Assignee, the effective date of such Assignment and
Acceptance)(any such change being referred to as a "Law Change"). Whenever
any Non-Excluded Taxes are payable by the Borrower, as promptly as possible
thereafter the Borrower shall send to the Agent for its own account or for the
account of such Lender, as the case may be, a certified copy of an original
official receipt received by the Borrower showing payment thereof. If the
Borrower fails to pay any Non-Excluded Taxes when due to the appropriate
taxing authority or fails to remit to the Agent the required receipts or other
required documentary evidence, the Borrower shall indemnify the Agent and the
Lenders for any incremental taxes, interest or penalties that may become
payable by the Agent or any Lender as a result of any such failure; provided,
however, that the Borrower shall not be required to so indemnify the Agent or
such Lenders if the Borrower's failure resulted from the Borrower's reliance
on any forms, certifications or statements provided to it by such Lenders
pursuant to paragraph (b) of this subsection 4.11.
(b) Each Lender shall:
(i) deliver to the Borrower and the Agent on or before the date
on which it becomes a Lender (or in the case of a Lender which is an
Assignee, the effective date of such Assignment and Acceptance) (x) in
the case of a Lender that is not incorporated or organized under the
laws of the United States of America or a state thereof or the
District of Columbia, two true and accurate duly completed and signed
copies of United States Internal Revenue Service Form 1001 or 4224, or
successor and related applicable forms, as the case may be and (y) two
true and accurate duly completed and signed copies of Internal Revenue
Service Form W-8 or W-9, or successor and related applicable forms, as
the case may be;
(ii) deliver to the Borrower and the Agent two further copies of
any such form or certification on or before the date that any such
form or certification expires or becomes obsolete or promptly after
the occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrower; and
30
(iii) obtain such extensions of time for filing and complete such
forms or certifications as may reasonably be requested by the Borrower
or the Agent.
In the event that a Lender determines that it is no longer able to execute and
deliver the forms, certifications or statements specified in this paragraph
(b), it shall promptly notify the Borrower in writing. Such Lender shall
certify (x) in the case of a Form 1001 or 4224, that it is entitled to receive
all payments under this Agreement without deduction or withholding of any
United States federal income taxes (provided that, if following a Law Change,
such Lender is not entitled to complete exemption from withholding of United
States federal income taxes but is entitled to a reduced rate of withholding,
the Form 1001 delivered by such Lender pursuant to this paragraph (b) shall
certify that it is entitled to such reduced rate) and (y) in the case of a
Form W-8 or W-9, that it is entitled to exemption from United States backup
withholding tax.
(c) If any Lender shall become aware that it is entitled to receive
a refund in respect of any Non-Excluded Taxes or other amounts that have been
paid or indemnified by the Borrower pursuant to subsection 4.10 or 4.11, it
shall promptly notify the Borrower of the availability of such refund and
shall, within 30 days after the receipt of a request by the Borrower, apply
for such refund at the Borrower's expense. If any Lender receives a refund in
respect of any Non-Excluded Taxes or other amounts that have been paid or
indemnified by the Borrower pursuant to subsection 4.10 or 4.11, which refund
in the good faith judgment of such Lender is allocable to such payment made
under subsection 4.10 or 4.11, as the case may be, it shall notify the
Borrower of such refund and shall, within 20 Business Days of its receipt
thereof, pay the amount of such refund (to the extent of amounts that have
been paid or indemnified by the Borrower with respect to such refund and not
previously reimbursed) to the Borrower, net of all reasonable out-of-pocket
expenses of such Lender and without interest (other than the interest, if any,
included in such refund, net of any taxes payable with respect to receipt of
such refund).
(d) The agreements in this subsection 4.11 shall survive the
termination of this Agreement and the payment of the Notes and all other
amounts payable hereunder.
4.12 Indemnity. The Borrower agrees to indemnify each Lender and
to hold each Lender harmless from any loss or expense which such Lender may
sustain or incur (other than through such Lender's gross negligence or willful
misconduct) as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment of a Eurodollar Loan after the Borrower has given a notice thereof
in accordance with the provisions of this Agreement or (c) the making of a
prepayment of Eurodollar Loans on a day which is not the last day of an
Interest Period with respect thereto. Such indemnification may include an
amount equal to the excess, if any, of (i) the amount of interest which would
have accrued on the amount so prepaid, or not so borrowed, converted or
continued, for the period from the date of such prepayment or of such failure
to borrow, convert or continue to the last day of the applicable Interest
Period (or, in the case of a failure to borrow, convert or continue, the
Interest Period that would have commenced on the date of such failure) in each
case at the applicable rate of interest for such Eurodollar Loans provided for
herein over (ii) the amount of interest (as reasonably determined by such
Lender) which would have accrued to such Lender on such amount by placing such
amount on deposit for a comparable period with leading banks in the interbank
eurodollar market. This covenant shall survive the termination of this
Agreement and the payment of the Notes and all other amounts payable
hereunder.
4.13 Certain Rules Relating to the Payment of Additional Amounts.
(a) Upon the request, and at the expense, of the Borrower, each Lender to
which the Borrower is required to pay any additional amount pursuant to
subsection 4.10 or 4.11, and any Participant in respect of whose participation
such payment is
31
required, shall reasonably afford the Borrower the opportunity to contest, and
reasonably cooperate with the Borrower in contesting, the imposition of any
Non-Excluded Tax giving rise to such payment, provided that (i) such Lender
shall not be required to afford the Borrower the opportunity to so contest
unless the Borrower shall have confirmed in writing to such Lender its
obligation to pay such amounts pursuant to this Agreement and (ii) the
Borrower shall reimburse such Lender for its reasonable attorneys' and
accountants' fees and disbursements incurred in so cooperating with the
Borrower in contesting the imposition of such Non-Excluded Tax.
(b) If a Lender changes its applicable lending office (other than
pursuant to paragraph (c) below) and the effect of the change, as of the date
of the change, would be to cause the Borrower to become obligated to pay any
additional amount under subsection 4.10 or 4.11, the Borrower shall not be
obligated to pay such additional amount.
(c) If a condition or an event occurs which would, or would upon
the passage of time or giving of notice, result in the payment of any
additional amount to any Lender by the Borrower pursuant to subsection 4.10 or
4.11, such Lender shall promptly notify the Borrower and the Agent and shall
take such steps as may reasonably be available to it and acceptable to the
Borrower to mitigate the effects of such condition or event (which shall
include efforts to rebook the Loans held by such Lender at another lending
office, or through another branch or an affiliate, of such Lender), provided
that such Lender shall not be required to take any step that, in its
reasonable judgment, would be materially disadvantageous to its business or
operations or would require it to incur additional costs (unless the Borrower
agrees to reimburse such Lender for the reasonable incremental out-of-pocket
costs thereof).
(d) If the Borrower shall become obligated to pay additional
amounts pursuant to subsection 4.10 or 4.11 and any affected Lender shall not
have promptly taken steps necessary to avoid the need for payments under
subsection 4.10 or 4.11, the Borrower shall have the right, for so long as
such obligation remains, (i) with the assistance of the Agent, to seek one or
more substitute Lenders reasonably satisfactory to the Agent and the Borrower
to purchase the affected Loan, in whole or in part, and assume the affected
obligations under this Agreement (and to effect such purchase and assumption),
or (at the Borrower's option) (ii) so long as no Default or Event of Default
shall have occurred and be continuing, upon at least four Business Days
irrevocable notice to the Agent, to prepay in whole (without any premium or
penalty but subject to subsection 4.12) the affected Loan. In the case of the
substitution of a Lender, the Borrower, the Agent, the affected Lender, and
any substitute Lender shall execute and deliver an appropriately completed
Assignment and Acceptance pursuant to subsection 11.6(c) to effect the
assignment of rights to, and the assumption of obligations by, the substitute
Lender. In the case of a prepayment of an affected Loan, the amount specified
in the notice shall be due and payable on the date specified therein, together
with any accrued interest to such date on the amount prepaid, and the
Commitment of such Lender shall be terminated upon prepayment of such Loan.
(e) The obligations of a Lender under this subsection 4.13 shall
survive the termination of this Agreement and the payment of the Notes and all
amounts payable hereunder.
SECTION 5. REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Lenders to enter into this Agreement and
to make the Loans and issue and participate in the Letters of Credit, the
Borrower hereby represents and warrants to the Agent and each Lender that:
5.1 Financial Condition. (a) The consolidated balance sheet of
the Borrower and its consolidated Subsidiaries as at December 31, 1996, the
related consolidated statements of operations, of changes in retained earnings
and of cash flows for the fiscal year ended on such date, reported on by
Deloitte
32
& Touche copies of which have heretofore been furnished to each Lender,
present fairly in all material respects the consolidated financial condition
of the Borrower and its consolidated Subsidiaries as at such date, and the
consolidated results of their operations and their consolidated cash flows for
the fiscal year then ended. The unaudited consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at September 30, 1997 and the
related unaudited consolidated statements of operations, of changes in
retained earnings and of cash flows for the 9-month period ended on such date,
certified by a Responsible Officer of the Borrower, copies of which have
heretofore been furnished to each Lender, present fairly in all material
respects the consolidated financial condition of the Borrower and its
consolidated Subsidiaries as at such date, and the consolidated results of
their operations and their consolidated cash flows for the 9-month period then
ended (except that such financial statements may not include footnote
disclosures and are subject to normal year-end audit and other adjustments).
All such financial statements, including the related notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the periods
involved (except as approved by such accountants or Responsible Officer, as
the case may be, and as disclosed therein and except that interim financial
statements may not include footnote disclosures, are subject to year-end
adjustment, and are presented in accordance with management's internal format
consistent with financial statements previously provided to the Agent).
Neither the Borrower nor any of its consolidated Subsidiaries had, at the date
of the most recent balance sheet referred to above, any material contingent
liability or liability for taxes, or any material unusual forward or long-term
commitment, including, without limitation, any interest rate or foreign
currency swap or exchange transaction, which is required under GAAP to be
included in the foregoing statements or in the notes thereto and which is not
reflected in the foregoing statements or in the notes thereto. Except as set
forth in Schedule 5.1, during the period from December 31, 1996 to and
including the date hereof there has been no sale, transfer or other
disposition by the Borrower or any of its Subsidiaries of any material part of
the business or property of the Borrower and its Subsidiaries, taken as a
whole, and no purchase or other acquisition of any business or property
(including any Capital Stock of any other Person) material in relation to the
consolidated financial condition of the Borrower and its Subsidiaries, taken
as a whole, at the Closing Date.
(b) The pro forma balance sheet of the Borrower and its
consolidated Subsidiaries (the "Pro Forma Balance Sheet"), certified by the
chief financial officer of the Borrower, copies of which have been heretofore
furnished to each Lender, is the balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of September 30, 1997 (the "Pro Forma
Date"), adjusted to give effect (as if such events had occurred on such date)
to (i) the making of the Loans, (ii) the consummation of the Refinancing,
including payment of all premiums, if any, in respect thereto and the
repayment of all outstanding borrowings and termination of all outstanding
letters of credit under the Existing Credit Agreement and (iii) the payment of
estimated fees, expenses and financing costs related to the transactions and
the Refinancing contemplated hereby and thereby. The Pro Forma Balance Sheet,
together with the notes thereto, were prepared based on good faith
assumptions, and present fairly in all material respects on a pro forma basis
the consolidated financial position of the Borrower and its consolidated
Subsidiaries as at the Pro Forma Date, adjusted as described above.
5.2 No Change; Solvency. Since December 31, 1996, there has been
no development or event which has had or could reasonably be expected to have
a Material Adverse Effect. As of the Closing Date, after giving effect to the
completion of the Refinancing, the Borrower, individually and together with
its Subsidiaries, is Solvent.
5.3 Corporate Existence; Compliance with Law. Each of the Borrower
and its Subsidiaries (a) is duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, (b) has the
corporate power and authority to own and operate its property, to lease the
property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified as a foreign corporation 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, other than in such jurisdictions where the failure to be so
qualified and in good standing could not reasonably be expected to
33
have a Material Adverse Effect and (d) is in compliance with all Requirements
of Law except to the extent that the failure to comply therewith could not, in
the aggregate, reasonably be expected to have a Material Adverse Effect.
5.4 Corporate Power; Authorization; Enforceable Obligations. Each
of the Borrower and the Subsidiaries has the corporate power and authority to
make, deliver and perform the Loan Documents to which it is a party and, in
the case of the Borrower, to borrow hereunder and has taken all necessary
corporate action to authorize the borrowings on the terms and conditions of
this Agreement, the Notes and the Applications and to authorize the execution,
delivery and performance of the Loan Documents to which it is a party. No
consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required to be
obtained or made by or on behalf of the Borrower or the Subsidiaries in
connection with the Refinancing, the borrowings hereunder or with the
execution, delivery, performance, validity or enforceability of the Loan
Documents to which the Borrower or the Subsidiaries is a party, except for
filings to perfect the Liens created by the Security Documents, except for
consents, authorizations and filings that have been obtained or made in
connection therewith and except for consents, authorizations and filings the
absence of which could not reasonably be expected to have a Material Adverse
Effect. This Agreement has been, and each other Loan Document to which it is
a party will be, duly executed and delivered on behalf of the Borrower and the
Subsidiaries party thereto. This Agreement constitutes, and each other Loan
Document to which it is a party when executed and delivered will constitute, a
legal, valid and binding obligation of the Borrower and the Subsidiaries party
thereto enforceable against the Borrower and such Subsidiaries in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or at law).
5.5 No Legal Bar. The execution, delivery and performance by the
Borrower and the Subsidiaries of the Loan Documents to which they are a party,
the borrowings hereunder and the use of the proceeds thereof (a) will not
violate any Requirement of Law or Contractual Obligation of the Borrower or of
any of the Subsidiaries in any respect that could reasonably be expected to
have a Material Adverse Effect and (b) will not result in, or require, the
creation or imposition of any Lien (other than the Liens created by the
Security Documents) on any of its or their respective properties or revenues
pursuant to any such Requirement of Law or Contractual Obligation.
5.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending
or, to the knowledge of the Borrower, threatened by or against the Borrower or
any of the Subsidiaries or against any of its or their respective properties
or revenues (a) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or thereby or (b) which, in any instance or
in the aggregate, could reasonably be expected to have a Material Adverse
Effect.
5.7 No Default. None of the Borrower nor any of the Subsidiaries
is in default under or with respect to any of its Contractual Obligations in
any respect which could reasonably be expected to have a Material Adverse
Effect. No Default or Event of Default has occurred and is continuing.
5.8 Ownership of Property; Liens. Except as set forth in Schedule
5.8, each of the Borrower and its Subsidiaries has good record and marketable
title in fee simple to, or a valid leasehold interest in, all its material
real property, and good title to, or a valid leasehold interest in, all its
other material property, and none of such property is subject to any Lien,
except for Liens permitted by subsection 8.3.
5.9 Intellectual Property. Except as set forth on Schedule 5.9,
the Borrower and each of its Subsidiaries owns, or is licensed to use, all
trademarks, trade names, copyrights, technology, know-how and processes (to
the extent related to accounts receivable and inventory) except for those the
failure of which to own or license could not reasonably be expected to have a
Material Adverse Effect (the "Intellectual
34
Property"). No claim has been asserted and is pending by any Person
challenging or questioning the use of any such Intellectual Property or the
validity or effectiveness of any such Intellectual Property, nor does the
Borrower know of any valid basis for any such claim, and to the knowledge of
the Borrower, the use of such Intellectual Property by the Borrower and its
Subsidiaries does not infringe on the rights of any Person, except for such
claims and infringements that, in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
5.10 No Burdensome Restrictions. No Requirement of Law or
Contractual Obligation of the Borrower or any of the Subsidiaries could (after
taking into account any and all corresponding benefits) reasonably be expected
to have a Material Adverse Effect.
5.11 Taxes. Each of the Borrower and the Subsidiaries has filed or
caused to be filed all federal tax returns and, to the knowledge of the
Borrower, all other tax returns which are required to be filed and has paid
all taxes shown to be due and payable on said returns on any assessments made
against it or any of its property and all other taxes, fees or other charges
imposed on it or any of its property by any Governmental Authority (other than
(a) any taxes, fees or other charges the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the Borrower or the Subsidiaries, as the case may be, and (b) where
the failure to file such other tax returns or pay such taxes, fees or other
charges could not reasonably be expected to have a Material Adverse Effect).
No tax Lien has been filed other than Liens (if any) for taxes not yet due or
which are being contested in good faith by appropriate proceedings. To the
knowledge of the Borrower, no claim is being asserted with respect to any tax,
fee or other charge referred to in the preceding sentence other than any claim
which, if determined adversely to the Borrower or any of its Subsidiaries, as
the case may be, could not reasonably be expected to have a Material Adverse
Effect.
5.12 Federal Regulations. No part of the proceeds of any Loans
will be used for "buying" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U of the
Board of Governors of the Federal Reserve System as now and from time to time
hereafter in effect or for any purpose which violates the provisions of the
Regulations of such Board of Governors. If requested by any Lender or the
Agent, the Borrower will furnish to the Agent and each Lender a statement to
the foregoing effect in conformity with the requirements of FR Form U-1
referred to in said Regulation U.
5.13 ERISA. Neither a Reportable Event that could reasonably be
expected to have a Material Adverse Effect nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which
this representation is made or deemed made with respect to any Single Employer
Plan, and no Plan has failed to comply in all material respects with the
applicable provisions of ERISA and the Code where the liability that has been
incurred or could reasonably be expected to be incurred in connection with any
Reportable Event or as a result of any such accumulated funding deficiency or
failure to so comply (a) has not been satisfied in full as of the date of the
last fiscal year for which audited financial statements are available prior to
the date this representation is made or deemed to be made or (b) would have a
Material Adverse Effect. No termination (other than a standard termination
pursuant to Section 4041(b) of ERISA) of a Single Employer Plan has occurred
during the five-year period prior to the date on which this representation is
made or deemed made, and no Lien in favor of the PBGC or a Plan has arisen and
continues in effect as of the date this representation is made or deemed
made. The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans as determined
pursuant to Section 302(c)(3)(A) of ERISA) did not, as of the last annual
valuation date prior to the date on which this representation is made or
deemed made, exceed the fair market value of the assets of such Plan allocable
to such accrued benefits by an amount in excess of $5,000,000. During the
immediately preceding five-year period prior to the date on which this
representation is made or deemed made, neither the Borrower nor any Commonly
Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan and no event has occurred or is expected to occur that
presents a material risk that either the Borrower or any
35
Commonly Controlled Entity could incur a complete or partial withdrawal from
any Multiemployer Plan, which withdrawal has subjected or would subject the
Borrower or any Commonly Controlled Entity to any liability under ERISA which
could reasonably be expected to have a Material Adverse Effect. To the
knowledge of Borrower, no such Multiemployer Plan is in Reorganization or
Insolvent.
5.14 Collateral. Upon the filing and recording of any financing
statements in the jurisdictions set forth in Schedule 5.14 (and, with respect
to Collateral acquired after the date hereof, such other jurisdictions
required under the Security Documents) the Senior Security Agreement, when
executed and delivered, will constitute a valid and continuing Lien on and, to
the extent provided therein, perfected security interest in the Collateral
required to be perfected thereunder in favor of the Agent for the ratable
benefit of the Lenders prior to all other Liens, claims and rights of all
other Persons.
5.15 Investment Company Act; Other Regulations. The Borrower is
not an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as
amended. The Borrower is not subject to regulation under any Federal or State
statute or regulation (other than Regulation X of the Board of Governors of
the Federal Reserve System) which limits its ability to incur Indebtedness
other than laws generally applicable to all Persons.
5.16 Subsidiaries. Schedule 5.16 sets forth all the Subsidiaries
of the Borrower at the date hereof, the jurisdiction of their incorporation
and the ownership interests therein.
5.17 Purpose of Loans. The proceeds of the Loans shall be used by
the Borrower solely for working capital and the general corporate purposes of
the Loan Parties.
5.18 Environmental Matters. Except insofar as any exception to the
following representations and warranties, or any aggregation of such
exceptions, could not reasonably be expected to have a Material Adverse Effect
(it being understood that the determination of whether a Material Adverse
Effect has occurred shall not take into account any liability to the extent
that reserves have been provided therefor on the books of the Borrower and the
Subsidiaries as of the Closing Date):
(a) To the knowledge of the Borrower, the facilities and
properties owned, leased or operated by the Borrower or any of the
Subsidiaries (the "Properties") do not contain, and have not
previously contained, any Materials of Environmental Concern in
amounts or concentrations which could reasonably be expected to give
rise to liability under any Environmental Law.
(b) The Properties and all operations at the Properties are in
compliance, and have in the last five years been in compliance, with
all Environmental Laws, and there is no contamination at, under or
about the Properties or violation of any Environmental Law with
respect to the Properties or the business operated by the Borrower or
any of the Subsidiaries (the "Business") which could reasonably be
expected to interfere with the continued operation of the Properties
or impair the fair saleable value thereof.
(c) None of the Borrower or any of the Subsidiaries has received
any written or, to the knowledge of the Borrower, any other notice of
violation, alleged violation, non-compliance, liability or potential
liability regarding environmental matters or compliance with any
Environmental Law with regard to any of the Properties or the
Business, and the Borrower has no reason to believe that any such
notice will be received or is being threatened.
(d) To the knowledge of the Borrower, materials of Environmental
Concern have not been transported or disposed of from, at, on or under
any of the Properties in violation of, or in any manner or to a
location that could reasonably be expected to give rise to liability
of the Borrower or any of the Subsidiaries under any Environmental
Law.
36
(e) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrower, threatened under
any Environmental Law to which the Borrower or any Subsidiary is or will
be named as a party, nor are there any consent decrees or other decrees,
consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any
Environmental Law which impose obligations on the Borrower or any of the
Subsidiaries or which otherwise adversely affect the Properties or the
Business.
(f) To the knowledge of the Borrower, there has been no release
or threat of release of Materials of Environmental Concern at or from
the Properties or elsewhere, so as to result in a violation of any
Environmental Law by the Borrower or any of the Subsidiaries, or in
amounts or in a manner that could give rise to liability of the
Borrower or any of the Subsidiaries under any Environmental Law.
(g) To the knowledge of the Borrower, there are no other past or
present actions, activities, events, conditions or circumstances that
could reasonably be expected to give rise to any liability or
obligation of the Borrower or any of the Subsidiaries under any
Environmental Law.
For purposes of this subsection 5.18, the term "Environmental Laws" refers to
applicable Environmental Laws in effect when this representation and warranty
is made or deemed made, except in paragraphs (c) and (e), where the term is
without regard to whether the Environmental Law is applicable.
SECTION 6. CONDITIONS PRECEDENT
6.1 Conditions to Initial Loan. The agreement of each Lender to
make its initial Loans requested to be made by it on the Closing Date is
subject to the satisfaction or waiver, immediately prior to or concurrently
with the making of such Loan, of the following conditions precedent:
(a) Intentionally Omitted.
(b) Loan Documents. The Agent shall have received (i) this
Agreement, executed and delivered by a duly authorized officer of each
of the parties hereto, (ii) for the account of each Lender, a Note
conforming to the requirements hereof and executed by a duly
authorized officer of the Borrower, (iii) the Senior Security
Agreement, executed and delivered by a duly authorized officer of the
Borrower or the Domestic Subsidiary party thereto, with a counterpart
for each Lender, (iv) the Guarantee Agreement, executed and delivered
by a duly authorized officer of each Loan Party named therein, with a
counterpart for each Lender, (v) the Intercreditor Agreement executed
and delivered by the Trustee, on behalf of itself and the holders of
the New Notes, with a counterpart for each Lender and (vi) the Lockbox
Assignment Agreement, executed and delivered by a duly authorized
officer of the Borrower or the Domestic Subsidiary party thereto and
each bank at which such Lockbox Accounts are maintained.
(c) Financial Information. The Lenders shall have received
copies of the Pro Forma Balance Sheet, together with a reconciliation
thereof to the balance sheet of the Borrower and its consolidated
Subsidiaries as at the Pro Forma Date.
(d) Corporate Proceedings of the Loan Parties.
(i) The Agent shall have received, with a counterpart
for each Lender, a copy of the resolutions, in form and
substance reasonably satisfactory to the Agent, of the Board
of Directors of each Loan Party authorizing, as applicable,
(A) the execution, delivery and performance of this Agreement,
the Notes and the other Loan Documents to which it is a party,
(B) the
37
borrowings contemplated hereunder and (C) the granting
by it of the Liens to be created pursuant to the Security
Documents to which it is a party, certified by the Secretary
or an Assistant Secretary of such Person as of the Closing
Date, which certificate shall be in form and substance
reasonably satisfactory to the Agent and shall state that the
resolutions thereby certified have not been amended, modified,
revoked or rescinded.
(ii) The Agent shall have received a certificate of the
Secretary or Assistant Secretary of the Borrower, such
certificate to be dated the date hereof, as to the incumbency
and signature of the officer or officers signing this
Agreement and the other Loan Documents to which it is a party,
together with evidence of the incumbency of such Secretary or
Assistant Secretary.
(iii) The Agent shall have received a certificate of the
Secretary or Assistant Secretary of each other Loan Party,
such certificate to be dated the date hereof, as to the
incumbency and signature of the officer or officers signing
each Security Document, together with evidence of the
incumbency of such Secretary or Assistant Secretary.
(e) Borrower's Certificate. The Agent shall have received a
certificate of the Borrower, dated the Closing Date, substantially in
the form of Exhibit I, with appropriate insertions and attachments,
reasonably satisfactory in form and substance to the Agent, executed
by a Responsible Officer and the Secretary or any Assistant Secretary
of the Borrower.
(f) Corporate Documents. The Agent shall have received copies
of the certificate of incorporation and by-laws of each Loan Party,
certified as of the Closing Date as complete and correct copies
thereof by the Secretary or an Assistant Secretary of such Loan Party.
(g) Other Documentation. The Lenders shall be reasonably
satisfied with each of the other documents relating to the Refinancing
and the transactions contemplated hereby and thereby, including,
without limitation, the Senior Secured Note Indenture and any tax
sharing agreement or other financing arrangement to which the Borrower
or any Subsidiary will be bound after the Closing Date.
(h) Insurance. The Agent shall have received evidence in form
and substance reasonably satisfactory to it that all of the
requirements of subsection 7.5 of this Agreement and subsection 4.3 of
the Senior Security Agreement have been satisfied.
(i) Termination of Existing Credit Agreement. The Agent shall
have received evidence, reasonably satisfactory to the Agent, that
prior to or concurrently with the initial Extensions of Credit
hereunder, (i) the Existing Credit Agreement and all commitments
thereunder to lend shall have been terminated permanently and all
amounts owing thereunder (other than the Existing Letters of Credit)
shall have been paid in full, (ii) all Liens on the property of the
Borrower or any Subsidiary and any guarantees securing the Existing
Credit Agreement shall have been released.
(j) Intentionally Omitted.
(k) Intentionally Omitted.
(l) New Notes. The New Notes shall have been issued on terms
(including but not limited to terms relating to the fees, maturity,
security, covenants, events of default and remedies) disclosed in the
Senior Secured Initial Note Offering Memorandum (with such
modifications as may be reasonably acceptable to the Agent and, in the
case of any such modifications that are adverse to the Lenders,
reasonably satisfactory to the Lenders) and shall have an interest
rate, maturity date, security
38
provisions and other terms reasonably acceptable to the Lenders, and
the Borrower shall have received gross cash proceeds of not less than
$100,000,000 therefrom.
(m) Lien Searches. The Agent shall have received the results of
a recent search by a Person reasonably satisfactory to the Agent of
the Uniform Commercial Code, judgment and tax lien filings which may
have been filed with respect to personal property of the Borrower and
its Subsidiaries in any of the jurisdictions set forth in Schedule
6.1(m), and the results of such search shall be reasonably
satisfactory to the Agent.
(n) Legal Opinions. The Agent shall have received the following
legal opinions:
(i) the executed legal opinion of Xxxxxxxx & Xxxxx,
special counsel to the Borrower and the other Loan Parties,
dated the Closing Date, substantially in the form of Exhibit
F-1;
(ii) the executed legal opinion of local counsel to the
Borrower with respect to collateral security matters, dated
the Closing Date, substantially in the form of Exhibit F-2, or
otherwise in form and substance reasonably satisfactory to the
Agent; and
(iii) the executed legal opinion of counsel to the
Trustee with respect to the Intercreditor Agreement, dated the
Closing Date, substantially in the form of Exhibit F-3, or
otherwise in form and substance satisfactory to the Agent.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement and the other Loan Documents as
the Agent may reasonably require and shall otherwise be in form and substance
satisfactory to the Agent.
(o) Actions to Perfect Liens. The Agent shall have received (i)
evidence in form and substance satisfactory to it that all filings,
recordings, registrations and other actions, including, without
limitation, the filing of duly executed financing statements on form
UCC-1, necessary or, in the opinion of the Agent, desirable to perfect
the Liens created by the Security Documents shall have been completed
and (ii) evidence in form and substance satisfactory to it that any
Liens securing Indebtedness under the Existing Credit Agreements shall
have been released; in addition, the Agent shall have received from
any Person holding any such Lien such Uniform Commercial Code
termination statements, mortgage releases and other instruments, in
each case in proper form for recording, as the Agent shall have
requested to terminate of record such Liens.
(p) Evidence of Fees. The Agent shall have received
satisfactory evidence that the fees and expenses incurred and to be
incurred in connection with the Refinancing and the initial issuance
of the New Notes and the transactions contemplated thereby and the
financing thereof will not exceed $5,000,000 in the aggregate.
(q) Fees. The Borrower shall have paid to the Agent the fees to
be received on the Closing Date referred to in subsection 4.5(b).
(r) Intentionally Omitted.
(s) Business Plan. The Lenders shall have received a detailed
business plan for the Borrower and its Subsidiaries for fiscal year
1998 in form substantially similar to Exhibit T hereto.
(t) Government Approvals. All requisite governmental authorities
and third parties (including landlords and lienholders) shall have
approved or consented to the transactions contemplated hereby to the
extent required, all applicable appeal periods shall have expired and
there shall be no
39
governmental or judicial action, actual or threatened, restraining,
preventing or imposing burdensome conditions on the transactions
contemplated hereby.
(u) Solvency. The Lenders shall have received a solvency
certificate in form and substance satisfactory to the Lenders from the
Chief Financial Officer of the Borrower, together with such other
evidence reasonably requested by the Lenders of the solvency of the
Borrower and the Subsidiaries on a consolidated basis after giving
effect to the transactions contemplated hereby.
(v) Litigation. No litigation, inquiry, injunction or
restraining order shall be pending, entered or threatened that, in the
reasonable opinion of the Lenders, could reasonably be expected to
have a material adverse effect on (i) the issuance of the New Notes,
any of the other transactions contemplated hereby or by any of the
other Loan Documents or the business, assets, operations, condition
(financial or otherwise) or prospects of the Borrower and the
Subsidiaries, taken as a whole, (ii) the ability of the Borrower and
the Subsidiaries (taken as a whole) to perform their obligations under
the Loan Documents or (iii) the rights and remedies of the Lenders
under the Loan Documents.
(w) Borrowing Base. The Lenders shall have received (i) an
evaluation and appraisal of the Borrower's accounts receivable and
inventory, in form, scope and substance satisfactory to the Lenders,
(ii) a Borrowing Base Certificate dated the Closing Date, and (iii) a
Borrowing Base Certificate dated as of the first Borrowing Date if the
first Borrowing Date is not the Closing Date.
6.2 Conditions to Each Loan. The agreement of each Lender to make
each Loan requested to be made by it on any date (including, without
limitation, its initial Loan) is subject to the satisfaction of the following
conditions precedent:
(a) Representations and Warranties. Each of the representations
and warranties made by the Borrower or any of the Subsidiaries
pursuant to this Agreement or any other Loan Document (or in any
amendment, modification or supplement hereto or thereto) to which it
is a party, and each of the representations and warranties contained
in any certificate furnished at any time by or on behalf of the
Borrower pursuant to this Agreement or any other Loan Document shall,
except to the extent that it relates to a particular date, be true and
correct in all material respects on and as of such date as if made on
and as of such date.
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
Extensions of Credit requested to be made on such date.
Each borrowing by and Letter of Credit issued on behalf of the Borrower
hereunder, and each notice of borrowing pursuant to subsection 2.3, shall
constitute a representation and warranty by the Borrower as of the date of
such borrowing or such issuance that the conditions contained in this
subsection 6.2 have been satisfied.
SECTION 7. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, from and after the Closing Date and
so long as the Commitments remain in effect, and thereafter until payment in
full of the Notes, all Reimbursement Obligations and any other amount then due
and owing to any Lender or the Agent hereunder or under any other Loan
Document and termination or expiration of all Letters of Credit, it shall and
(except in the case of delivery of financial information, reports and notices)
shall cause each of its Subsidiaries to:
7.1 Financial Statements. Furnish to the Agent and each Lender:
40
(a) as soon as available, but in any event not later than 90
days after the end of each fiscal year of the Borrower, a copy of the
audited consolidated and unaudited consolidating balance sheets of the
Borrower and its consolidated Subsidiaries as at the end of such year
and the related audited consolidated and unaudited consolidating
statements of operations, changes in retained earnings and cash flows
for such year, setting forth in each case with respect to the
consolidated financial statements in comparative form the figures for
the previous year and including management discussion thereof,
reported on without a "going concern" or like qualification or
exception, or qualification arising out of the scope of the audit, by
Ernst & Young LLP or other independent certified public accountants of
nationally recognized standing (other than a qualification with
respect to a change in accounting principles which is generally
applied to similarly situated companies and is not related to the
operations of the Borrower or any of its Subsidiaries);
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each
fiscal year of the Borrower (commencing with the fiscal quarter ending
on March 31, 1998), the unaudited consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such
quarter and the related unaudited consolidated statements of
operations, changes in retained earnings and cash flows of the
Borrower and its consolidated Subsidiaries for such quarter and the
portion of the fiscal year through the end of such quarter, setting
forth, in the case of such consolidated balance sheet, in comparative
form the figures as at the end of the previous fiscal year and, in the
case of such consolidated statements of operations and cash flows, in
comparative form the figures for the corresponding period of the
previous fiscal year, certified by a Responsible Officer of the
Borrower as being fairly stated in all material respects (subject to
normal year-end audit and other adjustments); and (c) as soon as
available, but in any event not later than 45 days after the end of
each fiscal month of each fiscal year of the Borrower, a copy of the
unaudited consolidated and consolidating balance sheets of the
Borrower and its consolidated Subsidiaries as of the end of such month
and the related unaudited consolidated and consolidating statement of
operations and consolidated statement of cash flows, setting forth, in
the case of such consolidated balance sheet, in comparative form the
budgeted figures (as adjusted consistent with past practice) for the
relevant period and the figures as at the end of the corresponding
fiscal month of the previous fiscal year and, in the case of such
consolidated statements of operations and cash flows, in comparative
form the budgeted figures (as adjusted consistent with past practice)
for the relevant period and the figures for the corresponding fiscal
month of the previous year, certified by a Responsible Officer of the
Borrower as being fairly stated in all material respects (subject to
normal year-end audit and other adjustments);
(d) within 15 days after the end of each calendar month (i) a
Borrowing Base Certificate showing the Borrowing Base as of the close
of business on the last day of such calendar month, each such
Certificate to be certified as complete and correct in all material
respects on behalf of the Borrower by a Financial Officer of the
Borrower, and (ii) such other supporting documentation and additional
reports with respect to the Borrowing base as the Agent shall
reasonably request;
all such financial statements shall be (and, in the case of financial
statements delivered pursuant to subsections 7.1(b) and (c) above, shall be
certified by a Responsible Officer of the Borrower as being) complete and
correct in all material respects in conformity with GAAP and shall be (and, in
the case of financial statements delivered pursuant to subsections 7.1(b) and
(c) above, shall be certified by a Responsible Officer of the Borrower as
being) prepared in accordance with GAAP applied consistently throughout the
periods reflected therein and with prior periods (except as approved by such
accountants or Officer, as the case may be, and disclosed therein) and except
that interim financial statements may not include footnote disclosure, are
subject to year-end adjustment, and are presented in accordance with
management's internal format consistent with the financial statements
previously provided to the Agent.
41
7.2 Certificates; Other Information. Furnish to the Agent (with
sufficient copies for each Lender, which shall be provided by the Agent to
each Lender):
(a) concurrently with the delivery of the financial statements
referred to in subsection 7.1(a), a certificate of the independent
certified public accountants reporting on such financial statements
stating that in connection with their audit nothing came to their
attention that caused them to believe that there was any Default or
Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsections 7.1(a) and (b), a certificate of a
Responsible Officer of the Borrower stating that, to the best of such
Officer's knowledge, each of the Borrower and its Subsidiaries during
such period has observed or performed all of its covenants and other
agreements, and satisfied every condition, contained in this Agreement
and in the Notes and the other Loan Documents to which it is a party
to be observed, performed or satisfied by it, and that such Officer
has obtained no knowledge of any Default or Event of Default, except,
in each case, as specified in such certificate and setting forth
reasonably detailed calculations of the Borrower's compliance with the
covenants contained in Section 8, to the extent applicable;
(c) as soon as available, but in any event not later than sixty
days after the beginning of each fiscal year of the Borrower, a copy
of the projections by the Borrower of the operating budget and cash
flow budget of the Borrower and its Subsidiaries for such fiscal year
on a consolidating basis and including management discussion thereof,
such projections to be accompanied by a certificate of a Responsible
Officer of the Borrower to the effect that such Responsible Officer
believes such projections to have been prepared on the basis of
reasonable assumptions;
(d)(i) within five days after the same become publicly available,
copies of all financial statements and reports which the Borrower
publicly filed or makes generally available to the public, and within
five days after the same are filed, copies of all financial statements
and periodic reports which the Borrower may file with the SEC and (ii)
simultaneously with the distribution of the same to the holders of the
Subordinated Notes or the New Notes, copies of all reports, notices,
certificates and other documents that it is required under the
Subordinated Note Indenture or the Senior Secured Note Indenture to
distribute to the holders of the Subordinated Notes or the New Notes,
respectively;
(e) within two days after the same are filed, copies of all
registration statements and any amendments and exhibits thereto, which
the Borrower may file with the SEC;
(f) notice of, at least five Business Days prior to, (i) any
modification or amendment to the certificate or articles of
incorporation or other constitutive documents or by-laws of the
Borrower or any Subsidiary or (ii) waiver, supplement, modification,
amendment, termination or release of the Subordinated Notes or the New
Notes; and
(g) promptly, such additional financial and other information as
any Lender may from time to time reasonably request.
7.3 Payment of Obligations. Pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all
its obligations of whatever nature, except (a) where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
diligently conducted and reserves, if any, in conformity with GAAP with
respect thereto have been provided on the books of the Borrower or its
Subsidiaries, as the case may be and (b) where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.
7.4 Conduct of Business and Maintenance of Existence. Continue to
engage in business of the same general type as now conducted by the Borrower
and its Subsidiaries, taken as a whole, and preserve,
42
renew and keep in full force and effect its corporate existence and take all
reasonable action to maintain all rights, privileges and franchises necessary
or desirable in the normal conduct of the business of the Borrower and its
Subsidiaries, taken as a whole, except as otherwise permitted pursuant to
subsection 8.5, 8.6 or 8.10, provided that the Borrower and its Subsidiaries
shall not be required to maintain any such rights, privileges or franchises,
if the failure to do so could not reasonably be expected to have a Material
Adverse Effect; and comply with all Contractual Obligations and Requirements
of Law except to the extent that failure to comply therewith, in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
7.5 Maintenance of Property; Insurance. (a) Keep all property
useful and necessary in the business of the Borrower and its Subsidiaries,
taken as a whole, in good working order and condition; maintain with
financially sound and reputable insurance companies insurance on all property
material to the business of the Borrower and its Subsidiaries, taken as a
whole, in at least such amounts and against at least such risks (but including
in any event public liability, product liability and business interruption) as
are usually insured against in the same general area by companies engaged in
the same or a similar business; and furnish to the Agent, upon written
request, information in reasonable detail as to the insurance carried,
provided that the Borrower may implement programs of self insurance in the
ordinary course of business and in accordance with industry standards for a
company of similar size so long as reserves are maintained in accordance with
GAAP for the liabilities associated therewith.
(b) Cause all casualty policies with respect to the
Collateral to be endorsed or otherwise amended to include a "standard"
or "New York" lender's loss payable endorsement, in form and substance
reasonably satisfactory to the Agent, which endorsement shall provide
that, from and after the Closing Date, (i) the insurance carrier shall
give the Agent at least 30 days' prior notice of termination of such
policies and (ii) if the insurance carrier shall have received written
notice from the Agent of the occurrence of an Event of Default, the
insurance carrier shall pay all proceeds otherwise payable to the
Borrower or the Subsidiaries under such policies directly to the
Agent.
7.6 Inspection of Property; Books and Records; Discussions. (a)
Keep proper books of records and account in which full, complete and correct
entries in conformity with (i) customary industry practice (and in a manner
that financial statements can be produced in accordance with GAAP) and (ii)
all material Requirements of Law shall be made of all dealings and
transactions in relation to its business and activities; and permit
representatives of any Lender to visit and inspect any of its properties and
examine and, to the extent reasonable, make abstracts from any of its books
and records, and to discuss the business, operations, properties and financial
and other condition of the Borrower and its Subsidiaries with officers and
employees of the Borrower and its Subsidiaries and (with the prior consent of
the Borrower, which consent shall not be unreasonably withheld) with its
independent certified public accountants, in each case at any reasonable time,
upon reasonable notice to the Borrower and/or its Subsidiaries, as the case
may be, and as often as may reasonably be desired.
(b) The Borrower and its Subsidiaries, from time to time
upon the request of the Agent or the Required Lenders through the
Agent, shall permit the Agent, accompanied by one or more Lenders and
professionals (including investment bankers, consultants, accountants,
lawyers and appraisers) retained by the Agent to conduct
non-environmental evaluations and appraisals of (i) the Borrower's
practices in the computation of the Borrowing Base and (ii) the assets
included in the Borrowing Base (it being understood and agreed to that
the Agent will conduct such evaluations and appraisals as frequently
as each quarter but not less than once per fiscal year of the
Borrower) and pay the reasonable fees and expenses of the Agent
incurred in connection therewith (including the fees and expenses of
the Agent's Collateral Monitoring Department), the Lenders or such
professionals with respect to all such appraisals; provided however,
that the Agent shall not be entitled to conduct such evaluations and
appraisals of assets more frequently than twice per year unless (x) a
Default or Event of Default has occurred and is continuing or (y) the
Agent, or the Required Lenders through the Agent, determines that any
material event or material change has occurred with respect to the
Borrower or its Domestic Subsidiaries, their inventory or receivables
practices or the
43
performance of the Collateral and that as a result of such event or
change more frequent evaluations or appraisals are required to
effectively monitor the Borrowing Base, in which case the Borrower
will permit the Agent to conduct such evaluations and appraisals at
such reasonable times and as often (not to exceed four times per
year) as may be reasonably requested by the Agent.
(c) The Borrower will, and will cause each of its Subsidiaries to,
in connection with any evaluation and appraisal relating to the computation of
the Borrowing Base, maintain such additional reserves (for purposes of
computing the Borrowing Base) in respect of Eligible Accounts Receivable and
Eligible Inventory and make such other adjustments to the parameters for
including Eligible Inventory in the Borrowing Base as the Agent or the
Required Lenders through the Agent shall reasonably require based upon the
results of such evaluation and appraisal.
7.7 Environmental Laws. Comply with, and undertake all best
efforts to ensure compliance by all tenants and subtenants, if any, with, all
applicable Environmental Laws and obtain and comply with and maintain, and
undertake all best efforts to ensure that all tenants and subtenants obtain
and comply with and maintain, any and all licenses, approvals, notifications,
registrations or permits required by applicable Environmental Laws, except for
noncompliance (i) with respect to which the Borrower is taking reasonable
steps to correct or (ii) which is the subject of an order by the Governmental
Authority with jurisdiction over the noncompliance and which order is being
complied with by the Borrower, provided that in either case such noncompliance
and the conditions giving rise to it could not reasonably be expected to
result in a Material Adverse Effect (it being understood that the
determination of whether a Material Adverse Effect has occurred shall not take
into account any liability to the extent that reserves have been provided
therefor of the books of the Borrower and the Subsidiaries as of the Closing
Date).
7.8 Landlord Consents. At its own expense, request, and use
reasonable efforts to obtain, with respect to the Borrower and its Domestic
Subsidiaries, (i) a consent, substantially in the form of Exhibit J or such
other form as may be reasonably satisfactory to the Agent, from the landlord
of each of the existing facilities in which any Inventory is located, as of
the Closing Date, by the Borrower or its Domestic Subsidiaries, in which such
landlord acknowledges the Agent's first priority security interest in the
Inventory pledged by each Loan Party to the Agent and (ii) prior to entering
into a lease of a facility in which any Inventory will be located on or after
the Closing Date, a consent from each landlord of any such facility, in which
such landlord acknowledges the Agent's first priority security interest in the
Inventory pledged by each Loan Party to the Agent.
7.9 Notices. Give notice to the Agent and each Lender of:
(a) the occurrence of any Default or Event of Default as soon as
possible after a Responsible Officer of the Borrower knows thereof;
(b) as soon as possible after a Responsible Officer of the
Borrower knows thereof, any (i) default or event of default under any
Contractual Obligation of the Borrower or any of its Subsidiaries or
(ii) any litigation, investigation or proceeding which may exist at
any time between the Borrower or any of its Subsidiaries and any
Governmental Authority, which in either case, could reasonably be
expected to have a Material Adverse Effect;
(c) as soon as possible after a Responsible Officer of the
Borrower knows thereof, any litigation or proceeding affecting the
Borrower or any of the Subsidiaries (i) in which the amount involved
(not covered by insurance) is $750,000 or more or (ii) in which
injunctive or similar relief is sought that could reasonably be
expected to have a Material Adverse Effect;
(d) the following events, as soon as possible and in any event
within 30 days after a Responsible Officer of the Borrower knows
thereof: (i) the occurrence or reasonably expected occurrence of any
Reportable Event with respect to any Single Employer Plan, a failure
to make any required
44
contribution to a Single Employer or Multiemployer Plan, the creation
of any Lien in favor of the PBGC or a Plan or any withdrawal from, or
the termination, Reorganization or Insolvency of, any Multiemployer
Plan or (ii) the institution of proceedings or the taking of any other
action by the PBGC or the Borrower or any Commonly Controlled Entity
or any Multiemployer Plan with respect to the withdrawal from, or the
terminating (other than the terminating of a Single Employer Plan in a
standard termination pursuant to Section 4041(b) of ERISA),
Reorganization or Insolvency of, any Single Employer or Multiemployer
Plan which, with respect to events in clause (i) or (ii), individually
or in the aggregate, could reasonably be expected to involve an amount
of $1,000,000 or more;
(e) as soon as possible after a Responsible Officer of the
Borrower knows thereof, (i) any release or discharge by the Borrower
or any Subsidiary of any Materials of Environmental Concern required
to be reported under Environmental Laws to any Governmental Authority
(other than releases or discharges routinely required to be reported
on a periodic basis); (ii) any condition, circumstance, occurrence or
event that could result in liability of the Borrower or any Subsidiary
under Environmental Laws which could reasonably be expected to have a
Material Adverse Effect (or, in any event, could reasonably be
expected to result in an adverse impact on the Borrower and its
Subsidiaries, in the aggregate, by an amount in excess of $1,000,000)
or could reasonably be expected to result in the imposition of any
Lien or other material restriction on the title, ownership or
transferability of any Property; or (iii) any proposed action to be
taken by the Borrower or any Subsidiary or any other Person that could
subject the Borrower or any Subsidiary to any requirements or
liabilities under Environmental Laws which could reasonably be
expected to have a Material Adverse Effect (or, in any event, could
reasonably be expected to result in an adverse impact on the Borrower
and its Subsidiaries, in the aggregate, by an amount in excess of
$1,000,000); and
(f) as soon as possible after a Responsible Officer of the
Borrower knows of any material adverse change in the business,
operations, property or condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole.
Each notice pursuant to this subsection shall be accompanied by a statement of
a Responsible Officer of the Borrower (and, if applicable, the relevant
Commonly Controlled Entity or Subsidiary) setting forth details of the
occurrence referred to therein and stating what action the Borrower (or, if
applicable, the relevant Commonly Controlled Entity or Subsidiary) proposes to
take with respect thereto.
7.10 Additional Collateral; Subsidiaries. (a) With respect to
any assets of the type covered by the Security Documents and acquired after
the Closing Date, (i) execute and deliver to the Agent such amendments to this
Agreement or the Security Documents or such other documents as the Agent
reasonably requests in order to grant to the Agent, for the benefit of the
Lenders, a security interest in such assets, (ii) take all actions reasonably
requested by the Agent to grant to the Agent, for the benefit of the Lenders,
a perfected first priority security interest in such assets, including without
limitation, the filing of Uniform Commercial Code financing statements in such
jurisdictions as may be required by the appropriate Security Documents or by
law or as may be requested by the Agent and (iii) if reasonably requested by
the Agent, deliver to the Agent all such instruments and documents (including
legal opinions relating to the matters described in the preceding clauses (i)
and (ii)), which shall be in form and substance and, with respect to opinions,
from counsel, reasonably satisfactory to the Agent.
(b) With respect to any Domestic Subsidiary of the Borrower created
or acquired after the Closing Date by the Borrower, (i) cause such Domestic
Subsidiary to execute and deliver a guarantee, in form and substance
satisfactory to the Agent, in respect of all obligations of the Borrower
hereunder and under the Loan Documents, (ii) cause such Domestic Subsidiary to
execute and deliver a security agreement in form and substance satisfactory to
the Agent, securing such Domestic Subsidiary's obligations under such
guarantee and covering the types of assets covered by the Senior Security
Agreement, (iii) execute and deliver such amendments to this Agreement
requested by the Agent to reflect the existence of such Domestic
45
Subsidiary and (iv) if reasonably requested by the Agent, deliver to the Agent
legal opinions relating to the matters described in the preceding clauses (i),
(ii) and (iii) which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Agent.
SECTION 8. NEGATIVE COVENANTS
The Borrower hereby agrees that, from and after the Closing Date and
so long as the Commitments remain in effect, and thereafter until payment in
full of the Notes, all Reimbursement Obligations and any other amount then due
and owing to any Lender or the Agent hereunder or under any other Loan
Document and termination or expiration of all Letters of Credit, the Borrower
shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly:
8.1 Financial Condition Covenants.
(a) Maintenance of Consolidated Interest Expense Ratio. Permit
for any period of four consecutive fiscal quarters ending on any date
set forth below, the Consolidated Interest Expense Ratio for such
period to be less than the ratio set forth opposite such date below:
Date Consolidated Interest Expense Ratio
---- -----------------------------------
------------------------------------------------------------------
March 31, 1998 0.70 to 1.00
------------------------------------------------------------------
June 30, 1998 0.70 to 1.00
------------------------------------------------------------------
September 3, 1998 0.80 to 1.00
------------------------------------------------------------------
December 31, 1998 1.00 to 1.00
------------------------------------------------------------------
------------------------------------------------------------------
March 31, 1999 1.10 to 1.00
------------------------------------------------------------------
June 30, 1999 1.10 to 1.00
------------------------------------------------------------------
September 30, 1999 1.10 to 1.00
------------------------------------------------------------------
December 31, 1999 1.20 to 1.00
------------------------------------------------------------------
------------------------------------------------------------------
March 31, 2000 1.3 to 1.00
------------------------------------------------------------------
June 30, 2000 1.3 to 1.00
------------------------------------------------------------------
September 30, 2000 1.3 to 1.00
------------------------------------------------------------------
December 31, 2000 1.35 to 1.00
------------------------------------------------------------------
------------------------------------------------------------------
March 31, 2001 1.4 to 1.00
------------------------------------------------------------------
June 30, 2001 1.4 to 1.00
------------------------------------------------------------------
September 30, 2001 1.4 to 1.00
------------------------------------------------------------------
December 31, 2001 1.5 to 1.00
------------------------------------------------------------------
------------------------------------------------------------------
March 31, 2002 1.5 to 1.00
------------------------------------------------------------------
June 30, 2002 1.5 to 1.00
------------------------------------------------------------------
September 30, 2002 1.5 to 1.00
------------------------------------------------------------------
(b) Maintenance of Leverage Ratio. Permit the Leverage Ratio
as at the end of each fiscal quarter of the Borrower set forth below
to be greater than the ratio set forth below opposite such fiscal
quarter end:
46
------------------------------------------------------------------
Fiscal Quarter Ending Leverage Ratio
--------------------- --------------
------------------------------------------------------------------
March 31, 1998 12.15 to 1.00
------------------------------------------------------------------
June 30, 1998 11.35 to 1.00
------------------------------------------------------------------
September 30, 1998 10.70 to 1.00
------------------------------------------------------------------
December 31, 1998 9.0 to 1.00
------------------------------------------------------------------
------------------------------------------------------------------
March 31, 1999 8.5 to 1.00
------------------------------------------------------------------
June 30, 1999 8.0 to 1.00
------------------------------------------------------------------
September 30, 1999 7.5 to 1.00
------------------------------------------------------------------
December 31, 1999 7.5 to 1.00
------------------------------------------------------------------
------------------------------------------------------------------
March 31, 2000 7.0 to 1.00
------------------------------------------------------------------
June 30, 2000 6.5 to 1.00
------------------------------------------------------------------
September 30, 2000 6.5 to 1.00
------------------------------------------------------------------
December 31, 2000 6.5 to 1.00
------------------------------------------------------------------
------------------------------------------------------------------
March 31, 2001 6.5 to 1.00
------------------------------------------------------------------
June 30, 2001 6.5 to 1.00
------------------------------------------------------------------
September 30, 2001 6.5 to 1.00
------------------------------------------------------------------
December 31, 2001 6.5 to 1.00
------------------------------------------------------------------
------------------------------------------------------------------
March 31, 2002 6.5 to 1.00
------------------------------------------------------------------
June 30, 2002 6.5 to 1.00
------------------------------------------------------------------
September 30, 2002 6.5 to 1.00
------------------------------------------------------------------
8.2 Limitation on Indebtedness. Create, incur, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness of the Borrower or any Subsidiary under this
Agreement and the other Loan Documents;
(b) Indebtedness of the Borrower to any wholly owned Domestic
Subsidiary of the Borrower and of any Subsidiary to the Borrower or
any other wholly owned Domestic Subsidiary of the Borrower;
(c) (i) Indebtedness of the Borrower or any of its Subsidiaries
incurred to finance the acquisition or construction of fixed or
capital assets (whether pursuant to a loan, a Financing Lease or
otherwise) otherwise not prohibited pursuant to this Agreement and
(ii) any refinancing, refunding, renewal or extension of any
Indebtedness specified in clause (i) above, provided that the
aggregate principal amount of Indebtedness under this clause (c) shall
not exceed in the aggregate as to the Borrower and its Subsidiaries
$10,000,000 at any time outstanding;
(d) Indebtedness under Interest Rate Agreements with one or more
Lenders or with other financial institutions satisfactory to the Agent
relating to Indebtedness of the Borrower or any Subsidiary under this
Agreement and other Indebtedness permitted hereunder;
47
(e) other Indebtedness outstanding on the date hereof and listed
on Schedule 8.2(e) and any refinancings, refundings, renewals or
extensions thereof, provided that the amount of such Indebtedness is
not increased at the time of such refinancing, refunding, renewal or
extension;
(f) to the extent that any Guarantee Obligation permitted under
subsection 8.4 constitutes Indebtedness, such Indebtedness;
(g) additional unsecured Indebtedness of the Borrower or any of
its Subsidiaries not otherwise permitted by any other clause of this
subsection 8.2 not exceeding $5,000,000 in aggregate principal amount
at any one time outstanding;
(h) Indebtedness permitted under subsection 4.8(b);
(i) Indebtedness of the Borrower or any of its Subsidiaries
consisting of reimbursement obligations under surety, indemnity,
performance, release and appeal bonds and guarantees thereof and
letters of credit required in the ordinary course of business or in
connection with the enforcement of rights or claims of the Borrower or
its Subsidiaries, in each case to the extent a Letter of Credit
supports the obligations of the Borrower and its Subsidiaries with
respect to such bonds, guarantees and letters of credit otherwise
permitted hereunder;
(j) Indebtedness of the Borrower or any of its Subsidiaries in
respect of letters of credit issued in connection with insurance
policies of the Borrower or any of its Subsidiaries;
(k) New Notes in an aggregate principal amount not to exceed the
principal amount of the New Notes on the Closing Date (less the
principal amount of any New Notes that is repaid after the Closing
Date); and
(l) Subordinated Notes in an aggregate principal amount not to
exceed the principal amount of the Subordinated Notes on the Closing
Date (less the principal amount of any Subordinated Notes that is
repaid after the Closing Date).
8.3 Limitation on Liens. Create, incur, assume or suffer to exist
any Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested in
good faith by appropriate proceedings, provided that adequate reserves
with respect thereto are maintained on the books of the Borrower or
the applicable Subsidiary, as the case may be, in conformity with
GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 60 days or
which are being contested in good faith by appropriate proceedings
diligently conducted;
(c) Liens of landlords or mortgagees of landlords arising by
operation of law, provided that the rental payments secured thereby
are not yet due and payable;
(d) pledges, deposits or other Liens in connection with workers'
compensation, unemployment insurance, other social security benefits
or other insurance related obligations (including, without limitation,
pledges or deposits securing liability to insurance carriers under
insurance or self-insurance arrangements) and Liens on the proceeds of
insurance policies created in connection with any of the foregoing;
48
(e) Liens or deposits to secure the performance of bids, trade
or governmental contracts (other than for borrowed money), leases,
statutory obligations, surety and appeal bonds, performance bonds,
judgment and like bonds, replevin and similar bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(f) easements, rights-of-way, restrictions on the use of
property and other similar encumbrances incurred in the ordinary
course of business which do not in any case materially interfere with
the ordinary conduct of the business of the Borrower or any
Subsidiary;
(g) Liens securing Indebtedness of the Borrower or its
Subsidiaries permitted by subsection 8.2(c);
(h) Liens existing on the date hereof on any assets of the
Borrower and its Subsidiaries and set forth in Schedule 8.3(h);
(i) Liens in existence on the date hereof and listed in Schedule
8.3(i), securing Indebtedness of the Borrower and its Subsidiaries
permitted by subsection 8.2(e), provided that no such Lien is extended
to cover any additional property after the Closing Date and that the
amount of Indebtedness secured thereby is not increased;
(j) Liens (not otherwise permitted hereunder) which secure
obligations (other than Indebtedness) not exceeding (as to the
Borrower and all its Subsidiaries) $1,000,000 in aggregate amount at
any time outstanding;
(k) judgment Liens in existence less than 45 days after the
entry thereof or with respect to which execution has been stayed or
the payment of which is covered in full (subject to a customary
deductible) by insurance maintained with responsible insurance
companies;
(l) Liens on documents of title and the property covered thereby
securing Indebtedness in respect of the Letters of Credit which are
Commercial Letters of Credit;
(m) Liens created pursuant to the Loan Documents;
(n) Liens on property of a Person or a property existing at the
time such Person is merged into, consolidated with, or such Person or
property is otherwise acquired by the Borrower or any Subsidiary of
the Borrower, provided that such Liens (i) were in existence prior to
such merger, consolidation or acquisition, (ii) do not extend to any
assets other than those of such Person or property, as the case may
be, and (iii) were not created in contemplation of such merger,
consolidation or acquisition;
(o) extensions, renewals and replacements of Liens referred to in
clauses (g), (h) and (i) above, provided that any such extension,
renewal or replacement Lien is limited to the property or assets
covered by the Lien extended, renewed or replaced and does not secure
any Indebtedness in addition to that secured immediately prior to such
extension, renewal or replacement;
(p) Liens in respect of the New Notes Collateral to secure
Indebtedness under the New Notes; and
(q) second priority, subordinated Liens on the Collateral
created pursuant to the Junior Security Agreement and subject to the
terms of the Intercreditor Agreement to secure Indebtedness under the
New Notes.
49
8.4 Limitation on Guarantee Obligations. Create, incur, assume or
suffer to exist any Guarantee Obligation except:
(a) Guarantee Obligations in existence on the date hereof and
listed on Schedule 8.4(a) (such listing to include relevant details as
to the amounts), and any refinancings, refundings, extensions or
renewals thereof, provided that the amount of such Guarantee
Obligation shall not be increased at the time of such refinancing,
refunding, extension or renewal;
(b) Reimbursement Obligations in respect of the Letters of
Credit;
(c) obligations to insurers required in connection with worker's
compensation and other insurance coverage incurred in the ordinary
course of business;
(d) Guarantee Obligations incurred pursuant to the Guarantee
Agreement or any of the other Loan Documents; and
(e) Guarantees by the Borrower or any Subsidiary by endorsements
of instruments for deposit or collection in the ordinary course of
business;
(f) Guarantees of any obligations of (a) a wholly owned Domestic
Subsidiary and (b) the Borrower by any wholly owned Subsidiary of the
Borrower, which obligations are not prohibited hereunder;
(g) Guarantees by the Borrower or any Subsidiary of obligations
to third parties made in the ordinary course of business in connection
with relocation of employees of the Borrower or any of its
Subsidiaries which, together with advances and loans made pursuant to
subsection 8.9(f), shall not exceed (as to the Borrower and all
Subsidiaries) $1,000,000 in aggregate amount at any time outstanding;
(h) Guarantee Obligations in respect of Indebtedness permitted
by subsection 8.2; and
(i) guarantees of obligations of a Person other than the
Borrower or any of its Subsidiaries by the Borrower or any of its
Subsidiaries in the ordinary course of business not exceeding (as to
the Borrower and all Subsidiaries) $1,000,000 in aggregate amount at
any time outstanding.
8.5 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign,
transfer or otherwise dispose of, all or substantially all of its property,
business or assets, except (a) as permitted under subsection 8.6 or 8.10 and
(b) that any Subsidiary of the Borrower may be merged or consolidated with or
into the Borrower (so long as that the Borrower shall be the continuing or
surviving corporation) or with or into any one or more Subsidiaries of the
Borrower (so long as (i) the Subsidiary or Subsidiaries shall be the
continuing or surviving corporation and (ii) if such merger is with or into
any Foreign Subsidiary of the Borrower, the Person being merged shall have not
more than $5,000,000 of assets), provided that any merger or consolidation of
any Subsidiary that is not a wholly owned Subsidiary shall comply with
subsection 8.10.
8.6 Limitation on Sale of Collateral. Without the prior written
consent of the Required Release Lenders, convey, sell, lease, assign, transfer
or otherwise dispose of any of the Collateral other than in the ordinary
course of business.
8.7 Limitation on Dividends. In the case of the Borrower or any of
its Subsidiaries, declare or pay any dividend (other than dividends payable
solely in common stock of the Borrower or such Subsidiary,
50
as the case may be, or options, warrants or other rights to purchase such
common stock) on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any shares of any class of Capital Stock
of the Borrower or such Subsidiary, as the case may be, or any warrants or
options to purchase any such Capital Stock, whether now or hereafter
outstanding, or make any other distribution (other than distributions payable
solely in common stock of the Borrower or such Subsidiary, as the case may be,
or options, warrants or other rights to purchase any such common stock) in
respect thereof, either directly or indirectly, whether in cash or property or
in obligations of the Borrower or such Subsidiary; provided, however, that (a)
any Subsidiary may declare and pay dividends or make other distributions to
the Borrower, (b) the Borrower or any Subsidiary may make any payment required
pursuant to any tax sharing agreement reasonably satisfactory to the Agent or
pursuant to any agreement set forth on Schedule 8.12 hereto, (c) the Borrower
may declare and pay dividends or make other distributions required to finance
the payment by RBX Group of corporate taxes in any given fiscal year and
directors fees and other overhead expenses, provided that the aggregate amount
of dividends and distributions in any fiscal year pursuant to this clause (c)
shall not exceed $750,000 and (d) so long as no Default or Event of Default
has occurred and is continuing or would exist immediately after giving effect
thereto, the Borrower may declare and pay dividends or make other
distributions to RBX Group in an (i) amount equal to amounts required to be
paid by RBX Group to repurchase, redeem, acquire or retire shares of Capital
Stock of RBX Group from an officer, director or employee of RBX Group, the
Borrower or any of its Subsidiaries in connection with the death or
termination (voluntary or otherwise) of such officer, director or employee in
an aggregate amount not to exceed $1,000,000 in any calendar year and
$3,000,000 during the term of this Agreement, provided that RBX Group shall
repurchase, redeem, acquire or retire such shares of Capital Stock to the
extent that amounts are dividended or otherwise distributed to it in pursuant
to this clause (d) no later than five Business Days after the date on which
such dividend or distribution is made and (ii) amounts required to make any
payment of interest on, or any repayment, prepayment, redemption or purchase
of, the Subordinated Seller Notes, in each case to the extent permitted by
Subsection 8.11(a) (such declarations, payments, setting apart and
distributions being collectively referred to herein as "Restricted Payments").
8.8 Limitation on Capital Expenditures. Make or commit to make any
Capital Expenditures exceeding in the aggregate for the Borrower and its
consolidated Subsidiaries, for any fiscal year of the Borrower set forth
below, the amount set forth opposite such fiscal year:
Fiscal Year Amount
----------- ------
1998 $13,000,000
1999 12,000,000
2000 10,000,000
2001 10,000,000
2002 10,000,000
An amount equal to 50% of the amount permitted to be used for Capital
Expenditures in any fiscal year but not so used (disregarding for purposes of
such calculation any amounts carried over to such fiscal year), may be carried
over from such fiscal year to the following fiscal year and may be used for
Capital Expenditures in addition to the amount specified above for such
following fiscal year (it being understood that the amount of any Capital
Expenditures made in any fiscal year shall be applied first to reduce the
amount that may be carried over to the following fiscal year).
8.9 Limitation on Investments, Loans and Advances. Make any
advance, loan, extension of credit or capital contribution to, or purchase any
stock, bonds, notes, debentures or other securities of or any assets
constituting a business unit of, or make any other investment in (each an
"Investment"), any other Person, except:
51
(a) Extensions of trade credit in the ordinary course of
business;
(b) Investments in Cash Equivalents;
(c) Investments existing on the date hereof and described in
Schedule 8.9(c), setting forth the respective amounts of such
Investments as of a recent date;
(d) Investments in all the business or assets of, or stock or
other evidences of beneficial ownership of, any Person to the extent
permitted by subsection 8.10;
(e) Investments in the Borrower or any wholly owned Domestic
Subsidiary of the Borrower;
(f) customary travel and entertainment advances and relocation
loans in the ordinary course of business to officers and employees of
the Borrower or any such Subsidiary which, together with advances and
loans made pursuant to subsection 8.4(g), shall not exceed (as to the
Borrower and all Subsidiaries) $1,000,000 at anytime outstanding;
(g) payroll advances in the ordinary course of business;
(h) the acquisition and holding of receivables owing to it, if
created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms (provided that
nothing in this clause (h) shall prevent the Borrower or any
Subsidiary from offering such concessionary trade terms in the
ordinary course of business, or from receiving such investments in
connection with the bankruptcy or reorganization of their respective
suppliers or customers or the settlement of disputes with such
customers or suppliers arising in the ordinary course of business as
management deems reasonable in the circumstances);
(i) extensions of credit representing the purchase price for the
sale of assets permitted under subsection 8.6;
(j) Capital Expenditures permitted under subsection 8.8;
(k) Investments consisting of any repurchase or redemption of
the Subordinated Notes, the New Notes or other Indebtedness that is
financed solely by (i) loans or equity contributions made in cash to
RBX Group (and then contributed as equity to the Borrower) by AIP, any
Permitted AIP Affiliate or any officer, director or employee of RBX
Group or any of its Subsidiaries or (ii) any proceeds from the sale or
issuance after the Closing Date of the Capital Stock of RBX Group, the
Borrower or any of the Subsidiaries; and
(l) other Investments not otherwise permitted by clauses (a)
through (k) above (including Investments in Foreign Subsidiaries of
the Borrower) in an aggregate amount not to exceed $5,000,000.
8.10 Limitations on Certain Acquisitions. Acquire by purchase or
otherwise all the business or assets of, or all of the stock or other
evidences of beneficial ownership of, any Person, except that, so long as no
Default or Event of Default shall have occurred and be continuing or would
occur immediately after giving effect thereto, the Borrower and its
Subsidiaries shall be allowed to make any such acquisitions so long as each
such acquisition involves the stock of a Person engaged substantially in, or a
business or assets constituting a business engaged substantially in, one or
more of the same or similar lines of business of the Borrower and the
aggregate consideration paid (including any Indebtedness assumed) by the
Borrower and its Subsidiaries in connection with all such acquisitions since
the Closing Date shall not exceed $5,000,000 in the aggregate; provided,
however, that the Borrower and its Subsidiaries may pay consideration in
excess of $5,000,000 in the aggregate in connection with acquisitions since
the Closing Date so long as (i) any
52
amount in excess of $5,000,000 is financed by means of loans or equity
contributions made in cash to RBX Group (and then contributed as equity to the
Borrower) by AIP, any AIP Permitted Affiliate or any officer, director or
employee of RBX Group or of its Subsidiaries and (ii) the Borrower, at the
time of such equity contribution to the Borrower, notifies the Agent in
writing that such equity contribution will be used for such purpose.
8.11 Limitation on Optional Payments and Modifications of Debt
Instruments. (a) (i) Make any optional payment or optional prepayment on or
optional redemption or optional purchase of any Indebtedness in a principal
amount in excess of $3,000,000 other than Indebtedness existing under this
Agreement or the other Loan Documents, (ii) except as otherwise provided in
this subsection 8.11, amend, modify or change, or consent or agree to any
amendment, modification or change to any of the terms of any such Indebtedness
other than Indebtedness existing under this Agreement or the other Loan
Documents (other than any such amendment, modification or change which would
(A) cure any ambiguity, defect or inconsistency in such Indebtedness or waive
any default thereunder, (B) extend the maturity or reduce the amount of any
payment of principal thereof, (C) reduce the rate or extend the date for
payment of interest thereon or (D) otherwise not be materially adverse to the
Borrower and its Subsidiaries, the Agent and the Lenders) or (iii) make any
payment of interest in cash in respect of any Indebtedness (other than
Indebtedness existing under this Agreement) that may in accordance with the
terms thereof be paid by the issuance of additional Indebtedness or (iv) offer
to do any of the actions described in the foregoing clauses (i), (ii) and
(iii), prior to the stated final maturity of any such Indebtedness.
Notwithstanding the foregoing, neither the Borrower nor any Subsidiary shall
make or shall distribute cash to RBX Group to permit or facilitate RBX Group's
making (i) any payment of interest on the Subordinated Seller Notes if a
Default or Event of Default shall have occurred and be continuing or (ii) any
payment or prepayment of principal of, or any redemption or purchase of, any
of the Subordinated Seller Notes unless (A) such repayment, prepayment,
redemption or purchase is made after the second anniversary of the Closing
Date and (B) at the time of, and immediately after giving effect to, such
repayment, prepayment, redemption or purchase, (x) the Leverage Ratio shall
not be greater than 5.00 to 1.00, (y) the Senior Leverage Ratio shall not be
greater than 2.50 to 1.00 and (z) no Default or Event of Default shall have
occurred and be continuing.
(b) Permit (i) any waiver, supplement, modification, amendment,
termination or release of the Subordinated Notes, the Subordinated Note
Indenture, the New Notes or the Senior Secured Note Indenture or any related
documentation (other than any such amendment, modification or change which
would (A) cure any ambiguity, defect or inconsistency in the Subordinated
Notes, the Subordinated Note Indenture, the New Notes or the Senior Secured
Note Indenture or such related documentation or waive any default thereunder,
(B) extend the maturity or reduce the amount of any payment of principal of
the Subordinated Notes or the New Notes, (C) reduce the rate or extend the
date for payment of interest on the Subordinated Notes or the New Notes or (D)
otherwise not be materially adverse to the Borrower and its Subsidiaries, the
Agent and the Lenders); provided, however, that the Borrower shall be
permitted to issue notes substantially identical to the notes originally
issued under the Senior Secured Note Indenture in exchange for such originally
issued notes pursuant to the terms of the Securities Purchase Agreement, or
(ii) if a Default or Event of Default shall have occurred and be continuing,
any waiver, supplement, modification, amendment, termination or release of the
Management Agreement or any related documentation, which is adverse in any
material respect to the interests of the Lenders (it being understood that the
foregoing limitation shall not apply to any accrual or waiver of any
management fees payable under the Management Agreement, which shall be
expressly permitted hereby).
(c) Notwithstanding anything to the contrary contained in subsection
(b) above, permit any waiver, supplement, modification, amendment, termination
or release of any of the terms or provisions of the Subordinated Notes, the
Subordinated Note Indenture, the New Notes, or the Senior Secured Note
Indenture that would have the effect of (A) increasing the principal amount of
the Subordinated Notes or the New Notes, (B) changing the maturity or any date
for the payment of any principal of or interest thereon (other than any
extension thereof), (C) increasing the rate of interest thereon, (D) making
more restrictive
53
any defaults or events of default in respect thereof or (E) in the case of the
Subordinated Notes or the Subordinated Note Indenture, changing in any respect
that is adverse to the interests of the Lenders the subordination provisions,
pay-in-kind provisions or any guarantees thereof.
(d) Make any distribution, whether in cash, property, securities or
a combination thereof, other than scheduled payments of principal and interest
(or trustee's fees and expenses) as and when due (to the extent not prohibited
by applicable subordination provisions), in respect of, or pay, or offer to
commit to pay, or directly or indirectly redeem, purchase, retire or otherwise
acquire for consideration, or set apart any sum for the aforesaid purposes,
any of the Subordinated Notes or the New Notes (except as contemplated by
subsection 8.9(k), whether or not an Investment).
8.12 Limitation on Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate
unless (a) such transaction is otherwise permitted under this Agreement, (b)
such transaction is upon terms no less favorable to the Borrower or the
applicable Subsidiary, as the case may be, than it would obtain in a
comparable arm's length transaction with a Person that is not an Affiliate and
(c) the Borrower delivers to the Agent (i) with respect to any such
transaction involving aggregate consideration in excess of $1,000,000, a
resolution of the Board of Directors of the Borrower set forth in an Officers'
Certificate certifying that such transaction complies with clause (b) above
and that such transaction has been approved by a majority of the disinterested
members of the Board of Directors of the Borrower and (ii) with respect to any
such transaction involving aggregate consideration in excess of $5,000,000, an
opinion as to the fairness to the Borrower or such Subsidiary, as the case may
be, of such transaction from a financial point of view issued by an investment
banking firm of national standing, provided that nothing contained in this
subsection 8.12 shall be deemed to prohibit the Borrower or any of their
respective Subsidiaries from (A) performing any agreements with or commitments
to any Affiliate existing on the date hereof and described on Schedule 8.12,
(B) selling or redeeming any securities of the Borrower or any of their
respective Subsidiaries (including any agreements relating thereto), to the
extent permitted by this Agreement, (D) entering into employment agreements in
the ordinary course of business, and (E) any transaction permitted by Section
8.7, provided, further, that this subsection 8.12 shall not prohibit (x) any
transaction between the Borrower and any of the Subsidiaries or any
transaction between or among any of the Subsidiaries, in each case to the
extent that such transaction is not otherwise prohibited by this Agreement, or
(y) the Borrower and its Subsidiaries from making payments required pursuant
to any tax sharing agreement in form and substance reasonably satisfactory to
the Agent.
8.13 Intentionally Omitted.
8.14 Intentionally Omitted.
8.15 Limitation on Changes in Fiscal Year. Permit the fiscal year
of the Borrower or any of its Subsidiaries to end on a day other than December
31.
8.16 Limitation on Negative Pledge Clauses. Enter into with any
Person any agreement, other than (a) this Agreement and the other Loan
Documents and the Subordinated Note Indenture and the Senior Secured Note
Indenture and (b) any industrial revenue or development bonds, purchase money
agreements, acquisition agreements or Financing Leases permitted by this
Agreement (in which cases, any prohibition or limitation shall only be
effective against the assets financed or acquired thereby) or operating leases
of real property entered into in the ordinary course of business, which
prohibits or limits the ability of the Borrower or any of its Subsidiaries to
create, incur, assume or suffer to exist any Lien upon any of its property,
assets or revenues, whether now owned or hereafter acquired, which represent
the Collateral or any portion thereof.
54
8.17 Limitation on Lines of Business; Creation of Subsidiaries.
(a) Enter into any business, either directly or through any Subsidiary,
except for those businesses of the same general type as those in which the
Borrower and its Subsidiaries are engaged on the date of this Agreement or
that are directly related thereto.
(b) Create any new Domestic Subsidiaries of the Borrower other than
any new Domestic Subsidiaries that shall execute a Guarantee Agreement and a
Senior Security Agreement.
8.18 Limitation on Bank Accounts. Maintain at any time any bank
accounts not covered by the Lockbox Assignment Agreement (other than bank
accounts to fund current payroll obligations).
SECTION 9. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan or
any Reimbursement Obligation when due in accordance with the terms
thereof or hereof; or the Borrower shall fail to pay any interest on
any Loan or any fee or other amount payable hereunder within three
Business Days after any such interest, fee or other amount becomes due
in accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by the
Borrower or any other Loan Party herein or in any other Loan Document
(or in any amendment, modification or supplement hereto or thereto) or
which is contained in any certificate furnished at any time by or on
behalf of the Borrower or any other Loan Party pursuant to this
Agreement or any such other Loan Document shall prove to have been
incorrect in any material respect on or as of the date made or deemed
made; or
(c) The Borrower or any other Loan Party shall default in the
observance or performance of any agreement contained in subsection 7.9
or Section 8 of this Agreement and, in the case of a default in the
observance or performance of its obligations under (i) subsection
7.9(a), such default shall have continued unremedied for a period of
two Business days after discovery thereof by a Responsible Officer of
the Borrower or (ii) subsection 7.9(b) through (f), such default shall
have continued unremedied for a period of three Business Days; or
(d) The Borrower or any other Loan Party shall default in the
observance or performance of any other agreement contained in this
Agreement or any other Loan Document (other than as provided in
paragraphs (a) through (c) of this Section), and such default shall
have continued unremedied for a period of 30 days; or
(e) The Borrower or any of its Subsidiaries shall (i) default in
any payment of principal of or interest on any Indebtedness (other
than the Notes) in excess of $1,000,000 or in the payment of any
Guarantee Obligation in excess of $1,000,000, beyond the period of
grace (not to exceed 30 days), if any, provided in the instrument or
agreement under which such Indebtedness or Guarantee Obligation was
created; or (ii) default in the observance or performance of any other
agreement or condition relating to any Indebtedness or Guarantee
Obligation referred to in clause (i) above or contained in any
instrument or agreement evidencing, securing or relating thereto, or
any other event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit the
holder or holders of such Indebtedness or beneficiary or beneficiaries
of such Guarantee Obligation (or a trustee or agent on behalf of such
holder or holders or beneficiary or beneficiaries) to cause, with the
giving of notice or lapse of time if required, such Indebtedness to
become due prior to its stated maturity or such Guarantee Obligation
to become payable, and such time shall have lapsed; or
55
(f) (i) RBX Group, the Borrower or any Significant Subsidiary
shall commence any case, proceeding or other action (A) under any
existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any
substantial part of its assets, or RBX Group, the Borrower or any
Significant Subsidiary shall make a general assignment for the benefit
of its creditors; or (ii) there shall be commenced against RBX Group,
the Borrower or any Significant Subsidiary any case, proceeding or
other action of a nature referred to in clause (i) above which (A)
results in the entry of an order for relief or any such adjudication
or appointment or (B) remains undismissed, undischarged, unstayed or
unbonded for a period of 60 days; or (iii) there shall be commenced
against RBX Group, the Borrower or any Significant Subsidiary any
case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order
for any such relief which shall not have been vacated, discharged,
stayed or bonded pending appeal, within 60 days from the entry
thereof; or (iv) the Borrower or any Significant Subsidiary shall
take any corporate action in furtherance of, or indicating its consent
to, approval of, or acquiescence in, any of the acts set forth in
clause (i), (ii), or (iii) above; or (v) the Borrower or any
Significant Subsidiary shall be generally unable to, or shall admit in
writing its general inability to, pay its debts as they become due; or
(g) (i) RBX Group or any Loan Party shall engage in any
non-exempt "prohibited transaction" (as defined in Section 406 of
ERISA or Section 4975 of the Code) involving any Plan, (ii) any
"accumulated funding deficiency" (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Single Employer
Plan or any Lien in favor of the PBGC or a Plan shall arise on the
assets of the Borrower or any Commonly Controlled Entity, (iii) a
Reportable Event shall occur with respect to, or proceedings shall
commence to have a trustee appointed, or a trustee shall be appointed,
to administer or to terminate, any Single Employer Plan, which
Reportable Event or commencement of proceedings or appointment of a
trustee is reasonably likely to result in the termination of such
Single Employer Plan for purposes of Title IV of ERISA (other than a
standard termination pursuant to Section 4041(b) of ERISA), (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA
(other than a standard termination pursuant to Section 4041(b) of
ERISA), (v) RBX Group, the Borrower or any Commonly Controlled Entity
shall, or is reasonably likely to, incur any liability in connection
with a withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other similar event or condition shall
occur or exist with respect to a Plan; and in each case in clauses (i)
through (vi) above, such event or condition, together with all other
such events or conditions, if any, could reasonably be expected to
have a Material Adverse Effect; or
(h) The Borrower or any Subsidiary shall, or is reasonably likely
to, become liable for costs of investigation, remediation or
compliance, for damages, fines, or penalties, or for other costs or
charges under or in connection with any Environmental Law, that
individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect or, in any event, could reasonably be
expected to result in an adverse impact on the Borrower and its
Subsidiaries in the aggregate by an amount in excess of $4,500,000; or
(i) One or more judgments or decrees shall be entered against
the Borrower or any of the Subsidiaries involving in the aggregate at
any time a liability (to the extent not paid or covered by insurance)
of $1,500,000 or more, and all such judgments or decrees shall not
have been vacated, discharged, stayed or bonded pending appeal within
60 days from the entry thereof; or
(j) (i) Any of the Loan Documents shall cease for any reason to
be in full force and effect, or the Borrower or any other Loan Party
which is a party to any of the Loan Documents shall so assert in
writing, or (ii) the Lien created by any of the Security Documents
shall cease to be perfected and enforceable in
56
accordance with its terms or of the same effect as to perfection and
priority purported to be created thereby with respect to any
significant portion of the Collateral, and the failure of such Lien to
be perfected and enforceable with such priority shall have continued
unremedied for a period of 20 days; or
(k) The Guarantee Agreement shall cease for any reason to be in
full force and effect or any guarantor thereunder shall so assert in
writing; or
(l) A Change of Control shall occur, provided that, in the case
of a Change of Control resulting from the existence of a lien on or a
security interest on the Capital Stock of the Borrower, such lien or
security interest shall not have been removed within 15 days after
notice thereof to the Borrower;
then, and in any such event, (A) if such event is an Event of Default
specified in clause (i) or (ii) of paragraph (f) above with respect to the
Borrower, automatically the Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement (including, without limitation, all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters
of Credit shall have presented the documents required thereunder) and the
Notes shall immediately become due and payable, and (B) if such event is any
other Event of Default, either or both of the following actions may be taken:
(i) with the consent of the Required Lenders, the Agent may, or upon the
request of the Required Lenders, the Agent shall, by notice to the Borrower
declare the Commitments to be terminated forthwith, whereupon the Commitments
shall immediately terminate; and (ii) with the consent of the Required
Lenders, the Agent may, or upon the request of the Required Lenders, the Agent
shall, by notice to the Borrower, declare the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement (including,
without limitation, all amounts of L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented
the documents required thereunder) and the Notes to be due and payable
forthwith, whereupon the same shall immediately become due and payable.
With respect to all Letters of Credit with respect to which
presentment for honor shall not have occurred at the time of an acceleration
pursuant to the preceding paragraph, the Borrower shall at such time deposit
in a cash collateral account opened by the Agent an amount equal to the
aggregate then undrawn and unexpired amount of such Letters of Credit. The
Borrower hereby grants to the Agent, for the benefit of the Issuing Lender and
the L/C Participants, a security interest in such cash collateral to secure
all obligations of the Borrower in respect of such Letters of Credit under
this Agreement and the other Loan Documents. The Borrower shall execute and
deliver to the Agent, for the account of the Issuing Lender and the L/C
Participants, such further documents and instruments as the Agent may request
to evidence the creation and perfection of such security interest in such cash
collateral account. Amounts held in such cash collateral account shall be
applied by the Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrower hereunder and under the Notes. After all such
Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations
of the Borrower hereunder and under the Notes shall have been paid in full,
the balance, if any, in such cash collateral account shall be returned to the
Borrower.
Except as expressly provided above in this Section, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
57
SECTION 10. THE AGENT
10.1 Appointment. Each Lender hereby irrevocably designates and
appoints Chase as the Agent of such Lender under this Agreement and the other
Loan Documents, and each such Lender irrevocably authorizes Chase, as the
Agent for such Lender, to take such action on its behalf under the provisions
of this Agreement and the other Loan Documents and to exercise such powers and
perform such duties as are expressly delegated to the Agent by the terms of
this Agreement and the other Loan Documents, together with such other powers
as are reasonably incidental thereto. Notwithstanding any provision to the
contrary elsewhere in this Agreement, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or 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.
10.2 Delegation of Duties. The Agent may execute any of its duties
under this Agreement and the other Loan Documents by or through agents,
Affiliates or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
10.3 Exculpatory Provisions. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall
be (i) liable for any action lawfully taken or omitted to be taken by it or
such Person under or in connection with this Agreement or any other Loan
Document (except for its or such Person's own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by the Borrower or
any officer thereof contained in this Agreement or 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, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
the Notes or any other Loan Document or for any failure of the Borrower to
perform its obligations hereunder or thereunder. The Agent shall not 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.
10.4 Reliance by Agent. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any Note, writing, resolution,
notice, consent, certificate, affidavit, letter, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Borrower), independent accountants and
other experts selected by the Agent. The Agent may deem and treat the payee
of any Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Agent. The Agent shall be fully justified as between itself and the Lenders
in failing or refusing to take any discretionary action under this Agreement
or any other Loan Document unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate or 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 and
the Notes and the other Loan Documents in accordance with a request of the
Required Lenders (or when expressly required hereby, all the Lenders or the
Required Release Lenders, as the case may be), and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the Lenders
and all future holders of the Notes.
10.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder (other than pursuant to subsection 9(a)) unless the Agent has
received 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
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receives such a notice, the Agent shall give prompt notice thereof to the
Lenders. The Agent shall take such action reasonably promptly with respect to
such Default or Event of Default as shall be directed by the Required Lenders,
provided that unless and until the Agent shall have received such directions,
the Agent may (but shall not be obligated to) take such action, or refrain
from taking such action, with respect to such Default or Event of Default as
it shall deem advisable in the best interests of the Lenders.
10.6 Non-Reliance on Agent and Other Lenders. Each Lender
expressly acknowledges that neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by the Agent hereinafter
taken, including any review of the affairs of the Borrower, 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 or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower and made its own decision to
make its Loans hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon the Agent or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the
other Loan Documents, and to make such investigation as it deems necessary to
inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Borrower. Except for notices, reports
and other documents expressly required to be furnished to the Lenders by the
Agent hereunder, the Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the
business, operations, property, condition (financial or otherwise), prospects
or creditworthiness of the Borrower which may come into the possession of the
Agent or any of its officers, directors, employees, agents, attorneys-in-fact
or Affiliates.
10.7 Indemnification. The Lenders agree to indemnify the Agent in
its capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Commitment Percentages in effect on the date on which
indemnification is sought under this subsection (or, if indemnification is
sought after the date upon which the Commitments shall have terminated and the
Loans shall have been paid in full, ratably in accordance with their
Commitment Percentages immediately prior to such date), from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever
which may at any time (including, without limitation, at any time following
the payment of the Notes) be imposed on, incurred by or asserted against the
Agent in any way relating to or arising out of this Agreement, any of the
other Loan Documents or any documents contemplated by or referred to herein or
therein 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 that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Agent's gross
negligence or willful misconduct. The agreements in this subsection shall
survive the payment of the Notes and all other amounts payable hereunder.
10.8 Agent in Its Individual Capacity. The Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Borrower as though the Agent were not the Agent
hereunder and under the other Loan Documents. With respect to its Loans made
or renewed by it and any Note issued to it and with respect to any Letter of
Credit issued or participated in by it, the Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and
may exercise the same as though it were not the Agent, and the terms "Lender"
and "Lenders" shall include the Agent in its individual capacity.
10.9 Successor Agent. The Agent may resign as Agent upon 10 days'
notice to the Lenders. If the Agent shall resign as Agent under this
Agreement and the other Loan Documents, then the Required
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Lenders shall appoint from among the Lenders a successor agent for the Lenders
(which successor agent shall be (a) a bank with an office in New York, New
York having a combined capital and surplus of at least $500,000,000 or an
Affiliate of any such bank and (b) approved by the Borrower, which approval
shall not be unreasonably withheld), whereupon such successor agent shall
succeed to the rights, powers and duties of the Agent, and the term "Agent"
shall mean such successor agent effective upon such appointment and approval,
and the former Agent's rights, powers and duties as Agent shall be terminated,
without any other or further act or deed on the part of such former Agent or
any of the parties to this Agreement or any holders of the Notes; provided,
however, that the appointment of a successor agent at any time after the
occurrence and during the continuance of an Event of Default need not be
approved by the Borrower. After any Agent's resignation as Agent, the
provisions of this subsection shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement and
the other Loan Documents.
SECTION 11. MISCELLANEOUS
11.1 Amendments and Waivers. Neither this Agreement, any Note or
any other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
subsection. The Required Lenders may, or, with the written consent of the
Required Lenders, the Agent may, from time to time, (a) enter into with the
Borrower written amendments, supplements or modifications hereto and to the
Notes and the other Loan Documents for the purpose of adding any provisions to
this Agreement, the Notes or the other Loan Documents or changing in any
manner the rights or obligations of the Lenders or of the Borrower hereunder
or thereunder or (b) waive at the Borrower's request, on such terms and
conditions as the Required Lenders or the Agent, as the case may be, may
specify in such instrument, any of the requirements of this Agreement, the
Notes or the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall (i) reduce the amount or extend the scheduled
date of maturity of any Note or any Reimbursement Obligation or of any
scheduled installment of any Note or any Reimbursement Obligation, or reduce
the stated rate of any interest or fee payable hereunder, extend the
scheduled date of any payment thereof or increase the amount or extend the
expiration date of any Lender's Commitment in each case without the written
consent of the Required Lenders and each Lender affected thereby, (ii) amend,
modify or waive any provision of this subsection 11.1 or subsection 11.6(a),
release from the security interest created by the Security Documents all or
substantially all of the Collateral, reduce the percentage specified in the
definition of the term "Required Lenders" or "Required Release Lenders",
consent to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement and the other Loan Documents or, release any
Subsidiary from any of its obligations pursuant to the Guarantee Agreement, in
any such case, without the written consent of all the Lenders, (iii) release
from the security interest created by the Security Documents any portion of
the Collateral without the written consent of the Required Release Lenders,
(iv) reduce the percentage specified in the definition of Required Lenders
without the written consent of all the Lenders, (v) amend, modify or waive any
provision of the Intercreditor Agreement without the written consent of the
Required Release Lenders or (vi) amend, modify or waive any provision of
Section 10 without the written consent of the then Agent and the Required
Lenders. The Letters of Credit and the Applications relating thereto and the
L/C Obligations may not be amended, supplemented or modified without the
written consent of the Issuing Lender and each affected L/C Participant. Any
waiver and any amendment, supplement or modification pursuant to this
subsection 11.1 shall apply to each of the Lenders and shall be binding upon
the Borrower, the Lenders, the Agent and all future holders of the Notes. In
the case of any waiver, the Borrower, the Lenders and the Agent shall be
restored to their former position and rights hereunder and under the
outstanding Notes and any other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.
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11.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered by hand, or three days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice,
when received, or, in the case of delivery by a nationally recognized
overnight courier, when received, addressed as follows in the case of the
Borrower and the Agent, and as set forth on Schedule 1 in the case of the
other parties hereto, or to such other address as may be hereafter notified by
the respective parties hereto and any future holders of the Notes:
The Borrower: 0000 Xxxxxx Xxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
Telecopy: 000-000-0000
with a copy to: American Industrial Partners Capital Fund II, L.P.
Xxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxx, Xx.
Telecopy: (000) 000-0000
The Agent: The Chase Manhattan Bank Agency Services Group
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxx
Telecopy: 000-000-0000
with a copy to: The Chase Manhattan Bank
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telecopy: 000-000-0000
provided that any notice, request or demand to or upon the Agent or the
Lenders pursuant to subsection 2.3, 3.2, 4.2, 4.4 or 4.8 shall not be
effective until received.
11.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Borrower, the Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
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. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
11.4 Survival of Representations and Warranties. All
representations and warranties made hereunder and in the other Loan Documents
(or in any amendment, modification or supplement hereto or thereto) and in any
certificate delivered pursuant hereto or such other Loan Documents shall
survive the execution and delivery of this Agreement and the Notes and the
making of the Loans hereunder.
11.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay
or reimburse the Agent, within ten days after demand, for all its reasonable
out-of-pocket costs and expenses incurred in connection with the preparation,
execution and delivery of, and any amendment, supplement, waiver or
modification to, this Agreement, the Notes and the other Loan Documents and
any other documents prepared in connection herewith or therewith, and the
consummation and administration of the transactions (including the syndication
of the Commitments) contemplated hereby and thereby, including, without
limitation, the
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reasonable fees and disbursements of Cravath, Swaine & Xxxxx, counsel to the
Agent, (b) to pay or reimburse each Lender and the Agent for all its costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the Notes, the other Loan Documents and any such
other documents, including, without limitation, the fees and disbursements of
counsel to the Agent and to the several Lenders, (c) to pay, indemnify, and
hold each Lender and the Agent harmless, within ten days after demand, from,
any and all recording and filing fees and any and all liabilities with respect
to, or resulting from any delay by the Borrower or any of its Subsidiaries in
paying, stamp, excise and other similar taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under
or in respect of, this Agreement, the Notes, the other Loan Documents and any
such other documents, and (d) to pay, indemnify, and hold each Lender and the
Agent (and their respective directors, officers, employees, Affiliates and
agents) harmless, within ten days after demand, from and against any and all
other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever (whether or not caused by any negligence (other than gross
negligence) of any Lender, the Agent or any of their respective directors,
officers, employees, Affiliates or agents and including, without limitation,
the reasonable fees and disbursements of counsel) with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement, the Notes, the other Loan Documents and any such other documents
(regardless of whether the Agent or any Lender is a party to the litigation or
other proceeding giving rise thereto), including, without limitation, any of
the foregoing relating to the violation of, noncompliance with or liability
under, any Environmental Law applicable to the operations of the Borrower, any
of its Subsidiaries or any of the Properties (all the foregoing in this clause
(d), collectively, the "indemnified liabilities"), provided, that the Borrower
shall have no obligation hereunder to the Agent or any Lender with respect to
indemnified liabilities arising from (i) the gross negligence or willful
misconduct of the Agent or any such Lender (or any of their respective
directors, officers, employees, Affiliates and agents) or (ii) legal
proceedings commenced against the Agent or any such Lender by any
securityholder or creditor thereof arising out of and based upon rights
afforded any such securityholder or creditor solely in its capacity as such.
The agreements in this subsection shall survive the termination of this
Agreement, repayment of the Notes and all other amounts payable hereunder.
11.6 Successors and Assigns; Participations and Assignments. (a)
This Agreement shall be binding upon and inure to the benefit of the Borrower,
the Lenders, the Agent, all future holders of the Notes and their respective
successors and assigns, except that the Borrower may not assign or transfer
any of its rights or obligations under this Agreement without the prior
written consent of each Lender. Any assignment or transfer by the Borrower
without such written consent shall be void and of no force or effect.
(b) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time sell to
one or more banks or other entities ("Participants") participating interests
in any Loan owing to such Lender, any Note held by such Lender, any Commitment
of such Lender or any other interest of such Lender hereunder and under the
other Loan Documents. In the event of any such sale by a Lender of a
participating interest to a Participant, such Lender's obligations under this
Agreement to the other parties to this Agreement shall remain unchanged, such
Lender shall remain solely responsible for the performance thereof, such
Lender shall remain the holder of any such Note for all purposes under this
Agreement and the other Loan Documents, and the Borrower and the Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and the other Loan
Documents. Any agreement pursuant to which any Lender shall sell any such
participating interest shall provide that such Lender shall retain the sole
right and responsibility to exercise such Lender's rights and enforce the
Borrower's obligations hereunder, including the right to consent to any
amendment, supplement, modification or waiver of any provision of this
Agreement or any of the other Loan Documents, provided that such participation
agreement may provide that such Lender will not agree to any amendment,
supplement, modification or waiver described in clause (i) or (ii) of the
proviso to the second sentence of subsection 11.1 without the consent of the
Participant. Each Lender shall be
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entitled to the benefits of subsections 4.9, 4.10, 4.11, 4.12, and 11.5
without regard to whether it has granted any participating interests;
provided, however, that all amounts payable to a Lender under subsections 4.9,
4.10, 4.11, 4.12, and 11.5 shall be determined as if such Lender had not
granted any such participating interests.
(c) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time and from
time to time assign to any Lender or any Affiliate thereof or, at any time
upon the occurrence and during the continuance of an Event of Default, with
the prior written consent of the Agent and, at any other time, with the prior
written consent of the Borrower and the Agent (which in each case shall not be
unreasonably withheld), to an additional bank, financial institution or mutual
fund (an "Assignee") all or any part of its rights and obligations under this
Agreement and the Notes, including, without limitation, its Commitments and
Loans, pursuant to an Assignment and Acceptance, substantially in the form of
Exhibit G, executed by such Assignee, such assigning Lender (and, in the case
of an Assignee that is not then a Lender or an Affiliate thereof, by the
Borrower and the Agent in accordance with the terms of this subsection
11.6(c)) and delivered to the Agent for its acceptance and recording in the
Register, provided that (i) no such transfer (other than to a Lender or any
Affiliate thereof) shall be in an aggregate principal amount less than
$5,000,000 (or, if less, the full amount of such assigning Lender's
Commitment), (ii) if any Lender assigns all or any part of its rights and
obligations under this Agreement to one of its Affiliates in connection with
or in contemplation of the sale of its interest in such Affiliate, the
Borrower's prior written consent, not to be unreasonably withheld, shall be
required for such assignment and (iii) in the event of a transfer of less than
all of such rights and obligations to an additional bank, financial
institution or mutual fund that is not then a Lender or any Affiliate thereof,
such Lender after such sale shall retain Commitments and/or Loans (without
duplication) aggregating at least 4% of the then outstanding Commitments
and/or Loans (without duplication). Upon such execution, delivery, acceptance
and recording, from and after the effective date determined pursuant to such
Assignment and Acceptance, (i) the Assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder with a Commitment as set forth therein,
and (ii) the assigning Lender thereunder shall be released from its
obligations under this Agreement to the extent that such obligations shall
have been expressly assumed by the Assignee pursuant to such Assignment and
Acceptance (and, in the case of an Assignment and Acceptance covering all or
the remaining portion of an assigning Lender's rights and obligations under
this Agreement, such assigning Lender shall cease to be a party hereto).
(d) The Agent acting on behalf of and as agent for the Borrower
shall maintain at its address referred to in subsection 11.2 a copy of each
Assignment and Acceptance delivered to it and a register (the "Register") for
the recordation of the names and addresses of the Lenders and the Commitment
of, and principal amount of the Loans owing to, each Lender from time to
time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Agent and the Lenders may treat each
Person whose name is recorded in the Register as the owner of the Loan
recorded therein for all purposes of this Agreement, notwithstanding any
notice to the contrary. The Register shall be available for inspection by the
Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is not
then a Lender or an Affiliate thereof, (x) at any time upon the occurrence and
during the continuance of an Event of Default, by the Agent and (y) at any
other time, by the Borrower and the Agent), together with payment to the Agent
of a registration and processing fee of $4,000 the Agent shall (i) promptly
accept such Assignment and Acceptance and (ii) on the effective date
determined pursuant thereto record the information contained therein in the
Register and give prompt notice of such acceptance and recordation to the
Lenders and the Borrower. On or prior to such effective date, the assigning
Lender shall surrender the outstanding Notes held by it, all or a portion of
which are being assigned, and the Borrower, at its own expense, shall execute
and deliver to the Agent (in exchange for the outstanding Notes of the
assigning Lender) a new Note, to the order of such Assignee in an amount equal
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to the amount of such Assignee's Commitment, after giving effect to such
Assignment and Acceptance and, if the assigning Lender has retained a
Commitment hereunder, a new Note to the order of the assigning Lender in an
amount equal to the amount of such Lender's Commitment after giving effect to
such Assignment and Acceptance. Such new Notes shall be dated the Closing
Date and shall otherwise be in the form of the Note replaced thereby. The
Notes surrendered by the assigning Lender shall be returned by the Agent to
the Borrower marked "canceled".
(f) The Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective Transferee,
subject to the provisions of subsection 11.14, any and all financial
information in such Lender's possession concerning the Borrower and its
Affiliates which has been delivered to such Lender by or on behalf of the
Borrower pursuant to this Agreement or which has been delivered to such Lender
by or on behalf of the Borrower in connection with such Lender's credit
evaluation of the Borrower and its Affiliates prior to becoming a party to
this Agreement. No assignment or participation made or purported to be made
to any Transferee shall be effective without the prior written consent of the
Borrower if it would require the Borrower to make any filing with any
Governmental Authority or qualify any Loan or Note under the laws of any
jurisdiction.
(g) Nothing herein shall prohibit any Lender from pledging or
assigning any Note to any Federal Reserve Bank in accordance with applicable
law.
11.7 Adjustments; Set-off. (a) If any Lender (a "benefitted
Lender") shall at any time receive any payment of all or part of its Loans or
the Reimbursement Obligations owing to it, or interest thereon, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by
set-off, pursuant to events or proceedings of the nature referred to in
subsection 9(f), or otherwise), in a greater proportion than any such payment
to or collateral received by any other Lender, if any, in respect of such
other Lender's Loans or the Reimbursement Obligations, as the case may be,
owing to it, or interest thereon, such benefitted Lender shall purchase for
cash from the other Lenders a participating interest in such portion of each
such other Lender's Loans or the Reimbursement Obligations, as the case may
be, owing to it, or shall provide such other Lenders with the benefits of any
such collateral, or the proceeds thereof, as shall be necessary to cause such
benefitted Lender to share the excess payment or benefits of such collateral
or proceeds ratably with each of the Lenders; provided, however, that if all
or any portion of such excess payment or benefits is thereafter recovered from
such benefitted Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but without
interest.
(b) In addition to any rights and remedies of the Lenders provided
by law, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the extent
permitted by applicable law, upon the occurrence of an Event of Default and
during the continuance of an Event of Default to set-off and appropriate and
apply against such amount any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender or any branch or agency thereof to or for the credit or
the account of the Borrower. Each Lender agrees promptly to notify the
Borrower and the Agent after any such set-off and application made by such
Lender, provided that the failure to give such notice shall not affect the
validity of such set-off and application.
11.8 Counterparts. This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be delivered to the Borrower and the
Agent.
11.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability
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without invalidating the remaining provisions hereof, and any such prohibition
or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrower, the Agent and the Lenders with
respect to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Borrower, the Agent or any Lender
relative to the subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.
11.11 GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS
THEREOF.
11.12 Submission To Jurisdiction; Waivers. Each party hereto
hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the Courts of the State
of New York, the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or
claim the same;
(c) agrees that service of process in any such action or proceeding may
be effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Borrower, the
applicable Lender or the Agent, as the case may be, at the address specified
in subsection 11.2 or at such other address of which the Agent and the
Borrower shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect service
of process in any other manner permitted by law or shall limit the right to
xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to in
this subsection any special, exemplary, punitive or consequential damages.
11.13 Acknowledgments. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the Notes and the other Loan Documents;
(b) neither the Agent nor any Lender has any fiduciary relationship with
or duty to the Borrower arising out of or in connection with this Agreement or
any of the other Loan Documents, and the relationship between Agent and
Lenders, on the one hand, and the Borrower, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
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(c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among the Borrower and the Lenders.
11.14 Confidentiality. Each Lender agrees to keep confidential all
non-public information provided to it by the Borrower pursuant to this
Agreement or the Senior Security Agreement, provided that nothing herein shall
prevent any Lender from disclosing any such information (a) to the Agent or
any other Lender, (b) to any Transferee or prospective Transferee who agrees
to keep such information confidential pursuant to the terms hereof, (c) to its
employees, directors, agents, Affiliates, attorneys, accountants and other
professional advisors as need to know such information, (d) upon the request
or demand of any Governmental Authority having jurisdiction over such Lender,
(e) in response to any order of any court or other Governmental Authority or
as may otherwise be required pursuant to any Requirement of Law, (f) which has
been publicly disclosed other than in breach of this Agreement, or (g) as may
be reasonably required in connection with the exercise of any remedy
hereunder.
11.15 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENT AND THE
LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE NOTES OR ANY
OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
11.16 Indemnity. The Borrower agrees to indemnify and hold
harmless the Agent and each Lender and their respective directors, officers,
employees and agents against any loss, liability, cost or expense which such
Persons may sustain or incur as a consequence of the Refinancing and the other
transactions contemplated hereby and thereby or the use or the proposed use of
proceeds hereof or thereof. This covenant shall survive the termination of
this Agreement and the payment of the Notes and all other amounts hereunder.
11.17 Senior Indebtedness. The Obligations shall rank senior in
right of payment to the Subordinated Notes.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
RBX CORPORATION,
by
/s/ Xxxxx Xxxxxx
----------------------------
Name: Xxxxx Xxxxxx
Title: President and Chief Executive Officer
THE CHASE MANHATTAN BANK , as Agent, as a
Lender and as Issuing Lender,
by
/s/ Xxxxxxx Xxxxxxxx
----------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Managing Director
BANKBOSTON, N.A., as a Lender,
by
/s/ Xxxxxx Xxxxxx
----------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
