EXHIBIT 10.14
CREDIT AGREEMENT
Dated as of May 16, 2002
Among
THE FINANCIAL INSTITUTIONS NAMED HEREIN
as the Lenders
and
BANK OF AMERICA, N.A.
as the Agent
CITICORP USA, INC.,
as the Syndication Agent
and
Coltec Industries Inc,
Coltec Industrial Products LLC,
Xxxxxxx Sealing Technologies LLC,
Xxxxxxx Bearings LLC,
Xxxxx Tool Company, and
Stemco LLC
as the Borrowers
and
Coltec Industries Inc
as the Funds Administrator
TABLE OF CONTENTS
Section Page
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ARTICLE 1 LOANS AND LETTERS OF CREDIT.............................................................................1
1.1 Total Facility..................................................................................1
1.2 Revolving Loans.................................................................................1
1.3 [Reserved.].....................................................................................5
1.4 Letters of Credit...............................................................................5
1.5 Bank Products...................................................................................8
ARTICLE 2 INTEREST AND FEES.......................................................................................8
2.1 Interest........................................................................................8
2.2 Continuation and Conversion Elections...........................................................9
2.3 Maximum Interest Rate..........................................................................10
2.4 Agent Fees.....................................................................................11
2.5 Unused Line Fee................................................................................11
2.6 Letter of Credit Fee...........................................................................11
ARTICLE 3 PAYMENTS AND PREPAYMENTS...............................................................................11
3.1 Revolving Loans................................................................................11
3.2 Termination of Facility........................................................................12
3.3 Lockboxes and Blocked Accounts.................................................................12
3.4 [Reserved].....................................................................................13
3.5 LIBOR Rate Loan Prepayments....................................................................13
3.6 Payments by the Borrowers......................................................................13
3.7 Payments as Revolving Loans....................................................................13
3.8 Apportionment, Application and Reversal of Payments............................................13
3.9 Indemnity for Returned Payments................................................................14
3.10 Agent's and Lenders' Books and Records; Monthly Statements.....................................14
ARTICLE 4 TAXES, YIELD PROTECTION AND ILLEGALITY.................................................................15
4.1 Taxes..........................................................................................15
4.2 Illegality.....................................................................................16
4.3 Increased Costs and Reduction of Return........................................................16
4.4 Funding Losses.................................................................................17
4.5 Inability to Determine Rates...................................................................17
4.6 Certificates of Agent; Replacement of Requesting Lenders.......................................18
4.7 Survival.......................................................................................18
ARTICLE 5 BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES......................................................18
5.1 Books and Records..............................................................................18
5.2 Financial Information..........................................................................18
5.3 Notices to the Lenders.........................................................................21
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5.4 Initial Field Examination......................................................................23
ARTICLE 6 GENERAL WARRANTIES AND REPRESENTATIONS.................................................................23
6.1 Authorization, Validity, and Enforceability of this Agreement and the Loan Documents...........24
6.2 Validity and Priority of Security Interest.....................................................24
6.3 Organization and Qualification.................................................................24
6.4 Corporate Name; Prior Transactions.............................................................24
6.5 Subsidiaries and Affiliates....................................................................25
6.6 Financial Statements and Projections...........................................................25
6.7 Capitalization.................................................................................25
6.8 Solvency.......................................................................................26
6.9 Debt...........................................................................................26
6.10 Distributions..................................................................................26
6.11 Real Estate; Leases............................................................................26
6.12 Proprietary Rights.............................................................................26
6.13 [Reserved].....................................................................................27
6.14 Litigation.....................................................................................27
6.15 Labor Disputes.................................................................................27
6.16 Environmental Laws.............................................................................27
6.17 No Violation of Law............................................................................28
6.18 No Default.....................................................................................28
6.19 ERISA Compliance...............................................................................28
6.20 Taxes..........................................................................................29
6.21 Regulated Entities.............................................................................29
6.22 Use of Proceeds; Margin Regulations............................................................29
6.23 [Reserved].....................................................................................29
6.24 No Material Adverse Change.....................................................................29
6.25 Full Disclosure................................................................................29
6.26 Material Agreements............................................................................29
6.27 Bank Accounts..................................................................................29
6.28 Governmental Authorization.....................................................................29
6.29 Tax Matters....................................................................................30
6.30 EIFA...........................................................................................30
ARTICLE 7 AFFIRMATIVE AND NEGATIVE COVENANTS.....................................................................30
7.1 Taxes and Other Obligations....................................................................30
7.2 Legal Existence and Good Standing..............................................................30
7.3 Compliance with Law and Agreements; Maintenance of Licenses....................................30
7.4 Maintenance of Property; Inspection of Property................................................31
7.5 Insurance......................................................................................31
7.6 Insurance and Condemnation Proceeds............................................................32
7.7 Environmental Laws.............................................................................32
7.8 Compliance with ERISA..........................................................................33
7.9 Mergers, Consolidations or Sales...............................................................33
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7.10 Distributions; Restricted Investments..........................................................33
7.11 Transactions Affecting Collateral or Obligations...............................................34
7.12 Guaranties.....................................................................................34
7.13 Debt...........................................................................................34
7.14 Prepayment.....................................................................................35
7.15 Transactions with Affiliates...................................................................35
7.16 Investment Banking and Finder's Fees...........................................................35
7.17 Business Conducted.............................................................................36
7.18 Liens..........................................................................................36
7.19 Sale and Leaseback Transactions................................................................36
7.20 New Subsidiaries...............................................................................36
7.21 Fiscal Year....................................................................................36
7.22 Limitation on Accelerated Settlement of Claims.................................................36
7.23 Fixed Charge Coverage Ratio....................................................................36
7.24 Use of Proceeds................................................................................37
7.25 Real Property Liens............................................................................37
7.26 Dormant Subsidiaries...........................................................................37
7.27 Tax Matters Agreement..........................................................................37
7.28 Modification to the EIFA.......................................................................37
7.29 Further Assurances.............................................................................38
ARTICLE 8 CONDITIONS OF LENDING..................................................................................38
8.1 Conditions Precedent to Making of Loans on the Closing Date....................................38
8.2 Conditions Precedent to Each Loan..............................................................40
ARTICLE 9 DEFAULT; REMEDIES......................................................................................40
9.1 Events of Default..............................................................................41
9.2 Remedies.......................................................................................44
ARTICLE 10 TERM AND TERMINATION..................................................................................45
10.1 Term and Termination...........................................................................45
ARTICLE 11 AMENDMENTS; WAIVERs; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS..........................................46
11.1 Amendments and Waivers.........................................................................46
11.2 Assignments; Participations....................................................................47
ARTICLE 12 THE AGENT.............................................................................................49
12.1 Appointment and Authorization..................................................................49
12.2 Delegation of Duties...........................................................................50
12.3 Liability of Agent.............................................................................50
12.4 Reliance by Agent..............................................................................50
12.5 Notice of Default..............................................................................51
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12.6 Credit Decision................................................................................51
12.7 Indemnification................................................................................51
12.8 Agent in Individual Capacity...................................................................52
12.9 Successor Agent................................................................................52
12.10 Withholding Tax................................................................................52
12.11 Collateral Matters.............................................................................54
12.12 Restrictions on Actions by Lenders; Sharing of Payments........................................55
12.13 Agency for Perfection..........................................................................55
12.14 Payments by Agent to Lenders...................................................................55
12.15 Settlement.....................................................................................56
12.16 Letters of Credit; Intra-Lender Issues.........................................................59
12.17 Concerning the Collateral and the Related Loan Documents.......................................61
12.18 Field Audit and Examination Reports; Disclaimer by Lenders.....................................61
12.19 Relation Among Lenders.........................................................................62
12.20 Syndication Agent..............................................................................62
ARTICLE 13 MISCELLANEOUS.........................................................................................62
13.1 No Waivers; Cumulative Remedies................................................................62
13.2 Severability...................................................................................63
13.3 Governing Law; Choice of Forum; Service of Process.............................................63
13.4 WAIVER OF JURY TRIAL...........................................................................64
13.5 Survival of Representations and Warranties.....................................................64
13.6 Other Security and Guaranties..................................................................64
13.7 Fees and Expenses..............................................................................64
13.8 Notices........................................................................................65
13.9 Waiver of Notices..............................................................................66
13.10 Binding Effect.................................................................................66
13.11 Indemnity of the Agent and the Lenders by the Borrowers........................................66
13.12 Limitation of Liability........................................................................67
13.13 Final Agreement................................................................................67
13.14 Counterparts...................................................................................67
13.15 Captions.......................................................................................67
13.16 Right of Setoff................................................................................67
13.17 Confidentiality................................................................................68
13.18 Conflicts with Other Loan Documents............................................................68
13.19 Joint and Several Liability of Borrowers.......................................................69
13.20 Appointment and Authorization of Funds Administrator...........................................70
13.21 Allocation of Loans and Expenses...............................................................71
13.22 Designated Senior Debt.........................................................................72
13.23 Agreement Effectiveness........................................................................72
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ANNEXES, EXHIBITS AND SCHEDULES
ANNEX A - DEFINED TERMS
EXHIBIT A - FORM OF BORROWING BASE CERTIFICATE
EXHIBIT B - FINANCIAL STATEMENTS
EXHIBIT C - FORM OF NOTICE OF BORROWING
EXHIBIT D - FORM OF NOTICE OF CONTINUATION/CONVERSION
EXHIBIT E - FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
SCHEDULE 1.2 - LENDERS' COMMITMENTS (ANNEX A - DEFINED TERMS)
SCHEDULE 6.3 - ORGANIZATION AND QUALIFICATIONS
SCHEDULE 6.4 - TRADE NAMES
SCHEDULE 6.5 - SUBSIDIARIES AND AFFILIATES
SCHEDULE 6.7 - CAPITALIZATION
SCHEDULE 6.9 - DEBT
SCHEDULE 6.11 - REAL ESTATE; LEASES
SCHEDULE 6.12 - PROPRIETARY RIGHTS
SCHEDULE 6.14 - LITIGATION
SCHEDULE 6.15 - LABOR DISPUTES
SCHEDULE 6.16 - ENVIRONMENTAL LAW
SCHEDULE 6.19 - ERISA COMPLIANCE
SCHEDULE 6.26 - MATERIAL AGREEMENTS
SCHEDULE 6.27 - BANK ACCOUNTS
SCHEDULE 7.10 - PERMITTED SHORT TERM INVESTMENTS
SCHEDULE A-1 - SUBSIDIARY GUARANTORS
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CREDIT AGREEMENT
This Credit Agreement, dated as of May 16, 2002, (this "Agreement")
among the financial institutions from time to time parties hereto (such
financial institutions, together with their respective successors and assigns,
are referred to hereinafter each individually as a "Lender" and collectively as
the "Lenders"), Bank of America, N.A. with an office at 000 Xxxxxxxxx Xxxxxx,
0xx Xxxxx, Xxxxxxx, Xxxxxxx 00000, as agent for the Lenders (in its capacity as
agent, the "Agent"), Citicorp USA, Inc., as Syndication Agent, and Coltec
Industries Inc, a Pennsylvania corporation ("Coltec"), Coltec Industrial
Products LLC, a Delaware limited liability company ("CIP"), Xxxxxxx Sealing
Technologies LLC, a Delaware limited liability company ("Xxxxxxx Sealing"),
Xxxxxxx Bearings LLC, a Delaware limited liability company ("Garlock Bearing"),
Xxxxx Tool Company, a Michigan corporation ("Xxxxx Tool"), and Stemco LLC, a
Delaware limited liability company ("Stemco" and, together with Coltec, CIP,
Xxxxxxx Sealing, Garlock Bearing and Xxxxx Tool, each individually referred to
herein as a "Borrower" and collectively as "Borrowers") with Coltec acting in
its capacity as Funds Administrator for the Borrowers.
WITNESSETH:
WHEREAS, the Borrowers have requested the Lenders to make available to
the Borrowers a revolving line of credit for loans and letters of credit in an
amount not to exceed $60,000,000, which extensions of credit the Borrowers will
use for the purposes permitted hereunder;
WHEREAS, capitalized terms used in this Agreement and not otherwise
defined herein shall have the meanings ascribed thereto in Annex A which is
attached hereto and incorporated herein; the rules of construction contained
therein shall govern the interpretation of this Agreement, and all Annexes,
Exhibits and Schedules attached hereto are incorporated herein by reference;
WHEREAS, the Lenders have agreed to make available to the Borrowers a
revolving credit facility upon the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth in this Agreement, and for good and valuable consideration,
the receipt of which is hereby acknowledged, the Lenders, the Agent, and the
Borrowers hereby agree as follows.
ARTICLE 1
LOANS AND LETTERS OF CREDIT
1.1 Total Facility. Subject to all of the terms and conditions of
this Agreement, the Lenders agree to make available a total credit facility of
up to $60,000,000 (the "Total Facility") to the Borrowers from time to time
during the term of this Agreement. The Total Facility shall be composed of a
revolving line of credit consisting of Revolving Loans and Letters of Credit
described herein.
1.2 Revolving Loans.
(a) Amounts. Subject to the satisfaction of the
conditions precedent set forth in Article 8, each Lender severally, but not
jointly, agrees, upon the Funds Administrator's request from time to time on any
Business Day during the period from the Closing Date to the Termination Date, to
make revolving loans (the "Revolving Loans") to the Borrowers on a joint and
several basis in amounts not to exceed such Lender's Pro Rata Share of
Availability with respect to Xxxxxxx Sealing or the Excess Collateral Providers,
as the case may be (or if less, such Lender's Pro Rata Share of Aggregate
Availability), on behalf of which such request is made, except for Non-Ratable
Loans and Agent Advances. The Lenders, however, in their unanimous discretion,
may elect to make Revolving Loans or issue or arrange to have issued Letters of
Credit in excess of the applicable Xxxxxxx Sealing Borrowing Base or the Excess
Collateral Providers Borrowing Base (as applicable) on one or more occasions,
but if they do so, neither the Agent nor the Lenders shall be deemed thereby to
have changed the limits of such Borrowing Base or to be obligated to exceed such
limits on any other occasion. If any Borrowing to Xxxxxxx Sealing would exceed
the Availability of Xxxxxxx Sealing, any Borrowing to the Excess Collateral
Providers would exceed the Availability of the Excess Collateral Providers, or
any Borrowing to any Borrower exceed Aggregate Availability, the Lenders may
refuse to make or may otherwise restrict the making of such Revolving Loans as
the Lenders determine until such excess has been eliminated, subject to the
Agent's authority, in its sole discretion, to make Agent Advances pursuant to
the terms of Section 1.2(i).
(b) Procedure for Borrowing.
(1) Each Borrowing shall be made upon the Funds
Administrator's irrevocable written notice delivered by the Funds Administrator
to the Agent in the form of a notice of borrowing ("Notice of Borrowing"), which
must be received by the Agent prior to (i) 1:00 p.m. (Eastern time) three
Business Days prior to the requested Funding Date, in the case of LIBOR Rate
Loans and (ii) 12:00 noon (Eastern time) on the requested Funding Date, in the
case of Base Rate Loans, specifying:
(A) the amount of the Borrowing, which in the
case of a LIBOR Rate Loan must equal or exceed $2,000,000 (and increments of
$1,000,000 in excess of such amount);
(B) the requested Funding Date, which must be a
Business Day;
(C) whether the Revolving Loans requested are to
be Base Rate Loans or LIBOR Rate Loans (and if not specified, it shall be deemed
a request for a Base Rate Loan);
(D) the duration of the Interest Period for
LIBOR Rate Loans (and if not specified, it shall be deemed a request for an
Interest Period of one month); and
(E) the applicable Borrower(s) (i.e. Xxxxxxx
Sealing or the Excess Collateral Providers) on behalf of which such request is
made;
provided, however, that with respect to any Borrowing to be made on the Closing
Date, such Borrowings will consist of Base Rate Loans only.
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(2) In lieu of delivering a Notice of Borrowing,
the Funds Administrator may give the Agent telephonic notice of such request for
advances to the Designated Account on or before the deadline set forth above.
The Agent at all times shall be entitled to rely on such telephonic notice in
making such Revolving Loans, regardless of whether any written confirmation is
received.
(3) The Borrowers shall have no right to request
a LIBOR Rate Loan while a Default or Event of Default has occurred and is
continuing.
(c) Reliance upon Authority. Prior to the Closing Date,
the Funds Administrator shall deliver to the Agent, a notice setting forth the
account of each of Xxxxxxx Sealing and the Funds Administrator (each a
"Designated Account") to which the Agent is authorized to transfer the proceeds
of the Revolving Loans requested hereunder. The Funds Administrator may
designate a replacement account from time to time by written notice. All such
Designated Accounts must be reasonably satisfactory to the Agent. The Agent is
entitled to rely conclusively on any person's request for Revolving Loans on
behalf of any Borrower or the Funds Administrator, so long as the proceeds
thereof are to be transferred to the applicable Designated Account. The Agent
has no duty to verify the identity of any individual representing himself or
herself as a person authorized by any Borrower or the Funds Administrator to
make such requests on its behalf.
(d) No Liability. The Agent shall not incur any liability
to any Borrower or the Funds Administrator as a result of acting upon any notice
referred to in Sections 1.2(b) and (c), which the Agent believes in good faith
to have been given by an officer or other person duly authorized by any Borrower
or the Funds Administrator to request Revolving Loans on its behalf. The
crediting of Revolving Loans to the applicable Designated Account conclusively
establishes the obligation of the Borrowers to repay such Revolving Loans as
provided herein.
(e) Notice Irrevocable. Any Notice of Borrowing (or
telephonic notice in lieu thereof) made pursuant to Section 1.2(b) shall be
irrevocable. The Borrowers shall be bound to borrow the funds requested therein
in accordance therewith.
(f) Agent's Election. Promptly after receipt of a Notice
of Borrowing (or telephonic notice in lieu thereof), the Agent shall elect to
have the terms of Section 1.2(g) or the terms of Section 1.2(h) apply to such
requested Borrowing. If the Bank declines in its sole discretion to make a
Non-Ratable Loan pursuant to Section 1.2(h), the terms of Section 1.2(g) shall
apply to the requested Borrowing.
(g) Making of Revolving Loans. If Agent elects to have
the terms of this Section 1.2(g) apply to a requested Borrowing, then promptly
after receipt of a Notice of Borrowing or telephonic notice in lieu thereof, the
Agent shall notify the Lenders by telecopy, telephone or e-mail of the requested
Borrowing. Each Lender shall transfer its Pro Rata Share of the requested
Borrowing available to the Agent in immediately available funds, to the account
from time to time designated by Agent, not later than 1:00 p.m. (Eastern time)
on the applicable Funding Date. After the Agent's receipt of all proceeds of
such Revolving Loans, the Agent shall make the proceeds of such Revolving Loans
available to the designated Borrower(s) on the
3
applicable Funding Date by transferring same day funds to the account of Xxxxxxx
Sealing in the case of a Revolving Loan to Xxxxxxx Sealing and/or the Funds
Administrator in the case of a Revolving Loan to the Excess Collateral Providers
(as applicable); provided, however, that the amount of Revolving Loans so made
on any date shall not exceed the applicable Availability of the applicable
Borrowers on such date nor shall the amount of Revolving Loans made on any date
exceed Aggregate Availability.
(h) Making of Non-Ratable Loans.
(A) If Agent elects, with the consent of the Bank, to
have the terms of this Section 1.2(h) apply to a requested Borrowing, the Bank
shall make a Revolving Loan in the amount of that Borrowing available on the
applicable Funding Date by transferring same day funds to the applicable
Designated Account. Each Revolving Loan made solely by the Bank pursuant to this
Section is herein referred to as a "Non-Ratable Loan", and such Revolving Loans
are collectively referred to as the "Non-Ratable Loans." Each Non-Ratable Loan
shall be subject to all the terms and conditions applicable to other Revolving
Loans except that all payments thereon shall be payable to the Bank solely for
its own account. The aggregate amount of Non-Ratable Loans outstanding at any
time shall not exceed $5,000,000. The Agent shall not request the Bank to make
any Non-Ratable Loan if (1) the Agent has received written notice from any
Lender that one or more of the applicable conditions precedent set forth in
Article 8 will not be satisfied on the requested Funding Date for the applicable
Borrowing, (2) the requested Borrowing on behalf of Xxxxxxx Sealing or the
Excess Collateral Providers would exceed the applicable Availability of such
Persons on that Funding Date or (3) the requested Borrowing would exceed
Aggregate Availability on that Funding Date.
(B) The Non-Ratable Loans shall be secured by the Agent's
Liens in and to the Collateral and shall constitute Base Rate Loans and
Obligations hereunder.
(i) Agent Advances.
(A) Subject to the limitations set forth below, the Agent
is authorized by the Borrowers and the Lenders, from time to time in the Agent's
sole discretion, (A) after the occurrence of a Default or an Event of Default,
or (B) at any time that any of the other conditions precedent set forth in
Article 8 have not been satisfied, to make Base Rate Loans to any Borrower on
behalf of the Lenders in an aggregate amount outstanding at any time not to
exceed 10% of the Borrowing Base of such Borrower but not in excess of the
Maximum Revolver Amount which the Agent, in its reasonable business judgment,
deems necessary or desirable (1) to preserve or protect the Collateral, or any
portion thereof, (2) to enhance the likelihood of, or maximize the amount of,
repayment of the Loans and other Obligations, or (3) to pay any other amount
chargeable to the Borrowers pursuant to the terms of this Agreement, including
costs, fees and expenses as described in Section 13.7 (any of such advances are
herein referred to as "Agent Advances"); provided, that the Majority Lenders may
at any time revoke the Agent's authorization to make Agent Advances. Any such
revocation must be in writing and shall become effective prospectively upon the
Agent's receipt thereof.
(B) The Agent Advances shall be secured by the Agent's
Liens in and to the Collateral and shall constitute Base Rate Loans and
Obligations hereunder.
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1.3 [Reserved.]
1.4 Letters of Credit.
(a) Agreement to Issue or Cause To Issue. Subject to the
terms and conditions of this Agreement, the Agent agrees (i) to cause the Letter
of Credit Issuer to issue for the account of each Borrower one or more
commercial/documentary and standby letters of credit ("Letter of Credit") and/or
(ii) to provide credit support or other enhancement to a Letter of Credit Issuer
acceptable to Agent, which issues a Letter of Credit for the account of each
Borrower (any such credit support or enhancement being herein referred to as a
"Credit Support") from time to time during the term of this Agreement.
(b) Amounts; Outside Expiration Date. The Agent shall not
have any obligation to issue or cause to be issued any Letter of Credit or to
provide Credit Support for any Letter of Credit at any time if: (i) the maximum
face amount of the requested Letter of Credit is greater than the Unused Letter
of Credit Subfacility at such time; (ii) the maximum undrawn amount of the
requested Letter of Credit by the Funds Administrator on behalf of any Borrower
and all commissions, fees, and charges due from such Borrower in connection with
the opening thereof would exceed either (A) the applicable Availability of
Xxxxxxx Sealing or the Excess Collateral Providers, as applicable, or (B)
Aggregate Availability at such time; or (iii) such Letter of Credit has an
expiration date less than 30 days prior to the Stated Termination Date or more
than 12 months from the date of issuance for standby letters of credit and 180
days for documentary letters of credit. With respect to any Letter of Credit
which contains any "evergreen" or automatic renewal provision, each Lender shall
be deemed to have consented to any such extension or renewal unless any such
Lender shall have provided to the Agent, written notice that it declines to
consent to any such extension or renewal at least thirty (30) days prior to the
date on which the Letter of Credit Issuer is entitled to decline to extend or
renew the Letter of Credit. If all of the requirements of this Section 1.4 are
met and no Default or Event of Default has occurred and is continuing, no Lender
shall decline to consent to any such extension or renewal.
(c) Other Conditions. In addition to conditions precedent
contained in Article 8, the obligation of the Agent to issue or to cause to be
issued any Letter of Credit or to provide Credit Support for any Letter of
Credit is subject to the following conditions precedent having been satisfied in
a manner reasonably satisfactory to the Agent:
(1) The Funds Administrator (on behalf of the
requesting Borrower) shall have delivered to the Letter of Credit Issuer, at
such times and in such manner as such Letter of Credit Issuer may prescribe, an
application in form and substance satisfactory to such Letter of Credit Issuer
and reasonably satisfactory to the Agent for the issuance of the Letter of
Credit and such other documents as may be required pursuant to the terms
thereof, and the form, terms and purpose of the proposed Letter of Credit shall
be reasonably satisfactory to the Agent and the Letter of Credit Issuer; and
(2) As of the date of issuance, no order of any
court, arbitrator or Governmental Authority shall purport by its terms to enjoin
or restrain money center banks generally from issuing letters of credit of the
type and in the amount of the proposed Letter of
5
Credit, and no law, rule or regulation applicable to money center banks
generally and no request or directive (whether or not having the force of law)
from any Governmental Authority with jurisdiction over money center banks
generally shall prohibit, or request that the proposed Letter of Credit Issuer
refrain from, the issuance of letters of credit generally or the issuance of
such Letters of Credit.
(d) Issuance of Letters of Credit.
(1) Request for Issuance. The Funds
Administrator must notify the Agent of a requested Letter of Credit at least
three (3) Business Days prior to the proposed issuance date. Such notice shall
be irrevocable and must specify the original face amount of the Letter of Credit
requested, the Business Day of issuance of such requested Letter of Credit,
whether such Letter of Credit may be drawn in a single or in partial draws, the
Business Day on which the requested Letter of Credit is to expire, the purpose
for which such Letter of Credit is to be issued, and the beneficiary of the
requested Letter of Credit. The Funds Administrator shall attach to such notice
the proposed form of the Letter of Credit.
(2) Responsibilities of the Agent; Issuance. As
of the Business Day immediately preceding the requested issuance date of the
Letter of Credit, the Agent shall determine the amount of the applicable Unused
Letter of Credit Subfacility, the applicable Availability of the applicable
Borrower and Aggregate Availability. If (i) the face amount of the requested
Letter of Credit is less than the Unused Letter of Credit Subfacility and (ii)
the amount of such requested Letter of Credit and all commissions, fees, and
charges due from such Borrower in connection with the opening thereof would not
exceed such Borrower's applicable Availability or Aggregate Availability, the
Agent shall cause the Letter of Credit Issuer to issue the requested Letter of
Credit on the requested issuance date so long as the other conditions hereof are
met.
(3) No Extensions or Amendment. The Agent shall
not be obligated to cause the Letter of Credit Issuer to extend or amend any
Letter of Credit issued pursuant hereto unless the requirements of this Section
1.4 are met as though a new Letter of Credit were being requested and issued.
(e) Payments Pursuant to Letters of Credit. The Borrowers
agree on a joint and several basis to reimburse immediately the Letter of Credit
Issuer for any draw under any Letter of Credit and the Agent for the account of
the Lenders upon any payment pursuant to any Credit Support, and to pay the
Letter of Credit Issuer the amount of all other charges and fees payable to the
Letter of Credit Issuer in connection with any Letter of Credit immediately when
due, irrespective of any claim, setoff, defense or other right which the
Borrowers may have at any time against the Letter of Credit Issuer or any other
Person. Each drawing under any Letter of Credit shall constitute a request by
the Funds Administrator on behalf of the applicable Borrower to the Agent for a
Borrowing of a Base Rate Loan in the amount of such drawing. The Funding Date
with respect to such borrowing shall be the date of such drawing.
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(f) Indemnification; Exoneration; Power of Attorney.
(1) Indemnification. In addition to amounts
payable as elsewhere provided in this Section 1.4, the Borrowers agree to
protect, indemnify, pay and save the Lenders and the Agent harmless from and
against any and all claims, demands, liabilities, damages, losses, costs,
charges and expenses (including reasonable attorneys' fees) which any Lender or
the Agent (other than a Lender in its capacity as Letter of Credit Issuer) may
incur or be subject to as a consequence, direct or indirect, of the issuance of
any Letter of Credit or the provision of any Credit Support or enhancement in
connection therewith. The Borrowers' obligations under this Section shall
survive payment of all other Obligations.
(2) Assumption of Risk by the Borrowers. As
among the Borrowers, the Lenders, and the Agent, the Borrowers assume all risks
of the acts and omissions of, or misuse of any of the Letters of Credit by, the
respective beneficiaries of such Letters of Credit. In furtherance and not in
limitation of the foregoing, the Lenders and the Agent shall not be responsible
for: (A) the form, validity, sufficiency, accuracy, genuineness or legal effect
of any document submitted by any Person in connection with the application for
and issuance of and presentation of drafts with respect to any of the Letters of
Credit, even if it should prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) the validity or sufficiency
of any instrument transferring or assigning or purporting to transfer or assign
any Letter of Credit or the rights or benefits thereunder or proceeds thereof,
in whole or in part, which may prove to be invalid or ineffective for any
reason; (C) the failure of the beneficiary of any Letter of Credit to comply
duly with conditions required in order to draw upon such Letter of Credit; (D)
errors, omissions, interruptions, or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or not they be
in cipher; (E) errors in interpretation of technical terms; (F) any loss or
delay in the transmission or otherwise of any document required in order to make
a drawing under any Letter of Credit or of the proceeds thereof; (G) the
misapplication by the beneficiary of any Letter of Credit of the proceeds of any
drawing under such Letter of Credit; (H) any consequences arising from causes
beyond the control of the Lenders or the Agent, including any act or omission,
whether rightful or wrongful, of any present or future de jure or de facto
Governmental Authority or (I) the Letter of Credit Issuer's honor of a draw for
which the draw or any certificate fails to comply in any respect with the terms
of the Letter of Credit. None of the foregoing shall affect, impair or prevent
the vesting of any rights or powers of the Agent or any Lender under this
Section 1.4(f).
(3) Exoneration. Without limiting the foregoing,
no action or omission by Agent or any Lender (excluding any Lender in its
capacity as a Letter of Credit Issuer) with respect to any Letter of Credit
shall result in any liability of Agent or and Lender to the Borrowers, or
relieve the Borrowers of any of their respective obligations hereunder to any
such Person.
(4) Rights Against Letter of Credit Issuer.
Nothing contained in this Agreement is intended to limit the Borrowers' rights,
if any, with respect to the Letter of Credit Issuer which arise as a result of
the letter of credit application and related documents executed by and between
the Borrowers and the Letter of Credit Issuer.
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(5) Account Party. The Borrowers hereby
authorize and direct any Letter of Credit Issuer to name the Borrowers (or any
applicable Borrower) as the "Account Party" therein and to deliver to the Agent
all instruments, documents and other writings and property received by the
Letter of Credit Issuer pursuant to the Letter of Credit, and to accept and rely
upon the Agent's instructions and agreements with respect to all matters arising
in connection with the Letter of Credit or the application therefor.
(g) Supporting Letter of Credit; Cash Collateral. If,
notwithstanding the provisions of Section 1.4(b) and Section 10.1, any Letter of
Credit or Credit Support is outstanding upon the termination of this Agreement,
then upon such termination the Borrowers shall deposit with the Agent, for the
ratable benefit of the Agent and the Lenders, with respect to each Letter of
Credit or Credit Support then outstanding, a standby letter of credit (a
"Supporting Letter of Credit") in form and substance satisfactory to the Agent,
issued by an issuer satisfactory to the Agent in an amount equal to the greatest
amount for which such Letter of Credit or such Credit Support may be drawn plus
any fees and expenses associated with such Letter of Credit or such Credit
Support, under which Supporting Letter of Credit the Agent is entitled to draw
amounts necessary to reimburse the Agent and the Lenders for payments to be made
by the Agent and the Lenders under such Letter of Credit or Credit Support and
any fees and expenses associated with such Letter of Credit or Credit Support.
Such Supporting Letter of Credit shall be held by the Agent, for the ratable
benefit of the Agent and the Lenders, as security for, and to provide for the
payment of, the aggregate undrawn amount of such Letters of Credit or such
Credit Support remaining outstanding.
1.5 Bank Products. The Borrowers may request and the Agent may, in
its sole and absolute discretion, arrange for the Borrowers to obtain from the
Bank or the Bank's Affiliates Bank Products although the Borrowers are not
required to do so. If Bank Products are provided by an Affiliate of the Bank,
the Borrowers agree, on a joint and several basis, to indemnify and hold the
Agent, the Bank and the Lenders harmless from any and all costs and obligations
now or hereafter incurred by the Agent, the Bank or any of the Lenders which
arise from any indemnity given by the Agent to its Affiliates related to such
Bank Products; provided, however, nothing contained herein is intended to limit
the Borrowers' rights, with respect to the Bank or its Affiliates, if any, which
arise as a result of the execution of documents by and between the Borrowers (or
any of them) and the Bank which relate to Bank Products. The agreement contained
in this Section shall survive termination of this Agreement. Each of the
Borrowers acknowledges and agrees that the obtaining of Bank Products from the
Bank or the Bank's Affiliates (a) is in the sole and absolute discretion of the
Bank or the Bank's Affiliates, and (b) is subject to all rules and regulations
of the Bank or the Bank's Affiliates.
ARTICLE 2
INTEREST AND FEES
2.1 Interest.
(a) Interest Rates. All outstanding Obligations shall
bear interest on the unpaid principal amount thereof (including, to the extent
permitted by law, on interest thereon not paid when due) from the date made
until paid in full in cash at a rate determined by reference to the Base Rate or
the LIBOR Rate plus the Applicable Margins as set forth below,
8
but not to exceed the Maximum Rate. If at any time Loans are outstanding with
respect to which the Funds Administrator has not delivered to the Agent a notice
specifying the basis for determining the interest rate applicable thereto in
accordance herewith, those Loans shall bear interest at a rate determined by
reference to the Base Rate until notice to the contrary has been given to the
Agent in accordance with this Agreement and such notice has become effective.
Except as otherwise provided herein, the outstanding Obligations shall bear
interest as follows:
(i) For all Base Rate Loans and other
Obligations (other than LIBOR Rate Loans) at a fluctuating per annum
rate equal to the Base Rate plus the Applicable Margin; and
(ii) For all LIBOR Rate Loans at a per annum rate
equal to the LIBOR Rate plus the Applicable Margin.
Each change in the Base Rate shall be reflected in the interest rate applicable
to Base Rate Loans as of the effective date of such change. All interest charges
shall be computed on the basis of a year of 360 days and actual days elapsed
(which results in more interest being paid than if computed on the basis of a
365-day year). The Borrowers shall pay to the Agent, for the ratable benefit of
Lenders, interest accrued on all Base Rate Loans in arrears on the first day of
each month hereafter and on the Termination Date. The Borrowers shall pay to the
Agent, for the ratable benefit of Lenders, interest on all LIBOR Rate Loans in
arrears on each LIBOR Interest Payment Date.
(b) Default Rate. If any Default or Event of Default
occurs and is continuing and the Agent or the Required Lenders in their
discretion so elect, then, while any such Default or Event of Default is
continuing, all of the Obligations shall bear interest at the Default Rate
applicable thereto.
2.2 Continuation and Conversion Elections.
(a) The Borrowers may (by notice from the Funds
Administrator):
(i) elect, as of any Business Day, in the case
of Base Rate Loans to convert any Base Rate Loans (or any part thereof
in an amount not less than $2,000,000, or that is in an integral
multiple of $1,000,000 in excess thereof) into LIBOR Rate Loans; or
(ii) elect, as of the last day of the applicable
Interest Period, to continue any LIBOR Rate Loans having Interest
Periods expiring on such day (or any part thereof in an amount not less
than $2,000,000, or that is in an integral multiple of $1,000,000 in
excess thereof);
provided, that if at any time the aggregate amount of LIBOR Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than $1,000,000, such LIBOR Rate Loans shall
automatically convert into Base Rate Loans; provided further that if the notice
shall fail to specify the duration of the Interest Period, such Interest Period
shall be one month.
9
(b) The Funds Administrator shall deliver a notice of
continuation/conversion ("Notice of Continuation/Conversion") to the Agent not
later than 1:00 p.m. (Eastern time) at least three (3) Business Days in advance
of the Continuation/Conversion Date, if the Loans are to be converted into or
continued as LIBOR Rate Loans and specifying:
(i) the proposed Continuation/Conversion Date;
(ii) the aggregate amount of Loans to be
converted or renewed;
(iii) the type of Loans resulting from the
proposed conversion or continuation; and
(iv) the duration of the requested Interest
Period, provided, however, the Funds Administrator may not
select an Interest Period that ends after the Stated
Termination Date.
(c) If upon the expiration of any Interest Period
applicable to LIBOR Rate Loans, the Funds Administrator has failed to select
timely a new Interest Period to be applicable to LIBOR Rate Loans or if any
Default or Event of Default then exists, the Funds Administrator shall be deemed
to have elected to convert such LIBOR Rate Loans into Base Rate Loans effective
as of the expiration date of such Interest Period.
(d) The Agent will promptly notify each Lender of its
receipt of a Notice of Continuation/Conversion. All conversions and
continuations shall be made ratably according to the respective outstanding
principal amounts of the Loans with respect to which the notice was given held
by each Lender.
(e) There may not be more than ten (10) different LIBOR
Rate Loans in effect hereunder at any time.
2.3 Maximum Interest Rate. In no event shall any interest rate
provided for hereunder exceed the maximum rate legally chargeable by any Lender
under applicable law for such Lender with respect to loans of the type provided
for hereunder (the "Maximum Rate"). If, in any month, any interest rate, absent
such limitation, would have exceeded the Maximum Rate, then the interest rate
for that month shall be the Maximum Rate, and, if in future months, that
interest rate would otherwise be less than the Maximum Rate, then that interest
rate shall remain at the Maximum Rate until such time as the amount of interest
paid hereunder equals the amount of interest which would have been paid if the
same had not been limited by the Maximum Rate. In the event that, upon payment
in full of the Obligations, the total amount of interest paid or accrued under
the terms of this Agreement is less than the total amount of interest which
would, but for this Section 2.3, have been paid or accrued if the interest rate
otherwise set forth in this Agreement had at all times been in effect, then the
Borrowers shall, to the extent permitted by applicable law, pay the Agent, for
the account of the Lenders, an amount equal to the excess of (a) the lesser of
(i) the amount of interest which would have been charged if the Maximum Rate
had, at all times, been in effect or (ii) the amount of interest which would
have accrued had the interest rate otherwise set forth in this Agreement, at all
times, been in effect over (b) the amount of interest actually paid or accrued
under this Agreement. If a court of competent jurisdiction determines that the
Agent and/or any Lender has received interest and other charges hereunder in
10
excess of the Maximum Rate, such excess shall be deemed received on account of,
and shall automatically be applied to reduce, the Obligations other than
interest, in the inverse order of maturity, and if there are no Obligations
outstanding, the Agent and/or such Lender shall refund to the Borrowers such
excess.
2.4 Agent Fees. The Borrowers agree on a joint and several basis
to pay the Agent the fees as set forth in the fee letter dated May 16 2002,
between the Agent and the Borrowers.
2.5 Unused Line Fee. On the first day of each month and on the
Termination Date the Borrowers agree to pay to the Agent, for the account of the
Lenders, in accordance with their respective Pro Rata Shares, an unused line fee
(the "Unused Line Fee") equal to the Applicable Unused Line Rate per annum on
each day during the immediately preceding month (or shorter period if calculated
for the first month hereafter or on the Termination Date) times the amount by
which the Maximum Revolver Amount exceeded the sum of the outstanding amount of
Revolving Loans and the undrawn face amount of outstanding Letters of Credit on
such day. The Unused Line Fee shall be computed on the basis of a 360-day year
for the actual number of days elapsed. All principal payments received by the
Agent shall be deemed to be credited to the Borrowers' Loan Accounts immediately
upon receipt for purposes of calculating the Unused Line Fee pursuant to this
Section 2.5.
2.6 Letter of Credit Fee. The Borrowers agree to pay to the Agent,
for the account of the Lenders, in accordance with their respective Pro Rata
Shares, for each Letter of Credit, a per annum fee (the "Letter of Credit Fee")
equal to (i) the Applicable Margin with respect to LIBOR Loans in effect from
time to time in the case of documentary Letters of Credit and (ii) the
Applicable Margin with respect to LIBOR Loans in effect from time to time plus
one-eighth percent (0.125%) per annum facing fee in the case of standby Letters
of Credit, and to the Letter of Credit Issuer, all other customary out-of-pocket
costs, fees and expenses incurred by the Letter of Credit Issuer in connection
with the application for, processing of, issuance of, or amendment to any Letter
of Credit. The Letter of Credit Fee shall be payable monthly in arrears on the
first day of each month following any month in which a Letter of Credit is
outstanding and on the Termination Date. The Letter of Credit Fee shall be
computed on the basis of a 360-day year for the actual number of days elapsed.
ARTICLE 3
PAYMENTS AND PREPAYMENTS
3.1 Revolving Loans. The Borrowers shall repay the outstanding
principal balance of the Revolving Loans, plus all accrued but unpaid interest
thereon, on the Termination Date. The Borrowers may prepay Revolving Loans at
any time, and reborrow subject to the terms of this Agreement. In addition, and
without limiting the generality of the foregoing, upon demand the Borrowers
shall pay to the Agent, for account of the Lenders, (i) the amount, without
duplication, by which the Aggregate Revolver Outstandings exceeds the lesser of
the aggregate Borrowing Base or the Maximum Revolver Amount, (ii) the amount by
which the Aggregate Revolver Outstandings of Xxxxxxx Sealing exceeds the Xxxxxxx
Sealing Borrowing Base and (iii) the amount by which the Aggregate Revolver
Outstandings of the Excess Collateral Providers exceeds the Excess Collateral
Providers Borrowing Base.
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3.2 Termination of Facility. The Borrowers may terminate this
Agreement upon at least ten (10) Business Days' notice to the Agent and the
Lenders, upon (a) the payment in full of all outstanding Revolving Loans,
together with accrued interest thereon, and the cancellation and return of all
outstanding Letters of Credit, (b) the payment in full in cash of all
reimbursable expenses and other Obligations, and (e) with respect to any LIBOR
Rate Loans prepaid, payment of the amounts due under Section 4.4, if any
3.3 Lockboxes and Blocked Accounts.
(a) (I) Each Borrower shall have established and shall
maintain, at one or more financial institutions selected by
such Borrower and acceptable to the Agent (each a "Lockbox
Bank"), one or more lockboxes (with respect to each Borrower,
such Borrower's "Lockboxes") and shall instruct all account
debtors on the Accounts of such Borrower to remit all payments
to such Borrower's Lockboxes. Each applicable Borrower shall
maintain a depository account at each Lockbox Bank (with
respect to each Borrower, such Borrower's "Depository
Accounts") and shall cause all amounts remitted to each such
Lockbox to be deposited into such Depository Accounts. Each
Borrower, the Agent and the applicable financial institutions
shall have entered into a Lockbox and Control Agreement
providing, among other things, that all amounts which are
deposited into the Depository Accounts shall be transferred at
the end of each day to, (A) in the case of Xxxxxxx Sealing,
the Xxxxxxx Sealing Concentration Account and (B) in the case
of any Excess Collateral Provider, the Excess Collateral
Provider Concentration Account. All amounts received by any
Borrower from any account debtor, in addition to all other
cash received from any other source that constitutes proceeds
of Collateral, shall upon receipt be deposited into (A) in the
case of such a receipt by Xxxxxxx Sealing, the Xxxxxxx Sealing
Concentration Account and (B) in the case of such a receipt by
an Excess Collateral Provider, the Excess Collateral Provider
Concentration Account. In addition, from and after the Closing
Date the Borrowers shall cause all proceeds payable to any
Borrower under or in connection with any Asbestos Insurance
Policy to be deposited into the Insurance Proceeds Account.
(ii) In addition, (A) Xxxxxxx Sealing and the
Bank and (B) each of the Excess Collateral Providers and the
Bank shall enter into agreements (each a "Concentration
Account Agreement") providing that all available amounts held
or received in the Xxxxxxx Sealing Concentration Account or
the Excess Collateral Providers Concentration Account shall be
transferred at the end of each day to an account maintained by
the Agent at the Bank (the "Agent Account") and applied in
accordance with the provisions of Section 3.8 hereof and
Section 11(c) of the Security Agreement.
(iii) The closing of any Lockbox, any related
Depository Account, and the termination of any Lockbox and
Control Agreement
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shall require in each case the prior written consent of the
Agent, which consent shall not be unreasonably withheld. The
Borrowers shall not close either of the Xxxxxxx Concentration
Account or the Excess Collateral Providers Concentration
Account or any related Concentration Account Agreement without
the prior written consent of the Agent.
(b) All amounts received by the Agent for distribution
hereunder shall, except as otherwise provided in this Agreement, be applied in
the order and manner set forth in Section 3.8 hereof and Section 11(c) of the
Security Agreement.
3.4 [Reserved].
3.5 LIBOR Rate Loan Prepayments. In connection with any
prepayment, if any LIBOR Rate Loans are prepaid prior to the expiration date of
the Interest Period applicable thereto, the Borrowers shall pay to the Lenders
the amounts described in Section 4.4.
3.6 Payments by the Borrowers.
(a) All payments to be made by the Borrowers shall be
made without set-off, recoupment or counterclaim. Except as otherwise expressly
provided herein, all payments by the Borrowers shall be made to the Agent for
the account of the Lenders, at the account designated by the Agent and shall be
made in Dollars and in immediately available funds, no later than 1:00 p.m.
(Eastern time) on the date specified herein. Any payment received by the Agent
after such time shall be deemed (for purposes of calculating interest only) to
have been received on the following Business Day and any applicable interest
shall continue to accrue.
(b) Subject to the provisions set forth in the definition
of "Interest Period", whenever any payment is due on a day other than a Business
Day, such payment shall be due on the following Business Day, and such extension
of time shall in such case be included in the computation of interest or fees,
as the case may be.
3.7 Payments as Revolving Loans. At the election of Agent, all
payments of principal, interest, reimbursement obligations in connection with
Letters of Credit and Credit Support for Letters of Credit, fees, premiums,
reimbursable expenses and other sums payable hereunder, may be paid from the
proceeds of Revolving Loans made hereunder. The Borrowers hereby irrevocably
authorize the Agent to charge the Loan Accounts for the purpose of paying all
amounts from time to time due hereunder and agrees that all such amounts charged
shall constitute Revolving Loans (including Non-Ratable Loans and Agent
Advances).
3.8 Apportionment, Application and Reversal of Payments. Principal
and interest payments shall be apportioned ratably among the Lenders (according
to the unpaid principal balance of the Loans to which such payments relate held
by each Lender) and payments of the fees shall, as applicable, be apportioned
ratably among the Lenders, except for fees payable solely to Agent and the
Letter of Credit Issuer and except as provided in Section 11.1(b). All payments
shall be remitted to the Agent and all such payments not relating to principal
or interest of specific Loans, or not constituting payment of specific fees, and
all proceeds of Accounts or other Collateral received by the Agent, shall be
applied, ratably, subject to the
13
provisions of this Agreement, first, to pay any fees, indemnities or expense
reimbursements then due to the Agent from the Borrowers; second, to pay any fees
or expense reimbursements then due to the Lenders from the Borrowers; third, to
pay interest due in respect of all Loans, including Non-Ratable Loans and Agent
Advances; fourth, to pay or prepay principal of the Non-Ratable Loans and Agent
Advances; fifth, to pay or prepay principal of the Revolving Loans (other than
Non-Ratable Loans and Agent Advances) and unpaid reimbursement obligations in
respect of Letters of Credit (provided that, unless payment is otherwise
required pursuant to the terms of this Agreement or a Event of Default shall
have occurred and be continuing, no payment of any LIBOR Rate Loan shall be
required other than on the last day of the applicable Interest Period); sixth,
to pay an amount to Agent equal to all due and outstanding Letter of Credit
Obligations (and, to the extent required pursuant to this Agreement or after the
occurrence and during the continuance of an Event of Default an additional
amount to be held as cash collateral for such Obligations not yet due); seventh,
to the payment of any other Obligation, including any amounts relating to Bank
Products due to the Agent or any Lender (or any Affiliate of any Lender) by the
Borrowers; and eighth, to the Funds Administrator for the benefit of the
Borrowers. Notwithstanding anything to the contrary contained in this Agreement,
unless so directed by the Funds Administrator, or unless an Event of Default has
occurred and is continuing, neither the Agent nor any Lender shall apply any
payments which it receives to any LIBOR Rate Loan, except (a) on the expiration
date of the Interest Period applicable to any such LIBOR Rate Loan, or (b) in
the event, and only to the extent, that there are no outstanding Base Rate Loans
and, in any event, the Borrowers shall pay LIBOR breakage losses in accordance
with Section 4.4. The Agent and the Lenders shall have the continuing and
exclusive right to apply and reverse and reapply any and all such proceeds and
payments to any portion of the Obligations.
3.9 Indemnity for Returned Payments. If after receipt of any
payment which is applied to the payment of all or any part of the Obligations,
the Agent, any Lender, the Bank or any Affiliate of the Bank is for any reason
compelled to surrender such payment or proceeds to any Person because such
payment or application of proceeds is invalidated, declared fraudulent, set
aside, determined to be void or voidable as a preference, impermissible setoff,
or a diversion of trust funds, or for any other reason, then the Obligations or
part thereof intended to be satisfied shall be revived and continued and this
Agreement shall continue in full force as if such payment or proceeds had not
been received by the Agent or such Lender and the Borrowers shall be liable to
pay to the Agent and the Lenders, and hereby indemnify the Agent and the Lenders
and hold the Agent and the Lenders harmless for the amount of such payment or
proceeds surrendered. The provisions of this Section 3.9 shall be and remain
effective notwithstanding any contrary action which may have been taken by the
Agent or any Lender in reliance upon such payment or application of proceeds,
and any such contrary action so taken shall be without prejudice to the Agent's
and the Lenders' rights under this Agreement and shall be deemed to have been
conditioned upon such payment or application of proceeds having become final and
irrevocable. The provisions of this Section 3.9 shall survive the termination of
this Agreement.
3.10 Agent's and Lenders' Books and Records; Monthly Statements.
The Agent shall record the principal amount of the Loans owing to each Lender,
the undrawn face amount of all outstanding Letters of Credit and the aggregate
amount of unpaid reimbursement obligations outstanding with respect to the
Letters of Credit from time to time on its books. In
14
addition, each Lender may note the date and amount of each payment or prepayment
of principal of such Lender's Loans in its books and records. Failure by Agent
or any Lender to make such notation shall not affect the obligations of the
Borrowers with respect to the Loans or the Letters of Credit. The Borrowers
agree that the Agent's and each Lender's books and records showing the
Obligations and the transactions pursuant to this Agreement and the other Loan
Documents shall be admissible in any action or proceeding arising therefrom, and
shall constitute rebuttably presumptive proof thereof, irrespective of whether
any Obligation is also evidenced by a promissory note or other instrument. The
Agent will provide to the Funds Administrator a monthly statement of Loans,
payments, and other transactions pursuant to this Agreement. Such statement
shall be deemed correct, accurate, and binding on the Borrowers and an account
stated (except for reversals and reapplications of payments made as provided in
Section 3.8 and corrections of errors discovered by the Agent), unless the Funds
Administrator notifies the Agent in writing to the contrary within sixty (60)
days after such statement is rendered. In the event a timely written notice of
objections is given by the Funds Administrator, only the items to which
exception is expressly made will be considered to be disputed by the Borrowers.
ARTICLE 4
TAXES, YIELD PROTECTION AND ILLEGALITY
4.1 Taxes.
(a) Any and all payments by the Borrowers to each Lender
or the Agent under this Agreement and any other Loan Document shall be made free
and clear of, and without deduction or withholding for any Taxes. In addition,
the Borrowers shall pay all Other Taxes.
(b) Each of the Borrowers agrees to indemnify and hold
harmless each Lender and the Agent for the full amount of Taxes or Other Taxes
(including any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section) paid by any Lender or the Agent and any liability
(including penalties, interest, additions to tax and expenses) arising therefrom
or with respect thereto, whether or not such Taxes or Other Taxes were correctly
or legally asserted. Payment under this indemnification shall be made within 30
days after the date such Lender or the Agent makes written demand therefor.
(c) If any Borrower shall be required by law to deduct or
withhold any Taxes or Other Taxes from or in respect of any sum payable
hereunder to any Lender or the Agent, then:
(i) the sum payable shall be increased as
necessary so that after making all required deductions and withholdings
(including deductions and withholdings applicable to additional sums
payable under this Section) such Lender or the Agent, as the case may
be, receives an amount equal to the sum it would have received had no
such deductions or withholdings been made;
(ii) the applicable Borrower shall make such
deductions and withholdings;
15
(iii) the applicable Borrower shall pay the full
amount deducted or withheld to the relevant taxing authority or other
authority in accordance with applicable law; and
(iv) the Borrowers shall also pay to each Lender
or the Agent for the account of such Lender, at the time interest is
paid, all additional amounts which the respective Lender specifies as
necessary to preserve the after-tax yield such Lender would have
received if such Taxes or Other Taxes had not been imposed.
(d) At the Agent's request, within 30 days after the date
of any payment by the Borrowers of Taxes or Other Taxes, the Funds Administrator
shall furnish the Agent the original or a certified copy of a receipt evidencing
payment thereof, or other evidence of payment satisfactory to the Agent.
(e) If any Borrower is required to pay additional amounts
to any Lender or the Agent pursuant to subsection (c) of this Section, then such
Lender shall use reasonable efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its lending office so as to
eliminate any such additional payment by such Borrower which may thereafter
accrue, if such change in the judgment of such Lender is not otherwise
disadvantageous to such Lender.
4.2 Illegality.
(a) If any Lender determines that the introduction of any
Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has asserted
that it is unlawful, for any Lender or its applicable lending office to make
LIBOR Rate Loans, then, on notice thereof by that Lender to the Funds
Administrator through the Agent, any obligation of that Lender to make LIBOR
Rate Loans shall be suspended until that Lender notifies the Agent and the Funds
Administrator that the circumstances giving rise to such determination no longer
exist.
(b) If a Lender determines that it is unlawful to
maintain any LIBOR Rate Loan, the Borrowers shall, upon receipt by the Funds
Administrator of notice of such fact and demand from such Lender (with a copy to
the Agent), prepay in full such LIBOR Rate Loans of that Lender then
outstanding, together with interest accrued thereon and amounts required under
Section 4.4, either on the last day of the Interest Period thereof, if that
Lender may lawfully continue to maintain such LIBOR Rate Loans to such day, or
immediately, if that Lender may not lawfully continue to maintain such LIBOR
Rate Loans. If any Borrower is required to so prepay any LIBOR Rate Loans, then
concurrently with such prepayment, such Borrower shall borrow from the affected
Lender, in the amount of such repayment, a Base Rate Loan.
4.3 Increased Costs and Reduction of Return.
(a) If any Lender determines that due to either (i) the
introduction of or any change in the interpretation of any law or regulation or
(ii) the compliance by that Lender
16
with any guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law), there shall be any increase
in the cost to such Lender of agreeing to make or making, funding or maintaining
any LIBOR Rate Loans, then the Borrowers shall be liable for, and shall from
time to time, upon demand (with a copy of such demand to be sent to the Agent),
pay to the Agent for the account of such Lender, additional amounts as are
sufficient to compensate such Lender for such increased costs.
(b) If any Lender shall have determined that (i) the
introduction of any Capital Adequacy Regulation, (ii) any change in any Capital
Adequacy Regulation, (iii) any change in the interpretation or administration of
any Capital Adequacy Regulation by any central bank or other Governmental
Authority charged with the interpretation or administration thereof, or (iv)
compliance by such Lender or any corporation or other entity controlling such
Lender with any Capital Adequacy Regulation, affects or would affect the amount
of capital required or expected to be maintained by such Lender or any
corporation or other entity controlling such Lender and (taking into
consideration such Lender's or such corporation's or other entity's policies
with respect to capital adequacy and such Lender's desired return on capital)
determines that the amount of such capital is increased as a consequence of its
Commitments, loans, credits or obligations under this Agreement, then, upon
demand of such Lender to the Funds Administrator through the Agent, the
Borrowers shall pay to such Lender, from time to time as specified by such
Lender, additional amounts sufficient to compensate such Lender for such
increase.
4.4 Funding Losses. The Borrowers shall reimburse each Lender and
hold each Lender harmless on a joint and several basis from any loss or expense
which such Lender may sustain or incur as a consequence of:
(a) the failure of any Borrower to make on a timely basis
any payment of principal of any LIBOR Rate Loan;
(b) the failure of any Borrower to borrow, continue or
convert a Loan after such Borrower has given (or is deemed to have
given) a Notice of Borrowing or a Notice of Continuation/Conversion; or
(c) the prepayment or other payment (including after
acceleration thereof) of any LIBOR Rate Loans on a day that is not the
last day of the relevant Interest Period;
including any such loss of anticipated profit and any loss or expense arising
from the liquidation or reemployment of funds obtained by it to maintain its
LIBOR Rate Loans or from fees payable to terminate the deposits from which such
funds were obtained. Borrowers shall also pay any customary administrative fees
charged by any Lender in connection with the foregoing.
4.5 Inability to Determine Rates. If the Agent determines that for
any reason adequate and reasonable means do not exist for determining the LIBOR
Rate for any requested Interest Period with respect to a proposed LIBOR Rate
Loan, or that the LIBOR Rate for any requested Interest Period with respect to a
proposed LIBOR Rate Loan does not adequately and fairly reflect the cost to the
Lenders of funding such Loan, the Agent will promptly so notify the
17
Funds Administrator and each Lender. Thereafter, the obligation of the Lenders
to make or maintain LIBOR Rate Loans hereunder shall be suspended until the
Agent revokes such notice in writing. Upon receipt of such notice, the Funds
Administrator may revoke any Notice of Borrowing or Notice of
Continuation/Conversion then submitted by it. If the Funds Administrator does
not revoke such Notice, the Lenders shall make, convert or continue the Loans,
as proposed by the Funds Administrator, in the amount specified in the
applicable notice submitted by the Funds Administrator, but such Loans shall be
made, converted or continued as Base Rate Loans instead of LIBOR Rate Loans.
4.6 Certificates of Agent; Replacement of Requesting Lenders(a) .
If any Lender claims reimbursement or compensation under this Article 4, Agent
shall reasonably determine the amount thereof and shall deliver to the Funds
Administrator (with a copy to the affected Lender) a certificate setting forth
in reasonable detail the amount payable to the affected Lender and the basis for
the determination of such amount, and such certificate shall be conclusive and
binding on the Borrowers in the absence of manifest error. If, any Lender shall
so claim any reimbursement or compensation pursuant to Section 4.1 or 4.3, or is
unable to make LIBOR Loans as a consequence of the items described in Section
4.2, then, at the Funds Administrator's request, the Agent or an Eligible
Assignee shall have the right (but not the obligation) with the Agent's
approval, to purchase from such Lender, and such Lender agrees that it shall
sell, all such Lender's Commitments for an amount equal to the principal
balances thereof and all accrued interest and fees with respect thereto through
the date of sale pursuant to Assignment and Acceptance Agreement(s), without
premium or discount.
4.7 Survival. The agreements and obligations of the Borrowers in
this Article 4 shall survive the payment of all other Obligations.
ARTICLE 5
BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES
5.1 Books and Records. The Borrowers shall maintain, at all times,
correct and complete books, records and accounts in which complete, correct and
timely entries are made of its transactions in accordance with GAAP applied
consistently with the audited Financial Statements required to be delivered
pursuant to Section 5.2(a). The Borrowers shall, by means of appropriate
entries, reflect in such accounts and in all Financial Statements proper
liabilities and reserves for all taxes and proper provision for depreciation and
amortization of property and bad debts, all in accordance with GAAP. The
Borrowers shall maintain at all times books and records pertaining to the
Collateral in such detail, form and scope as the Agent or any Lender shall
reasonably require, including, but not limited to, records of (a) all payments
received and all credits and extensions granted with respect to the Accounts;
(b) the return, rejection, repossession, stoppage in transit, loss, damage, or
destruction of any Inventory; and (c) all other dealings affecting the
Collateral.
5.2 Financial Information. The Borrowers shall promptly furnish to
each Lender, all such financial information as the Agent shall reasonably
request. Without limiting the foregoing, the Borrowers will furnish to the
Agent, in sufficient copies for distribution by the Agent to each Lender, in
such detail as the Agent or the Lenders shall request, the following:
18
(a) As soon as available, but in any event not later than
ninety (90) days after the close of each Fiscal Year, consolidated audited
balance sheets, and income statements, cash flow statements and changes in
stockholders' equity for the Parent for such Fiscal Year, and the accompanying
notes thereto, setting forth in each case in comparative form figures for the
previous Fiscal Year, all in reasonable detail, fairly presenting the financial
position and the results of operations of Parent and its consolidated
Subsidiaries as at the date thereof and for the Fiscal Year then ended, and
prepared in accordance with GAAP. Such statements shall be examined in
accordance with generally accepted auditing standards by and, in the case of
such statements performed on a consolidated basis, accompanied by a report
thereon unqualified in any respect of independent certified public accountants
selected by the Parent and reasonably satisfactory to the Agent. The Parent,
simultaneously with retaining such independent public accountants to conduct
such annual audit, shall send a letter to such accountants, with a copy to the
Agent and the Lenders, notifying such accountants that one of the primary
purposes for retaining such accountants' services and having audited financial
statements prepared by them is for use by the Agent and the Lenders. Upon the
Agent's request, the Parent and each of the Borrowers shall authorize the Agent
to communicate directly with its certified public accountants and, by this
provision, authorizes those accountants to disclose to the Agent any and all
financial statements and other supporting financial documents and schedules
relating to the Parent and its Subsidiaries and to discuss directly with the
Agent the finances and affairs of the Parent and its Subsidiaries. So long as no
Default or Event of Default shall have occurred and be continuing, the Parent
and the Borrowers shall be included in any such communications with such
accountants.
(b) As soon as available, but in any event not later than
forty five (45) days after the end of each month (including the last month of
each Fiscal Year), consolidated and consolidating (by business unit) unaudited
balance sheets of the Parent and of its consolidated Subsidiaries as at the end
of such month, and consolidated and consolidating (by business unit) unaudited
income statements and cash flow statements for the Parent and its consolidated
Subsidiaries for such month and for the period from the beginning of the Fiscal
Year to the end of such month, all in reasonable detail, fairly presenting the
financial position and results of operations of the Parent and its consolidated
Subsidiaries as at the date thereof and for such periods, and prepared in
accordance with GAAP applied consistently with the audited Financial Statements
required to be delivered pursuant to Section 5.2(a). The Parent and each
Borrower shall certify by a certificate signed by the Parent's chief financial
officer and an officer of each Borrower that all such statements have been
prepared in accordance with GAAP (other than the absence of footnotes and
customary year-end audit adjustments) and present fairly the Parent's and such
Borrower's financial position as at the dates thereof and its results of
operations for the periods then ended, subject to normal year-end adjustments.
(c) As soon as available, but in any event not later than
ninety (90) days after the close of each Fiscal Year, a certificate of the
independent certified public accountants that examined the audited financial
statements delivered pursuant to Section 5.2(a) with respect to such year, to
the effect that they have reviewed and are familiar with this Agreement and
that, in examining such Financial Statements, they did not become aware of any
fact or condition which then constituted a Default or Event of Default with
respect to a financial covenant, except for those, if any, described in
reasonable detail in such certificate.
19
(d) Within forty five (45) days after the end of each
fiscal month (including the last month of each Fiscal Year), a certificate of
the chief financial officer of the Parent and an officer of each Borrower
setting forth in reasonable detail the calculations required to establish
compliance with the covenants set forth in Section 7.23 during the period
covered in such Financial Statements and as at the end thereof (to the extent
compliance is required during such applicable period as provided in Section
7.23. Within forty five (45) days after the end of each month, a certificate of
the chief financial officer of the Parent and an officer of each Borrower
stating that, except as explained in reasonable detail in such certificate, (A)
all of the representations and warranties of the Borrowers contained in this
Agreement and the other Loan Documents are correct and complete in all material
respects as at the date of such certificate as if made at such time, except for
those that speak as of a particular date, (B) each Borrower is, at the date of
such certificate, in compliance in all material respects with all of its
respective covenants and agreements in this Agreement and the other Loan
Documents, (C) no Default or Event of Default then exists or existed during the
period covered by the Financial Statements for such month, (D) describing and
analyzing in reasonable detail all material trends, changes, and developments in
each and all Financial Statements; and (E) explaining the variances of the
figures versus the prior Fiscal Year financial statements; provided that the
information described in clauses (D) and (E) above need only be furnished after
the end of each fiscal quarter and may be delivered within such forty-five (45)
day period after the first three fiscal quarters of each Fiscal Year with the
10-Q and within ninety (90) days after the last fiscal quarter of each Fiscal
Year with the 10-K reports required to be delivered pursuant to clause (f)
below. If such certificate discloses that a representation or warranty is not
correct or complete, or that a covenant has not been complied with, or that a
Default or Event of Default existed or exists, such certificate shall set forth
what action the Borrowers have taken or propose to take with respect thereto.
(e) No later than forty five (45) days after the
beginning of each Fiscal Year, annual forecasts (to include forecasted
consolidated and consolidating (by business unit) balance sheets, income
statements and cash flow statements) for each Borrower and its Subsidiaries as
at the end of and for each month of such Fiscal Year.
(f) Promptly upon the filing thereof, copies of all
reports, if any, to or other documents filed by Parent or any Borrower or any of
their respective Subsidiaries with the Securities and Exchange Commission under
the Exchange Act (including all 10-Ks and 10-Qs filed by any such Person), and
all material reports, notices, or statements sent or received by Parent, any
such Borrower or any of their respective Subsidiaries to or from the holders of
any equity interests of Parent or of any Debt of Parent, any Borrower or any of
their respective Subsidiaries registered under the Securities Act of 1933 or to
or from the trustee under any indenture under which the same is issued.
(g) Within forty five (45) days after the end of each
fiscal quarter, the updated reports of patents, trademarks and other Proprietary
Rights required to be delivered pursuant to the terms of any Copyright Security
Agreement, Trademark Security Agreement or Patent Security Agreement.
20
(h) Promptly after their preparation, copies of any and
all proxy statements, financial statements, and reports which Parent or any
Borrower makes available to shareholders of the Parent or holders of any public
Debt of Parent or any Borrower.
(i) If requested by the Agent, promptly after filing with
the IRS, a copy of each tax return filed by Parent, any Borrower or any of their
respective Subsidiaries.
(j) As soon as available, but in any event (i) at any
time that the Aggregate Availability shall be greater than $30,000,000, within
fifteen (15) days after the end of each month (for such month) and (ii) at any
time that the Aggregate Availability shall be equal to or less than $30,000,000,
within two (2) Business Days after the end of each calendar week, a Borrowing
Base Certificate and supporting information in accordance with Section 9 of the
Security Agreement.
(k) Such additional information as the Agent and/or any
Lender may from time to time reasonably request regarding the financial and
business affairs, Collateral, litigation, liabilities or potential liabilities
of Parent, any Borrower or any Subsidiary of any Borrower.
5.3 Notices to the Lenders. The Borrowers shall notify the Agent
and the Lenders in writing of the following matters at the following times
(which notification may be made by the Funds Administrator):
(a) Immediately after becoming aware of any Default or
Event of Default;
(b) Immediately after becoming aware of the assertion by
the holder of any Debt of Parent, any Borrower or any Subsidiary in a face
amount in excess of $2,000,000 that a default exists with respect thereto or
that the Parent, any Borrower or such Subsidiary is not in compliance with the
terms thereof;
(c) Immediately after becoming aware of any event or
circumstance which could reasonably be expected to have a Material Adverse
Effect;
(d) Immediately after becoming aware of any pending or
threatened action, suit, or proceeding, by any Person, or any pending or
threatened investigation by a Governmental Authority, which could reasonably be
expected to have a Material Adverse Effect;
(e) Immediately after becoming aware of any pending or
threatened strike, work stoppage, unfair labor practice claim, or other labor
dispute affecting the Parent, any Borrower or any of their respective
Subsidiaries in a manner which could reasonably be expected to have a Material
Adverse Effect;
(f) Immediately after becoming aware of any violation of
any law, statute, regulation, or ordinance of a Governmental Authority affecting
the Parent, any Borrower or any of their respective Subsidiaries which could
reasonably be expected to have a Material Adverse Effect;
21
(g) Immediately after receipt of any notice (i) of any
violation by the Parent, any Borrower or any of their respective Subsidiaries of
any Environmental Law or (ii) that any Governmental Authority has asserted in
writing that the Parent, any Borrower or any of their respective Subsidiaries is
not in compliance with any Environmental Law or is investigating the Parent, any
such Borrower's or such Subsidiary's compliance therewith, which in either case,
could reasonably be expected to have a Material Adverse Effect;
(h) Immediately after receipt of any written notice that
the Parent, any Borrower or any of their respective Subsidiaries is or may be
liable to any Person as a result of the Release or threatened Release of any
Contaminant or that the Parent, any Borrower or any of their respective
Subsidiaries is subject to investigation by any Governmental Authority
evaluating whether any remedial action is needed to respond to the Release or
threatened Release of any Contaminant which, in either case, is reasonably
likely to give rise to liability in excess of $3,000,000;
(i) Immediately after receipt of any written notice of
the imposition of any Environmental Lien against any property of the Parent, any
Borrower or any of their respective Subsidiaries;
(j) Any change in the Parent's, any Borrower's or any
Guarantors' name as it appears in the state of its incorporation or other
organization, state of incorporation or organization, type of entity,
organizational identification number, locations where Collateral is located
(other than (A) consignments of Inventory in the ordinary course of business not
to exceed $2,000,000 at any one time, (B) other Inventory having an aggregate
value of less than $1,000,000 and (C) other immaterial portions of the
Collateral), or form of organization, trade names under which any Borrower will
sell Inventory or create Accounts, or to which instruments in payment of
Accounts may be made payable, in each case at least thirty (30) days prior
thereto;
(k) Within ten (10) Business Days after any Borrower or
any ERISA Affiliate knows that an ERISA Event or a prohibited transaction (as
defined in Sections 406 of ERISA and 4975 of the Code) has occurred, and, when
known, any action taken or threatened by the IRS, the DOL or the PBGC with
respect thereto;
(l) Upon request, or, in the event that such filing
reflects a significant change with respect to the matters covered thereby,
within three (3) Business Days after the filing thereof with the PBGC, the DOL
or the IRS, as applicable, copies of the following: (i) each annual report (form
5500 series), including Schedule B thereto, filed with the PBGC, the DOL or the
IRS with respect to each Plan, (ii) a copy of each funding waiver request filed
with the PBGC, the DOL or the IRS with respect to any Plan and all
communications received by the Borrower or any ERISA Affiliate from the PBGC,
the DOL or the IRS any respect to such request, and (iii) a copy of each other
filing or notice filed with the
22
PBGC, the DOL or the IRS, with respect to each Plan by either any
Borrower or any ERISA Affiliate;
(m) Upon request, copies of each actuarial report for any
Plan or Multi-employer Plan and annual report for any Multi-employer
Plan; and within three (3) Business Days after receipt thereof by any
Borrower or any ERISA Affiliate, copies of the following: (i) any
notices of the PBGC's intention to terminate a Plan or to have a
trustee appointed to administer such Plan; (ii) any favorable or
unfavorable determination letter from the IRS regarding the
qualification of a Plan under Section 401(a) of the Code; or (iii) any
notice from a Multi-employer Plan regarding the imposition of
withdrawal liability;
(n) Within three (3) Business Days after the occurrence
thereof: (i) any changes in the benefits of any existing Plan which
increase the Parent's any Borrower's or any of their respective
Subsidiaries' annual costs with respect thereto by an amount in excess
of $3,000,000, or the establishment of any new Plan or the commencement
of contributions to any Plan to which any Borrower or any ERISA
Affiliate was not previously contributing; or (ii) any failure by any
Borrower or any ERISA Affiliate to make a required installment or any
other required payment under Section 412 of the Code on or before the
due date for such installment or payment; or
(o) Within three (3) Business Days after any Borrower or
any ERISA Affiliate knows that any of the following events has or will
occur: (i) a Multi-employer Plan has been or will be terminated; (ii)
the administrator or plan sponsor of a Multi-employer Plan intends to
terminate a Multi-employer Plan; or (iii) the PBGC has instituted or
will institute proceedings under Section 4042 of ERISA to terminate a
Multi-employer Plan.
Each notice given under this Section shall describe the subject matter
thereof in reasonable detail, and shall set forth the action that the Parent,
the applicable Borrower(s), the Subsidiary, or any ERISA Affiliate, as
applicable, has taken or proposes to take with respect thereto.
5.4 Initial Field Examination. The Borrowers acknowledge and agree
the Agent shall conduct (at the Borrowers' expense) a field examination of the
Collateral, including, without limitation, the Borrowers' Accounts and Inventory
within sixty (60) days after the Closing Date, and that such examination may
result in adjustments to Eligible Accounts, Eligible Inventory and related
Reserves.
ARTICLE 6
GENERAL WARRANTIES AND REPRESENTATIONS
Each Borrower with respect to itself, each other Borrower and each of
their respective Subsidiaries warrants and represents to the Agent and the
Lenders that except as hereafter disclosed to and accepted by the Agent and the
Required Lenders in writing:
23
6.1 Authorization, Validity, and Enforceability of this Agreement
and the Loan Documents. Each Borrower has the power and authority to execute,
deliver and perform this Agreement and the other Loan Documents to which it is a
party, to incur the Obligations, and to grant to the Agent Liens upon and
security interests in the Collateral. Each Borrower has taken all necessary
action (including obtaining approval of its stockholders if necessary) to
authorize its execution, delivery, and performance of this Agreement and the
other Loan Documents to which it is a party. This Agreement and the other Loan
Documents to which it is a party have been duly executed and delivered by each
Borrower, and constitute the legal, valid and binding obligations of each such
Borrower, enforceable against it in accordance with their respective terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally, or by general equitable principles. Each Borrower's execution,
delivery, and performance of this Agreement and the other Loan Documents to
which it is a party do not and will not conflict with, or constitute a violation
or breach of, or result in the imposition of any Lien upon the property of any
Borrower or any of its Subsidiaries, by reason of the terms of (a) any contract,
mortgage, lease, agreement, indenture, or instrument to which any Borrower is a
party or which is binding upon it, (b) any Requirement of Law applicable to any
Borrower or any of their respective Subsidiaries, or (c) the certificate or
articles of incorporation or by-laws or the limited liability company or limited
partnership agreement of any Borrower or any of their respective Subsidiaries.
6.2 Validity and Priority of Security Interest. The provisions of
this Agreement and the other Loan Documents create legal and valid Liens on all
the Collateral in favor of the Agent, for the ratable benefit of the Agent and
the Lenders, and such Liens constitute perfected and continuing Liens on all the
Collateral securing all the Obligations, having priority over all other Liens on
the Collateral, except for those Liens identified in clauses (a), (c), (d) and
(e) of the definition of Permitted Liens, Liens existing as of the Closing Date
and described on Schedule 6.9, and Liens securing Capital Leases and purchase
money liens on Collateral (other than Inventory) securing purchase money Debt
permitted by Section 7.13, and enforceable against each applicable Borrower and
all third parties, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally, or by general equitable principles.
6.3 Organization and Qualification. Each Borrower (a) is duly
organized or incorporated and validly existing in good standing under the laws
of the state of its organization or incorporation, (b) is qualified to do
business and is in good standing in each jurisdiction necessary in order for it
to own or lease its property and conduct its business, except for such
jurisdictions where the failure to be so qualified could not reasonably be
expected to have a Material Adverse Effect, and (c) has all requisite power and
authority to conduct its business and to own its property. As of the Closing
Date each Borrower is qualified to do business and is in good standing in the
jurisdictions set forth opposite its name on Schedule 6.3 which are the only
jurisdictions in which qualification is necessary in order for it to own or
lease its property and conduct its business as of the Closing Date.
6.4 Corporate Name; Prior Transactions. Except as set forth on
Schedule 6.4 or as disclosed pursuant to the requirements of the Security
Agreement, no Borrower or Domestic Subsidiary of any Borrower has, during the
past five (5) years, been known by or used
24
any other corporate or fictitious name or trade name, or been a party to any
merger or consolidation, or acquired all or substantially all of the assets of
any Person. All trade names or styles under which the Parent, any Borrower or
any of their respective Domestic Subsidiaries will sell Inventory or create
Accounts, or to which instruments in payment of Accounts may be made payable,
are listed on Schedule 6.4 or have been disclosed to the Agent pursuant to the
requirements of the Security Agreement.
6.5 Subsidiaries and Affiliates. Schedule 6.5 is a correct and
complete list of the name and relationship to the Borrowers of each and all of
the Borrowers' Subsidiaries and other Affiliates as of the Closing Date. Each
Domestic Subsidiary is (a) duly incorporated or organized and validly existing
in good standing under the laws of its state of incorporation or organization
set forth on Schedule 6.5, and (b) qualified to do business and in good standing
in each jurisdiction in which the failure to so qualify or be in good standing
could reasonably be expected to have a Material Adverse Effect and (c) has all
requisite power and authority to conduct its business and own its property.
6.6 Financial Statements and Projections.
(a) The Borrowers have delivered to the Agent and the
Lenders the pro forma balance sheet and related statements of income, retained
earnings, cash flows, and changes in stockholders equity for the Parent and its
consolidated Subsidiaries as of December 31, 2001 (which pro forma was based on
the audited financial statements for such Fiscal Year of Coltec and its
consolidated Subsidiaries, which was accompanied by the report thereon of such
Borrower's independent certified public accountants, Ernst & Young). All such
financial statements have been prepared in accordance with GAAP (to the extent
applicable) and present accurately and fairly in all material respects on a pro
forma basis the financial position of the Parent and its consolidated
Subsidiaries as at the dates thereof and their results of operations for the
periods then ended.
(b) The Latest Projections as of the date submitted to
the Lenders as required herein represent the Borrowers' best estimate of the
future financial performance of the Borrowers and their respective consolidated
Subsidiaries for the periods set forth therein. The Latest Projections have been
prepared on the basis of the assumptions set forth therein, which the Borrowers
believe are fair and reasonable in light of current and reasonably foreseeable
business conditions at the time submitted to the Lenders.
(c) The Borrowers have delivered the pro forma balance
sheet and related pro forma statement of income, retained earnings, and cash
flows for the Parent and its consolidated Subsidiaries as at May 31, 2002,
attached hereto as Exhibit B, and such financial statements have been prepared
in accordance with GAAP (to the extent applicable) and present accurately and
fairly the Parent's financial condition on a pro forma basis as at such date
after giving effect to the transactions contemplated by the Spinoff (assuming
the Spinoff had occurred on such date and the Closing Date had been such date).
6.7 Capitalization. Set forth on Schedule 6.7 is the authorized
capital stock of the Parent, each Borrower and each of the Borrower's
Subsidiaries as of the Closing Date. All shares and other equity interests
reflected as being outstanding on such Schedule are validly
25
issued and outstanding and are owned beneficially and of record as of the
Closing Date by the Person indicated on such Schedule. All such shares of any
corporation are fully paid and non-assessable.
6.8 Solvency. The Parent and each Borrower is Solvent prior to and
after giving effect to each requested Borrowing and the issuance of each Letter
of Credit to be issued, and reasonably expects to remain Solvent during the term
of this Agreement.
6.9 Debt. After giving effect to the making of the Revolving Loans
to be made on the Closing Date, the Parent, the Borrowers and their respective
Domestic Subsidiaries have no Debt, except (a) the Obligations, (b) Debt
described on Schedule 6.9 and (c) Debt expressly permitted pursuant to Section
7.13.
6.10 Distributions. Through the date of the Spinoff, no
Distribution has been declared, paid, or made upon or in respect of any capital
stock or other securities of the Parent, any Borrower or any of their respective
Subsidiaries, except as set forth in the financial statements referred to in
Section 6.6(c).
6.11 Real Estate; Leases. Schedule 6.11 sets forth, as of the
Closing Date, a correct and complete list of all Real Estate owned by the Parent
or any Borrower and all Real Estate owned by any of their respective Domestic
Subsidiaries, all leases and subleases of real or personal property held by the
Parent, any Borrower or any of their respective Domestic Subsidiaries as lessee
or sublessee (other than leases of personal property as to which any such
Borrower is lessee or sublessee for which the value of such personal property in
the aggregate is less than $1,500,000), and all leases and subleases of real or
personal property held by the Parent, any Borrower or any of their respective
Domestic Subsidiaries as lessor, or sublessor. Except to the extent terminated
in the ordinary course of business, each of such leases and subleases relating
to the lease of any material personal property or the lease of any location at
which any Collateral is located is valid and enforceable in accordance with its
terms and is in full force and effect, and no default by any Borrower or any
such Domestic Subsidiary, or to the Borrowers' knowledge any other party, party
to any such lease or sublease exists, except as identified on Schedule 6.11. The
Parent, the applicable Borrower, or the applicable Subsidiary has good and
marketable title in fee simple to the Real Estate identified on Schedule 6.11 as
owned by such Person, or valid leasehold interests in all Real Estate designated
therein as "leased" by such Person and such Person has good, indefeasible, and
merchantable title to all of its other material property reflected on the pro
forma balance sheet referred to in Section 6.6(c), except as disposed of as
permitted by this Agreement since the date thereof, free of all Liens except
Liens permitted under Section 7.18.
6.12 Proprietary Rights. Schedule 6.12 sets forth a correct and
complete list of all of the Parent's, each Borrower's and each of their
respective Domestic Subsidiaries' registered United States patents and patent
applications, United States registered trademark and trademark applications,
United States registered copyright and copyright applications and all other
material United States Proprietary Rights as of the Closing Date. None of such
Proprietary Rights is subject to any licensing agreement or similar arrangement
except as set forth on Schedule 6.12. Each of the Parent, each Borrower and each
of their respective Subsidiaries owns or is licensed or otherwise has the right
to use all Proprietary Rights that are reasonably
26
necessary for the operation of its businesses, without conflict with the rights
of any other Person, except for any such conflict which could not reasonably be
expected to have a Material Adverse Effect. To the best knowledge of the
Borrowers, no slogan or other advertising device, product, process, method,
substance, part or other material now employed, or now contemplated to be
employed, by the Parent, any Borrower or any of their respective Subsidiaries
infringes upon any rights held by any other Person. No claim or litigation
regarding any of the foregoing is pending or threatened, and no patent,
invention, device, application, principle or any statute, law, rule, regulation,
standard or code is pending or, to the knowledge of the Borrowers, proposed,
which, in either case, could reasonably be expected to have a Material Adverse
Effect.
6.13 [Reserved].
6.14 Litigation. Except as set forth on Schedule 6.14, there is no
pending, or to the best of the Borrowers' knowledge threatened, action, suit,
proceeding, or counterclaim by any Person, or to the best of the Borrowers'
knowledge, investigation by any Governmental Authority, or any basis for any of
the foregoing, which could reasonably be expected to have a Material Adverse
Effect.
6.15 Labor Disputes. Except as set forth on Schedule 6.15, as of
the Closing Date (a) there is no collective bargaining agreement or other labor
contract covering employees of the Parent, any Borrower or any of their
respective Domestic Subsidiaries, (b) no such collective bargaining agreement or
other labor contract is scheduled to expire during the term of this Agreement,
(c) no union or other labor organization is seeking to organize, or to be
recognized as, a collective bargaining unit of employees of the Parent, any
Borrower or any of their respective Domestic Subsidiaries or for any similar
purpose, and (d) there is no pending or (to the best of each Borrower's
knowledge) threatened, strike, work stoppage, material unfair labor practice
claim, or other material labor dispute against or affecting the Parent, any
Borrower or any of their respective Domestic Subsidiaries or their employees.
6.16 Environmental Laws. Except as otherwise disclosed on Schedule
6.16:
(a) The Parent, each Borrower and each of their
respective Subsidiaries have complied in all material respects with all
Environmental Laws. None of the Parent, any Borrower nor any of their respective
Subsidiaries nor any of their respective presently owned real property or
presently conducted operations, nor, to their knowledge, any of their previously
owned real property or prior operations, is subject to any enforcement order
from or liability agreement with any Governmental Authority or private Person
respecting (i) compliance with any Environmental Law or (ii) any potential
liabilities and costs or remedial action arising from the Release or threatened
Release of a Contaminant, except to the extent any such noncompliance,
enforcement order or liability could not reasonably be expected to have a
Material Adverse Effect.
(b) The Parent, each Borrower and each of their
respective Subsidiaries have obtained all permits necessary for their current
operations under Environmental Laws, and all such permits are in good standing
and the Parent, each Borrower and each of their respective Subsidiaries are in
compliance with all material terms and conditions
27
of such permits, except to the extent that the lack of a permit or any such
non-compliance could not reasonably be expected to have a Material Adverse
Effect.
(c) None of the products manufactured, distributed or
sold by the Parent, any Borrower or any of their respective Subsidiaries on and
after the date of this Agreement contain asbestos containing material.
(d) No Environmental Lien has attached to the Real
Estate.
6.17 No Violation of Law. None of the Parent, any Borrower nor any
of their respective Subsidiaries is in violation of any law, statute,
regulation, ordinance, judgment, order, or decree applicable to it which
violation could reasonably be expected to have a Material Adverse Effect.
6.18 No Default. None of the Parent, any Borrower nor any of their
respective Subsidiaries is in default with respect to any note, indenture, loan
agreement, mortgage, lease, deed, or other agreement to which the Parent, any
Borrower or such Subsidiary is a party or by which it is bound, which default
could reasonably be expected to have a Material Adverse Effect.
6.19 ERISA Compliance. Except as specifically disclosed in Schedule
6.19:
(a) Each Plan is in compliance in all material respects
with the applicable provisions of ERISA, the Code and other federal or state
law. Each Plan which is intended to qualify under Section 401(a) of the Code has
received a favorable determination letter from the IRS and to the best knowledge
of the Borrowers, nothing has occurred which would cause the loss of such
qualification. The Borrowers and each ERISA Affiliate have made all required
contributions to any Plan subject to Section 412 of the Code, and no application
for a funding waiver or an extension of any amortization period pursuant to
Section 412 of the Code has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of
Borrowers, threatened claims, actions or lawsuits, or action by any Governmental
Authority, with respect to any Plan which has resulted or could reasonably be
expected to result in a Material Adverse Effect. There has been no prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any Plan which has resulted or could reasonably be expected to result in a
Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably
expected to occur; (ii) no Pension Plan has any Unfunded Pension Liability;
(iii) no Borrower nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability under Title IV of ERISA with respect to any Pension Plan
(other than premiums due and not delinquent under Section 4007 of ERISA); (iv)
no Borrower nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability (and no event has occurred which, with the giving of notice
under Section 4219 of ERISA, would result in such liability) under Section 4201
or 4243 of ERISA with respect to a Multi-employer Plan; and (v) no Borrower nor
any ERISA Affiliate has engaged in a transaction that could be subject to
Section 4069(a) or 4212(c) of ERISA.
28
6.20 Taxes. Each of the Parent, each Borrower and each of their
respective Subsidiaries have filed all federal and other tax returns and reports
required to be filed, and have paid all federal and other taxes, assessments,
fees and other governmental charges levied or imposed upon them or their
properties, income or assets otherwise due and payable unless such unpaid taxes
and assessments would constitute a Permitted Lien.
6.21 Regulated Entities. None of the Parent, any Borrower, any of
their respective Subsidiaries nor any Person controlling the Parent, any
Borrower, or any of their respective Subsidiaries, is an "Investment Company"
within the meaning of the Investment Company Act of 1940. None of the Parent,
any Borrower, nor any of their respective Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, any state public utilities code or law, or any other
federal or state statute or regulation limiting its ability to incur
indebtedness.
6.22 Use of Proceeds; Margin Regulations. The proceeds of the Loans
are to be used solely for working capital purposes and other general corporate
purposes permitted by this Agreement. None of the Parent, any Borrower nor any
of their respective Subsidiaries is engaged in the business of purchasing or
selling Margin Stock or extending credit for the purpose of purchasing or
carrying Margin Stock.
6.23 [Reserved].
6.24 No Material Adverse Change. No Material Adverse Effect has
occurred since May 31, 2002.
6.25 Full Disclosure. None of the representations, warranties or
statements made by the Parent, any Borrower or any of their respective
Subsidiaries in the Loan Documents as of the date such representations,
warranties and statements are made or deemed made, and none of the statements
contained in any exhibit, report, statement or certificate furnished by or on
behalf of the Parent, any Borrower or any of their respective Subsidiaries in
connection with the Loan Documents (including the offering and disclosure
materials delivered by or on behalf of the Parent or any Borrower to the Lenders
prior to the Closing Date), in each case, as of the date made, contains any
untrue statement of a material fact or omits any material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading as of the time when made
or delivered.
6.26 Material Agreements. Schedule 6.26 hereto sets forth as of the
Closing Date all material agreements and contracts (within the meaning of Item
601(b)(10) of Regulation S-K of the Securities Act of 1933, as amended) to which
the Parent, any Borrower or any of their respective Domestic Subsidiaries is a
party or is bound as of the date hereof.
6.27 Bank Accounts. Schedule 6.27 contains as of the Closing Date a
complete and accurate list of all bank accounts maintained by the Parent, any
Borrower or any of their respective Domestic Subsidiaries with any bank or other
financial institution.
6.28 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority or other Person is necessary or required in connection
with the execution, delivery or performance
29
by, or enforcement against, the Parent, any Borrower or any of their respective
Subsidiaries of this Agreement or any other Loan Document.
6.29 Tax Matters. The representations and warranties of the Parent
in support of the "Tax Opinion" (as defined in the Tax Matters Agreement) are
true and correct in all material respects as of the Closing Date.
6.30 EIFA. All amounts owing or payable to any of Coltec, Xxxxxxx
Sealing or Xxxxxxxx under any Asbestos Insurance Policy issued by any Person
party to the EIFA are and shall be payable solely pursuant to the EIFA.
ARTICLE 7
AFFIRMATIVE AND NEGATIVE COVENANTS
Each of the Borrowers covenants to the Agent and each Lender that so
long as any of the Obligations remain outstanding or this Agreement is in
effect:
7.1 Taxes and Other Obligations. The Borrowers shall, and shall
cause each of their respective Subsidiaries to, (a) file when due all tax
returns and other reports which it is required to file; (b) pay, or provide for
the payment, when due, of all taxes, fees, assessments and other governmental
charges against it or upon its property, income and franchises, make all
required withholding and other tax deposits, and establish adequate reserves for
the payment of all such items, and provide to the Agent and the Lenders, upon
request, satisfactory evidence of its timely compliance with the foregoing; and
(c) pay when due all Debt owed by it and all claims of materialmen, mechanics,
carriers, warehousemen, landlords, processors and other like Persons, and all
other indebtedness owed by it and perform and discharge in a timely manner all
other obligations undertaken by it; provided, however, no Borrower nor any of
its Subsidiaries need pay any tax, fee, assessment, or governmental charge or
Debt described in clause (c) above (i) it is contesting in good faith by
appropriate proceedings diligently pursued, (ii) as to which such Borrower or
its Subsidiary, as the case may be, has established proper reserves as required
under GAAP, and (iii) the nonpayment of which does not result in the imposition
of a Lien (other than a Permitted Lien).
7.2 Legal Existence and Good Standing. Each Borrower shall, and
shall cause each of its Subsidiaries to, maintain its legal existence and its
qualification and good standing in all jurisdictions in which the failure to
maintain such existence and qualification or good standing could reasonably be
expected to have a Material Adverse Effect.
7.3 Compliance with Law and Agreements; Maintenance of Licenses.
Each Borrower shall comply, and shall cause each Subsidiary to comply, in all
material respects with all Requirements of Law of any Governmental Authority
having jurisdiction over it or its business (including the Federal Fair Labor
Standards Act and all Environmental Laws). Each Borrower shall, and shall cause
each of its Subsidiaries to, obtain and maintain all licenses, permits,
franchises, and governmental authorizations necessary to own its property and to
conduct its business as conducted on the Closing Date. No Borrower shall modify,
amend or alter its certificate or articles of incorporation, or its limited
liability company operating
30
agreement or limited partnership agreement, as applicable, other than in a
manner which does not adversely affect the rights of the Lenders or the Agent.
7.4 Maintenance of Property; Inspection of Property.
(a) Each Borrower shall, and shall cause each of its
Subsidiaries to, maintain all of its property necessary and useful in the
conduct of its business, in good operating condition and repair, ordinary wear
and tear excepted.
(b) Each Borrower shall permit representatives and
independent contractors of the Agent (at the expense of the Borrowers) to visit
and inspect any of its properties, to examine its corporate, financial and
operating records, and make copies thereof or abstracts therefrom and to discuss
its affairs, finances and accounts with its directors, officers and independent
public accountants, at such reasonable times during normal business hours and as
soon as may be reasonably desired, upon reasonable advance notice to the Funds
Administrator; provided, however, when an Event of Default exists, the Agent or
any Lender may do any of the foregoing at the expense of the Borrowers at any
time during normal business hours and without advance notice.
7.5 Insurance.
(a) Each Borrower shall maintain, and shall cause each of
its Subsidiaries to maintain, with financially sound and reputable insurers
having a rating of at least B+ or better by Best Rating Guide, insurance against
loss or damage by fire with extended coverage; theft, burglary, pilferage and
loss in transit; public liability and third party property damage; larceny,
embezzlement or other criminal liability; business interruption; public
liability and third party property damage; and such other hazards or of such
other types as is customary for Persons engaged in the same or similar business,
as the Agent, in its reasonable discretion, or acting at the reasonable
direction of the Required Lenders, shall specify, in amounts, and under policies
acceptable to the Agent and the Required Lenders (provided that such insurance
so specified by the Agent shall be obtainable from such an insurer). Without
limiting the foregoing, in the event that any improved Real Estate covered by
the Mortgages is determined to be located within an area that has been
identified by the Director of the Federal Emergency Management Agency as a
Special Flood Hazard Area ("SFHA"), the Borrowers shall purchase and maintain
flood insurance on the improved Real Estate and any Equipment and Inventory
located on such Real Estate. The amount of said flood insurance will be
reasonably determined by the Agent, and shall, at a minimum, comply with
applicable federal regulations as required by the Flood Disaster Protection Act
of 1973, as amended. The Borrowers shall also maintain flood insurance for its
Inventory and Equipment which is, at any time, located in a SFHA. The Agent and
each of the Lenders confirm to the Borrowers that the level of insurance in
effect with respect to the Borrowers and their respective Domestic Subsidiaries
and disclosed to the Agent as of the Closing Date constitute an acceptable level
of coverage as of such date.
(b) The Borrowers shall cause the Agent, for the ratable
benefit of the Agent and the Lenders, to be named as secured party or mortgagee
and sole loss payee (with respect to the Collateral) or additional insured, in a
manner acceptable to the Agent. Each policy of insurance shall contain a clause
or endorsement requiring the insurer to give not less than
31
thirty (30) days' prior written notice to the Agent in the event of cancellation
of the policy for any reason whatsoever and a clause or endorsement stating that
the interest of the Agent shall not be impaired or invalidated by any act or
neglect of the Parent, any Borrower or any of their respective Subsidiaries or
the owner of any Real Estate for purposes more hazardous than are permitted by
such policy. All premiums for such insurance shall be paid by the Borrowers when
due, and certificates of insurance and, if requested by the Agent or any Lender,
photocopies of the policies, shall be delivered to the Agent, in each case in
sufficient quantity for distribution by the Agent to each of the Lenders. If the
Borrowers fail to procure such insurance or to pay the premiums therefor when
due, the Agent may, and at the direction of the Required Lenders shall, do so
from the proceeds of Revolving Loans.
7.6 Insurance and Condemnation Proceeds. The Borrowers (through
the Funds Administrator) shall promptly notify the Agent and the Lenders of any
loss, damage, or destruction to the Collateral in excess of $1,000,000, whether
or not covered by insurance. The Agent is hereby authorized to collect all
insurance and condemnation proceeds in respect of Collateral directly and to
apply or remit them as follows:
(i) With respect to insurance and condemnation
proceeds relating to Collateral other than Collateral consisting of
Fixed Assets, after deducting from such proceeds the reasonable
expenses, if any, incurred by the Agent in the collection or handling
thereof, the Agent shall apply such proceeds, ratably, to the reduction
of the Obligations in the order provided for in Section 3.8.
(ii) With respect to insurance and condemnation
proceeds relating to Collateral consisting of Fixed Assets, the Agent
shall permit or require the Borrowers to use such proceeds, or any part
thereof, to replace, repair, restore or rebuild the relevant Fixed
Assets in a diligent and expeditious manner with materials and
workmanship of substantially the same quality as existed before the
loss, damage or destruction so long as (1) no Default or Event of
Default has occurred and is continuing, and (2) Aggregate Availability
shall be greater than $15,000,000 at the time of Borrowers' receipt
thereof. If at the time of the receipt of any such insurance and
condemnation proceeds either (1) a Default or Event of Default has
occurred and is continuing or (2) Aggregate Availability shall not be
greater than $15,000,000, then such funds shall be paid to the Agent
and the Agent shall apply such insurance and condemnation proceeds,
ratably, to the reduction of the Obligations in the order provided for
in Section 3.8.
7.7 Environmental Laws.
(a) Each Borrower shall, and shall cause each of its
Subsidiaries to, conduct its business in material compliance with all
Environmental Laws applicable to it, including those relating to the generation,
handling, use, storage, and disposal of any Contaminant. Each Borrower shall,
and shall cause each of its Subsidiaries to, take prompt and appropriate action
to respond to any non-compliance with Environmental Laws and shall, at the
request of the Agent, regularly report to the Agent on such response.
32
(b) Without limiting the generality of the foregoing,
each Borrower, at the Agent's request, (through the Funds Administrator) shall
submit to the Agent and the Lenders annually, an update of the status of each
material environmental compliance or liability issue.
(c) The Agent and its representatives will have the right
at any reasonable time to enter and visit the Real Estate and any other place
where any property of the Parent, any Borrower or any of their respective
Subsidiaries is located for the purposes of observing the Real Estate.
7.8 Compliance with ERISA. The Borrowers shall, and shall cause
each of its ERISA Affiliates to: (a) maintain each Plan in compliance in all
material respects with the applicable provisions of ERISA, the Code and other
federal or state law; (b) cause each Plan which is qualified under Section
401(a) of the Code to maintain such qualification; (c) make all required
contributions to any Plan subject to Section 412 of the Code; (d) not engage in
a prohibited transaction or violation of the fiduciary responsibility rules with
respect to any Plan; and (e) not engage in a transaction that could be subject
to Section 4069(a) or 4212(c) of ERISA.
7.9 Mergers, Consolidations or Sales. No Borrower nor any of their
respective Subsidiaries shall enter into any transaction of merger,
reorganization, or consolidation, or transfer, sell, assign, lease, or otherwise
dispose of all or any part of its property, or wind up, liquidate or dissolve,
or agree to do any of the foregoing, except for (i) sales of Inventory and
licenses or leases of any Proprietary Rights in the ordinary course of its
business (provided that no such license or lease shall be on an exclusive basis,
if the Proprietary Rights which are the subject thereof are necessary or
desirable to enable the Agent to sell, dispose, or complete manufacture of, or
otherwise exercise its rights with respect to, any Collateral), (ii) sales or
other dispositions of Equipment in the ordinary course of business that are
obsolete or no longer used by Borrower in its business, (iii) Permitted
Dispositions, (iv) sales or other dispositions of Fixed Assets which do not
constitute Collateral for fair market value in an aggregate amount with respect
to all such sales and dispositions after the Closing Date not to exceed
$20,000,000 and (v) sales or other dispositions of Fixed Assets which do not
constitute Collateral by Foreign Subsidiaries for fair market value. In addition
to the foregoing, any Borrower may merge with any other Borrower, any Subsidiary
of any Borrower may merge or consolidate with or into any Borrower, and any
Subsidiary of any Borrower may merge with any Subsidiary of such Borrower or any
other Borrower so long as (i) the surviving Person in any such merger shall be a
Wholly-Owned Subsidiary of the Parent and (ii) in no event whatsoever shall any
of Xxxxxxx Sealing, Xxxxxxxx or any Dormant Subsidiary be a party to any such
merger or consolidation.
7.10 Distributions; Restricted Investments. None of the Parent, any
Borrower nor any of their respective Subsidiaries shall directly or indirectly
declare or make, or incur any liability to make, any Distribution, except (i)
Distributions to a Borrower by its Subsidiaries or by any such Subsidiary to any
other Subsidiary (provided that no Borrower nor any Subsidiary Guarantor may
declare or pay any Distribution to any Person that is not a Borrower or a
Subsidiary Guarantor), (ii) so long as no Default or Event of Default shall have
occurred and be continuing at the time of such Distribution, Distributions from
any Borrower or any Subsidiary of any Borrower to the Parent in an amount during
any twelve (12) month period, which when added to all other amounts received by
the Parent during such period from any Borrower or any
33
Subsidiary of any Borrower from any source (including, without limitation,
payments on any Debt of such Borrower or any of their respective Subsidiaries
held by the Parent) shall not exceed 120% of the Parent's actual operating
expenses during such period, and (iii) so long as no Default or Event of Default
shall have occurred and be continuing at the time of declaration or payment
thereof, the Parent may pay cash dividends in an aggregate amount not to exceed
$250,000 in any twelve (12) month period. None of the Parent, any Borrower nor
any of their respective Subsidiaries shall directly or indirectly declare or
make, or incur any liability to make, any Restricted Investment other than (i)
Permitted Restricted Investments, (ii) Permitted Foreign Subsidiary Investments,
(iii) Permitted Excess Collateral Provider Loans, (iv) Debt among the Borrowers
and their respective Subsidiaries to the extent expressly permitted by Section
7.13(b), (d), (e) and (f) and (v) Permitted Purchase Money Acquisitions.
7.11 Transactions Affecting Collateral or Obligations. No Borrower
nor any of its Subsidiaries shall enter into any transaction which would be
reasonably expected to have a Material Adverse Effect.
7.12 Guaranties. None of Parent, any Borrower nor any of their
respective Subsidiaries shall make, issue, or become liable on any Guaranty,
except (i) Guaranties of the Obligations in favor of the Agent, (ii) unsecured
Guaranties by the Parent, any Borrower or any of their respective Subsidiaries
(other than Xxxxxxx Sealing or Xxxxxxxx) with respect to Debt of Parent, any
other Borrower or any such Subsidiary in an aggregate outstanding principal
amount not to exceed $5,000,000, (iii) unsecured Guaranties entered into by the
Parent in the ordinary course of business guaranteeing obligations and/or
liabilities not constituting Debt of any Borrower or any Borrower's respective
Subsidiaries and (iv) to the extent permitted under Section 7.13(b), other
unsecured Guaranties and related obligations in existence as of the Closing Date
and arising from discontinued operations.
7.13 Debt. No Borrower nor any of its Domestic Subsidiaries shall
incur or maintain any Debt, other than: (a) the Obligations; (b) Debt described
on Schedule 6.9; (c) Capital Leases of Equipment and purchase money secured Debt
incurred to purchase Equipment provided that (i) Liens securing the same attach
only to the Equipment acquired by the incurrence of such Debt, and (ii) the
aggregate amount of such Debt (including Capital Leases) outstanding does not
exceed $5,000,000 at any time; (d) Debt from any Borrower to Coltec in
connection with the ordinary course operation of the Borrowers' cash management
system; (e) intercompany Debt from any Excess Collateral Provider to any other
Excess Collateral Provider (provided that such Debt is subordinated to the
Obligations pursuant to the terms of the Intercompany Subordination Agreement);
(f) Debt owing from Xxxxxxxx to Xxxxxxx Sealing pursuant to the terms of that
certain Letter Agreement dated as of September 13, 1996 (provided that such Debt
is subordinated to the Obligations on terms satisfactory to the Agent); (g)
unsecured Debt of the Borrowers (or any Borrower) in an aggregate principal
amount for all Borrowers not to exceed $10,000,000 so long as the payment of
such Debt is subordinated to the Obligations on terms and conditions
satisfactory to the Required Lenders; (h) Debt evidencing a refunding, renewal
or extension of the Debt described on Schedule 6.9; provided that (i) the
principal amount thereof is not increased, (ii) the Liens, if any, securing such
refunded, renewed or extended Debt do not attach to any assets in addition to
those assets, if any, securing the Debt to be refunded, renewed or extended,
(iii) no Person that is not an obligor or guarantor of such Debt as of the
Closing Date shall become an obligor or guarantor thereof, and (iv) the terms of
34
such refunding, renewal or extension are no less favorable in any material
respect to the applicable Borrower, the Agent or the Lenders than the original
Debt (other than increases in interest rates to reflect the then current market
interest rates; provided that such interest rate may not exceed 125% of the
interest rate on such original Debt); (i) Permitted Excess Collateral Provider
Loans permitted pursuant to Section 7.10 and (j) Debt incurred by a newly
created Subsidiary of any Borrower formed in connection with a Permitted
Purchase Money Acquisition, provided that (A) such newly created Subsidiary
shall not engage in any transaction with any of the Parent, any Borrower or any
other Subsidiary of any Borrower (other than diminimis ordinary course
transactions that comply with the provisions of Section 7.15, including
diminimis capital contributions required in connection with the formation of
such Subsidiary), (B) shall not receive any proceeds of any Revolving Loan or
the benefit of any Letter of Credit or any credit or other support from the
Parent, any Borrower or any other Subsidiary of the Parent or any Borrower and
(C) such Debt shall be recourse solely to the assets of such newly created
Subsidiary.
7.14 Prepayment. No Borrower nor any of its Subsidiaries shall
voluntarily prepay or repurchase any Debt, except (i) the Obligations in
accordance with the terms of this Agreement, (ii) payments with respect to Debt
owing to or from any Borrower or its respective Subsidiaries to any other
Borrower or its respective Subsidiaries, to the extent such payment is permitted
pursuant to the terms of the Intercompany Subordination Agreement, and (iii)
payments and repurchases of the TIDES if (A) at the time of any such prepayment
or repurchase no Default or Event of Default shall have occurred and be
continuing, (B) after giving effect to any such prepayment Aggregate
Availability shall exceed $30,000,000 and (C) the aggregate amount of any such
prepayment shall not exceed the Permitted Excess Expenditure Amount calculated
on the date of such prepayment or repurchase.
7.15 Transactions with Affiliates. Except as set forth below, no
Borrower nor any of its Subsidiaries shall, sell, transfer, distribute, or pay
any money or property, including, but not limited to, any fees or expenses of
any nature (including, but not limited to, any fees or expenses for management
services), to any Affiliate, or lend or advance money or property to any
Affiliate, or invest in (by capital contribution or otherwise) or purchase or
repurchase any stock or indebtedness, or any property, of any Affiliate, or
become liable on any Guaranty of the indebtedness, dividends, or other
obligations of any Affiliate. Notwithstanding the foregoing, while no Event of
Default has occurred and is continuing, each Borrower and its Subsidiaries may
(i) engage in transactions with Affiliates in the ordinary course of business
consistent with past practices, in amounts and upon terms fully disclosed to the
Agent and the Lenders, and no less favorable to such Borrower and its
Subsidiaries than would be obtained in a comparable arm's-length transaction
with a third party who is not an Affiliate, (ii) make payments pursuant to that
certain management agreements and tax sharing agreements to be executed prior to
the Closing Date, copies of which shall have been provided to the Agent and each
of the Lenders, or which have otherwise been approved by the Agent, (iii) enter
into transactions expressly permitted by the terms of Sections 7.9, 7.10, 7.12
and 7.13 and (iv) the guaranty fee payable to Xxxxxxx (not to exceed $1,000,000
per annum) payable pursuant to that certain agreement dated on or about the
Closing Date between Xxxxxxx and Xxxxxxxx.
7.16 Investment Banking and Finder's Fees. No Borrower nor any of
its Subsidiaries shall pay or agree to pay, or reimburse any other party with
respect to, any
35
investment banking or similar or related fee, underwriter's fee, finder's fee,
or broker's fee to any Person in connection with this Agreement. The Borrowers
shall defend and indemnify the Agent and the Lenders against and hold them
harmless from all claims of any Person that any Borrower is obligated to pay for
any such fees, and all costs and expenses (including attorneys' fees) incurred
by the Agent and/or any Lender in connection therewith.
7.17 Business Conducted. No Borrower shall nor shall it permit any
of its Subsidiaries to, engage directly or indirectly, in any line of business
other than the businesses in which such Person is engaged on the Closing Date
(after giving effect to the Spinoff) and similar businesses that manufacture
products, and provide related services, for sale to industrial customers.
7.18 Liens. No Borrower nor any of their respective Domestic
Subsidiaries shall create, incur, assume, or permit to exist any Lien on any
property now owned or hereafter acquired by any of them, except Permitted Liens,
and Liens, if any, in effect as of the Closing Date described in Schedule 6.9
securing Debt described in Schedule 6.9 and Liens securing Capital Leases and
purchase money Debt permitted in Section 7.13.
7.19 Sale and Leaseback Transactions. No Borrower nor any of their
respective Domestic Subsidiaries shall, directly or indirectly, enter into any
arrangement with any Person providing for any Borrower or any Domestic
Subsidiary to lease or rent property that any Borrower or any Domestic
Subsidiary has sold or will sell or otherwise transfer to such Person; provided,
however, that any Borrower (or any Domestic Subsidiary of any Borrower) may
lease or rent any asset which is sold or disposed of as permitted by Section
7.9.
7.20 New Subsidiaries. The Borrowers shall not, directly or
indirectly, organize, create, acquire or permit to exist any Subsidiary other
than those listed on Schedule 6.5 and Wholly Owned Subsidiaries created in
connection with any Permitted Restricted Investment.
7.21 Fiscal Year. Neither the Parent nor the Borrowers shall change
their Fiscal Year.
7.22 Limitation on Accelerated Settlement of Claims. If at any time
Aggregate Availability shall be less than $30,000,000, the Agent, Xxxxxxx
Sealing and any other Borrower or Subsidiary Guarantor managing asbestos claims
against itself shall meet on a prompt basis and discuss such Persons' ongoing
strategy with respect to settling and payment of legal claims relating to
asbestos and possible changes that such Persons may propose to implement in
connection therewith.
7.23 Fixed Charge Coverage Ratio. The Parent and the Borrowers will
maintain a Fixed Charge Coverage Ratio for each period of twelve consecutive
fiscal months ended on the last day of each fiscal month of not less than 1.0 to
1; provided that with respect to the fiscal months ending on or before May 31,
2003, such Fixed Charge Coverage Ratio shall be calculated for the period
commencing on the Closing Date and ending on the last day of such fiscal month;
and provided further that for any period ending prior to September 1, 2002, the
Borrowers need only maintain a Fixed Charge
36
Coverage Ratio of not less than 0.80 to 1.0 and for the period ending on
September 30, 2002, the Borrowers need only maintain a Fixed Charge Coverage
Ratio of not less than 0.90 to 1.0. The Fixed Charge Coverage Ratio shall only
be tested, and the Borrowers need only comply with the covenant set forth in the
Section 7.23, as of the last day of any fiscal month in which either (i) average
daily Aggregate Availability of the Borrowers during such fiscal month (as
determined by the Agent) shall be equal to or less than $30,000,000 or (ii)
Aggregate Availability on any day during such fiscal month (as determined by the
Agent) shall be equal to or less than $15,000,000; provided, however, that a
breach of such covenant when so tested shall not be cured by an increase of the
aggregate average daily Availability in any subsequent month above $30,000,000
or an increase of the Aggregate Availability on any day above $15,000,000.
7.24 Use of Proceeds. The Borrowers shall not, and shall not suffer
or permit any Subsidiary to, use any portion of the Loan proceeds, directly or
indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or otherwise
refinance indebtedness of any Borrower or others incurred to purchase or carry
Margin Stock, (iii) to extend credit for the purpose of purchasing or carrying
any Margin Stock, or (iv) to acquire any security in any transaction that is
subject to Section 13 or 14 of the Exchange Act.
7.25 Real Property Liens.
If at any time Aggregate Availability shall be less than $15,000,000
for ten (10) consecutive Business Days, the Borrowers shall, and shall cause
each of their respective Domestic Subsidiaries to, promptly (and in any event
within 60 days after such event) secure their respective obligations under this
Agreement and the other Loan Documents with mortgage liens on all of their
respective domestic Real Estate. In connection with the recording of such
mortgages and deeds of trust and similar documents, the Agent shall be entitled
to obtain title insurance (with appropriate endorsements and a waiver of any
survey exception contained therein) and other items customarily received by
lenders in similar transactions secured by real property collateral. All costs,
expenses, title fees, insurance premiums and similar amounts in connection
therewith and with the preparation, negotiation and execution of such mortgages
and deeds of trust and similar documents shall be for the account of the
Borrowers.
7.26 Dormant Subsidiaries. From and after the date of this
Agreement, no Dormant Subsidiary shall (i) conduct or engage in any business,
(ii) incur of become liable with respect to any Debt, (iii) acquire any assets,
(iv) enter into any transaction with any of the Parent, any Borrower, any of
their respective Subsidiaries or any other Person.
7.27 Tax Matters Agreement. The Parent shall comply in all material
respects with all of its respective covenants and obligations under the Tax
Matters Agreement, including without limitation, its obligations pursuant to
Section 3.02(b) thereof not to take any action inconsistent with the
representation letter delivered by the Parent in connection with the "Tax
Opinion" as defined therein (unless the requirements of such Section 3.02(b)
have been satisfied).
7.28 Modification to the EIFA. None of the Parent, any Borrower nor
any of their respective Subsidiaries shall amend, modify, supplement, waive or
terminate the EIFA or any term, condition or other provision thereof without the
prior written consent of the Required Lenders; provided that only the prior
written consent of the Agent shall be required with respect
37
to any immaterial amendment, modification, supplement or waiver or any
amendment, modification, supplement or waiver that increases or accelerates the
timing of payments thereunder.
7.29 Further Assurances. The Borrowers shall execute and deliver,
or cause to be executed and delivered, to the Agent and/or the Lenders such
documents and agreements, and shall take or cause to be taken such actions, as
the Agent or any Lender may, from time to time, request to carry out the terms
and conditions of this Agreement and the other Loan Documents.
ARTICLE 8
CONDITIONS OF LENDING
8.1 Conditions Precedent to Making of Loans on the Closing Date.
The obligation of the Lenders to make the initial Revolving Loans on the Closing
Date, and the obligation of the Agent to cause the Letter of Credit Issuer to
issue any Letter of Credit on the Closing Date, are subject to the following
conditions precedent having been satisfied in a manner satisfactory to the Agent
and each Lender:
(a) This Agreement and the other Loan Documents shall
have been executed by each party thereto and the Borrowers shall have performed
and complied with all covenants, agreements and conditions contained herein and
the other Loan Documents which are required to be performed or complied with by
the Borrowers before or on such Closing Date.
(b) Upon making the Revolving Loans (including such
Revolving Loans made to finance the fees payable to the Agent on the Closing
Date or otherwise as reimbursement for fees, costs and expenses then payable
under this Agreement) and with all its obligations current, the Borrowers shall
have Aggregate Availability of at least $35,000,000.
(c) All representations and warranties made hereunder and
in the other Loan Documents shall be true and correct in all material respects
as if made on such date.
(d) No Default or Event of Default shall have occurred
and be continuing after giving effect to the Loans to be made and the Letters of
Credit to be issued on the Closing Date.
(e) The Agent and the Lenders shall have received such
opinions of counsel for the Parent, each Borrower and their respective Domestic
Subsidiaries as the Agent or any Lender shall request, each such opinion to be
in a form, scope, and substance satisfactory to the Agent, the Lenders, and
their respective counsel.
(f) The Agent shall have received:
(i) acknowledgment copies of proper financing
statements, duly filed on or before the Closing Date under the UCC of
all jurisdictions that the Agent may deem necessary or desirable in
order to perfect the Agent's Liens;
(ii) duly executed UCC-3 Termination Statements
and such other instruments, in form and substance satisfactory to the
Agent, as shall be
38
necessary to terminate and satisfy all Liens on the Property of the
Parent, each Borrower and their respective Domestic Subsidiaries except
Permitted Liens;
(iii) (A) executed Assignments of Proceeds of
Insurance Policy as Collateral by each of Coltec, Xxxxxxxx and Xxxxxxx,
together with executed acknowledgments, in each case in form and
substance satisfactory to the Agent, from Eligible Insurance Providers
which are obligated, in the aggregate, on at least 50% of the amounts
owing to Xxxxxxx Sealing as of the Closing Date to reimburse Xxxxxxx
Sealing for payments made by Xxxxxxx Sealing with respect to claims
against Xxxxxxx Sealing relating to its use and distribution of
products alleged to contain asbestos, and (B) an opinion of Xxxxxxxx,
Xxxxxxxx & Xxxxxx, P.A. as to the perfection and priority of the
security interest granted to the Agent pursuant to such assignments
under North Carolina law.
(g) The Borrowers shall have paid all fees and expenses
of the Agent and the Attorney Costs incurred in connection with any of the Loan
Documents and the transactions contemplated thereby to the extent invoiced.
(h) The Agent shall have received evidence, in form,
scope, and substance, reasonably satisfactory to the Agent, of all insurance
coverage as required by this Agreement and the Agent and each of the Lenders
shall be satisfied with such coverage as of the Closing Date.
(i) The Agent and the Lenders shall have had an
opportunity, if they so choose, to examine the books of account and other
records and files of the Borrowers and to make copies thereof, and to conduct a
pre-closing audit which shall include, without limitation, verification of
Inventory, Accounts, and the Borrowing Base, and the results of such examination
and audit shall have been satisfactory to the Agent and the Lenders in all
respects.
(j) All proceedings taken in connection with the
execution of this Agreement, all other Loan Documents and all documents and
papers relating thereto shall be satisfactory in form, scope, and substance to
the Agent and the Lenders, including, without limitation, acceptable
intercreditor agreements with any other secured Debt and subordination terms
with respect to any obligations which may become owing under the Xxxxxxxx
Indemnification Agreement and acceptable subordination terms with respect to
Debt among the Borrowers and their respective Subsidiaries.
(k) Without limiting the generality of the items
described above, the Parent, the Borrowers and each Person guarantying or
securing payment of the Obligations shall have delivered or caused to be
delivered to the Agent (in form and substance reasonably satisfactory to the
Agent), the financial statements, instruments, resolutions, documents,
agreements, certificates, opinions and other items set forth on the "Closing
Checklist" delivered by the Agent to the Borrowers prior to the Closing Date.
(l) The Spinoff shall have occurred and the Agent shall
have received comfort satisfactory to the Agent that the representations made by
the Parent in support
39
of the "Tax Opinion" as such opinion relates to the tax free nature of the
Spinoff are true and correct in all material respects, together with a copy
of the executed Tax Matters Agreement.
The acceptance by the Borrowers of any Loans made or Letters of Credit
issued on the Closing Date shall be deemed to be a representation and warranty
made by the Borrowers to the effect that all of the conditions precedent to the
making of such Loans or the issuance of such Letters of Credit have been
satisfied (or waived by the necessary Lenders, as applicable), with the same
effect as delivery to the Agent and the Lenders of a certificate signed by a
Responsible Officer of the Borrowers, dated the Closing Date, to such effect.
8.2 Conditions Precedent to Each Loan. The obligation of the
Lenders to make each Loan, including the initial Revolving Loans on the Closing
Date, and the obligation of the Agent to cause the Letter of Credit Issuer to
issue any Letter of Credit shall be subject to the further conditions precedent
that on and as of the date of any such extension of credit:
(a) The following statements shall be true, and the
acceptance by any Borrower of any extension of credit shall be deemed to be a
statement to the effect set forth in clauses (i), (ii) and (iii) with the same
effect as the delivery to the Agent and the Lenders of a certificate signed by a
Responsible Officer, dated the date of such extension of credit, stating that:
(i) The representations and warranties contained
in this Agreement and the other Loan Documents are correct in all
material respects on and as of the date of such extension of credit as
though made on and as of such date, other than any such representation
or warranty which relates to a specified prior date and except to the
extent the Agent and the Lenders have been notified in writing by the
Funds Administrator that any representation or warranty is not correct
and the Required Lenders have explicitly waived in writing compliance
with such representation or warranty; and
(ii) No event has occurred and is continuing, or
would result from such extension of credit, which constitutes a Default
or an Event of Default; and
(iii) No event has occurred and is continuing, or
would result from such extension of credit, which has had or would have
a Material Adverse Effect.
(b) No such Borrowing with respect to any Borrower shall
exceed Availability of such Borrower and no such Borrowing to any Borrower shall
exceed Aggregate Availability, provided, however, that the foregoing conditions
precedent are not conditions to each Lender participating in or reimbursing the
Bank or the Agent for such Lenders' Pro Rata Share of any Non-Ratable Loan or
Agent Advance made in accordance with the provisions of Sections 1.2(h) and (i).
ARTICLE 9
DEFAULT; REMEDIES
40
9.1 Events of Default. It shall constitute an event of default
("Event of Default") if any one or more of the following shall occur for any
reason:
(a) any failure by any Borrower to pay the principal of
or interest or premium on any of the Obligations or any fee or other
amount owing hereunder when due, whether upon demand or otherwise;
(b) any representation or warranty made or deemed made by
any Borrower in this Agreement or by the Parent, any Borrower or any of
their respective Subsidiaries in any of the other Loan Documents, any
Financial Statement, or any certificate furnished any such Person at
any time to the Agent or any Lender shall prove to be untrue in any
material respect as of the date on which made, deemed made, or
furnished;
(c) (i) any default shall occur in the observance or
performance of any of the covenants and agreements contained in
Sections 5.2(j), 7.2, 7.5, 7.9-7.25, or Section 11 of any Security
Agreement, (ii) any default shall occur in the observance or
performance of any of the covenants and agreements contained in
Sections 5.2 (other than 5.2(j)) or 5.3 and such default shall continue
for five (5) Business Days or more after the earlier of (A) the date on
which an officer of any Borrower acquired knowledge thereof and (B) the
date on which written notice thereof is delivered by the Agent or any
Lender to the Funds Administrator; or (iii) any default shall occur in
the observance or performance of any of the other covenants or
agreements contained in any other Section of this Agreement or any
other Loan Document, any other Loan Documents, or any other agreement
entered into at any time to which the Parent, any Borrower or any of
their respective Subsidiaries and the Agent or any Lender are party
(including in respect of any Bank Products) and such default shall
continue for fifteen (15) days or more after the earlier of (A) the
date on which an officer of any Borrower acquired knowledge thereof and
(B) the date on which written notice thereof is delivered by the Agent
or any Lender to the Funds Administrator;
(d) any default shall occur with respect to any Debt
(other than the Obligations) of the Parent, any Borrower or any of
their respective Subsidiaries in an outstanding principal amount which
exceeds $2,000,000, or under any agreement or instrument under or
pursuant to which any such Debt may have been issued, created, assumed,
or guaranteed by the Parent, any Borrower or any of their respective
Subsidiaries, and such default shall continue for more than the period
of grace, if any, therein specified, if the effect thereof (with or
without the giving of notice or further lapse of time or both) is to
accelerate, or to permit the holders of any such Debt to accelerate,
the maturity of any such Debt; or any such Debt shall be declared due
and payable or be required to be prepaid (other than by a regularly
scheduled required prepayment) prior to the stated maturity thereof; or
the Parent, any Borrower or any of their respective Subsidiaries shall
default beyond any applicable grace period in the payment of principal
of, or interest on, any such Debt when due (whether at the final
maturity thereof or otherwise);
41
(e) the Parent, any Borrower or any of their respective
Subsidiaries shall (i) file a voluntary petition in bankruptcy or file
a voluntary petition or an answer or otherwise commence any action or
proceeding seeking reorganization, arrangement or readjustment of its
debts or for any other relief under the federal Bankruptcy Code, as
amended, or under any other bankruptcy or insolvency act or law, state
or federal, now or hereafter existing, or consent to, approve of, or
acquiesce in, any such petition, action or proceeding; (ii) apply for
or acquiesce in the appointment of a receiver, assignee, liquidator,
sequestrator, custodian, monitor, trustee or similar officer for it or
for all or any part of its property; (iii) make an assignment for the
benefit of creditors; (iv) be unable generally to pay its debts as they
become due or shall admit in writing its inability to pay such debts as
they become due;
(f) an involuntary petition shall be filed or an action
or proceeding otherwise commenced seeking reorganization, arrangement,
consolidation or readjustment of the debts of the Parent, any Borrower
or any of their respective Subsidiaries or for any other relief under
the federal Bankruptcy Code, as amended, or under any other bankruptcy
or insolvency act or law, state or federal, now or hereafter existing
and such petition or proceeding shall not be dismissed within thirty
(30) days after the filing or commencement thereof or an order of
relief shall be entered with respect thereto;
(g) a receiver, assignee, liquidator, sequestrator,
custodian, monitor, trustee or similar officer for the Parent, any
Borrower or any of their respective Subsidiaries or for all or any part
of its property shall be appointed or a warrant of attachment,
execution or similar process shall be issued against any part of the
property of the Parent, any Borrower or any of their respective
Subsidiaries;
(h) the Parent, any Borrower or any of their respective
Subsidiaries shall file a certificate of dissolution under applicable
state law or shall be liquidated, dissolved or wound-up or shall
commence or have commenced against it any action or proceeding for
dissolution, winding-up or liquidation, or shall take any corporate
action in furtherance thereof;
(i) all or any material part of the property of the
Parent, any Borrower or any of their respective Subsidiaries with
assets in excess of $2,000,000 in value shall be nationalized,
expropriated or condemned, seized or otherwise appropriated, or custody
or control of such property or of the Parent, any Borrower or any of
their respective Subsidiaries shall be assumed by any Governmental
Authority or any court of competent jurisdiction at the instance of any
Governmental Authority, except where contested in good faith by proper
proceedings diligently pursued where a stay of enforcement is in
effect;
(j) any Loan Document shall be terminated, revoked or
declared void or invalid or unenforceable or challenged by the Parent,
any Borrower or any of their respective Subsidiaries or any other
obligor; or the Xxxxxxxx Subordination Agreement shall be terminated,
revoked or declared void or invalid or
42
unenforceable or challenged by Xxxxxxxx, any Borrower or any of their
respective Subsidiaries, or any payment shall be made in violation of
the terms and provisions thereof; or any subordination agreement or
intercreditor agreement (including, without limitation the Intercompany
Subordination Agreement) entered into with the Agent with respect to
any intercompany Debt among the Parent, Borrowers and their respective
Subsidiaries shall be terminated, revoked or declared void or invalid
or unenforceable or challenged by the Parent, any Borrower or any of
their respective Subsidiaries, or any payment shall be made in
violation of the terms and provisions thereof;
(k) one or more judgments, orders, decrees or arbitration
awards is entered against the Parent, any Borrower or any of their
respective Subsidiaries involving in the aggregate liability (to the
extent not covered by independent third-party insurance as to which the
insurer does not dispute coverage) as to any single or related or
unrelated series of transactions, incidents or conditions, of
$2,000,000 or more, and the same shall remain unsatisfied, unvacated
and unstayed pending appeal for a period of thirty (30) days after the
entry thereof;
(l) any loss, theft, damage or destruction of any item or
items of Collateral or other property of the Parent, any Borrower or
any of their respective Subsidiaries occurs which could reasonably be
expected to cause a Material Adverse Effect and is not adequately
covered by insurance;
(m) there is filed against the Parent, any Borrower or
any of their respective Subsidiaries any action, suit or proceeding
under any federal or state racketeering statute (including the
Racketeer Influenced and Corrupt Organization Act of 1970), which
action, suit or proceeding (i) is not dismissed within one hundred
twenty (120) days, and (ii) could reasonably be expected to result in
the confiscation or forfeiture of any material portion of the
Collateral;
(n) for any reason other than the failure of the Agent to
take any action available to it to maintain perfection of the Agent's
Liens, pursuant to the Loan Documents, any Loan Document ceases to be
in full force and effect or any Lien with respect to any material
portion of the Collateral intended to be secured thereby ceases to be,
or is not, valid, perfected and prior to all other Liens (other than
Permitted Liens) or is terminated, revoked or declared void;
(o) an ERISA Event shall occur with respect to a Pension
Plan or Multi-employer Plan which has resulted or could reasonably be
expected to result in liability of any Borrower under Title IV of ERISA
to the Pension Plan, Multi-employer Plan or the PBGC in an aggregate
amount in excess of $2,000,000; (ii) the aggregate amount of Unfunded
Pension Liability among all Pension Plans at any time exceeds
$2,000,000; or (iii) any Borrower or any ERISA Affiliate shall fail to
pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under
Section 4201 of ERISA under a Multi-employer Plan in an aggregate
amount in excess of $2,000,000;
43
(p) at any time the Agent shall not have a perfected
first priority security interest (acknowledged by the applicable
insurance company pursuant to an acknowledgment in form and substance
satisfactory to the Agent) in at least 50% of the amounts owing to
Xxxxxxx Sealing as such time to reimburse Xxxxxxx Sealing for payments
made by Xxxxxxx Sealing with respect to claims against Xxxxxxx Sealing
relating to its use and distribution of products alleged to contain
asbestos;
(q) there occurs a Change of Control; or
(r) there occurs an event having a Material Adverse
Effect.
9.2 Remedies.
(a) If a Default or an Event of Default exists, the Agent
may, in its discretion, and shall, at the direction of the Required Lenders, do
one or more of the following at any time or times and in any order, without
notice to or demand on any Borrower: (i) reduce the Maximum Revolver Amount, or
the advance rates against Eligible Accounts and/or Eligible Inventory used in
computing the Borrowing Base, or reduce one or more of the other elements used
in computing the Borrowing Base; (ii) restrict the amount of or refuse to make
Revolving Loans; and (iii) restrict or refuse to provide Letters of Credit or
Credit Support. If an Event of Default exists, the Agent shall, at the direction
of the Required Lenders, do one or more of the following, in addition to the
actions described in the preceding sentence, at any time or times and in any
order, without notice to or demand on any Borrower: (A) terminate the
Commitments and this Agreement; (B) declare any or all Obligations to be
immediately due and payable; provided, however, that upon the occurrence of any
Event of Default described in Sections 9.1(e), 9.1(f), 9.1(g), or 9.1(h), the
Commitments shall automatically and immediately expire and all Obligations shall
automatically become immediately due and payable without notice or demand of any
kind; (C) require any Borrower to cash collateralize all outstanding Letter of
Credit Obligations; and (D) pursue its other rights and remedies under the Loan
Documents and applicable law.
(b) If an Event of Default has occurred and is
continuing: (i) the Agent shall have for the benefit of the Lenders, in addition
to all other rights of the Agent and the Lenders, the rights and remedies of a
secured party under the Loan Documents and the UCC; (ii) the Agent may, at any
time, take possession of the Collateral and keep it on the Borrowers' premises,
at no cost to the Agent or any Lender, or remove any part of it to such other
place or places as the Agent may desire, or the Borrowers shall, upon the
Agent's demand, at the Borrowers' cost, assemble the Collateral and make it
available to the Agent at a place reasonably convenient to the Agent; and (iii)
the Agent may sell and deliver any Collateral at public or private sales, for
cash, upon credit or otherwise, at such prices and upon such terms as the Agent
deems advisable, in its sole discretion, and may, if the Agent deems it
reasonable, postpone or adjourn any sale of the Collateral by an announcement at
the time and place of sale or of such postponed or adjourned sale without giving
a new notice of sale. Without in any way requiring notice to be given in the
following manner, the Borrowers agree that any notice by the Agent of sale,
disposition or other intended action hereunder or in connection herewith,
whether required by the UCC or otherwise, shall constitute reasonable notice to
the Borrowers if such notice is
44
mailed by registered or certified mail, return receipt requested, postage
prepaid, or is delivered personally against receipt, at least five (5) Business
Days prior to such action to the Borrowers' respective addresses specified in or
pursuant to Section 13.8. If any Collateral is sold on terms other than payment
in full at the time of sale, no credit shall be given against the Obligations
until the Agent or the Lenders receive payment, and if the buyer defaults in
payment, the Agent may resell the Collateral without further notice to any
Borrower. In the event the Agent seeks to take possession of all or any portion
of the Collateral by judicial process, each of the Borrowers irrevocably waives:
(A) the posting of any bond, surety or security with respect thereto which might
otherwise be required; (B) any demand for possession prior to the commencement
of any suit or action to recover the Collateral; and (C) any requirement that
the Agent retain possession and not dispose of any Collateral until after trial
or final judgment. Each of the Borrowers agrees that the Agent has no obligation
to preserve rights to the Collateral or marshal any Collateral for the benefit
of any Person. The Agent is hereby granted a license or other right to use,
without charge after the occurrence and during the continuance of an Event of
Default, the Borrowers' labels, patents, copyrights, name, trade secrets, trade
names, trademarks, and advertising matter, or any similar property, in
completing production of, advertising or selling any Collateral, and the
Borrowers' rights under all licenses and all franchise agreements shall inure to
the Agent's benefit for such purpose. The proceeds of sale shall be applied
first to all expenses of sale, including attorneys' fees, and then to the
Obligations. The Agent will return any excess to the Borrowers and the Borrowers
shall remain liable for any deficiency.
(c) If an Event of Default occurs, each of the Borrowers
hereby waives all rights to notice and hearing prior to the exercise by the
Agent of the Agent's rights to repossess the Collateral without judicial process
or to reply, attach or levy upon the Collateral without notice or hearing.
ARTICLE 10
TERM AND TERMINATION
10.1 Term and Termination. The term of this Agreement shall end on
the Stated Termination Date unless sooner terminated in accordance with the
terms hereof. The Agent upon direction from the Required Lenders may terminate
this Agreement without notice upon the occurrence of an Event of Default. Upon
the effective date of termination of this Agreement for any reason whatsoever,
all Obligations (including all unpaid principal, accrued and unpaid interest and
any early termination or prepayment fees or penalties) shall become immediately
due and payable and the Borrowers shall immediately arrange for the cancellation
and return of Letters of Credit then outstanding. Notwithstanding the
termination of this Agreement, until all Obligations are indefeasibly paid and
performed in full in cash, the Borrowers shall remain bound by the terms of this
Agreement and shall not be relieved of any of its Obligations hereunder or under
any other Loan Document, and the Agent and the Lenders shall retain all their
rights and remedies hereunder (including the Agent's Liens in and all rights and
remedies with respect to all then existing and after-arising Collateral).
45
ARTICLE 11
AMENDMENTS; WAIVERS; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS
11.1 Amendments and Waivers.
(a) No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent with respect to any
departure by the Parent, any Borrower or any of their respective Subsidiaries
therefrom, shall be effective unless the same shall be in writing and signed by
the Required Lenders (or by the Agent at the written request of the Required
Lenders) and the Borrowers (or other applicable Person) and then any such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such waiver, amendment, or
consent shall, unless in writing and signed by all the Lenders and the Borrowers
and acknowledged by the Agent, do any of the following:
(i) increase or extend the Commitment of any
Lender;
(ii) postpone or delay any date fixed by this
Agreement or any other Loan Document for any payment of principal,
interest, fees or other amounts due to the Lenders (or any of them)
hereunder or under any other Loan Document;
(iii) reduce the principal of, or the rate of
interest specified herein on any Loan, or any fees or other amounts
payable hereunder or under any other Loan Document;
(iv) change the percentage of the Commitments or
of the aggregate unpaid principal amount of the Loans which is required
for the Lenders or any of them to take any action hereunder;
(v) increase any of the percentages set forth in
the definition of the Borrowing Base, Xxxxxxx Sealing Borrowing Base or
Excess Collateral Providers Borrowing Base;
(vi) amend this Section or any provision of this
Agreement providing for consent or other action by all Lenders;
(vii) release any Guaranties of the Obligations
(other than release of any Subsidiary Guarantor of its obligations
under the Subsidiary Guaranty if such Subsidiary Guarantor is sold or
otherwise disposed of as permitted by this Agreement or pursuant to a
transaction consented to by the Required Lenders) or release Collateral
other than as permitted by Section 12.11;
(viii) change the definitions of "Majority Lenders"
or "Required Lenders";
(ix) increase the Maximum Revolver Amount, and
Letter of Credit Subfacility; or
46
(x) amend Section 3.8;
provided, however, the Agent may, in its sole discretion and notwithstanding the
limitations contained in clauses (v) and (ix) above and any other terms of this
Agreement, make Agent Advances in accordance with Section 1.2(i) and, provided
further, that no amendment, waiver or consent shall, unless in writing and
signed by the Agent, affect the rights or duties of the Agent under this
Agreement or any other Loan Document and provided further, that Schedule 1.2
hereto (Commitments) may be amended from time to time by Agent alone to reflect
assignments of Commitments in accordance herewith.
(b) If any fees are paid to the Lenders as consideration
for amendments, waivers or consents with respect to this Agreement, at Agent's
election, such fees may be paid only to those Lenders that agree to such
amendments, waivers or consents within the time specified for submission
thereof.
(c) If, in connection with any proposed amendment, waiver
or consent (a "Proposed Change"):
(i) requiring the consent of all Lenders, the
consent of Required Lenders is obtained, but the consent of other
Lenders is not obtained (any such Lender whose consent is not obtained
as described in this clause (i) and in clause (ii) below being referred
to as a "Non-Consenting Lender"), or
(ii) requiring the consent of Required Lenders,
the consent of Majority Lenders is obtained,
then, so long as the Agent is not a Non-Consenting Lender, at the Funds
Administrator's request, the Agent or an Eligible Assignee shall have the right
(but not the obligation) with the Agent's approval, to purchase from the
Non-Consenting Lenders, and the Non-Consenting Lenders agree that they shall
sell, all the Non-Consenting Lenders' Commitments for an amount equal to the
principal balances thereof and all accrued interest and fees with respect
thereto through the date of sale pursuant to Assignment and Acceptance
Agreement(s), without premium or discount.
11.2 Assignments; Participations.
(a) Any Lender may, with the written consent of the Agent
(which consent shall not be unreasonably withheld), and so long as no Default or
Event of Default has occurred and is continuing, with the written consent of the
Funds Administrator (which consent shall not be unreasonably withheld), assign
and delegate to one or more Eligible Assignees (provided that no consent of the
Agent or the Funds Administrator shall be required in connection with any
assignment and delegation by a Lender to an Affiliate of such Lender) (each an
"Assignee") all, or any ratable part of all, of the Loans, the Commitments and
the other rights and obligations of such Lender hereunder, in a minimum amount
of $5,000,000 (provided that, unless an assignor Lender has assigned and
delegated all of its Loans and Commitments, no such assignment and/or delegation
shall be permitted unless, after giving effect thereto, such assignor Lender
retains a Commitment in a minimum amount of $10,000,000; provided, however, that
the Borrowers and the Agent may continue to deal solely and directly with such
Lender in connection with the interest so assigned to an Assignee until (i)
written notice of such
47
assignment, together with payment instructions, addresses and related
information with respect to the Assignee, shall have been given to the Funds
Administrator and the Agent by such Lender and the Assignee; (ii) such Lender
and its Assignee shall have delivered to the Funds Administrator and the Agent
an Assignment and Acceptance in the form of Exhibit E ("Assignment and
Acceptance") together with any note or notes subject to such assignment and
(iii) the assignor Lender or Assignee has paid to the Agent a processing fee in
the amount of $3,500 (other than with respect to assignments to such assignor's
Affiliates). The Borrowers agree to promptly execute and deliver new promissory
notes and replacement promissory notes as reasonably requested by the Agent to
evidence assignments of the Loans and Commitments in accordance herewith.
(b) From and after the date that the Agent notifies the
assignor Lender that it has received an executed Assignment and Acceptance and
payment of the above-referenced processing fee, (i) the Assignee thereunder
shall be a party hereto and, to the extent that rights and obligations,
including, but not limited to, the obligation to participate in Letters of
Credit and Credit Support have been assigned to it pursuant to such Assignment
and Acceptance, shall have the rights and obligations of a Lender under the Loan
Documents, and (ii) the assignor Lender shall, to the extent that rights and
obligations hereunder and under the other Loan Documents have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto).
(c) By executing and delivering an Assignment and
Acceptance, the assigning Lender thereunder and the Assignee thereunder confirm
to and agree with each other and the other parties hereto as follows: (i) other
than as provided in such Assignment and Acceptance, such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Loan Document furnished
pursuant hereto or the attachment, perfection, or priority of any Lien granted
by the Borrowers to the Agent or any Lender in the Collateral; (ii) such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrowers or the
performance or observance by the Borrowers of any of its obligations under this
Agreement or any other Loan Document furnished pursuant hereto; (iii) such
Assignee confirms that it has received a copy of this Agreement, together with
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such Assignee will, independently and without reliance upon the Agent, such
assigning Lender or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (v) such
Assignee appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement as are delegated to the
Agent by the terms hereof, together with such powers, including the
discretionary rights and incidental power, as are reasonably incidental thereto;
and (vi) such Assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of this Agreement are required
to be performed by it as a Lender.
48
(d) Immediately upon satisfaction of the requirements of
Section 11.2(a), this Agreement shall be deemed to be amended to the extent, but
only to the extent, necessary to reflect the addition of the Assignee and the
resulting adjustment of the Commitments arising therefrom. The Commitment
allocated to each Assignee shall reduce such Commitments of the assigning Lender
pro tanto.
(e) Any Lender may at any time sell to one or more
commercial banks, financial institutions, or other Persons not Affiliates of any
Borrower (a "Participant") participating interests in any Loans, the Commitment
of that Lender and the other interests of that Lender (the "originating Lender")
hereunder and under the other Loan Documents; provided, however, that (i) the
originating Lender's obligations under this Agreement shall remain unchanged,
(ii) the originating Lender shall remain solely responsible for the performance
of such obligations, (iii) the Borrowers and the Agent shall continue to deal
solely and directly with the originating Lender in connection with the
originating Lender's rights and obligations under this Agreement and the other
Loan Documents, and (iv) no Lender shall transfer or grant any participating
interest under which the Participant has rights to approve any amendment to, or
any consent or waiver with respect to, this Agreement or any other Loan Document
except the matters set forth in Section 11.1(a) (i), (ii) and (iii), and all
amounts payable by the Borrowers hereunder shall be determined as if such Lender
had not sold such participation; except that, if amounts outstanding under this
Agreement are due and unpaid, or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed to have the
right of set-off in respect of its participating interest in amounts owing under
this Agreement to the same extent and subject to the same limitation as if the
amount of its participating interest were owing directly to it as a Lender under
this Agreement.
(f) Notwithstanding any other provision in this
Agreement, any Lender may at any time create a security interest in, or pledge,
all or any portion of its rights under and interest in this Agreement in favor
of any Federal Reserve Bank in accordance with Regulation A of the FRB or U.S.
Treasury Regulation 31 CFR ss.203.14, and such Federal Reserve Bank may enforce
such pledge or security interest in any manner permitted under applicable law.
ARTICLE 12
THE AGENT
12.1 Appointment and Authorization. Each Lender hereby designates
and appoints Bank as its Agent under this Agreement and the other Loan Documents
and each Lender hereby irrevocably authorizes the Agent to take such action on
its behalf under the provisions of this Agreement and each other Loan Document
and to exercise such powers and perform such duties as are expressly delegated
to it by the terms of this Agreement or any other Loan Document, together with
such powers as are reasonably incidental thereto. The Agent agrees to act as
such on the express conditions contained in this Article 12. The provisions of
this Article 12 are solely for the benefit of the Agent and the Lenders and the
Borrowers shall have no rights as a third party beneficiary of any of the
provisions contained herein. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall the Agent have or be deemed to have any fiduciary
49
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.
Without limiting the generality of the foregoing sentence, the use of the term
"agent" in this Agreement with reference to the Agent is not intended to connote
any fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable law. Instead, such term is used merely as a matter of
market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties. Except as expressly
otherwise provided in this Agreement, the Agent shall have and may use its sole
discretion with respect to exercising or refraining from exercising any
discretionary rights or taking or refraining from taking any actions which the
Agent is expressly entitled to take or assert under this Agreement and the other
Loan Documents, including (a) the determination of the applicability of
ineligibility criteria with respect to the calculation of the Borrowing Base,
the Xxxxxxx Sealing Borrowing Base or the Excess Collateral Providers Borrowing
Base, (b) the making of Agent Advances pursuant to Section 1.2(i), and (c) the
exercise of remedies pursuant to Section 9.2, and any action so taken or not
taken shall be deemed consented to by the Lenders.
12.2 Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects as
long as such selection was made without gross negligence or willful misconduct.
12.3 Liability of Agent. None of the Agent-Related Persons shall
(i) be liable for any action taken or omitted to be taken by any of them under
or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct), or (ii) be responsible in any manner to any of the Lenders for any
recital, statement, representation or warranty made by the Parent, any Borrower
or any of their respective Subsidiaries or Affiliates, or any officer thereof,
contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this Agreement or any
other Loan Document, or the validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document, or for any failure
of any Borrower or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of the Parent, the Borrowers or any of their respective Subsidiaries or
Affiliates.
12.4 Reliance by Agent. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement 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 counsel
to the Borrowers), independent accountants and other experts selected by the
Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the
50
Lenders against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a request or consent of
the Required Lenders (or all Lenders if so required by Section 11.1) and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all of the Lenders.
12.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, unless
the Agent shall have received written notice from a Lender or the Funds
Administrator referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default." The Agent will
notify the Lenders of its receipt of any such notice. The Agent shall take such
action with respect to such Default or Event of Default as may be requested by
the Required Lenders in accordance with Section 9; provided, however, that
unless and until the Agent has received any such request, the Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Default or Event of Default as it shall deem advisable.
12.6 Credit Decision. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Parent, the Borrowers and their respective Affiliates, shall be deemed to
constitute any representation or warranty by any Agent-Related Person to any
Lender. Each Lender represents to the Agent that it has, independently and
without reliance upon any Agent-Related Person and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of the Parent, the Borrowers and their
respective Affiliates, and all applicable bank regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to the Borrowers. Each Lender also represents
that it will, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Parent, the Borrowers and their respective Affiliates.
Except for notices, reports and other documents expressly herein required to be
furnished to the Lenders by the Agent, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of the Parent, the Borrowers and their respective
Affiliates which may come into the possession of any of the Agent-Related
Persons.
12.7 Indemnification. Whether or not the transactions contemplated
hereby are consummated, the Lenders shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Borrowers and without limiting the obligation of the Borrowers to do so), in
accordance with their Pro Rata Shares, from and against any and all Indemnified
Liabilities as such term is defined in Section 13.11; provided, however, that no
Lender shall be liable for the payment to the Agent-Related Persons of any
portion of such Indemnified Liabilities resulting solely from such Person's
gross negligence or willful
51
misconduct. Without limitation of the foregoing, each Lender shall reimburse the
Agent upon demand for its Pro Rata Share of any costs or out-of-pocket expenses
(including Attorney Costs) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that the Agent is not reimbursed for such expenses by or on behalf
of the Borrowers. The undertaking in this Section shall survive the payment of
all Obligations hereunder and the resignation or replacement of the Agent.
12.8 Agent in Individual Capacity. The Bank and its Affiliates may
make loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Parent, any Borrower
and any of their respective Subsidiaries or Affiliates as though the Bank were
not the Agent hereunder and without notice to or consent of the Lenders. The
Bank or its Affiliates may receive information regarding the Parent, any
Borrower and any of their respective Subsidiaries or Affiliates and Account
Debtors (including information that may be subject to confidentiality
obligations in favor of the Parent, any Borrower and any of their respective
Subsidiaries or Affiliates) and acknowledge that the Agent and the Bank shall be
under no obligation to provide such information to them. With respect to its
Loans, the Bank shall have the same rights and powers under this Agreement as
any other Lender and may exercise the same as though it were not the Agent, and
the terms "Lender" and "Lenders" include the Bank in its individual capacity.
12.9 Successor Agent. The Agent may resign as Agent upon at least
30 days' prior notice to the Lenders and the Funds Administrator, such
resignation to be effective upon the acceptance of a successor agent to its
appointment as Agent. In the event the Bank sells all of its Commitment and
Revolving Loans as part of a sale, transfer or other disposition by the Bank of
substantially all of its loan portfolio, the Bank shall resign as Agent and such
purchaser or transferee shall become the successor Agent hereunder. Subject to
the foregoing, if the Agent resigns under this Agreement, the Required Lenders
shall appoint from among the Lenders a successor agent for the Lenders. If no
successor agent is appointed prior to the effective date of the resignation of
the Agent, the Agent may appoint, after consulting with the Lenders and the
Funds Administrator, a successor agent from among the Lenders. Upon the
acceptance of its appointment as successor agent hereunder, such successor agent
shall succeed to all the rights, powers and duties of the retiring Agent and the
term "Agent" shall mean such successor agent and the retiring Agent's
appointment, powers and duties as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Article 12 shall
continue to inure to its benefit as to any actions taken or omitted to be taken
by it while it was Agent under this Agreement.
12.10 Withholding Tax.
(a) If any Lender is a "foreign corporation, partnership
or trust" within the meaning of the Code and such Lender claims exemption from,
or a reduction of, U.S. withholding tax under Sections 1441 or 1442 of the Code,
such Lender agrees with and in favor of the Agent, to deliver to the Agent:
52
(i) if such Lender claims an exemption from, or
a reduction of, withholding tax under a United States of America tax
treaty, properly completed IRS Forms W-8BEN and W-8ECI before the
payment of any interest in the first calendar year and before the
payment of any interest in each third succeeding calendar year during
which interest may be paid under this Agreement;
(ii) if such Lender claims that interest paid
under this Agreement is exempt from United States of America
withholding tax because it is effectively connected with a United
States of America trade or business of such Lender, two properly
completed and executed copies of IRS Form W-8ECI before the payment of
any interest is due in the first taxable year of such Lender and in
each succeeding taxable year of such Lender during which interest may
be paid under this Agreement, and IRS Form W-9; and
(iii) such other form or forms as may be required
under the Code or other laws of the United States of America as a
condition to exemption from, or reduction of, United States of America
withholding tax.
Such Lender agrees to promptly notify the Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction.
(b) If any Lender claims exemption from, or reduction of,
withholding tax under a United States of America tax treaty by providing IRS
Form FW-8BEN and such Lender sells, assigns, grants a participation in, or
otherwise transfers all or part of the Obligations owing to such Lender, such
Lender agrees to notify the Agent of the percentage amount in which it is no
longer the beneficial owner of Obligations of the Borrowers to such Lender. To
the extent of such percentage amount, the Agent will treat such Lender's IRS
Form W-8BEN as no longer valid.
(c) If any Lender claiming exemption from United States
of America withholding tax by filing IRS Form W-8ECI with the Agent sells,
assigns, grants a participation in, or otherwise transfers all or part of the
Obligations owing to such Lender, such Lender agrees to undertake sole
responsibility for complying with the withholding tax requirements imposed by
Sections 1441 and 1442 of the Code.
(d) If any Lender is entitled to a reduction in the
applicable withholding tax, the Agent may withhold from any interest payment to
such Lender an amount equivalent to the applicable withholding tax after taking
into account such reduction. If the forms or other documentation required by
subsection (a) of this Section are not delivered to the Agent, then the Agent
may withhold from any interest payment to such Lender not providing such forms
or other documentation an amount equivalent to the applicable withholding tax.
(e) If the IRS or any other Governmental Authority of the
United States of America or other jurisdiction asserts a claim that the Agent
did not properly withhold tax from amounts paid to or for the account of any
Lender (because the appropriate form was not delivered, was not properly
executed, or because such Lender failed to notify the Agent of a change in
circumstances which rendered the exemption from, or reduction of, withholding
tax
53
ineffective, or for any other reason) such Lender shall indemnify the Agent
fully for all amounts paid, directly or indirectly, by the Agent as tax or
otherwise, including penalties and interest, and including any taxes imposed by
any jurisdiction on the amounts payable to the Agent under this Section,
together with all costs and expenses (including Attorney Costs). The obligation
of the Lenders under this subsection shall survive the payment of all
Obligations and the resignation or replacement of the Agent.
12.11 Collateral Matters.
(a) The Lenders hereby irrevocably authorize the Agent,
at its option and in its sole discretion, to release any Agent's Liens upon any
Collateral (i) upon the termination of the Commitments and payment and
satisfaction in full by Borrowers of all Loans and reimbursement obligations in
respect of Letters of Credit and Credit Support, and the termination of all
outstanding Letters of Credit (whether or not any of such obligations are due)
and all other Obligations; (ii) constituting property being sold or disposed of
if the Funds Administrator certifies to the Agent that the sale or disposition
is made in compliance with Section 7.9 (and the Agent may rely conclusively on
any such certificate, without further inquiry); (iii) constituting property in
which the Borrowers owned no interest at the time the Lien was granted or at any
time thereafter; or (iv) constituting property leased to the Borrowers under a
lease which has expired or been terminated in a transaction permitted under this
Agreement. Except as provided above, the Agent will not release any of the
Agent's Liens without the prior written authorization of the Lenders; provided
that, in addition to releases of Collateral sold pursuant to Section 7.9 or
other dispositions expressly approved by the Required Lenders, the Agent may, in
its discretion, release the Agent's Liens on Collateral valued in the aggregate
not in excess of $1,000,000 during each Fiscal Year without the prior written
authorization of the Lenders and the Agent may release the Agent's Liens on
Collateral valued in the aggregate not in excess of $2,000,000 during each
Fiscal Year with the prior written authorization of Required Lenders. Upon
request by the Agent or the Funds Administrator at any time, the Lenders will
confirm in writing the Agent's authority to release any Agent's Liens upon
particular types or items of Collateral pursuant to this Section 12.11.
(b) Upon receipt by the Agent of any authorization
required pursuant to Section 12.11(a) from the Lenders of the Agent's authority
to release Agent's Liens upon particular types or items of Collateral, and upon
at least five (5) Business Days prior written request by the Funds
Administrator, the Agent shall (and is hereby irrevocably authorized by the
Lenders to) execute such documents as may be necessary to evidence the release
of the Agent's Liens upon such Collateral; provided, however, that (i) the Agent
shall not be required to execute any such document on terms which, in the
Agent's opinion, would expose the Agent to liability or create any obligation or
entail any consequence other than the release of such Liens without recourse or
warranty, and (ii) such release shall not in any manner discharge, affect or
impair the Obligations or any Liens (other than those expressly being released)
upon (or obligations of the Borrowers in respect of) all interests retained by
the Borrowers, including the proceeds of any sale, all of which shall continue
to constitute part of the Collateral.
(c) The Agent shall have no obligation whatsoever to any
of the Lenders to assure that the Collateral exists or is owned by the Borrowers
or is cared for, protected or insured or has been encumbered, or that the
Agent's Liens have been properly or
54
sufficiently or lawfully created, perfected, protected or enforced or are
entitled to any particular priority, or to exercise at all or in any particular
manner or under any duty of care, disclosure or fidelity, or to continue
exercising, any of the rights, authorities and powers granted or available to
the Agent pursuant to any of the Loan Documents, it being understood and agreed
that in respect of the Collateral, or any act, omission or event related
thereto, the Agent may act in any manner it may deem appropriate, in its sole
discretion given the Agent's own interest in the Collateral in its capacity as
one of the Lenders and that the Agent shall have no other duty or liability
whatsoever to any Lender as to any of the foregoing.
12.12 Restrictions on Actions by Lenders; Sharing of Payments.
(a) Each of the Lenders agrees that it shall not, without
the express consent of all Lenders, and that it shall, to the extent it is
lawfully entitled to do so, upon the request of all Lenders, set off against the
Obligations, any amounts owing by such Lender to the Borrowers or any accounts
of the Borrowers now or hereafter maintained with such Lender. Each of the
Lenders further agrees that it shall not, unless specifically requested to do so
by the Agent, take or cause to be taken any action to enforce its rights under
this Agreement or against any Borrower, including the commencement of any legal
or equitable proceedings, to foreclose any Lien on, or otherwise enforce any
security interest in, any of the Collateral.
(b) If at any time or times any Lender shall receive (i)
by payment, foreclosure, setoff or otherwise, any proceeds of Collateral or any
payments with respect to the Obligations of any Borrower to such Lender arising
under, or relating to, this Agreement or the other Loan Documents, except for
any such proceeds or payments received by such Lender from the Agent pursuant to
the terms of this Agreement, or (ii) payments from the Agent in excess of such
Lender's ratable portion of all such distributions by the Agent, such Lender
shall promptly (1) turn the same over to the Agent, in kind, and with such
endorsements as may be required to negotiate the same to the Agent, or in same
day funds, as applicable, for the account of all of the Lenders and for
application to the Obligations in accordance with the applicable provisions of
this Agreement, or (2) purchase, without recourse or warranty, an undivided
interest and participation in the Obligations owed to the other Lenders so that
such excess payment received shall be applied ratably as among the Lenders in
accordance with their Pro Rata Shares; provided, however, that if all or part of
such excess payment received by the purchasing party is thereafter recovered
from it, those purchases of participations shall be rescinded in whole or in
part, as applicable, and the applicable portion of the purchase price paid
therefor shall be returned to such purchasing party, but without interest except
to the extent that such purchasing party is required to pay interest in
connection with the recovery of the excess payment.
12.13 Agency for Perfection. Each Lender hereby appoints each other
Lender as agent for the purpose of perfecting the Lenders' security interest in
assets which, in accordance with Article 9 of the UCC can be perfected only by
possession. Should any Lender (other than the Agent) obtain possession of any
such Collateral, such Lender shall notify the Agent thereof, and, promptly upon
the Agent's request therefor shall deliver such Collateral to the Agent or in
accordance with the Agent's instructions.
12.14 Payments by Agent to Lenders. All payments to be made by the
Agent to the Lenders shall be made by bank wire transfer or internal transfer of
immediately available
55
funds to each Lender pursuant to wire transfer instructions delivered in writing
to the Agent on or prior to the Closing Date (or if such Lender is an Assignee,
on the applicable Assignment and Acceptance), or pursuant to such other wire
transfer instructions as each party may designate for itself by written notice
to the Agent. Concurrently with each such payment, the Agent shall identify
whether such payment (or any portion thereof) represents principal, premium or
interest on the Revolving Loans, Term Loans or otherwise. Unless the Agent
receives notice from the Funds Administrator prior to the date on which any
payment is due to the Lenders that the Borrowers will not make such payment in
full as and when required, the Agent may assume that the Borrowers have made
such payment in full to the Agent on such date in immediately available funds
and the Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent the Borrowers have not made
such payment in full to the Agent, each Lender shall repay to the Agent on
demand such amount distributed to such Lender, together with interest thereon at
the Federal Funds Rate for each day from the date such amount is distributed to
such Lender until the date repaid.
12.15 Settlement.
(a) (i) Each Lender's funded portion of the Revolving
Loans is intended by the Lenders to be equal at all times to such Lender's Pro
Rata Share of the outstanding Revolving Loans. Notwithstanding such agreement,
the Agent, the Bank, and the other Lenders agree (which agreement shall not be
for the benefit of or enforceable by the Borrowers) that in order to facilitate
the administration of this Agreement and the other Loan Documents, settlement
among them as to the Revolving Loans, the Non-Ratable Loans and the Agent
Advances shall take place on a periodic basis in accordance with the following
provisions:
(ii) The Agent shall request settlement
("Settlement") with the Lenders on at least a weekly basis, or on a more
frequent basis at Agent's election, (A) on behalf of the Bank, with respect to
each outstanding Non-Ratable Loan, (B) for itself, with respect to each Agent
Advance, and (C) with respect to collections received, in each case, by
notifying the Lenders of such requested Settlement by telecopy, telephone or
other similar form of transmission, of such requested Settlement, no later than
12:00 noon (Eastern time) on the date of such requested Settlement (the
"Settlement Date"). Each Lender (other than the Bank, in the case of Non-Ratable
Loans and the Agent in the case of Agent Advances) shall transfer the amount of
such Lender's Pro Rata Share of the outstanding principal amount of the
Non-Ratable Loans and Agent Advances with respect to each Settlement to the
Agent, to Agent's account, not later than 2:00 p.m. (Eastern time), on the
Settlement Date applicable thereto. Settlements may occur during the
continuation of a Default or an Event of Default and whether or not the
applicable conditions precedent set forth in Article 8 have then been satisfied.
Such amounts made available to the Agent shall be applied against the amounts of
the applicable Non-Ratable Loan or Agent Advance and, together with the portion
of such Non-Ratable Loan or Agent Advance representing the Bank's Pro Rata Share
thereof, shall constitute Revolving Loans of such Lenders. If any such amount is
not transferred to the Agent by any Lender on the Settlement Date applicable
thereto, the Agent shall be entitled to recover such amount on demand from such
Lender together with interest thereon at the Federal Funds Rate for the first
three (3) days from and after the Settlement Date and thereafter at the Interest
Rate then applicable to the Revolving Loans (A) on behalf of the Bank, with
respect to each outstanding Non-Ratable Loan, and (B) for itself, with respect
to each Agent Advance.
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(iii) Notwithstanding the foregoing, not more than
one (1) Business Day after demand is made by the Agent (whether before or after
the occurrence of a Default or an Event of Default and regardless of whether the
Agent has requested a Settlement with respect to a Non-Ratable Loan or Agent
Advance), each other Lender (A) shall irrevocably and unconditionally purchase
and receive from the Bank or the Agent, as applicable, without recourse or
warranty, an undivided interest and participation in such Non-Ratable Loan or
Agent Advance equal to such Lender's Pro Rata Share of such Non-Ratable Loan or
Agent Advance and (B) if Settlement has not previously occurred with respect to
such Non-Ratable Loans or Agent Advances, upon demand by Bank or Agent, as
applicable, shall pay to Bank or Agent, as applicable, as the purchase price of
such participation an amount equal to one-hundred percent (100%) of such
Lender's Pro Rata Share of such Non-Ratable Loans or Agent Advances. If such
amount is not in fact made available to the Agent by any Lender, the Agent shall
be entitled to recover such amount on demand from such Lender together with
interest thereon at the Federal Funds Rate for the first three (3) days from and
after such demand and thereafter at the Interest Rate then applicable to Base
Rate Loans.
(iv) From and after the date, if any, on which
any Lender purchases an undivided interest and participation in any Non-Ratable
Loan or Agent Advance pursuant to clause (iii) above, the Agent shall promptly
distribute to such Lender, such Lender's Pro Rata Share of all payments of
principal and interest and all proceeds of Collateral received by the Agent in
respect of such Non-Ratable Loan or Agent Advance.
(v) Between Settlement Dates, the Agent, to the
extent no Agent Advances are outstanding, may pay over to the Bank any payments
received by the Agent, which in accordance with the terms of this Agreement
would be applied to the reduction of the Revolving Loans, for application to the
Bank's Revolving Loans including Non-Ratable Loans. If, as of any Settlement
Date, collections received since the then immediately preceding Settlement Date
have been applied to the Bank's Revolving Loans (other than to Non-Ratable Loans
or Agent Advances in which such Lender has not yet funded its purchase of a
participation pursuant to clause (iii) above), as provided for in the previous
sentence, the Bank shall pay to the Agent for the accounts of the Lenders, to be
applied to the outstanding Revolving Loans of such Lenders, an amount such that
each Lender shall, upon receipt of such amount, have, as of such Settlement
Date, its Pro Rata Share of the Revolving Loans. During the period between
Settlement Dates, the Bank with respect to Non-Ratable Loans, the Agent with
respect to Agent Advances, and each Lender with respect to the Revolving Loans
other than Non-Ratable Loans and Agent Advances, shall be entitled to interest
at the applicable rate or rates payable under this Agreement on the actual
average daily amount of funds employed by the Bank, the Agent and the other
Lenders.
(vi) Unless the Agent has received written notice
from a Lender to the contrary, the Agent may assume that the applicable
conditions precedent set forth in Article 8 have been satisfied and the
requested Borrowing will not exceed either the Availability of such Borrower or
Aggregate Availability on any Funding Date for a Revolving Loan or Non-Ratable
Loan.
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(b) Lenders' Failure to Perform. All Revolving Loans
(other than Non-Ratable Loans and Agent Advances) shall be made by the Lenders
simultaneously and in accordance with their Pro Rata Shares. It is understood
that (i) no Lender shall be responsible for any failure by any other Lender to
perform its obligation to make any Revolving Loans hereunder, nor shall any
Commitment of any Lender be increased or decreased as a result of any failure by
any other Lender to perform its obligation to make any Revolving Loans
hereunder, (ii) no failure by any Lender to perform its obligation to make any
Revolving Loans hereunder shall excuse any other Lender from its obligation to
make any Revolving Loans hereunder, and (iii) the obligations of each Lender
hereunder shall be several, not joint and several.
(c) Defaulting Lenders. Unless the Agent receives notice
from a Lender on or prior to the Closing Date or, with respect to any Borrowing
after the Closing Date, at least one Business Day prior to the date of such
Borrowing, that such Lender will not make available as and when required
hereunder to the Agent that Lender's Pro Rata Share of a Borrowing, the Agent
may assume that each Lender has made such amount available to the Agent in
immediately available funds on the Funding Date. Furthermore, the Agent may, in
reliance upon such assumption, make available to the Borrowers on such date a
corresponding amount. If any Lender has not transferred its full Pro Rata Share
to the Agent in immediately available funds and the Agent has transferred
corresponding amount to the Borrowers on the Business Day following such Funding
Date that Lender shall make such amount available to the Agent, together with
interest at the Federal Funds Rate for that day. A notice by the Agent submitted
to any Lender with respect to amounts owing shall be conclusive, absent manifest
error. If each Lender's full Pro Rata Share is transferred to the Agent as
required, the amount transferred to the Agent shall constitute that Lender's
Revolving Loan for all purposes of this Agreement. If that amount is not
transferred to the Agent on the Business Day following the Funding Date, the
Agent will notify the Funds Administrator of such failure to fund and, upon
demand by the Agent, the Borrowers shall pay such amount to the Agent for the
Agent's account, together with interest thereon for each day elapsed since the
date of such Borrowing, at a rate per annum equal to the Interest Rate
applicable at the time to the Revolving Loans comprising that particular
Borrowing. The failure of any Lender to make any Revolving Loan on any Funding
Date (any such Lender, prior to the cure of such failure, being hereinafter
referred to as a "Defaulting Lender") shall not relieve any other Lender of its
obligation hereunder to make a Revolving Loan on that Funding Date. No Lender
shall be responsible for any other Lender's failure to advance such other
Lenders' Pro Rata Share of any Borrowing.
(d) Retention of Defaulting Lender's Payments. The Agent
shall not be obligated to transfer to a Defaulting Lender any payments made by
any Borrower to the Agent for the Defaulting Lender's benefit; nor shall a
Defaulting Lender be entitled to the sharing of any payments hereunder. Amounts
payable to a Defaulting Lender shall instead be paid to or retained by the
Agent. In its discretion, the Agent may loan Borrowers the amount of all such
payments received or retained by it for the account of such Defaulting Lender.
Any amounts so loaned to the Borrowers shall bear interest at the rate
applicable to Base Rate Loans and for all other purposes of this Agreement shall
be treated as if they were Revolving Loans, provided, however, that for purposes
of voting or consenting to matters with respect to the Loan Documents and
determining Pro Rata Shares, such Defaulting Lender shall be deemed not to be a
"Lender". Until a Defaulting Lender cures its failure to fund its Pro Rata Share
of any Borrowing (A) such Defaulting Lender shall not be entitled to any portion
of the Unused Line
58
Fee and (B) the Unused Line Fee shall accrue in favor of the Lenders which have
funded their respective Pro Rata Shares of such requested Borrowing and shall be
allocated among such performing Lenders ratably based upon their relative
Commitments. This Section shall remain effective with respect to such Lender
until such time as the Defaulting Lender shall no longer be in default of any of
its obligations under this Agreement. The terms of this Section shall not be
construed to increase or otherwise affect the Commitment of any Lender, or
relieve or excuse the performance by the Borrowers of their respective duties
and obligations hereunder.
(e) Removal of Defaulting Lender. At the Funds
Administrator's request, the Agent or an Eligible Assignee reasonably acceptable
to the Agent and the Funds Administrator shall have the right (but not the
obligation) to purchase from any Defaulting Lender, and each Defaulting Lender
shall, upon such request, sell and assign to the Agent or such Eligible
Assignee, all of the Defaulting Lender's outstanding Commitments hereunder. Such
sale shall be consummated promptly after Agent has arranged for a purchase by
Agent or an Eligible Assignee pursuant to an Assignment and Acceptance, and at a
price equal to the outstanding principal balance of the Defaulting Lender's
Loans, plus accrued interest and fees, without premium or discount.
12.16 Letters of Credit; Intra-Lender Issues.
(a) Notice of Letter of Credit Balance. On each
Settlement Date the Agent shall notify each Lender of the issuance of all
Letters of Credit since the prior Settlement Date.
(b) Participations in Letters of Credit.
(i) Purchase of Participations. Immediately upon
issuance of any Letter of Credit in accordance with Section 1.4(d), each Lender
shall be deemed to have irrevocably and unconditionally purchased and received
without recourse or warranty, an undivided interest and participation equal to
such Lender's Pro Rata Share of the face amount of such Letter of Credit or the
Credit Support provided through the Agent to the Letter of Credit Issuer, if not
the Bank, in connection with the issuance of such Letter of Credit (including
all obligations of the Borrowers with respect thereto, and any security therefor
or guaranty pertaining thereto).
(ii) Sharing of Reimbursement Obligation
Payments. Whenever the Agent receives a payment from the Borrowers on account of
reimbursement obligations in respect of a Letter of Credit or Credit Support as
to which the Agent has previously received for the account of the Letter of
Credit Issuer thereof payment from a Lender, the Agent shall promptly pay to
such Lender such Lender's Pro Rata Share of such payment from the Borrowers.
Each such payment shall be made by the Agent on the next Settlement Date.
(iii) Documentation. Upon the request of any
Lender, the Agent shall furnish to such Lender copies of any Letter of Credit,
Credit Support for any Letter of Credit, reimbursement agreements executed in
connection therewith, applications for any Letter of Credit, and such other
documentation as may reasonably be requested by such Lender.
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(iv) Obligations Irrevocable. The obligations of
each Lender to make payments to the Agent with respect to any Letter of Credit
or with respect to their participation therein or with respect to any Credit
Support for any Letter of Credit or with respect to the Revolving Loans made as
a result of a drawing under a Letter of Credit and the obligations of the
Borrowers for whose account the Letter of Credit or Credit Support was issued to
make payments to the Agent, for the account of the Lenders, shall be irrevocable
and shall not be subject to any qualification or exception whatsoever, including
any of the following circumstances:
(1) any lack of validity or enforceability of
this Agreement or any of the other Loan Documents;
(2) the existence of any claim, setoff, defense
or other right which any Borrower may have at any time against a beneficiary
named in a Letter of Credit or any transferee of any Letter of Credit (or any
Person for whom any such transferee may be acting), any Lender, the Agent, the
issuer of such Letter of Credit, or any other Person, whether in connection with
this Agreement, any Letter of Credit, the transactions contemplated herein or
any unrelated transactions (including any underlying transactions between any
Borrower or any other Person and the beneficiary named in any Letter of Credit);
(3) any draft, certificate or any other document
presented under the Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(4) the surrender or impairment of any security
for the performance or observance of any of the terms of any of the Loan
Documents;
(5) the occurrence of any Default or Event of
Default; or
(6) the failure of any Borrower to satisfy the
applicable conditions precedent set forth in Article 8.
(c) Recovery or Avoidance of Payments; Refund of Payments
In Error. In the event any payment by or on behalf of any Borrower received by
the Agent with respect to any Letter of Credit or Credit Support provided for
any Letter of Credit and distributed by the Agent to the Lenders on account of
their respective participations therein is thereafter set aside, avoided or
recovered from the Agent in connection with any receivership, liquidation or
bankruptcy proceeding, the Lenders shall, upon demand by the Agent, pay to the
Agent their respective Pro Rata Shares of such amount set aside, avoided or
recovered, together with interest at the rate required to be paid by the Agent
upon the amount required to be repaid by it. Unless the Agent receives notice
from the Funds Administrator prior to the date on which any payment is due to
the Lenders that the Borrowers will not make such payment in full as and when
required, the Agent may assume that the Borrowers have made such payment in full
to the Agent on such date in immediately available funds and the Agent may (but
shall not be so required), in reliance upon such assumption, distribute to each
Lender on such due date an amount equal to the amount then due such Lender. If
and to the extent the Borrowers have not made such payment in full to the Agent,
each Lender shall repay to the Agent on demand such amount
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distributed to such Lender, together with interest thereon at the Federal Funds
Rate for each day from the date such amount is distributed to such Lender until
the date repaid.
(d) Indemnification by Lenders. To the extent not
reimbursed by the Borrowers and without limiting the obligations of the
Borrowers hereunder, the Lenders agree to indemnify the Letter of Credit Issuer
ratably in accordance with their respective Pro Rata Shares, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including attorneys' fees) or disbursements of any kind and
nature whatsoever that may be imposed on, incurred by or asserted against the
Letter of Credit Issuer in any way relating to or arising out of any Letter of
Credit or the transactions contemplated thereby or any action taken or omitted
by the Letter of Credit Issuer under any Letter of Credit or any Loan Document
in connection therewith; provided that no Lender shall be liable for any of the
foregoing to the extent it arises from the gross negligence or willful
misconduct of the Person to be indemnified. Without limitation of the foregoing,
each Lender agrees to reimburse the Letter of Credit Issuer promptly upon demand
for its Pro Rata Share of any costs or expenses payable by the Borrowers to the
Letter of Credit Issuer, to the extent that the Letter of Credit Issuer is not
promptly reimbursed for such costs and expenses by the Borrowers. The agreement
contained in this Section shall survive payment in full of all other
Obligations.
12.17 Concerning the Collateral and the Related Loan Documents. Each
Lender authorizes and directs the Agent to enter into the other Loan Documents,
for the ratable benefit and obligation of the Agent and the Lenders. Each Lender
agrees that any action taken by the Agent, Majority Lenders or Required Lenders,
as applicable, in accordance with the terms of this Agreement or the other Loan
Documents, and the exercise by the Agent, the Majority Lenders, or the Required
Lenders, as applicable, of their respective powers set forth therein or herein,
together with such other powers that are reasonably incidental thereto, shall be
binding upon all of the Lenders. The Lenders acknowledge that the Revolving
Loans, Agent Advances, Non-Ratable Loans, Hedge Agreements, Bank Products and
all interest, fees and expenses hereunder constitute one Debt, secured pari
passu by all of the Collateral.
12.18 Field Audit and Examination Reports; Disclaimer by Lenders. By
signing this Agreement, each Lender:
(a) is deemed to have requested that the Agent furnish
such Lender, promptly after it becomes available, a copy of each field
audit or examination report (each a "Report" and collectively,
"Reports") prepared by or on behalf of the Agent;
(b) expressly agrees and acknowledges that neither the
Bank nor the Agent (i) makes any representation or warranty as to the
accuracy of any Report, or (ii) shall be liable for any information
contained in any Report;
(c) expressly agrees and acknowledges that the Reports
are not comprehensive audits or examinations, that the Agent or the
Bank or other party performing any audit or examination will inspect
only specific information regarding any Borrower and will rely
significantly upon the Borrowers' books and records, as well as on
representations of the Borrowers' personnel;
61
(d) agrees to keep all Reports confidential and strictly
for its internal use, and not to distribute except to its participants,
or use any Report in any other manner; and
(e) without limiting the generality of any other
indemnification provision contained in this Agreement, agrees: (i) to
hold the Agent and any such other Lender preparing a Report harmless
from any action the indemnifying Lender may take or conclusion the
indemnifying Lender may reach or draw from any Report in connection
with any loans or other credit accommodations that the indemnifying
Lender has made or may make to any Borrower, or the indemnifying
Lender's participation in, or the indemnifying Lender's purchase of, a
loan or loans of any Borrower; and (ii) to pay and protect, and
indemnify, defend and hold the Agent and any such other Lender
preparing a Report harmless from and against, the claims, actions,
proceedings, damages, costs, expenses and other amounts (including
Attorney Costs) incurred by the Agent and any such other Lender
preparing a Report as the direct or indirect result of any third
parties who might obtain all or part of any Report through the
indemnifying Lender.
12.19 Relation Among Lenders. The Lenders are not partners or
co-venturers, and no Lender shall be liable for the acts or omissions of, or
(except as otherwise set forth herein in case of the Agent) authorized to act
for, any other Lender.
12.20 Syndication Agent. No Lender identified on the facing page or
signature pages of this Agreement as a "Syndication Agent" shall have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than those applicable to all Lenders as such. Without limiting the foregoing,
none of the Lenders so identified as a "Syndication Agent" shall have or be
deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders so
identified in deciding to enter into this Agreement or in taking or not taking
action hereunder.
ARTICLE 13
MISCELLANEOUS
13.1 No Waivers; Cumulative Remedies. No failure by the Agent or
any Lender to exercise any right, remedy, or option under this Agreement or any
present or future supplement thereto, or in any other agreement between or among
any Borrower and the Agent and/or any Lender, or delay by the Agent or any
Lender in exercising the same, will operate as a waiver thereof. No waiver by
the Agent or any Lender will be effective unless it is in writing, and then only
to the extent specifically stated. No waiver by the Agent or the Lenders on any
occasion shall affect or diminish the Agent's and each Lender's rights
thereafter to require strict performance by the Borrowers of any provision of
this Agreement. The Agent and the Lenders may proceed directly to collect the
Obligations without any prior recourse to the Collateral. The Agent's and each
Lender's rights under this Agreement will be cumulative and not exclusive of any
other right or remedy which the Agent or any Lender may have.
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13.2 Severability. The illegality or unenforceability of any
provision of this Agreement or any Loan Document or any instrument or agreement
required hereunder shall not in any way affect or impair the legality or
enforceability of the remaining provisions of this Agreement or any instrument
or agreement required hereunder.
13.3 Governing Law; Choice of Forum; Service of Process.
(a) THIS AGREEMENT SHALL BE INTERPRETED AND THE RIGHTS
AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE INTERNAL
LAWS (AS OPPOSED TO THE CONFLICT OF LAWS PROVISIONS PROVIDED THAT PERFECTION
ISSUES WITH RESPECT TO ARTICLE 9 OF THE UCC MAY GIVE EFFECT TO APPLICABLE CHOICE
OR CONFLICT OF LAW RULES SET FORTH IN ARTICLE 9 OF THE UCC) OF THE STATE OF
NORTH CAROLINA; PROVIDED THAT THE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS
ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF NORTH CAROLINA OR OF THE UNITED STATES OF AMERICA LOCATED IN THE WESTERN
DISTRICT OF NORTH CAROLINA, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
EACH OF THE BORROWERS, THE AGENT AND THE LENDERS CONSENTS, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH
OF THE BORROWERS, THE AGENT AND THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION
OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO. NOTWITHSTANDING THE FOREGOING: (1) THE AGENT AND THE LENDERS
SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST ANY BORROWER OR
ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION THE AGENT OR THE LENDERS
DEEM NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR OTHER
SECURITY FOR THE OBLIGATIONS AND (2) EACH OF THE PARTIES HERETO ACKNOWLEDGES
THAT ANY APPEALS FROM THE COURTS DESCRIBED IN THE IMMEDIATELY PRECEDING SENTENCE
MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE THOSE JURISDICTIONS.
(c) EACH BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY
AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE
MADE BY REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO SUCH BORROWER AT
ITS ADDRESS SET FORTH IN SECTION 13.8 AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED IN THE U.S.
MAILS POSTAGE PREPAID. NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF AGENT
OR THE LENDERS TO SERVE LEGAL PROCESS BY ANY OTHER MANNER PERMITTED BY LAW.
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13.4 WAIVER OF JURY TRIAL. EACH BORROWER, THE LENDERS AND THE AGENT
EACH IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT,
THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN
ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE
PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR
ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.
EACH BORROWER, THE LENDERS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE
OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE
FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY
JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR
OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION
HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
13.5 Survival of Representations and Warranties. All of the
Borrowers' respective representations and warranties contained in this Agreement
shall survive the execution, delivery, and acceptance thereof by the parties,
notwithstanding any investigation by the Agent or the Lenders or their
respective agents.
13.6 Other Security and Guaranties. The Agent, may, without notice
or demand and without affecting the Borrowers' obligations hereunder, from time
to time: (a) take from any Person and hold collateral (other than the
Collateral) for the payment of all or any part of the Obligations and exchange,
enforce or release such collateral or any part thereof; and (b) accept and hold
any endorsement or guaranty of payment of all or any part of the Obligations and
release or substitute any such endorser or guarantor, or any Person who has
given any Lien in any other collateral as security for the payment of all or any
part of the Obligations, or any other Person in any way obligated to pay all or
any part of the Obligations.
13.7 Fees and Expenses. The Borrowers agree to pay to the Agent,
for its benefit, on demand, all costs and expenses that Agent pays or incurs in
connection with the negotiation, preparation, syndication, consummation,
administration, enforcement, and termination of this Agreement or any of the
other Loan Documents, including: (a) Attorney Costs; (b) costs and expenses
(including attorneys' and paralegals' fees and disbursements) for any amendment,
supplement, waiver, consent, or subsequent closing in connection with the Loan
Documents and the transactions contemplated thereby; (c) costs and expenses of
lien and title searches and title insurance; (d) taxes, fees and other charges
for recording the Mortgages, filing financing statements and continuations, and
other actions to perfect, protect, and continue the Agent's Liens (including
costs and expenses paid or incurred by the Agent in connection with the
consummation of Agreement); (e) sums paid or incurred to pay any amount or take
any action required of any Borrower under the Loan Documents that such Borrower
fails to pay or take; (f) costs of appraisals, inspections, and verifications of
the Collateral, including travel,
64
lodging, and meals for inspections of the Collateral and the Borrowers'
respective operations by the Agent plus the Agent's then customary charge for
field examinations and audits and the preparation of reports thereof (such
charge is currently $750 per day (or portion thereof) for each Person retained
or employed by the Agent with respect to each field examination or audit); and
(g) costs and expenses of forwarding loan proceeds, collecting checks and other
items of payment, and establishing and maintaining Depository Accounts and lock
boxes, and costs and expenses of preserving and protecting the Collateral. In
addition, the Borrowers agree to pay costs and expenses incurred by the Agent
(including Attorneys' Costs) to the Agent, for its benefit, on demand, and to
the other Lenders for their benefit, on demand, and all reasonable fees,
expenses and disbursements incurred by such other Lenders for one law firm
retained by such other Lenders, in each case, paid or incurred to obtain payment
of the Obligations, enforce the Agent's Liens, sell or otherwise realize upon
the Collateral, and otherwise enforce the provisions of the Loan Documents, or
to defend any claims made or threatened against the Agent or any Lender arising
out of the transactions contemplated hereby (including preparations for and
consultations concerning any such matters). The foregoing shall not be construed
to limit any other provisions of the Loan Documents regarding costs and expenses
to be paid by the Borrowers. All of the foregoing costs and expenses shall be
charged to the Borrower's Loan Accounts as Revolving Loans as described in
Section 3.7.
13.8 Notices. Except as otherwise provided herein, all notices,
demands and requests that any party is required or elects to give to any other
shall be in writing, or by a telecommunications device capable of creating a
written record, and any such notice shall become effective (a) upon personal
delivery thereof, including, but not limited to, delivery by overnight mail and
courier service, (b) four (4) days after it shall have been mailed by United
States mail, first class, certified or registered, with postage prepaid, or (c)
in the case of notice by such a telecommunications device, when properly
transmitted, in each case addressed to the party to be notified as follows:
If to the Agent or to the Bank:
Bank of America, N.A.
000 Xxxxxxxxx Xxxxxx
0xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Love
Telecopy No.: 000-000-0000
If to any Borrower or the Funds Administrator:
Coltec Industries Inc
c/o EnPro Industries, Inc.
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Treasurer
Telecopy No.: 000-000-0000
65
or to such other address as each party may designate for itself by like notice.
Failure or delay in delivering copies of any notice, demand, request, consent,
approval, declaration or other communication to the persons designated above to
receive copies shall not adversely affect the effectiveness of such notice,
demand, request, consent, approval, declaration or other communication.
13.9 Waiver of Notices. Unless otherwise expressly provided herein,
the each Borrower waives presentment, and notice of demand or dishonor and
protest as to any instrument, notice of intent to accelerate the Obligations and
notice of acceleration of the Obligations, as well as any and all other notices
to which it might otherwise be entitled. No notice to or demand on any Borrower
which the Agent or any Lender may elect to give shall entitle such Borrower or
any other Borrower to any or further notice or demand in the same, similar or
other circumstances.
13.10 Binding Effect. The provisions of this Agreement shall be
binding upon and inure to the benefit of the respective representatives,
successors, and assigns of the parties hereto; provided, however, that no
interest herein may be assigned by any Borrower without prior written consent of
the Agent and each Lender. The rights and benefits of the Agent and the Lenders
hereunder shall, if such Persons so agree, inure to any party acquiring any
interest in the Obligations or any part thereof.
13.11 Indemnity of the Agent and the Lenders by the Borrowers.
(a) Each of the Borrowers agrees to defend, indemnify and
hold the Agent-Related Persons, and each Lender and each of its respective
officers, directors, employees, counsel, representatives, Affiliates, agents and
attorneys-in-fact (each, an "Indemnified Person") harmless from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses and disbursements (including Attorney
Costs) of any kind or nature whatsoever which may at any time (including at any
time following repayment of the Loans and the termination, resignation or
replacement of the Agent or replacement of any Lender) be imposed on, incurred
by or asserted against any such Person in any way relating to or arising out of
this Agreement or any document contemplated by or referred to herein, or the
transactions contemplated hereby, or any action taken or omitted by any such
Person under or in connection with any of the foregoing, including with respect
to any investigation, litigation or proceeding (including any Insolvency
Proceeding or appellate proceeding) related to or arising out of this Agreement,
any other Loan Document, or the Loans or the use of the proceeds thereof,
whether or not any Indemnified Person is a party thereto (all the foregoing,
collectively, the "Indemnified Liabilities"); provided, that no Borrower shall
have any obligation hereunder to any Indemnified Person with respect to
Indemnified Liabilities resulting primarily from the gross negligence or willful
misconduct of such Indemnified Person. The agreements in this Section shall
survive payment of all other Obligations.
(b) Each of the Borrowers agrees to indemnify, defend and
hold harmless the Agent and the Lenders (and their respective Affiliates) from
any loss or liability directly or indirectly arising out of the use, generation,
manufacture, production, storage, release, threatened release, discharge,
disposal or presence of a hazardous substance relating to any Borrower's
operations, business or property. This indemnity will apply whether the
hazardous
66
substance is on, under or about any Borrower's property or operations or
property leased to any Borrower. The indemnity includes but is not limited to
Attorneys Costs. The indemnity extends to the Agent and the Lenders, their
parents, affiliates, subsidiaries and all of their directors, officers,
employees, agents, successors, attorneys and assigns. "Hazardous substances"
means any substance, material or waste that is or becomes designated or
regulated as "toxic," "hazardous," "pollutant," or "contaminant" or a similar
designation or regulation under any federal, state or local law (whether under
common law, statute, regulation or otherwise) or judicial or administrative
interpretation of such, including petroleum or natural gas. This indemnity will
survive repayment of all other Obligations.
13.12 Limitation of Liability. EXCEPT AS EXPRESSLY PROVIDED HEREIN,
NO CLAIM MAY BE MADE BY ANY BORROWER, ANY LENDER OR OTHER PERSON AGAINST THE
AGENT, ANY LENDER, ANY BORROWER, OR THE AFFILIATES, DIRECTORS, OFFICERS,
EMPLOYEES, COUNSEL, REPRESENTATIVES, AGENTS OR ATTORNEYS-IN-FACT OF ANY OF THEM
FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT OF ANY
CLAIM FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY ARISING OUT OF OR
RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH, AND
EACH BORROWER, THE AGENT, AND EACH LENDER HEREBY WAIVES, RELEASES AND AGREES NOT
TO XXX UPON ANY CLAIM FOR SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR
NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.
13.13 Final Agreement. This Agreement and the other Loan Documents
are intended by the Borrowers, the Agent and the Lenders to be the final,
complete, and exclusive expression of the agreement between them. This
Agreement, the Fee Letter and the other Loan Documents supersede any and all
prior oral or written agreements relating to the subject matter hereof. No
modification, rescission, waiver, release, or amendment of any provision of this
Agreement or any other Loan Document shall be made, except by a written
agreement signed by the Borrowers and a duly authorized officer of each of the
Agent and the requisite Lenders.
13.14 Counterparts. This Agreement may be executed in any number of
counterparts, and by the Agent, each Lender and the Borrowers in separate
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same agreement; signature pages may be detached
from multiple separate counterparts and attached to a single counterpart so that
all signature pages are physically attached to the same document.
13.15 Captions. The captions contained in this Agreement are for
convenience of reference only, are without substantive meaning and should not be
construed to modify, enlarge, or restrict any provision.
13.16 Right of Setoff. In addition to any rights and remedies of the
Lenders provided by law, if an Event of Default exists or the Loans have been
accelerated, each Lender is authorized at any time and from time to time,
without prior notice to any Borrower, any such notice being waived by the
Borrowers to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held by,
67
and other indebtedness at any time owing by, such Lender or any Affiliate of
such Lender to or for the credit or the account of any Borrower against any and
all Obligations owing to such Lender, now or hereafter existing, irrespective of
whether or not the Agent or such Lender shall have made demand under this
Agreement or any Loan Document and although such Obligations may be contingent
or unmatured. Each Lender agrees promptly to notify the Funds Administrator and
the Agent after any such set-off and application made by such Lender; provided,
however, that the failure to give such notice shall not affect the validity of
such set-off and application. NOTWITHSTANDING THE FOREGOING, NO LENDER SHALL
EXERCISE ANY RIGHT OF SET-OFF, BANKER'S LIEN, OR THE LIKE AGAINST ANY DEPOSIT
ACCOUNT OR PROPERTY OF ANY BORROWER OR SUBSIDIARY GUARANTOR HELD OR MAINTAINED
BY SUCH LENDER WITHOUT THE PRIOR WRITTEN UNANIMOUS CONSENT OF THE LENDERS.
13.17 Confidentiality.
(a) Each of the Borrowers hereby consents that the Agent
and each Lender may issue and disseminate to the public general information
describing the credit accommodation entered into pursuant to this Agreement,
including the names and addresses of the Borrowers and a general description of
the Borrowers' businesses and may use the Borrowers' names in advertising and
other promotional material.
(b) Each Lender severally agrees to take normal and
reasonable precautions and exercise due care to maintain the confidentiality of
all information identified as "confidential" or "secret" by the Borrowers and
provided to the Agent or such Lender by or on behalf of the Borrowers, under
this Agreement or any other Loan Document, except to the extent that such
information (i) was or becomes generally available to the public other than as a
result of disclosure by the Agent or such Lender, or (ii) was or becomes
available on a nonconfidential basis from a source other than the Borrowers,
provided that such source is not bound by a confidentiality agreement with the
Borrowers known to the Agent or such Lender; provided, however, that the Agent
and any Lender may disclose such information (1) at the request or pursuant to
any requirement of any Governmental Authority to which the Agent or such Lender
is subject or in connection with an examination of the Agent or such Lender by
any such Governmental Authority; (2) pursuant to subpoena or other court
process; (3) when required to do so in accordance with the provisions of any
applicable Requirement of Law; (4) to the extent reasonably required in
connection with any litigation or proceeding (including, but not limited to, any
bankruptcy proceeding) to which the Agent, any Lender or their respective
Affiliates may be party; (5) to the extent reasonably required in connection
with the exercise of any remedy hereunder or under any other Loan Document; (6)
to the Agent's or such Lender's independent auditors, accountants, attorneys and
other professional advisors; (7) to any prospective Participant or Assignee
under any Assignment and Acceptance, actual or potential, provided that such
prospective Participant or Assignee agrees to keep such information confidential
to the same extent required of the Agent and the Lenders hereunder; (8) as
expressly permitted under the terms of any other document or agreement regarding
confidentiality to which the applicable Borrower is party or is deemed party
with the Agent or such Lender, and (9) to its Affiliates.
13.18 Conflicts with Other Loan Documents. Unless otherwise
expressly provided in this Agreement (or in another Loan Document by specific
reference to the applicable
68
provision contained in this Agreement), if any provision contained in this
Agreement conflicts with any provision of any other Loan Document, the provision
contained in this Agreement shall govern and control.
13.19 Joint and Several Liability of Borrowers.
(a) Each of the Borrowers shall be jointly and severally
liable hereunder and under each of the other Loan Documents with respect to all
Obligations, regardless of which of the Borrowers actually receives the proceeds
of the Loans or the benefit of any other extensions of credit hereunder, or the
manner in which the Funds Administrator, the Borrowers, the Agent, the Lenders
or any of the Letter of Credit Issuers account therefore in their respective
books and records. In furtherance and not in limitation of the foregoing, (i)
each Borrower's obligations and liabilities with respect to proceeds of Loans
which it receives or Letters of Credit issued for its account, and related fees,
costs and expenses, and (ii) each Borrower's obligations and liabilities arising
as a result of the joint and several liability of the Borrowers hereunder with
respect to proceeds of Loans received by, or Letters of Credit issued for the
account of, any of the other Borrowers, together with the related fees, costs
and expenses, shall be separate and distinct obligations, both of which are
primary obligations of such Borrower. Neither the joint and several liability
of, nor the Liens granted to the Agent under the Collateral Documents by, any of
the Borrowers shall be impaired or released by (A) the failure of the Agent, any
Lender or any Letter of Credit Issuer, any successors or assigns thereof, or any
holder of any of the Obligations to assert any claim or demand or to exercise or
enforce any right, power or remedy against the Funds Administrator, any
Borrower, any Subsidiary of any Borrower, any other Person, the Collateral or
otherwise; (B) any extension or renewal for any period (whether or not longer
than the original period) or exchange of any of the Obligations or the release
or compromise of any obligation of any nature of any Person with respect
thereto; (C) the surrender, release or exchange of all or any part of any
property (including without limitation the Collateral) securing payment,
performance and/or observance of any of the Obligations or the compromise or
extension or renewal for any period (whether or not longer than the original
period) of any obligations of any nature of any Person with respect to any such
property; (D) any action or inaction on the part of the Agent, any Lender or any
Letter of Credit Issuer, or any other event or condition with respect to any
other Borrower, including any such action or inaction or other event or
condition, which might otherwise constitute a defense available to, or a
discharge of, such Borrower, or a guarantor or surety of or for any or all of
the Obligations; and (E) any other act, matter or thing (other than payment or
performance of the Obligations) which would or might, in the absence of this
provision, operate to release, discharge or otherwise prejudicially affect the
obligations of such Borrower or any other Borrower.
(b) Notwithstanding any provision to the contrary
contained herein or in any other of the Loan Documents, to the extent the joint
obligations of a Borrower shall be adjudicated to be invalid or unenforceable
for any reason (including, without limitation, because of Section 548 of Chapter
11 of the Bankruptcy Code or under any applicable state Uniform Fraudulent
Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or common
law) then the Obligations of each Borrower hereunder shall be limited to the
maximum amount that is permissible under applicable law (whether federal or
state and including, without limitation, the federal Bankruptcy Code).
69
(c) To the extent that any Borrower shall make a payment
under this Section 13.19 of all or any of the Obligations (other than Loans made
to that Borrower for which it is primarily liable) (a "Guarantor Payment") that,
taking into account all other Guarantor Payments then previously or concurrently
made by any other Borrower, exceeds the amount that such Borrower would
otherwise have paid if each Borrower had paid the aggregate Obligations
satisfied by such Guarantor Payment in the same proportion that such Borrower's
"Allocable Amount" (as defined below) (as determined immediately prior to such
Guarantor Payment) bore to the aggregate Allocable Amounts of each of the
Borrowers as determined immediately prior to the making of such Guarantor
Payment, then, following indefeasible payment in full in cash of the Obligations
and termination of the Commitments, such Borrower shall be entitled to receive
contribution and indemnification payments from, and be reimbursed by, each other
Borrower for the amount of such excess, pro rata based upon their respective
Allocable Amounts in effect immediately prior to such Guarantor Payment. As of
any date of determination, the "Allocable Amount" of any Borrower shall be equal
to the maximum amount of the claim that could then be recovered from such
Borrower under this Section 13.19 without rendering such claim voidable or
avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or under any
applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance
Act or similar statute or common law. This Section 13.19(c) is intended only to
define the relative rights of Borrowers and nothing set forth in this Section
13.19(c) is intended to or shall impair the obligations of Borrowers, jointly
and severally, to pay any amounts as and when the same shall become due and
payable in accordance with the terms of this Credit Agreement, including Section
13.19(a). Nothing contained in this Section 13.19(c) shall limit the liability
of any Borrower to pay the Loans made directly or indirectly to that Borrower
and accrued interest, fees and expenses with respect thereto for which such
Borrower shall be primarily liable. The parties hereto acknowledge that the
rights of contribution and indemnification hereunder shall constitute assets of
each applicable Borrower to which such contribution and indemnification is
owing. The rights of the indemnifying Borrowers against other Persons under this
Section 13.19(c) shall be exercisable upon the full and indefeasible payment of
the Obligations and the termination of the Commitments.
(d) The liability of Borrowers under this Section 13.19
is in addition to and shall be cumulative with all liabilities of each Borrower
to Agent and Lenders under this Agreement and the other Loan Documents to which
such Borrower is a party, without any limitation as to amount.
13.20 Appointment and Authorization of Funds Administrator.
(a) Each Borrower hereby designates, appoints, authorizes
and empowers Coltec as its agent to act as specified in the capacity of Funds
Administrator under this Agreement and each of the other Loan Documents and
Coltec hereby acknowledges such designation, authorization and empowerment, and
accepts such appointment. Each Borrower hereby irrevocably authorizes and
directs the Funds Administrator to take such action on its behalf under the
respective provisions of this Agreement and the other Loan Documents, and any
other instruments, documents and agreements referred to herein or therein, and
to exercise such powers and to perform such duties hereunder and thereunder as
are specifically delegated to or required of the Funds Administrator by the
respective terms and provisions hereof and thereof,
70
and such other powers as are reasonably incidental thereto, including, without
limitation, to take the following actions for and on such Borrower's behalf:
(i) to submit on behalf of each Borrower Notices
of Borrowing, Notices of Conversion and Notices of
Continuation to Agent in accordance with the provisions of
this Agreement, each such notice to be submitted by the Funds
Administrator to Agent as soon as practicable after its
receipt of a request to do so from a Borrower; and
(ii) to submit on behalf of each Borrower
requests for the issuance of Letters of Credit in accordance
with the provisions of this Agreement, each such request for
the issuance of a Letter of Credit to be submitted by the
Funds Administrator as soon as practicable after its receipt
of a request to do so from any Borrower.
(b) The Funds Administrator is further authorized and
directed by each of the Borrowers to take all such actions on behalf of such
Borrower necessary to exercise the specific powers granted in clauses (i) and
(ii) above and to perform such other duties hereunder and under the other Loan
Documents, and deliver such documents as delegated to or required of the Funds
Administrator by the terms hereof or thereof. Agent and each Lender may regard
any notice or other communication pursuant to any Loan Documents from the Funds
Administrator as a notice or communication from all Borrowers, and may give any
notice or communication required or permitted to be given to any Borrower or
Borrowers hereunder to the Funds Administrator on behalf of such Borrower or
Borrowers. Each Borrower agrees that each notice, election, representation and
warranty, covenant, agreement and undertaking made on its behalf by the Funds
Administrator shall be deemed for all purposes to have been made by such
Borrower and shall be binding upon and enforceable against such Borrower to the
same extent as if the same had been made directly by such Borrower.
(c) The Funds Administrator may perform any of its duties
hereunder or under any of the other Loan Documents by or through its agents or
employees.
13.21 Allocation of Loans and Expenses.
(a) In order to efficiently fund and operate their
respective businesses and minimize the number of Borrowings which they
will make under this Agreement and thereby reduce the administrative
costs and record keeping required in connection therewith, including
the necessity to enter into and maintain separately identified and
monitored borrowing facilities, the Borrowers have requested, and the
Agent and the Lenders have agreed that, subject to Section 13.19, (i)
all Loans will be advanced to and for the account of the Borrowers on a
joint and several basis to the applicable Designated Account and (ii)
all Letters of Credit will be issued pursuant to an letter of credit
application executed by the Funds Administrator on behalf and for the
account of the Borrower or Borrowers specified by the Funds
Administrator in such application. Each Borrower hereby acknowledges
that it will be receiving a direct benefit from each Loan made and each
Letter of Credit issued pursuant to this Agreement.
71
(b) In order to track more precisely the respective
recipients of the proceeds of each Loan and the Borrower or Borrowers
receiving the primary benefit from the issuance of each Letter of
Credit, and to assist the Funds Administrator, the Borrowers, the Agent
and the Lenders in administering the Loans and the Letters of Credit,
each Borrower has agreed with the Agent and the Lenders to cause the
Funds Administrator to establish and maintain, and the Funds
Administrator hereby agrees to establish and maintain, accounts and
other appropriate business records with respect to each Borrower (each
Borrower's "ALLOCATION ACCOUNT") in which the Funds Administrator shall
record its good faith allocation to each of the Borrowers of (W) the
proceeds, if any, of each Loan received by or for the account of such
Borrower, (X) payments made to the Agent on account of the Obligations
of such Borrower, whether from collection of proceeds of Collateral or
otherwise, (Y) the aggregate face amount of all outstanding Letters of
Credit (or an appropriate allocation thereof, if the Letters of Credit
are issued for the direct benefit of more than one Borrower) issued for
the benefit of such Borrower, and (Z) all previously unallocated
Expenses.
At the request of the Agent, as soon as available, but not later than
fifteen (15) Business Days after the last Business Day of each month ending
after the Closing Date, the Funds Administrator shall deliver to the Agent and
each Borrower a report prepared by or under the supervision of the chief
financial officer of the Funds Administrator, and certified by such officer,
setting forth with respect to each Borrower the balance of the Allocation
Account of such Borrower as of the end of, and all activity occurring in such
Allocation Account during, such month. Absent manifest error, each such monthly
statement shall be final, conclusive and binding on the respective Borrowers.
13.22 Designated Senior Debt.
The Obligations incurred pursuant to this Agreement shall constitute
"Designated Senior Debt" as such term is defined in the Indenture governing the
subordinated debentures issued as part of the TIDES, and Coltec shall notify the
Indenture Trustee thereunder of such designation of the Obligations on or prior
to the Closing Date.
13.23 Agreement Effectiveness.
This Agreement shall become effective as of the date first above
written when it has been executed and delivered by each of the parties hereto.
The parties hereto agree that (i) as of its execution of this Agreement, the
Borrowers shall be deemed to only make the representations and warranties set
forth in Sections 6.1 (with respect to this Agreement, the Security Agreement
and the Fee Letter) and 6.3(a) and (ii) for the period from the date of such
execution until the Closing Date, the Borrowers shall not be obligated to comply
with the covenants set forth in Article 7.
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IN WITNESS WHEREOF, the parties have entered into this Agreement on the
date first above written.
"BORROWERS"
COLTEC INDUSTRIES INC
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Title: Vice President and Treasurer
COLTEC INDUSTRIAL PRODUCTS LLC
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Title: Vice President and Treasurer
XXXXXXX SEALING TECHNOLOGIES LLC
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Title: President
XXXXXXX BEARINGS LLC
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Title: Vice President and Treasurer
STEMCO LLC
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Title: Vice President and Treasurer
XXXXX TOOL COMPANY INC
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Title: Vice President and Treasurer
S-1
"AGENT"
Bank of America, N.A., as the Agent
By: /s/ Xxxxx X. Love
---------------------------------------
Xxxxx X. Love, Assistant Vice President
"LENDERS"
Bank of America, N.A., as a Lender
By: /s/ Xxxxx X. Love
---------------------------------------
Xxxxx X. Love, Assistant Vice President
S-2
CITICORP USA, INC., as Syndication
Agent and as a Lender
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Xxxxx X. Xxxxxx, Vice President
S-3
ANNEX A
TO
CREDIT AGREEMENT
DEFINITIONS
Capitalized terms used in the Loan Documents shall have the
following respective meanings (unless otherwise defined therein), and all
section references in the following definitions shall refer to sections of the
Agreement:
"Accounts" means, with respect to any Borrower, all of such
Borrower's now owned or hereafter acquired or arising accounts, as defined in
the UCC, including any rights to payment for the sale or lease of goods or
rendition of services, whether or not they have been earned by performance.
"Account Debtor" means each Person obligated in any way on or
in connection with an Account, Chattel Paper or General Intangibles (including a
payment intangible).
"ACH Transactions" means any cash management or related
services including the automatic clearing house transfer of funds by the Bank
for the account of the Borrowers pursuant to agreement or overdrafts.
"Adjusted Net Earnings from Operations" means, with respect to
the Parent and its consolidated Subsidiaries for any fiscal period, net income
after provision for income taxes for such fiscal period, as determined in
accordance with GAAP and reported on the Financial Statements for such period,
excluding any and all of the following included in such net income: (a) gain or
loss arising from the sale of any capital assets; (b) gain or non-cash loss
arising from any write-up or write down in the book value of any asset; (c)
earnings or losses of any Person, substantially all the assets of which have
been acquired by the Parent or any consolidated Subsidiary in any manner, to the
extent realized by such other Person prior to the date of acquisition; (d)
earnings of any Person (other than a consolidated Subsidiary) in which the
Parent or any consolidated Subsidiary has an ownership interest unless (and only
to the extent) such earnings shall actually have been received by the Parent or
any consolidated Subsidiary in the form of cash distributions; (e) earnings or
losses of any Person to which assets of the Parent or any consolidated
Subsidiary shall have been sold, transferred or disposed of, or into which the
Parent or any Subsidiary shall have been merged, or which has been a party with
the Parent or any Subsidiary to any consolidation or other form of
reorganization, prior to the date of such transaction; (f) non-cash gain or
non-cash loss arising from the acquisition of debt or equity securities of the
Parent or any of its Subsidiaries or from cancellation or forgiveness of Debt;
(g) non-cash gain or non-cash loss arising from extraordinary items, as
determined in accordance with GAAP, or from any other non-recurring transaction
and (h) non-cash gain or non-cash loss arising from or relating to Hedge
Agreements. Notwithstanding the foregoing, the net income (subject to the
adjustments) of Foreign Subsidiaries of the Parent ("Foreign Sub Net Income")
shall not be included in Adjusted Net Earnings from Operations for any fiscal
period to the extent that Foreign Sub Net Income for such fiscal period exceeds
forty five percent (45%) of Adjusted Net Earnings from Operations, except to the
extent that Foreign Sub Net Income above such percentage reflects earnings
actually received by the Parent or any Domestic Subsidiary in the form of cash
distributions.
A-1
"Affiliate" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person or which owns, directly or indirectly, five percent
(5%) or more of the outstanding equity interest of such Person. A Person shall
be deemed to control another Person if the controlling Person possesses,
directly or indirectly, the power to direct or cause the direction of the
management and policies of the other Person, whether through the ownership of
voting securities, by contract, or otherwise.
"Agent" means the Bank, solely in its capacity as agent for
the Lenders, and any successor agent.
"Agent Account" has the meaning specified in Section 3.3(a).
"Agent Advances" has the meaning specified in Section 1.2(i).
"Agent's Liens" means the Liens in the Collateral granted to
the Agent, for the benefit of the Lenders, Bank, and Agent pursuant to this
Agreement and the other Loan Documents.
"Agent-Related Persons" means the Agent, together with its
Affiliates, and the officers, directors, employees, counsel, representatives,
agents and attorneys-in-fact of the Agent and such Affiliates.
"Aggregate Availability" shall mean, at any time with respect
to the Borrowers, an amount equal to (a) the lesser of (i) the Maximum Revolver
Amount and (ii) the sum of (A) the Xxxxxxx Sealing Accounts and Inventory
Borrowing Base, plus (B) the Excess Collateral Providers Borrowing Base, minus
(b) the Aggregate Revolver Outstandings with respect to all Borrowers, minus (c)
without duplication, Reserves allocated by the Agent to any of the Borrowers.
"Aggregate Revolver Outstandings" means, at any date of
determination, without duplication:
(i) with respect to all of the Borrowers, the
sum of (a) the unpaid balance of Revolving Loans, (b) the aggregate
amount of Pending Revolving Loans, (c) one hundred percent (100%) of
the aggregate undrawn face amount of all outstanding Letters of Credit,
and (d) the aggregate amount of any unpaid reimbursement obligations in
respect of Letters of Credit;
(ii) with respect to Xxxxxxx Sealing, the sum of
(a) the unpaid balance of Revolving Loans allocated to Xxxxxxx Sealing,
(b) the aggregate amount of Pending Revolving Loans to be allocated to
Xxxxxxx Sealing, (c) one hundred percent (100%) of the aggregate
undrawn face amount of all outstanding Letters of Credit issued for the
account of Xxxxxxx Sealing, and (d) the aggregate amount of any unpaid
reimbursement obligations in respect of Letters of Credit issued for
the account of Xxxxxxx Sealing; and
A-2
(iii) with respect to the Excess Collateral
Providers, the sum of (a) the unpaid balance of Revolving Loans
allocated to the Excess Collateral Providers, (b) the aggregate amount
of Pending Revolving Loans to be allocated to the Excess Collateral
Providers, (c) one hundred percent (100%) of the aggregate undrawn face
amount of all outstanding Letters of Credit issued for the account of
any Excess Collateral Provider, and (d) the aggregate amount of any
unpaid reimbursement obligations in respect of Letters of Credit issued
for the account of any Excess Collateral Provider.
"Agreement" means the Credit Agreement to which this Annex A
is attached, as from time to time amended, modified or restated.
"AIG Company" means each of AIU Insurance Co., Granite State,
Insurance Company of Pennsylvania, Lexington, National Union, and American Home.
"Anniversary Date" means each anniversary of the Closing Date.
"Applicable Margin" means
(i) with respect to Base Rate Loans and all other
Obligations under this Agreement or any other Loan
Document (other than LIBOR Rate Loans), 1.5%; and
(ii) with respect to LIBOR Rate Loans, 2.75%.
"Applicable Unused Line Rate" means for any day (i) one
percent (1%) if Facility Usage is less than or equal to 33.3%, (ii)
three-quarters of one percent (0.75%) if Facility Usage is greater than 33.3%
and less than or equal to 66.7% and (iii) one-half percent (0.50%) if Facility
Usage is great than 66.7%.
"Asbestos Insurance Policy" means the insurance policies
maintained by any of the Borrowers or any of their respective Domestic
Subsidiaries with respect to which any such Borrower or Subsidiary is entitled
to (or claims entitlement to) insurance coverage in connection with claims made
against any such Borrower or such Subsidiary (or any of their predecessors) for
asbestos related injury or alleged injury.
"Assignee" has the meaning specified in Section 11.2(a).
"Assignment and Acceptance" has the meaning specified in
Section 11.2(a).
"Attorney Costs" means and includes all reasonable fees,
expenses and disbursements of any law firm or other counsel engaged by the
Agent, the reasonably allocated costs and expenses of internal legal services of
the Agent.
"Availability" means, at any time:
(i) with respect to Xxxxxxx Sealing, (a) the
lesser of (i) the Maximum Revolver Amount or (ii) the Xxxxxxx Sealing
Borrowing Base, minus (b) the Aggregate Revolver Outstandings of
Xxxxxxx Sealing, minus (b) Reserves allocated by the Agent to Xxxxxxx
Sealing, other than Reserves deducted in the calculation of the Xxxxxxx
Sealing Borrowing Base,
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(ii) with respect to any Excess Collateral
Provider, (a) the lesser of (i) the Maximum Revolver Amount and (ii)
the Excess Collateral Providers Borrowing Base, minus (b) the Aggregate
Revolver Outstandings of the Excess Collateral Providers, minus (c)
Reserves allocated by the Agent to the Excess Collateral Providers,
other than Reserves deducted in the calculation of the Excess
Collateral Providers Borrowing Base.
"Bank" means Bank of America, N.A., a national banking
association, or any successor entity thereto.
"Bank Products" means any one or more of the following types
of services or facilities extended to any Borrower by the Bank or any affiliate
of the Bank in reliance on the Bank's agreement to indemnify such affiliate: (i)
credit cards; (ii) ACH Transactions; (iii) cash management, including controlled
disbursement services; and (iv) Hedge Agreements.
"Bank Product Reserves" means all reserves which the Agent
from time to time establishes in its reasonable discretion for the Bank Products
then provided or outstanding.
"Bankruptcy Code" means Title 11 of the United States Code (11
U.S.C. ss.101 et seq.).
"Base Rate" means, for any day, the rate of interest in effect
for such day as publicly announced from time to time by the Bank in Charlotte,
North Carolina as its "prime rate" (the "prime rate" being a rate set by the
Bank based upon various factors including the Bank's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate). Any change in the prime rate announced by the Bank shall take effect at
the opening of business on the day specified in the public announcement of such
change. Each Interest Rate based upon the Base Rate shall be adjusted
simultaneously with any change in the Base Rate.
"Base Rate Loan" means a Revolving Loan during any period in
which it bears interest based on the Base Rate.
"Borrowing" means a borrowing hereunder consisting of
Revolving Loans made on the same day by the Lenders to the Borrowers or by Bank
in the case of a Borrowing funded by Non-Ratable Loans or by the Agent in the
case of a Borrowing consisting of an Agent Advance, or the issuance of Letters
of Credit hereunder.
"Borrowing Base" means, at any time with respect to Xxxxxxx
Sealing the Xxxxxxx Sealing Borrowing Base and (ii) with respect to an Excess
Collateral Provider, the Excess Collateral Providers Borrowing Base. At any time
that Aggregate Availability shall be less than $15,000,000, until such time as
the Agent shall have received an updated Borrowing Base Certificate, all amounts
transferred to the Agent pursuant to the requirement so Section 3.3(b) shall
reduce the applicable Borrowing Base as determined based upon the most recently
delivered Borrowing Base Certificate on a dollar for dollar basis.
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"Borrowing Base Certificate" means a certificate by a
Responsible Officer of each Borrower, substantially in the form of Exhibit A (or
another form acceptable to the Agent) setting forth the calculation of the
Xxxxxxx Sealing Borrowing Base and the Excess Collateral Providers Borrowing
Base, including a calculation of each component thereof, all in such detail as
shall be reasonably satisfactory to the Agent. All calculations of the Xxxxxxx
Sealing Borrowing Base and the Excess Collateral Providers Borrowing Base in
connection with the preparation of any Borrowing Base Certificate shall
originally be made by such applicable Borrower and certified to the Agent;
provided, that the Agent shall have the right to review and adjust, in the
exercise of its reasonable credit judgment, any such calculation (1) to reflect
its reasonable estimate of declines in value of any of the Collateral described
therein, and (2) to the extent that such calculation is not in accordance with
this Agreement.
"Business Day" means (a) any day that is not a Saturday,
Sunday, or a day on which banks in Atlanta, Georgia or Charlotte, North Carolina
are required or permitted to be closed, and (b) with respect to all notices,
determinations, fundings and payments in connection with the LIBOR Rate or LIBOR
Rate Loans, any day that is a Business Day pursuant to clause (a) above and that
is also a day on which trading in Dollars is carried on by and between banks in
the London interbank market.
"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority, or any other law,
rule or regulation, whether or not having the force of law, in each case,
regarding capital adequacy of any bank or of any corporation controlling a bank.
"Capital Expenditures" means all payments due (whether or not
paid during any fiscal period) in respect of the cost of any fixed asset or
improvement, or replacement, substitution, or addition thereto, which has a
useful life of more than one year, including, without limitation, those costs
arising in connection with the direct or indirect acquisition of such asset by
way of increased product or service charges or in connection with a Capital
Lease.
"Capital Lease" means any lease of property by any Person
which, in accordance with GAAP, should be reflected as a capital lease on the
balance sheet of any Borrower or any of its Subsidiaries.
"Capital Security" shall mean, with respect to any Person, (a)
any share of capital stock of or other unit of ownership interest in such Person
and (b) any security convertible into, or any option, warrant or other right to
acquire, any share of capital stock of or other unit of ownership interest in
such Person.
"Change of Control" means one or more of the following events:
(a) less than a majority of the members of
Parent's Board of Directors shall be persons who either (i) were
serving as directors on the Closing Date or (ii) were nominated as
directors and approved by the vote of the majority of the directors who
are either directors referred to in clause (i) above or directors
nominated and approved pursuant to this clause (ii); or
(b) the stockholders of Parent shall approve any
plan or proposal for the liquidation or dissolution of Parent or the
stockholders of any Borrower shall approve any plan for the liquidation
or dissolution of such Borrower; or
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(c) a Person or group of Persons acting in
concert shall, as a result of a tender or exchange offer, open market
purchases, privately negotiated purchases or otherwise, have become the
direct or indirect beneficial owner (within the meaning of Rule 13d-3
under the Securities Exchange Act of 1934, as amended from time to
time) of Capital Securities of Parent representing more than Parent
twenty five per cent (25%) of the combined voting power of the
outstanding voting Capital Securities or other ownership interests for
the election of directors or shall have the right to elect a majority
of the Board of Directors of Parent; or
(d) any Borrower ceases to be a Wholly Owned
Subsidiary of Parent; or
(e) a "Change of Control" or similar event
occurs under the terms of any document or agreement evidencing Debt of
Parent, any Borrower or any of their respective Subsidiaries (other
than the Obligations) having an outstanding principal balance of
$2,000,000 or greater.
"Chattel Paper" means each Borrower's now owned or hereafter
acquired chattel paper, as defined in the UCC, including electronic chattel
paper.
"Closing Date" means the date of the initial extension of
credit pursuant to this Agreement, whether as the making of Loans or the
issuance of any Letter of Credit; provided, that in no event shall any such
initial extension of credit be made after June 15, 2002.
"Code" means the Internal Revenue Code of 1986.
"Collateral" means all of the Borrowers', the Parent's and
each of their respective Subsidiaries' real and personal property and all other
assets of any Person from time to time subject to Agent's Liens securing payment
or performance of the Obligations.
"Commitment" means, at any time with respect to a Lender, the
principal amount set forth beside such Lender's name under the heading
"Commitment" on Schedule 1.2 attached to the Agreement or on the signature page
of the Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of Section 11.2, as such Commitment
may be adjusted from time to time in accordance with the provisions of Section
11.2, and "Commitments" means, collectively, the aggregate amount of the
commitments of all of the Lenders.
"Concentration Account" means (i) Xxxxxxx Concentration
Account and (ii) Coltec Concentration Account, in each case maintained at the
Bank.
"Concentration Account Agreement" has the meaning specified in
Section 3.3(a).
"Contaminant" means any waste, pollutant, hazardous substance,
toxic substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos in any form or condition, polychlorinated biphenyls
("PCBs"), or any constituent of any such substance or waste.
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"Continuation/Conversion Date" means the date on which a Loan
is converted into or continued as a LIBOR Rate Loan.
"Copyright Security Agreement" means any Copyright Security
Agreement executed and delivered by a Borrower or any Subsidiary of any Borrower
to the Agent, for the benefit of the Agent and the Lenders, to evidence and
perfect the Agent's security interest in such Borrower's present and future
copyrights and related licenses and rights.
"Credit Support" has the meaning specified in Section 1.4(a).
"Debt" of any Person means, without duplication, all
liabilities, obligations and indebtedness of such Person to any other Person, of
any kind or nature, now or hereafter owing, arising, due or payable, howsoever
evidenced, created, incurred, acquired or owing, whether primary, secondary,
direct, contingent, fixed or otherwise, consisting of indebtedness for borrowed
money or the deferred purchase price of property, excluding trade payables, but
including (a) with respect to the Borrowers, all Obligations; (b) all
obligations and liabilities of any Person secured by any Lien on such Person's
property, even though such Person shall not have assumed or become liable for
the payment thereof; provided, however, that all such obligations and
liabilities which are limited in recourse to such property shall be included in
Debt only to the extent of the book value of such property as would be shown on
a balance sheet of such Person prepared in accordance with GAAP; (c) all
obligations or liabilities created or arising under any Capital Lease or
conditional sale or other title retention agreement with respect to property
used or acquired by such Person, even if the rights and remedies of the lessor,
seller or lender thereunder are limited to repossession of such property;
provided, however, that all such obligations and liabilities which are limited
in recourse to such property shall be included in Debt only to the extent of the
book value of such property as would be shown on a balance sheet of the
applicable Borrower prepared in accordance with GAAP; (d) all obligations and
liabilities under Guaranties; (e) the present value (discounted at the Base
Rate) of lease payments due under synthetic leases and (f) any obligations or
liabilities owing by the Parent, any Borrower or any of their respective
Subsidiaries at any time under the Xxxxxxxx Indemnification Agreement.
"Default" means any event or circumstance which, with the
giving of notice, the lapse of time, or both, would (if not cured, waived, or
otherwise remedied during such time) constitute an Event of Default.
"Default Rate" means a fluctuating per annum interest rate at
all times equal to the sum of (a) the otherwise applicable Interest Rate plus
(b) two percent (2%) per annum. Each Default Rate shall be adjusted
simultaneously with any change in the applicable Interest Rate. In addition, the
Default Rate shall result in an increase in the Letter of Credit Fee by two (2)
percentage points per annum.
"Defaulting Lender" has the meaning specified in Section
12.15(c).
"Deposit Accounts" means all "deposit accounts" as such term
is defined in the UCC, now or hereafter held in the name of any Borrower.
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"Depository Account" has the meaning specified in Section
3.3(a).
"Designated Account" has the meaning specified in Section
1.2(c).
"Dispositions" shall mean the sale, transfer or other
disposition of any business unit or line of business of any Borrower or any of
its respective Subsidiaries in one or a series of related transactions.
"Distribution" means, in respect of any Person: (a) the
payment or making of any dividend or other distribution of property in respect
of capital stock, partnership interest, member interest or other equity (or any
options or warrants for, or other rights with respect thereto) of such Person,
other than distributions in capital stock, partnership interest, member interest
or other equity of such Person (or any options or warrants therefor) of the same
class; or (b) the redemption or other acquisition by such Person of any capital
stock, partnership interest, member interest or other equity of such Person (or
any options or warrants therefor such stock) of such Person.
"Documents" means all documents as such term is defined in the
UCC, including bills of lading, warehouse receipts or other documents of title,
now owned or hereafter acquired by any Borrower.
"DOL" means the United States Department of Labor or any
successor department or agency.
"Dollar" and "$" means dollars in the lawful currency of the
United States. Unless otherwise specified, all payments under the Agreements
shall be made in Dollars.
"Domestic Subsidiary" means any Subsidiary that is
incorporated or formed under the laws of any jurisdiction of the United States
of America or that conducts a substantial portion of its business in the United
States of America.
"Dormant Subsidiary" means each of the following direct or
indirect Subsidiaries of Coltec: (i) Coltec Automotive Inc, a Delaware
corporation, (ii) Coltec Charitable Foundation Inc, a Delaware corporation,
(iii) EXH Automotive Holdings, Inc, a Delaware corporation, (iv) FSS Divestiture
Corp., a Delaware corporation, (v) Mainland Sealing Products, LLC, a North
Carolina limited liability company, (vi) The Anchor Packing Company, a Delaware
corporation and (vii) Salt Lick Railroad Company, a Pennsylvania corporation.
"EBITDA" means, with respect to any fiscal period of the
Borrowers, Adjusted Net Earnings from Operations, plus, to the extent deducted
in the determination of Adjusted Net Earnings from Operations for that fiscal
period, interest expenses, Federal, state, local and foreign income taxes, and
depreciation and amortization.
"EIFA" means that certain Excess Insurance Funding Agreement
dated on or about June 16, 1995 by and among Coltec and various insurance
companies party thereto, as amended through the date of this Agreement, and as
the same may hereafter be amended, supplemented or modified in accordance with
the terms hereof.
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"Eligible Accounts" means the Accounts which the Agent in the
exercise of its reasonable commercial discretion determines to be Eligible
Accounts. Without limiting the discretion of the Agent to establish other
criteria of ineligibility, Eligible Accounts shall not, unless the Agent in its
sole discretion elects, include any Account:
(a) with respect to which more than 90 days have elapsed
since the date of the original invoice therefor or which is more than 60 days
past due;
(b) with respect to which any of the representations,
warranties, covenants, and agreements contained in the Security Agreement are
incorrect or have been breached;
(c) with respect to which Account (or any other Account
due from such Account Debtor), in whole or in part, 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;
(d) which represents a progress billing (as hereinafter
defined) or as to which the applicable Borrower has extended the time for
payment without the consent of the Agent; for the purposes hereof, "progress
billing" means any invoice for goods sold or leased or services rendered under a
contract or agreement pursuant to which the Account Debtor's obligation to pay
such invoice is conditioned upon such Borrower's completion of any further
performance under the contract or agreement;
(e) with respect to which any one or more of the
following events has occurred to the Account Debtor on such Account: death or
judicial declaration of incompetency of an Account Debtor who is an individual;
the filing by or against the Account Debtor of a request or petition for
liquidation, reorganization, arrangement, adjustment of debts, adjudication as a
bankrupt, winding-up, or other relief under the bankruptcy, insolvency, or
similar laws of the United States, any state or territory thereof, or any
foreign jurisdiction, now or hereafter in effect; the making of any general
assignment by the Account Debtor for the benefit of creditors; the appointment
of a receiver or trustee for the Account Debtor or for any of the assets of the
Account Debtor, including, without limitation, the appointment of or taking
possession by a "custodian," as defined in the Federal Bankruptcy Code; the
institution by or against the Account Debtor of any other type of insolvency
proceeding (under the bankruptcy laws of the United States or otherwise) or of
any formal or informal proceeding for the dissolution or liquidation of,
settlement of claims against, or winding up of affairs of, the Account Debtor;
the sale, assignment, or transfer of all or any material part of the assets of
the Account Debtor; the nonpayment generally by the Account Debtor of its debts
as they become due; or the cessation of the business of the Account Debtor as a
going concern;
(f) if fifty percent (50%) or more of the aggregate
Dollar amount of outstanding Accounts owed at such time by the Account Debtor
thereon is classified as ineligible under clause (a) above;
(g) owed by an Account Debtor which: (i) does not
maintain its chief executive office in the United States of America; or (ii) is
not organized under the laws of the United States of America or Canada or any
state or province thereof; or (iii) is the government of
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any foreign country or sovereign state, or of any state, province, municipality,
or other political subdivision thereof, or of any department, agency, public
corporation, or other instrumentality thereof; except to the extent that such
Account is secured or payable by a letter of credit satisfactory to the Agent in
its discretion;
(h) owed by an Account Debtor which is an Affiliate or
employee of any Borrower;
(i) except as provided in clause (k) below, with respect
to which either the perfection, enforceability, or validity of the Agent's Liens
in such Account, or the Agent's right or ability to obtain direct payment to the
Agent of the proceeds of such Account, is governed by any federal, state, or
local statutory requirements other than those of the UCC;
(j) owed by an Account Debtor to which any Borrower or
any of their respective Subsidiaries, is indebted in any way, or which is
subject to any right of setoff or recoupment by the Account Debtor, unless the
Account Debtor has entered into an agreement acceptable to the Agent to waive
setoff rights; or if the Account Debtor thereon has disputed liability or made
any claim with respect to any other Account due from such Account Debtor; but in
each such case only to the extent of such indebtedness, setoff, recoupment,
dispute, or claim;
(k) owed by the government of the United States of
America, or any department, agency, public corporation, or other instrumentality
thereof, unless the Federal Assignment of Claims Act of 1940, as amended (31
U.S.C. ss.3727 et seq.), and any other steps necessary to perfect the Agent's
Liens therein, have been complied with to the Agent's satisfaction with respect
to such Account;
(l) owed by any state, municipality, or other political
subdivision of the United States of America, or any department, agency, public
corporation, or other instrumentality thereof and as to which the Agent
determines that its Lien therein is not or cannot be perfected;
(m) which represents a sale on a xxxx-and-hold,
guaranteed sale, sale and return, sale on approval, consignment, or other
repurchase or return basis;
(n) which is evidenced by a promissory note or other
instrument or by chattel paper;
(o) if the Agent believes, in the exercise of its
reasonable judgment, that the prospect of collection of such Account is impaired
or that the Account may not be paid by reason of the Account Debtor's financial
inability to pay;
(p) with respect to which the Account Debtor is located
in any state requiring the filing of a Notice of Business Activities Report or
similar report in order to permit the applicable Borrower to seek judicial
enforcement in such State of payment of such Account, unless such Borrower has
qualified to do business in such state or has filed a Notice of Business
Activities Report or equivalent report for the then current year;
(q) which arises out of a sale not made in the ordinary
course of such Borrower's business;
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(r) with respect to which the goods giving rise to such
Account have not been shipped and delivered to and accepted by the Account
Debtor or the services giving rise to such Account have not been performed by
such Borrower, and, if applicable, accepted by the Account Debtor, or the
Account Debtor revokes its acceptance of such goods or services;
(s) owed by an Account Debtor which is obligated to such
Borrower respecting Accounts the aggregate unpaid balance of which exceeds
twenty percent (20%) of the aggregate unpaid balance of all Accounts owed to
such Borrower at such time by all of such Borrower's Account Debtors which but
for the application of this clause (s) would otherwise constitute "Eligible
Accounts", but only to the extent of such excess;
(t) which is not subject to a first priority and
perfected security interest in favor of the Agent for the benefit of the
Lenders.
If any Account at any time ceases to be an Eligible Account,
then such Account shall promptly be excluded from the calculation of Eligible
Accounts.
"Eligible Assignee" means (a) a commercial bank, commercial
finance company or other asset based lender, having total assets in excess of
$1,000,000,000; (b) any Lender listed on the signature page of this Agreement;
(c) any Affiliate of any Lender; and (d) if an Event of Default has occurred and
is continuing, any Person reasonably acceptable to the Agent.
"Eligible Insurance Providers" means insurance companies
acceptable to the Agent, having a rating of at least B+ or better by Best Rating
Guide and which (i) either (A) in the case of each insurance company other than
an AIG Company, have agreed in writing pursuant to the EIFA, to make payments
to, or (B) in the case of an AIG Company, is making payments in accordance with
the terms of the EIFA (as if it were a party thereto) to, reimburse Xxxxxxx
Sealing for payments made by Xxxxxxx Sealing with respect to claims against
Xxxxxxx Sealing relating to its use and distribution of products alleged to
contain asbestos and (ii) have acknowledged, pursuant to a writing in form and
substance satisfactory to the Agent, the Agent's security interest in the
amounts payable by such insurance company to Xxxxxxx Sealing.
"Eligible Inventory" means Inventory, valued at the lower of
cost (on a first-in, first-out basis) or market, which the Agent, in its
reasonable discretion, determines to be Eligible Inventory. Without limiting the
discretion of the Agent to establish other criteria of ineligibility, Eligible
Inventory shall not, unless the Agent in its sole discretion elects, include any
Inventory:
(a) that is not owned by a Borrower;
(b) that is not subject to the Agent's Liens, which are
perfected as to such Inventory, or that are subject to any other Lien whatsoever
(other than the Liens described in clause (d) of the definition of Permitted
Liens provided that such Permitted Liens (i) are junior in priority to the
Agent's Liens or subject to Reserves and (ii) do not impair directly or
indirectly the ability of the Agent to realize on or obtain the full benefit of
the Collateral);
(c) that does not consist of finished goods or raw
materials;
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(d) that consists of work-in-process, chemicals, samples,
prototypes, supplies, or packing and shipping materials;
(e) that is not in good condition, is unmerchantable, or
does not meet all standards imposed by any Governmental Authority, having
regulatory authority over such goods, their use or sale;
(f) that is not currently either usable or salable, at
prices approximating at least cost, in the normal course of such Borrower's
business, or that is slow moving or stale;
(g) that is obsolete or returned or repossessed or used
goods taken in trade;
(h) that is located outside the United States of America
(or that is in-transit from vendors or suppliers);
(i) that is located in a public warehouse or in
possession of a bailee or in a facility leased by such Borrower, if the
warehouseman, or the bailee, or the lessor has not delivered to the Agent, if
requested by the Agent, a subordination agreement in form and substance
satisfactory to the Agent or if a Reserve for rents or storage charges has not
been established for Inventory at that location;
(j) that contains or bears any Proprietary Rights
licensed to a Borrower by any Person, if the Agent is not satisfied that it may
sell or otherwise dispose of such Inventory in accordance with the terms of the
Security Agreement and Section 9.2 without infringing the rights of the licensor
of such Proprietary Rights or violating any contract with such licensor (and
without payment of any royalties other than any royalties due with respect to
the sale or disposition of such Inventory pursuant to the existing license
agreement), and, as to which such Borrower has not delivered to the Agent a
consent or sublicense agreement from such licensor in form and substance
acceptable to the Agent if requested;
(k) that is not reflected in the details of a current
perpetual inventory report; or
(l) that is Inventory placed on consignment.
If any Inventory at any time ceases to be Eligible Inventory,
such Inventory shall promptly be excluded from the calculation of Eligible
Inventory.
"Environmental Claims" means all claims, however asserted, by
any Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for a Release or
injury to the environment.
"Environmental Laws" means all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes, together
with all administrative orders, directed duties, licenses, authorizations and
permits of, and agreements with, any Governmental Authority, in each case
relating to environmental, health, safety and land use matters.
"Environmental Lien" means a Lien in favor of any Governmental
Authority for (a) any liability under Environmental Laws, or (b) damages arising
from, or costs incurred by
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such Governmental Authority in response to, a Release or threatened Release of a
Contaminant into the environment.
"Equipment" means with respect to any Borrower, all of such
Borrower's now owned and hereafter acquired machinery, equipment, furniture,
furnishings, fixtures, and other tangible personal property (except Inventory),
including embedded software, motor vehicles with respect to which a certificate
of title has been issued, aircraft, dies, tools, jigs, molds and office
equipment, as well as all of such types of property leased by such Borrower and
all of such Borrower's rights and interests with respect thereto under such
leases (including, without limitation, options to purchase); together with all
present and future additions and accessions thereto, replacements therefor,
component and auxiliary parts and supplies used or to be used in connection
therewith, and all substitutes for any of the foregoing, and all manuals,
drawings, instructions, warranties and rights with respect thereto; wherever any
of the foregoing is located.
"ERISA" means the Employee Retirement Income Security Act of
1974, and regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Parent or any Borrower within the
meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the
Code for purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a
Pension Plan, (b) a withdrawal by the Parent, any Borrower or any ERISA
Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan
year in which it was a substantial employer (as defined in Section 4001(a)(2) of
ERISA) or a cessation of operations which is treated as such a withdrawal under
Section 4062(e) of ERISA, (c) a complete or partial withdrawal by the Parent,
any Borrower or any ERISA Affiliate from a Multi-employer Plan or notification
that a Multi-employer Plan is in reorganization, (d) the filing of a notice of
intent to terminate, the treatment of a Plan amendment as a termination under
Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC
to terminate a Pension Plan or Multi-employer Plan, or (e) the imposition of any
liability under Title IV of ERISA, other than for PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon the Parent, any Borrower or any
ERISA Affiliate.
"Event of Default" has the meaning specified in Section 9.1.
"Excess Collateral Amount" means at any time the lesser of
(a) 50% of the Insurance Receivables Amount due and payable to Xxxxxxx Sealing
and (b) the difference between (i) the aggregate Excess Collateral Providers
Borrowing Base (without giving effect to any reduction thereto as a result of
the proviso set forth in such definition) minus (ii) the Aggregate Revolver
Outstandings of the Excess Collateral Providers at such time.
"Excess Collateral Providers" means each of Coltec, CIP,
Xxxxxxx Bearings, Xxxxx Tool and Stemco.
"Excess Collateral Providers Accounts and Inventory Borrowing
Base" means at any time with respect to the Excess Collateral Providers, an
amount equal to (i) the sum of (A)
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up to eighty five percent (85%) of the Net Amount of Eligible Accounts of the
Excess Collateral Providers, plus (B) up to fifty percent (50%) of the value of
Eligible Inventory of the Excess Collateral Providers, minus (ii) Reserves from
time to time established by the Agent in its reasonable credit judgment with
respect to the Excess Collateral Providers.
"Excess Collateral Providers Borrowing Base" means at any time
with respect to the Excess Collateral Providers, an amount equal to the Excess
Collateral Providers Accounts and Inventory Borrowing Base; provided that there
shall be subtracted from the Excess Collateral Providers Borrowing Base an
amount equal to the excess of (x) the sum (without duplication) of (1) the
unpaid balance of Revolving Loans allocated to Xxxxxxx Sealing, (2) the
aggregate amount of Pending Revolving Loans to be allocated to Xxxxxxx Sealing,
(3) one hundred percent (100%) of the aggregate undrawn face amount of all
outstanding Letters of Credit issued for the account of Xxxxxxx Sealing, and (4)
the aggregate amount of any unpaid reimbursement obligations in respect of
Letters of Credit issued for the account of Xxxxxxx Sealing over (y) the Xxxxxxx
Sealing Accounts and Inventory Borrowing Base.
"Excess Collateral Providers Concentration Account" means the
account designated by the Excess Collateral providers in writing to the Agent
and maintained at the Bank.
"Exchange Act" means the Securities Exchange Act of 1934, and
regulations promulgated thereunder.
"Excluded Foreign Sub Income Amount" means, in connection with
any calculation of the Fixed Charge Coverage Ratio for any applicable fiscal
period (i) if Foreign Subsidiary EBITDA is less than Foreign Subsidiary Fixed
Charges, $0 and (ii) if Foreign Subsidiary EBITDA is equal to or greater than
Foreign Subsidiary Fixed Charges, the Foreign Sub Net Income that is excluded
from the calculation of Adjusted Net Earnings from Operations in calculating
EBITDA for such fiscal period.
"Facility Usage" means for any day, a fraction expressed as a
percentage equal to the outstanding amount of Revolving Loans and undrawn face
amount of outstanding Letters of Credit on such day divided by the Maximum
Revolver Amount.
"FDIC" means the Federal Deposit Insurance Corporation, and
any Governmental Authority succeeding to any of its principal functions.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate charged to
the Bank on such day on such transactions as determined by the Agent.
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"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System or any successor thereto.
"Financial Statements" means, according to the context in
which it is used, the financial statements referred to in Sections 5.2 and 6.6
or any other financial statements required to be given to the Lenders pursuant
to this Agreement.
"Fiscal Year" means the Borrowers' fiscal years for financial
accounting purposes. The current Fiscal Year of each Borrower will end on
December 31, 2002.
"Fixed Assets" means the Equipment and Real Estate of the
Borrowers.
"Fixed Charge Coverage Ratio" means, with respect to any
fiscal period of Borrowers, the ratio of (i) EBITDA plus administrative expenses
and defense costs relating to asbestos claims to the extent such costs and
expenses are not reimbursed by insurance and are expensed through the profit and
loss statements of the Borrowers during such fiscal period to (ii) (A) Fixed
Charges minus (B) the Excluded Foreign Sub Income Amount.
"Fixed Charges" means, with respect to any fiscal period of
Parent and its consolidated Subsidiaries on a consolidated basis, without
duplication, interest expense, Capital Expenditures (excluding Capital
Expenditures funded with Debt other than Revolving Loans, but including, without
duplication, principal payments with respect to such Debt), scheduled principal
payments of Debt, Federal, state, local and foreign income taxes (excluding
deferred taxes), payments (net of insurance reimbursements) relating to asbestos
claims and litigation against any Borrower or its Subsidiaries, Permitted
Restricted Investments made in accordance with Section 7.10 with the Permitted
Excess Expenditure Amount and prepayments and repurchases of Debt made pursuant
to Section 7.14 with the Permitted Excess Expenditure Amount.
"Foreign Sub Net Income" has the meaning specified in the
definition of "Adjusted Net Earnings from Operations."
"Foreign Subsidiary" means any Subsidiary of a Borrower other
than such Borrower's Domestic Subsidiaries.
"Foreign Subsidiary EBITDA" means for any applicable fiscal
period, EBITDA calculated solely for the Foreign Subsidiaries of the Parent for
such fiscal period.
"Foreign Subsidiary Fixed Charges" means for any applicable
fiscal period, Fixed Charges calculated solely for the Foreign Subsidiaries of
the Parent for such fiscal period.
"Funding Date" means the date on which a Borrowing occurs.
"Funds Administrator" means Coltec.
"GAAP" means generally accepted accounting principles and
practices set forth from time to time in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of
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the Financial Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the U.S. accounting profession), which
are applicable to the circumstances as of the Closing Date.
"Xxxxxxx Sealing Accounts and Inventory Borrowing Base" means
at any time with respect to Xxxxxxx Sealing, an amount equal to (i) the sum of
(A) up to eighty five percent (85%) of the Net Amount of Eligible Accounts of
Xxxxxxx Sealing, plus (B) up to fifty percent (50%) of the value of Eligible
Inventory of Xxxxxxx Sealing, minus (ii) Reserves from time to time established
by the Agent in its reasonable credit judgment with respect to Xxxxxxx Sealing.
"Xxxxxxx Sealing Borrowing Base" means at any time, an amount
equal to (i) the sum of (A) the Xxxxxxx Sealing Accounts and Inventory Borrowing
Base at such time plus (B) the Excess Collateral Amount at such time minus (ii)
the outstanding principal balance of the Permitted Excess Collateral Provider
Loans at such time.
"Xxxxxxx Sealing Concentration Account" means the account
designated by Xxxxxxx Sealing in writing to the Agent and maintained at the
Bank.
"Xxxxxxxx" means Xxxxxxxx Litigation Management Ltd., a
Delaware corporation.
"General Intangibles" means with respect to any Borrower, all
of such Borrower's now owned or hereafter acquired general intangibles, choses
in action and causes of action and all other intangible personal property of
such Borrower of every kind and nature (other than Accounts), including, without
limitation, all contract rights, payment intangibles, Proprietary Rights,
corporate or other business records, inventions, designs, blueprints, plans,
specifications, patents, patent applications, trademarks, service marks, trade
names, trade secrets, goodwill, copyrights, computer software, customer lists,
registrations, licenses, franchises, tax refund claims, any funds which may
become due to such Borrower in connection with the termination of any Plan or
other employee benefit plan or any rights thereto and any other amounts payable
to such Borrower from any Plan or other employee benefit plan, rights and claims
against carriers and shippers, rights to indemnification, business interruption
insurance and proceeds thereof, property, casualty or any similar type of
insurance and any proceeds thereof, proceeds of insurance covering the lives of
key employees on which such Borrower is beneficiary, rights to receive
dividends, distributions, cash, Instruments and other property in respect of or
in exchange for pledged equity interests or Investment Property and any letter
of credit, guarantee, claim, security interest or other security held by or
granted to such Borrower.
"Xxxxxxxx" means Xxxxxxxx Corporation, a New York corporation,
and its successors and assigns.
"Xxxxxxxx Indemnification Agreement" means that certain
Indemnification Agreement dated on or about the Closing Date by and among the
Parent and Xxxxxxxx, Coltec and Coltec Capital Trust, a Delaware statutory
trust.
"Xxxxxxxx Subordination Agreement" means that certain
Subordination Agreement executed by Xxxxxxxx in favor of the Agent and the
Lenders, as the same may be amended, supplemented, amended and restated or
otherwise modified from time to time.
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"Goods" means with respect to any Borrower all "goods" as
defined in the UCC, now owned or hereafter acquired by such Borrower, wherever
located, including embedded software to the extent included in "goods" as
defined in the UCC, manufactured homes, standing timber that is cut and removed
for sale and unborn young of animals.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Guaranty" means, with respect to any Person, all obligations
of such Person which in any manner directly or indirectly guarantee or assure,
or in effect guarantee or assure, the payment or performance of any
indebtedness, dividend or other obligations of any other Person (the "guaranteed
obligations"), or assure or in effect assure the holder of the guaranteed
obligations against loss in respect thereof, including any such obligations
incurred through an agreement, contingent or otherwise: (a) to purchase the
guaranteed obligations or any property constituting security therefor; (b) to
advance or supply funds for the purchase or payment of the guaranteed
obligations or to maintain a working capital or other balance sheet condition;
or (c) to lease property or to purchase any debt or equity securities or other
property or services.
"Hedge Agreement" means any and all transactions, agreements
or documents now existing or hereafter entered into, which provides for an
interest rate, credit, commodity or equity swap, cap, floor, collar, forward
foreign exchange transaction, currency swap, cross currency rate swap, currency
option, or any combination of, or option with respect to, these or similar
transactions, for the purpose of hedging the Parent's or any Borrower's exposure
to fluctuations in interest or exchange rates, loan, credit exchange, security
or currency valuations or commodity prices.
"Instruments" means with respect to any Borrower, all
instruments as such term is defined in the UCC, now owned or hereafter acquired
by such Borrower.
"Insurance Proceeds Account" means the account designated by
Xxxxxxx Sealing and Coltec in writing to the Agent and maintained at the Bank.
"Insurance Receivables Amount" means the aggregate amounts
owing to Xxxxxxx Sealing from Eligible Insurance Providers pursuant to the EIFA
(or in the case of AIG, amounts that would be owing from AIG pursuant to the
EIFA if it were a party thereto) to reimburse Xxxxxxx Sealing for payments made
by Xxxxxxx Sealing with respect to claims against Xxxxxxx Sealing relating to
its use and distribution of products alleged to contain asbestos; provided that
such amounts shall only include amounts with respect to which the Agent has been
granted a perfected first priority security interest as collateral for the
Obligations. Prior to the delivery of opinions in form and substance
satisfactory to the Agent and from such counsel satisfactory to the Agent as to
the perfection and priority of such security interest from counsel in Delaware,
New York, North Carolina and Pennsylvania, the Insurance Receivables Amount
shall be deemed to be $0. In addition, amounts owing from any Eligible Insurance
Provider shall not be included in the Insurance Receivables Amount unless the
Agent shall have received a full and
A-17
complete copy of the EIFA (including all addendums, sideletters and other
agreements related thereto) as executed by such Eligible Insurance Provider,
accompanied by an executed certificate from an officer of the Funds
Administrator and Xxxxxxx Sealing to such effect in form satisfactory to the
Agent.
"Intercompany Subordination Agreement" means that certain
Subordination Agreement date on or about the Closing Date by and among the
Parent, the Borrowers and certain of their respective Subsidiaries subordinating
certain intercompany Debt and other liabilities to the Obligations and such
Persons' obligations under the Loan Documents, as the same may be amended,
supplemented, amended and restated or otherwise modified from time to time.
"Interest Period" means, as to any LIBOR Rate Loan, the period
commencing on the Funding Date of such Loan or on the Continuation/Conversion
Date on which the Loan is converted into or continued as a LIBOR Rate Loan, and
ending on the date one, two, three or six months thereafter as selected by the
Funds Administrator in its Notice of Borrowing, in the form attached hereto as
Exhibit C, or Notice of Continuation/Conversion, in the form attached hereto as
Exhibit D, provided that:
(a) if any Interest Period would otherwise end on a day
that is not a Business Day, that Interest Period shall be extended to
the following 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 preceding Business Day;
(b) any Interest Period pertaining to a LIBOR Rate Loan
that begins on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest Period;
and
(c) no Interest Period shall extend beyond the Stated
Termination Date.
"Interest Rate" means each or any of the interest rates,
including the Default Rate, set forth in Section 2.1.
"Inventory" means with respect to any Borrower, all of such
Borrower's now owned and hereafter acquired inventory, goods and merchandise,
wherever located, to be furnished under any contract of service or held for sale
or lease, all returned goods, raw materials, work-in-process, finished goods
(including embedded software), other materials and supplies of any kind, nature
or description which are used or consumed in such Borrower's business or used in
connection with the packing, shipping, advertising, selling or finishing of such
goods, merchandise, and all documents of title or other Documents representing
them.
"Investment Property" means with respect to any Borrower, all
of such Borrower's right title and interest in and to any and all: (a)
securities whether certificated or uncertificated; (b) securities entitlements;
(c) securities accounts; (d) commodity contracts; or (e) commodity accounts.
"IRS" means the Internal Revenue Service and any Governmental
Authority succeeding to any of its principal functions under the Code.
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"Latest Projections" means: (a) on the Closing Date and
thereafter until the Agent receives new projections pursuant to Section 5.2(e),
the projections of the Parent's and the Borrowers' financial condition, results
of operations, and cash flows, for the period commencing on January 1, 2002 and
ending on December 31, 2002 and delivered to the Agent prior to the Closing
Date; and (b) thereafter, the projections most recently received by the Agent
pursuant to Section 5.2(f).
"Lender" and "Lenders" have the meanings specified in the
introductory paragraph hereof and shall include the Agent to the extent of any
Agent Advance outstanding and the Bank to the extent of any Non-Ratable Loan
outstanding; provided that no such Agent Advance or Non-Ratable Loan shall be
taken into account in determining any Lender's Pro Rata Share.
"Letter of Credit" has the meaning specified in Section
1.4(a).
"Letter of Credit Fee" has the meaning specified in Section
2.6.
"Letter of Credit Issuer" means the Bank, any affiliate of the
Bank or any other financial institution that issues any Letter of Credit
pursuant to this Agreement.
"Letter-of-Credit Rights" means with respect to any Borrower,
"letter-of-credit rights" as such term is defined in the UCC, now owned or
hereafter acquired by such Borrower, including rights to payment or performance
under a letter of credit, whether or not such Borrower, as beneficiary, has
demanded or is entitled to demand payment or performance.
"Letter of Credit Subfacility" means $15,000,000.
"LIBOR Interest Payment Date" means, with respect to a LIBOR
Rate Loan, the first day of each month and the Termination Date.
"LIBOR Rate" means, for any Interest Period, with respect to
LIBOR Rate Loans, the rate of interest per annum determined pursuant to the
following formula:
LIBOR Rate = Offshore Base Rate
------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Offshore Base Rate" means the rate per annum
appearing on Telerate Page 3750 (or any successor page) as the London
interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period. If for
any reason such rate is not available, the Offshore Base Rate shall be,
for any Interest Period, the rate per annum appearing on Reuters Screen
LIBO Page as the London interbank offered rate for deposits in Dollars
at approximately 11:00 a.m. (London time) two Business Days prior to
the first day of such Interest Period for a term comparable to such
Interest Period; provided, however, if more than one rate is specified
on Reuters Screen
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LIBO Page, the applicable rate shall be the arithmetic mean of all such
rates. If for any reason none of the foregoing rates is available, the
Offshore Base Rate shall be, for any Interest Period, the rate per
annum determined by Agent as the rate of interest at which dollar
deposits in the approximate amount of the LIBOR Rate Loan comprising
part of such Borrowing would be offered by the Bank's London Branch to
major banks in the offshore dollar market at their request at or about
11:00 a.m. (London time) two Business Days prior to the first day of
such Interest Period for a term comparable to such Interest Period.
"Eurodollar Reserve Percentage" means, for any day
during any Interest Period, the reserve percentage (expressed as a
decimal, rounded upward to the next 1/100th of 1%) in effect on such
day applicable to member banks under regulations issued from time to
time by the Federal Reserve Board for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal
reserve requirement) with respect to Eurocurrency funding (currently
referred to as "Eurocurrency liabilities"). The Offshore Rate for each
outstanding LIBOR Rate Loan shall be adjusted automatically as of the
effective date of any change in the Eurodollar Reserve Percentage.
"LIBOR Rate Loans" means a Revolving Loan during any period in
which it bears interest based on the LIBOR Rate.
"Lien" means: (a) any interest in property securing an
obligation owed to, or a claim by, a Person other than the owner of the
property, whether such interest is based on the common law, statute, or
contract, and including a security interest, charge, claim, or lien arising from
a mortgage, deed of trust, encumbrance, pledge, hypothecation, assignment,
deposit arrangement, agreement, security agreement, conditional sale or trust
receipt or a lease, consignment or bailment for security purposes; (b) to the
extent not included under clause (a), any reservation, exception, encroachment,
easement, right-of-way, covenant, condition, restriction, lease or other title
exception or encumbrance affecting property; and (c) any contingent or other
agreement to provide any of the foregoing.
"Loan Account" means the loan account of each Borrower, which
account shall be maintained by the Agent.
"Loan Documents" means this Agreement, the Patent and
Trademark Security Agreements, any Copyright Security Agreement, the Security
Agreements, the Mortgages, the Parent Guaranty, the Subsidiary Guaranty, the
Pledge Agreements and any other agreements, instruments, and documents
heretofore, now or hereafter evidencing, securing, guaranteeing or otherwise
relating to the Obligations, the Collateral, or any other aspect of the
transactions contemplated by this Agreement.
"Loans" means, collectively, all loans and advances provided
for in Article 1.
"Lockbox and Control Agreement" means an agreement among any
Borrower, the Agent and a Lockbox Bank, in form and substance reasonably
satisfactory to the Agent, concerning the collection of payments which represent
the proceeds of Accounts or of any other Collateral.
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"Lockbox Bank" has the meaning specified in Section 3.3(a).
"Lockboxes" has the meaning specified in Section 3.3(a).
"Majority Lenders" means at any date of determination Lenders
whose Pro Rata Shares aggregate more than 50%.
"Margin Stock" means "margin stock" as such term is defined in
Regulation T, U or X of the Federal Reserve Board.
"Material Adverse Effect" means (a) a material adverse change
in, or a material adverse effect upon, the operations, business, properties,
condition (financial or otherwise) or prospects of the Parent, any Borrower, the
Collateral or any guarantor of the Obligations, taken as a whole; (b) a material
impairment of the ability of the Parent, any Borrower, or any Subsidiary
Guarantor with assets valued at $2,000,000 or more, to perform under any Loan
Document to which it is a party; or (c) a material adverse effect upon the
legality, validity, binding effect or enforceability against the Parent, any
Borrower, or any Subsidiary Guarantor with assets valued at $2,000,000 or more,
of any Loan Document to which it is a party.
"Maximum Revolver Amount" means $60,000,000.
"Mortgages" means and includes any and all of the mortgages,
deeds of trust, deeds to secure debt, assignments and other instruments executed
and delivered by any Borrower or any Affiliate of any Borrower to or for the
benefit of the Agent by which the Agent, on behalf of the Lenders, acquires a
Lien on the Real Estate or a collateral assignment of any Borrower's or any
Borrower's Affiliate's interests under leases of Real Estate, and all
amendments, modifications and supplements thereto.
"Multi-employer Plan" means a "multi-employer plan" as defined
in Section 4001(a)(3) of ERISA which is or was at any time during the current
year or the immediately preceding six (6) years contributed to by the Parent,
any Borrower or any ERISA Affiliate.
"Net Amount of Eligible Accounts" means, at any time, the
gross amount of Eligible Accounts less sales, excise or similar taxes, and less
returns, discounts, claims, credits and allowances accrued rebates, offsets,
deductions, counterclaims, disputes and other defenses of any nature at any time
issued, owing, granted, outstanding, available or claimed.
"Non-Ratable Loan" and "Non-Ratable Loans" have the meanings
specified in Section 1.2(h).
"Notice of Borrowing" has the meaning specified in Section
1.2(b).
"Notice of Continuation/Conversion" has the meaning specified
in Section 2.2(b).
"Obligations" means all present and future loans, advances,
liabilities, obligations, covenants, duties, and debts owing by the Borrowers to
the Agent and/or any
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Lender, arising under or pursuant to this Agreement or any of the other Loan
Documents, whether or not evidenced by any note, or other instrument or
document, whether arising from an extension of credit, opening of a letter of
credit, acceptance, loan, guaranty, indemnification or otherwise, whether direct
or indirect, absolute or contingent, due or to become due, primary or secondary,
as principal or guarantor, and including all principal, interest, charges,
expenses, fees, attorneys' fees, filing fees and any other sums chargeable to
the Borrowers hereunder or under any of the other Loan Documents. "Obligations"
includes, without limitation, (a) all debts, liabilities, and obligations now or
hereafter arising from or in connection with the Letters of Credit and (b) all
debts, liabilities and obligations now or hereafter arising from or in
connection with Bank Products.
"Other Taxes" means any present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies which
arise from any payment made hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any other Loan
Documents.
"Parent" means EnPro Industries, Inc., a North Carolina
corporation.
"Parent Guaranty" means the Guaranty, dated as of the date
hereof, executed and delivery by the Parent, as the same may be amended,
supplemented, amended and restated or otherwise modified from time to time.
"Participant" means any Person who shall have been granted the
right by any Lender to participate in the financing provided by such Lender
under this Agreement, and who shall have entered into a participation agreement
in form and substance satisfactory to such Lender.
"Patent and Trademark Security Agreements" means the Patent
Security Agreement and the Trademark Security Agreement, each dated as of the
date hereof, executed and delivered by each Borrower to the Agent to evidence
and perfect the Agent's security interest in such Borrower's present and future
patents, trademarks, and related licenses and rights, for the benefit of the
Agent and the Lenders.
"PBGC" means the Pension Benefit Guaranty Corporation or any
Governmental Authority succeeding to the functions thereof.
"Pending Revolving Loans" means, at any time, the aggregate
principal amount of all Revolving Loans requested in any Notice of Borrowing
received by the Agent which have not yet been advanced.
"Pension Plan" means a pension plan (as defined in Section
3(2) of ERISA) subject to Title IV of ERISA which the Parent or any Borrower
sponsors, maintains, or to which it makes, is making, or is obligated to make
contributions, or in the case of a Multi-employer Plan has made contributions at
any time during the immediately preceding five (5) plan years.
"Permitted Dispositions" means Dispositions for fair market
value generating aggregate cash proceeds in an amount not to exceed (i) with
respect to all such Dispositions during any twelve (12) month period, ten
percent (10%) of the consolidated net assets of the
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Borrowers and their Subsidiaries taken as a whole as of the first day of such
twelve (12) month period and (ii) with respect to all such Dispositions from and
after the Closing Date, thirty percent (30%) of the consolidated net assets of
the Borrowers and their Subsidiaries taken as a whole as of the Closing Date.
"Permitted Excess Collateral Provider Loans" means Debt owing
from Xxxxxxx Sealing to one or more of the Excess Collateral Providers so long
as (i) none of such loans and advances were made with the proceeds of Revolving
Loans, (ii) such Debt is pledged to the Agent as additional security for the
Obligations pursuant to a Pledge Agreement, (iii) such Debt is subordinated to
the Obligations on terms and conditions satisfactory to the Required Lenders and
(iv) such Debt was incurred at a time when no Revolving Loans allocated to the
Excess Collateral Providers were outstanding.
"Permitted Excess Expenditure Amount" means at any time during
any month an amount (calculated for the twelve fiscal months ended as of the
last day of the most recently completed fiscal month) equal to the excess of (i)
EBITDA, plus administrative expenses and defense costs relating to asbestos
claims to the extent such costs and expenses are not reimbursed by insurance and
are expensed through the profit and loss statements of the Borrowers, plus
Borrowers' cash on hand in excess of $25,000,000 over (ii) the sum of (A) Fixed
Charges, (B) prepayments on or repurchases of the TIDES during such period as
permitted by Section 7.14 and (C) Permitted Restricted Investments made during
such period as permitted by Section 7.10. Notwithstanding the preceding
sentence, if in connection with any transaction, distribution, prepayment,
repurchase or other event with respect to which the Borrowers or any Subsidiary
intends to utilize the "Permitted Excess Expenditure Amount calculated above,
(i) Aggregate Availability either before or after giving effect thereto would be
less than or equal to $30,000,000 or (ii) prior to giving effect thereto the
Borrowers shall have available cash on hand of less than $25,000,000, the
Permitted Excess Expenditure Amount at such time shall be $0.
"Permitted Foreign Subsidiary Investments" means (i) Debt
owing from any Borrower or Domestic Subsidiary to any Foreign Subsidiary so long
as such Debt is subordinated to the Obligations and all other amounts owing
under the Loan Documents (on terms and conditions satisfactory to the Required
Lenders), (ii) any Debt owing from any Foreign Subsidiary to any Borrower (or
any Borrower's Domestic Subsidiary) or any capital contribution made by any
Borrower (or any Borrower's Domestic Subsidiary) in any Foreign Subsidiary which
is incurred or made after the Closing Date, so long as at the time such Debt is
incurred or such capital contribution is made, the aggregate of all such Debt
and capital contributions outstanding with respect to all of the Borrowers'
Foreign Subsidiaries does not exceed (A) $7,500,000 if at such time, after
giving effect thereto, Aggregate Availability is in excess of $30,000,000 or (B)
$5,000,000 if at such time, after giving effect thereto, Aggregate Availability
is equal to or less than $30,000,000, and (iii) Debt of any Foreign Subsidiary
set forth on Schedule 6.9, but not any refinancing or refunding thereof.
"Permitted Liens" means:
(a) Liens for taxes not delinquent or that remain payable
without penalty or statutory Liens for taxes in an amount not to exceed
$2,000,000 provided that the payment of such taxes which are due and payable is
being contested in good faith and by appropriate
A-23
proceedings diligently pursued and as to which adequate financial reserves have
been established on the applicable Borrower's books and records and a stay of
enforcement of any such Lien is in effect;
(b) the Agent's Liens;
(c) Liens on deposits made in the ordinary course of
business in connection with, or to secure payment of, obligations under worker's
compensation, unemployment insurance, social security and other similar laws, or
to secure the performance of bids, tenders or contracts (other than for the
repayment of Debt) or to secure indemnity, performance or other similar bonds
for the performance of bids, tenders or contracts (other than for the repayment
of Debt) or to secure statutory obligations (other than liens arising under
ERISA or Environmental Liens) or surety or appeal bonds, or to secure indemnity,
performance or other similar bonds;
(d) Liens securing the claims or demands of materialmen,
mechanics, carriers, warehousemen, landlords and other like Persons, provided
that if any such Lien arises from the nonpayment of such claims or demand when
due, such claims or demands do not exceed $500,000 in the aggregate and provided
that the payment of such claims and demands are being contested in good faith
and by appropriate proceedings diligently pursued and as to which adequate
financial reserves have been established on the applicable Borrower's books and
records and a stay of enforcement of any such Lien is in effect;
(e) Liens constituting encumbrances in the nature of
reservations, exceptions, encroachments, easements, rights of way, covenants
running with the land, non-material leases, and other similar title exceptions
or encumbrances affecting any Real Estate; provided that they do not in the
aggregate materially detract from the value of the Real Estate or materially
interfere with its use in the ordinary conduct of any Borrower's business; and
(f) Liens arising from judgments and attachments in
connection with court proceedings provided that the attachment or enforcement of
such Liens would not result in an Event of Default hereunder and such Liens are
being contested in good faith by appropriate proceedings, adequate reserves have
been set aside and no material Property is subject to a material risk of loss or
forfeiture and a stay of execution pending appeal or proceeding for review is in
effect.
"Permitted Purchase Money Acquisition" means the purchase by a
Domestic Subsidiary of the Borrower (which Subsidiary shall not be a Subsidiary
Guarantor or a Dormant Subsidiary) of all or substantially all of the assets of
any business unit or line of business of any other Person in a line of business
permitted to be engaged in by the Borrowers and its Subsidiaries pursuant to
Section 7.17 and for which the consideration paid to such Person shall consist
of Debt payable to such Person and limited in recourse solely to the Subsidiary
making such acquisition.
"Permitted Restricted Investment" means an acquisition by a
Borrower or any of its Subsidiaries (other than a Dormant Subsidiary) of all or
substantially all of the assets of any other Person (or a division of any other
Person) in a line of business permitted to be engaged in by the Borrowers and
its Subsidiaries pursuant to Section 7.17, and with respect to which (i) after
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giving effect thereto, Aggregate Availability shall be at least $30,000,000,
(ii) the aggregate consideration paid in connection with any such acquisition
shall not exceed the Permitted Excess Expenditure Amount at such time, (iii)
prior to and after giving effect to such acquisition no Default or Event of
Default shall have occurred and be continuing, and (iv) in the event a new
Domestic Subsidiary of the Parent is formed in connection therewith, such new
Subsidiary shall, prior to or concurrently with such acquisition, execute all
such documents and instruments as the Agent may request to guaranty the
Obligations and to pledge all of its personal property assets (and to the effect
the provisions of Section 7.25 shall be applicable all of its Real Estate) as
security therefor and all (or in the case of a foreign Subsidiary that is owned
directly by a Domestic Subsidiary, 65%) of the issued and outstanding equity
securities of such new Subsidiary shall be pledged by the owner thereof as
additional security for the Obligations. In no event shall (i) the purchase or
acquisition of the stock, partnership interest, member interest or other equity
of any Person constitute a Permitted Restricted Investment nor (ii) shall any
purchase described in this definition be permitted if as of the last day of the
last full fiscal month immediately prior to any such purchase, the Borrowers
shall not have been in compliance with the Fixed Charge Coverage Ratio covenant
set forth in Section 7.23 hereof (without regard to any limitation on the
application of such covenant based on Aggregate Availability). In addition to
the foregoing, solely with the proceeds of its cash on hand, any Foreign
Subsidiary may acquire all or substantially all of the assets of any other
Person (or a division of any other Person) in a line of business permitted to be
engaged in by the Borrowers and its Subsidiaries pursuant to Section 7.17.
"Person" means any individual, sole proprietorship,
partnership, limited liability company, joint venture, trust, unincorporated
organization, association, corporation, Governmental Authority, or any other
entity.
"Plan" means an employee benefit plan (as defined in Section
3(3) of ERISA) which the Parent or any Borrower sponsors or maintains or to
which the Parent or any Borrower makes, is making, or is obligated to make
contributions and includes any Pension Plan.
"Pledge Agreements" means any Pledge Agreements or similar
documents executed by the Parent, any Borrower or any of their respective
Subsidiaries evidencing the pledge by such Persons of any equity interests owned
by such Person in any of its Subsidiaries and/or the pledge of any Debt owing to
such Person.
"Proprietary Rights" means with respect to any Borrower, all
of such Borrower's now owned and hereafter arising or acquired: licenses,
franchises, permits, patents, patent rights, copyrights, works which are the
subject matter of copyrights, trademarks, service marks, trade names, trade
styles, patent, trademark and service xxxx applications, and all licenses and
rights related to any of the foregoing, including those patents, trademarks,
service marks, trade names and copyrights set forth on Schedule 6.12 hereto, and
all other rights under any of the foregoing, all extensions, renewals, reissues,
divisions, continuations, and continuations-in-part of any of the foregoing, and
all rights to xxx for past, present and future infringement of any of the
foregoing.
"Pro Rata Share" means, with respect to a Lender, a fraction
(expressed as a percentage), the numerator of which is the amount of such
Lender's Commitment and the
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denominator of which is the sum of the amounts of all of the Lenders'
Commitments, or if no Commitments are outstanding, a fraction (expressed as a
percentage), the numerator of which is the amount of Obligations owed to such
Lender and the denominator of which is the aggregate amount of the Obligations
owed to the Lenders, in each case giving effect to a Lender's participation in
Non-Ratable Loans and Agent Advances.
"Real Estate" means with respect to any Borrower, all of such
Borrower's now or hereafter owned or leased estates in real property, including,
without limitation, all fees, leaseholds and future interests, together with all
of such Borrower's now or hereafter owned or leased interests in the
improvements thereon, the fixtures attached thereto and the easements
appurtenant thereto.
"Release" means a release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration of a
Contaminant into the indoor or outdoor environment or into or out of any Real
Estate or other property, including the movement of Contaminants through or in
the air, soil, surface water, groundwater or Real Estate or other property.
"Reportable Event" means, any of the events set forth in
Section 4043(c) of ERISA or the regulations thereunder, other than any such
event for which the 30-day notice requirement under ERISA has been waived in
regulations issued by the PBGC or expressly waived by the PBGC.
"Required Lenders" means at any time Lenders whose Pro Rata
Shares aggregate at least 66-2/3%.
"Requirement of Law" means, as to any Person, any law
(statutory or common), treaty, rule or regulation or determination of an
arbitrator or of a Governmental Authority, in each case applicable to or binding
upon the Person or any of its property or to which the Person or any of its
property is subject.
"Reserves" means reserves that limit the availability of
credit hereunder, consisting of reserves against Availability, Eligible Accounts
or Eligible Inventory, established by Agent from time to time in Agent's
reasonable credit judgment. Without limiting the generality of the foregoing,
the following reserves shall be deemed to be a reasonable exercise of Agent's
credit judgment: (a) Bank Product Reserves, (b) a reserve for accrued, unpaid
interest on the Obligations, (c) reserves for rent at leased locations subject
to statutory or contractual landlord liens, (d) Inventory shrinkage, (e) customs
charges, (f) dilution, and (g) warehousemen's or bailees' charges.
"Responsible Officer" means with respect to any Borrower, the
chief executive officer or the president of such Borrower, or any other officer
having substantially the same authority and responsibility; or, with respect to
compliance with financial covenants and the preparation of the Borrowing Base
Certificate, the chief financial officer or the treasurer of such Borrower, or
any other officer having substantially the same authority and responsibility.
"Restricted Investment" means, as to any Person, any
acquisition of property by such Person in exchange for cash or other property,
whether in the form of an acquisition of
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stock, debt, or other indebtedness or obligation, or the purchase or acquisition
of any other property, or a loan, advance, capital contribution, or
subscription, except the following: (a) acquisitions of Equipment or other
assets (including licenses or leases of Proprietary Rights) to be used in the
business of such Person so long as the acquisition costs thereof constitute
Capital Expenditures permitted hereunder; (b) acquisitions of Inventory in the
ordinary course of business of such Person; (c) acquisitions of current assets
acquired in the ordinary course of business of such Person; (d) short term
investments made in conformity with the investment policies attached as Schedule
7.10, provided that (i) such direct or indirect obligations of the United States
of America or of the listed European governments mature within one year from the
date of acquisition thereof and (ii) each other investment must mature not more
than 90 days from the date of creation thereof (or in the case of money market
funds, have an average maturity of not more than 90 days); and (e) Hedge
Agreements.
"Revolving Loans" has the meaning specified in Section 1.2 and
includes each Agent Advance and Non-Ratable Loan.
"Security Agreements" means the Security Agreements of even
date herewith among Borrowers, the Parent and the Subsidiary Guarantors and
Agent for the benefit of Agent and other Lenders.
"Settlement" and "Settlement Date" have the meanings specified
in Section 12.15(a)(ii).
"Software" means with respect to any Borrower, all "software"
as such term is defined in the UCC, now owned or hereafter acquired by such
Borrower, other than software embedded in any category of Goods, including all
computer programs and all supporting information provided in connection with a
transaction related to any program.
"Solvent" means, when used with respect to any Person, that at
the time of determination:
(a) the assets of such Person, at a fair valuation, are
in excess of the total amount of its debts (including contingent
liabilities); and
(b) the present fair saleable value of its assets is
greater than its probable liability on its existing debts as such debts
become absolute and matured; and
(c) it is then able and expects to be able to pay its
debts (including contingent debts and other commitments) as they
mature; and
(d) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted.
For purposes of determining whether a Person is Solvent, the
amount of any contingent liability shall be computed as the amount that, in
light of all the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured liability.
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"Spinoff" means the spinoff of the Parent from Xxxxxxxx
Corporation on the terms and conditions described in the Form 10/A-3 by the
Parent with the Securities and Exchange Commission on or about May 16, 2002 and
effective May 31, 2002.
"Stated Termination Date" means May 31, 2006.
"Subsidiary" of a Person means any corporation, association,
partnership, limited liability company, joint venture or other business entity
of which more than fifty percent (50%) of the voting stock or other equity
interests (in the case of Persons other than corporations), is owned or
controlled directly or indirectly by the Person, or one or more of the
Subsidiaries of the Person, or a combination thereof. Unless the context
otherwise clearly requires, references herein to a "Subsidiary" refer to a
Subsidiary of the Borrowers.
"Subsidiary Guarantor" means each of the Subsidiaries of the
Parent listed on Schedule A-1 hereto and each other Subsidiary of any Borrower
which guaranties all or any portion of the Obligations.
"Subsidiary Guaranty" means the Guaranty, dated as of the date
hereof, executed and delivery by each Subsidiary Guarantor, as the same may be
amended, supplemented, amended and restated or otherwise modified from time to
time.
"Taxes" means any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender and the Agent, such taxes
(including income taxes or franchise taxes) as are imposed on or measured by the
Agent's or each Lender's net income in any the jurisdiction (whether federal,
state or local and including any political subdivision thereof) under the laws
of which such Lender or the Agent, as the case may be, is organized or maintains
a lending office.
"Tax Matters Agreement" means that certain Tax Matters
Agreement dated on or about the Closing Date by and between Xxxxxxxx and the
Parent, as the same may be amended, supplemented, amended and restated or
otherwise modified from time to time with the prior written consent of the
Required Lenders.
"Termination Date" means the earliest to occur of (i) the
Stated Termination Date, (ii) the date the Total Facility is terminated either
by the Borrowers pursuant to Section 3.2 or by the Required Lenders pursuant to
Section 9.2, and (iii) the date this Agreement is otherwise terminated for any
reason whatsoever pursuant to the terms of this Agreement.
"TIDES" means, collectively, the $150 million of 5 1/4%
Convertible Preferred Securities (Term Income Deferred Equity Securities) issued
by Coltec Capital Trust, a Delaware business trust, which are supported by an
equivalent aggregate principal amount of 5 1/4% Convertible Junior Subordinated
Deferrable Interest Debentures due April 15, 2028, issued by Coltec to Coltec
Capital Trust.
"Total Facility" has the meaning specified in Section 1.1.
"UCC" means the Uniform Commercial Code, as in effect from
time to time, of the State of North Carolina or of any other state the laws of
which are required as a result thereof
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to be applied in connection with the issue of perfection of security interests;
provided, that to the extent that the UCC is used to define any term herein or
in any other documents and such term is defined differently in different
Articles or Divisions of the UCC, the definition of such term contained in
Article or Division 9 shall govern.
"Unfunded Pension Liability" means the excess of a Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Plan's assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.
"Unused Letter of Credit Subfacility" means an amount equal to
the Letter of Credit Subfacility minus the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit plus, without duplication, (b) the
aggregate unpaid reimbursement obligations with respect to all Letters of
Credit.
"Unused Line Fee" has the meaning specified in Section 2.5.
"Wholly Owned Subsidiary" shall mean, with respect to any
Person, any Subsidiary of such Person all of the Capital Securities of which
(except directors' qualifying shares) are, directly or indirectly, owned and
controlled by such Person or one or more Wholly Owned Subsidiaries of such
Person or by such Person and one or more of such Subsidiaries.
Accounting Terms. Any accounting term used in the Agreement
shall have, unless otherwise specifically provided herein, the meaning
customarily given in accordance with GAAP, and all financial computations in the
Agreement shall be computed, unless otherwise specifically provided therein, in
accordance with GAAP as consistently applied and using the same method for
inventory valuation as used in the preparation of the Financial Statements.
Interpretive Provisions. (a) The meanings of defined terms are
equally applicable to the singular and plural forms of the defined terms.
(b) The words "hereof," "herein," "hereunder" and similar
words refer to the Agreement as a whole and not to any particular provision of
the Agreement; and Subsection, Section, Schedule and Exhibit references are to
the Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all
instruments, documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
(ii) The term "including" is not limiting and
means "including without limitation."
(iii) In the computation of periods of time from a
specified date to a later specified date, the word "from" means "from
and including," the words "to" and "until" each mean "to but excluding"
and the word "through" means "to and including."
(iv) The word "or" is not exclusive.
(d) Unless otherwise expressly provided herein, (i)
references to agreements
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(including the Agreement) and other contractual instruments shall be deemed to
include all subsequent amendments and other modifications thereto, but only to
the extent such amendments and other modifications are not prohibited by the
terms of any Loan Document, and (ii) references to any statute or regulation are
to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting the statute or
regulation.
(e) The captions and headings of the Agreement and other
Loan Documents are for convenience of reference only and shall not affect the
interpretation of the Agreement.
(f) The Agreement and other Loan Documents may use
several different limitations, tests or measurements to regulate the same or
similar matters. All such limitations, tests and measurements are cumulative and
shall each be performed in accordance with their terms.
(g) For purposes of Section 9.1, a breach of a financial
covenant contained in Section 7.23 shall be deemed to have occurred as of any
date of determination thereof by the Agent or as of the last day of any
specified measuring period, regardless of when the Financial Statements
reflecting such breach are delivered to the Agent.
(h) The Agreement and the other Loan Documents are the
result of negotiations among and have been reviewed by counsel to the Agent, the
Borrowers and the other parties, and are the products of all parties.
Accordingly, they shall not be construed against the Lenders or the Agent merely
because of the Agent's or Lenders' involvement in their preparation.
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