EXHIBIT 10.6
CONFORMED COPY
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CREDIT AGREEMENT
among
GRAPHIC HOLDINGS, INC.,
GRAPHIC CONTROLS CORPORATION,
VARIOUS LENDING INSTITUTIONS,
THE FIRST NATIONAL BANK OF CHICAGO
and
FLEET BANK OF MASSACHUSETTS, N.A.,
AS CO-AGENTS,
CHEMICAL BANK,
AS AGENT
____________________________________
Dated as of September 28, 1995, as
amended and restated through
February 29, 1996
____________________________________
$179,937,500
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TABLE OF CONTENTS
Page
SECTION 1. Amount and Terms of Credit..................................1
1.1 Commitment..................................................1
1.2 Minimum Borrowing Amounts, etc. ............................3
1.3 Notice of Borrowing.........................................3
1.4 Disbursement of Funds.......................................3
1.5 Notes.......................................................4
1.6 Conversions.................................................5
1.7 Pro Rata Borrowings.........................................5
1.8 Interest....................................................5
1.9 Interest Periods............................................6
1.10 Increased Costs, Illegality, etc. ..........................7
1.11 Compensation................................................8
1.12 Change of Lending Office....................................8
1.13 Replacement of Lenders......................................9
SECTION 2. Letters of Credit...........................................9
2.1 Letters of Credit...........................................9
2.2 Minimum Stated Amount..................................... 10
2.3 Letter of Credit Requests; Notices of Issuance............ 10
2.4 Agreement to Repay Letter of Credit Drawings.............. 10
2.5 Letter of Credit Participations........................... 10
2.6 Increased Costs........................................... 12
2.7 Existing Letters of Credit................................ 12
SECTION 3. Fees; Commitments......................................... 12
3.1 Fees...................................................... 12
3.2 Voluntary Reduction of Commitments........................ 13
3.3 Mandatory Adjustments of Commitments, etc. ............... 13
SECTION 4. Payments.................................................. 13
4.1 Voluntary Prepayments..................................... 13
4.2 Mandatory Prepayments..................................... 14
4.3 Method and Place of Payment............................... 17
4.4 Net Payments.............................................. 18
SECTION 5. Conditions Precedent...................................... 20
5.1 Conditions Precedent to Initial Borrowing Date............ 20
5.2 Conditions Precedent to Additional Borrowing Date......... 24
5.3 Conditions Precedent to All Credit Events................. 29
SECTION 6. Representations, Warranties and Agreements................ 29
6.1 Corporate Status.......................................... 29
6.2 Corporate Power and Authority............................. 30
6.3 No Violation.............................................. 30
6.4 Litigation................................................ 30
6.5 Use of Proceeds; Margin Regulations....................... 30
6.6 Governmental Approvals.................................... 31
6.7 Investment Company Act.................................... 31
6.8 Public Utility Holding Company Act........................ 31
6.9 True and Complete Disclosure.............................. 31
Page
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6.10 Financial Condition; Financial Statements................. 31
6.11 Security Interests........................................ 33
6.12 Representations and Warranties in Documents............... 33
6.13 Consummation of Merger; Issuance of Subordinated Notes;
Consummation of Devon Acquisition....................... 34
6.14 Tax Returns and Payments.................................. 34
6.15 Compliance with ERISA..................................... 34
6.16 Subsidiaries.............................................. 35
6.17 Intellectual Property..................................... 35
6.18 Pollution and Other Regulations........................... 35
6.19 Properties................................................ 36
6.20 Collective Bargaining Agreements.......................... 36
6.21 Holding Company Status.................................... 36
SECTION 7. Affirmative Covenants..................................... 36
7.1 Information Covenants..................................... 36
(a) Annual Financial Statements....................... 36
(b) Quarterly Financial Statements.................... 37
(c) Budgets; etc. .................................... 37
(d) Officer's Certificates............................ 37
(e) Notice of Default or Litigation................... 37
(f) Auditors' Reports................................. 37
(g) Borrowing Base Certificate;
Total Availability Certificate.................. 37
(h) Other Information................................. 38
7.2 Books, Records and Inspections............................ 38
7.3 Maintenance of Insurance.................................. 38
7.4 Payment of Taxes.......................................... 38
7.5 Consolidated Corporate Franchises......................... 39
7.6 Compliance with Laws, Statutes, etc. ..................... 39
7.7 ERISA; FDA................................................ 39
7.8 Good Repair............................................... 39
7.9 End of Fiscal Years; Fiscal Quarters...................... 40
7.10 Use of Proceeds........................................... 40
7.11 Additional Security; Further Assurances................... 40
7.12 Interest Rate Agreements.................................. 41
SECTION 8. Negative Covenants........................................ 41
8.1 Changes in Business....................................... 41
8.2 Consolidation, Merger, Sale or Purchase of Assets, etc. .. 41
8.3 Liens..................................................... 42
8.4 Indebtedness.............................................. 44
8.5 Capital Expenditures...................................... 45
8.6 Advances, Investments and Loans........................... 45
8.7 Leases.................................................... 46
8.8 Prepayments of Indebtedness; Amendments to Documents, etc. 46
8.9 Dividends, etc. .......................................... 47
8.10 Transactions with Affiliates.............................. 48
8.11 Consolidated Net Worth.................................... 49
8.12 Debt Service Coverage Ratio............................... 49
8.13 Cash Interest Coverage Ratio.............................. 49
8.14 Leverage Ratio............................................ 49
8.15 Current Ratio............................................. 50
8.16 Issuance of Stock......................................... 50
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SECTION 9. Events of Default......................................... 50
9.1 Payments.................................................. 50
9.2 Representations etc. ..................................... 50
9.3 Covenants................................................. 50
9.4 Default Under Other Agreements............................ 51
9.5 Bankruptcy, etc. ......................................... 51
9.6 ERISA..................................................... 51
9.7 Security Documents........................................ 51
9.8 Guaranty.................................................. 52
9.9 Judgments................................................. 52
9.10 Subordination Provisions.................................. 52
SECTION 10. Definitions.............................................. 52
SECTION 11. The Agent and Co-Agents.................................. 76
11.1 Appointment............................................... 76
11.2 Delegation of Duties...................................... 76
11.3 Exculpatory Provisions.................................... 76
11.4 Reliance by Agent and Co-Agents........................... 77
11.5 Notice of Default......................................... 77
11.6 Non-Reliance on Agent, Co-Agents and Other Lenders........ 77
11.7 Indemnification........................................... 77
11.8 The Agent and Co-Agents in their Individual Capacity...... 78
11.9 Successor Agent........................................... 78
SECTION 12. Miscellaneous............................................ 78
12.1 Payment of Expenses, etc. ................................ 78
12.2 Right of Setoff........................................... 79
12.3 Notices................................................... 79
12.4 Benefit of Agreement...................................... 79
12.5 No Waiver; Remedies Cumulative............................ 81
12.6 Payments Pro Rata......................................... 81
12.7 Calculations; Computations................................ 81
12.8 Governing Law; Submission to Jurisdiction; Venue; Waiver
of Jury Trial............................................. 82
12.9 Counterparts.............................................. 82
12.10 Effectiveness............................................. 82
12.11 Headings Descriptive...................................... 83
12.12 Amendment or Waiver....................................... 83
12.13 Survival.................................................. 83
12.14 Domicile of Loans......................................... 83
12.15 Confidentiality........................................... 83
12.16 Release of Liens and Guarantees........................... 84
12.17 Pre-Closing Funding Arrangements.......................... 84
SECTION 13. Guaranty................................................. 84
13.1 The Guaranty.............................................. 84
13.2 Bankruptcy................................................ 85
13.3 Nature of Liability....................................... 85
13.4 Independent Obligation.................................... 85
13.5 Authorization............................................. 85
13.6 Reliance.................................................. 85
13.7 Subordination............................................. 85
13.8 Waiver.................................................... 85
13.9 Limitation on Enforcement................................. 86
ANNEXES:
1.1 Commitments and Addresses
2.7 Existing Letters of Credit
5.1(i) Preferred Stock
5.1(l) Mortgaged Properties
5.2(i) Preferred Stock
6.4 Litigation
6.16 Subsidiaries
6.18 Environmental Matters
6.19 Real Property
6.20 Collective Bargaining Agreements
7.1(d) Adjustments
7.3 Insurance
8.3(d) Existing Liens
8.4(e) Existing Indebtedness
8.4(f) Interest Rate Agreements
8.6(d) Existing Investments
8.10 Affiliate Transactions
10 Devon EBITDA Adjustments
EXHIBITS FOR INITIAL BORROWING DATE:
A Form of Notice of Borrowing
B-1 Form of Tranche A Term Note
B-2 Form of Tranche B Note
B-3 Form of Revolving Note
B-4 Form of Swingline Note
B-5 Form of Qualified Non-U.S. Lender Note
C Form of Letter of Credit Request
D Form of Assignment Agreement
E Form of Officers' Certificate
F Form of Exemption Certificate
G Form of Opinion of Counsel
H-1 Form of Holdings Pledge Agreement
H-2 Form of Borrower Pledge Agreement
H-3 Form of Subsidiary Guarantor Pledge Agreement
I-1 Form of Holdings Security Agreement
I-2 Form of Borrower Security Agreement
I-3 Form of Subsidiary Security Agreement
J Form of Subsidiary Guaranty
K-1 Form of Borrowing Base Certificate
K-2 Form of Total Availability Certificate
L Form of Officer's Solvency Certificate
M Form of Mortgage
EXHIBITS FOR ADDITIONAL BORROWING DATE:
N Form of Opinion of Cravath, Swaine & Xxxxx
O Form of Officers' Certificate
P-1 Form of Supplement No. 1 to Holdings Pledge Agreement
P-2 Form of Amendment to Borrower Pledge Agreement
Q-1 Form of Supplement No. 1 to Holdings Security Agreement
Q-2 Form of Supplement No. 1 to Borrower Security Agreement
Q-3 Form of Supplement No. 1 to Subsidiary Security Agreement
Q-4 Form of Supplement No. 1 to Subsidiary Security Agreement
Q-5 Form of Devon Subsidiary Security Agreement
R-1 Form of Supplement No. 1 to Subsidiary Guaranty
R-2 Form of Supplement No. 1 to Subsidiary Guaranty
R-3 Form of Devon Subsidiary Guaranty
S-1 Form of Supplement No. 1 to Patent Security Agreement
S-2 Form of Devon Subsidiary Patent Security Agreement
T-1 Form of Supplement No. 1 to Trademark Security Agreement
T-2 Form of Devon Subsidiary Trademark Security Agreement
U Form of Amendment to Mortgage on the Mortgaged Properties
V Form of Officer's Solvency Certificate
CREDIT AGREEMENT, dated as of September 28, 1995, as amended and
restated through February 29, 1996, among GRAPHIC HOLDINGS, INC. ("Holdings"),
a Delaware corporation, GRAPHIC CONTROLS CORPORATION (the "Borrower"), a New
York corporation, the lending and other financial institutions listed from time
to time on Annex 1.1 hereto (each a "Lender" and, collectively, the "Lenders"),
THE FIRST NATIONAL BANK OF CHICAGO, as successor to NBD BANK and FLEET BANK OF
MASSACHUSETTS, N.A., as co-agents (the "Co-Agents"), and CHEMICAL BANK, a New
York banking corporation, as agent (the "Agent"). Unless otherwise defined
herein, all capitalized terms used herein and defined in Section 10 are used
herein as so defined.
W I T N E S S E T H:
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WHEREAS, Holdings, the Borrower, the Lenders (the "Original
Lenders") party to this Agreement on February 29, 1996, the Co-Agents and the
Agent are parties to the Credit Agreement dated as of September 28, 1995 and as
in effect immediately prior to the effectiveness of this Agreement (the
"Original Credit Agreement");
WHEREAS, the parties to the Original Credit Agreement wish to amend
and restate the Original Credit Agreement pursuant to this Agreement in order,
inter alia, to increase the Tranche A Term Facility by $15,000,000 and
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the Tranche B Term Facility by $52,500,000 and for any other revisions
reasonably necessary or incidental thereto; and
WHEREAS, the parties hereto have elected to amend and restate the
Original Credit Agreement pursuant to this Agreement rather than amend the
Original Credit Agreement or enter into a new credit agreement for their
convenience and intend that all indebtedness, obligations and liens created
under the Original Credit Agreement and the other Loan Documents be continued
hereunder and thereunder and remain in full force and effect and not be
discharged, paid, satisfied or cancelled;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
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1.1 Commitment. Subject to and upon the terms and conditions
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herein set forth, each Lender severally agrees to make a loan or loans (each a
"Loan" and, collectively, the "Loans") to the Borrower, which Loans shall be
drawn, to the extent such Lender has a Commitment under such Facility, under
the Term Facilities, the Revolving Facility and the Swingline Facility, as set
forth below:
(a)(i) Loans under the Initial Tranche A Term Facility (each an
"Initial Tranche A Term Loan" and, collectively, the "Initial Tranche A
Term Loans") (x) shall be made pursuant to a single borrowing which shall
be on the Initial Borrowing Date and (y) shall not exceed in aggregate
principal amount for any Lender at the time of incurrence thereof the
Initial Tranche A Term Commitment, if any, of such Lender. Once repaid,
Initial Tranche A Term Loans borrowed hereunder may not be reborrowed.
(ii) Loans under the Additional Tranche A Term Facility (each an
"Additional Tranche A Term Loan" and, collectively, the "Additional
Tranche A Term Loans") (x) shall be made pursuant to a single borrowing
which shall be on the Additional Borrowing Date and (y) shall not exceed
in aggregate principal amount for any Lender at the time of incurrence
thereof the Additional Tranche A Term Commitment, if any, of such Lender.
Once repaid, Additional Tranche A Term Loans borrowed hereunder may not be
reborrowed.
(b) (i) Loans under the Initial Tranche B Term Facility (each an
"Initial Tranche B Term Loan" and, collectively, the "Initial Tranche B
Term Loans") (x) shall be made pursuant to a single borrowing which shall
be on the Initial Borrowing Date and (y) shall not exceed in aggregate
principal
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amount for any Lender at the time of incurrence thereof the Initial
Tranche B Term Commitment, if any, of such Lender. Once repaid, Initial
Tranche B Term Loans borrowed hereunder may not be reborrowed.
(ii) Loans under the Additional Tranche B Term Facility (each an
"Additional Tranche B Term Loan" and, collectively, the "Additional
Tranche B Term Loans") (x) shall be made pursuant to a single borrowing
which shall be on the Additional Borrowing Date and (y) shall not exceed
in aggregate principal amount for any Lender at the time of incurrence
thereof the Additional Tranche B Term Commitment, if any, of such Lender.
Once repaid, Additional Tranche B Term Loans borrowed hereunder may not be
reborrowed.
(c) Loans under the Revolving Facility (each a "Revolving Loan"
and, collectively, the "Revolving Loans"), (i) shall be made at any time
and from time to time on and after the Initial Borrowing Date and prior
to the Revolving Facility Final Maturity Date, (ii) except as hereinafter
provided, may, at the option of the Borrower, be incurred and maintained
as, and/or converted into, Base Rate Loans or Eurodollar Loans,
provided that all Revolving Loans made as part of the same Borrowing
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shall, unless otherwise specifically provided herein, consist of
Revolving Loans of the same Type, (iii) may be repaid and reborrowed in
accordance with the provisions hereof, (iv) shall not exceed for any
Lender at any time outstanding that aggregate principal amount which,
when added to the product of (x) such Lender's Revolving Percentage and
(y) the sum of (I) the aggregate amount of Letter of Credit Outstandings
at such time and (II) the aggregate principal amount of all Swingline
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Loans then outstanding, equals the Revolving Commitment of such Lender at
such time and (v) shall not exceed in aggregate principal amount at any
time outstanding, when added to the sum of (x) the aggregate amount of
Letters of Credit Outstandings at such time and (y) the aggregate
principal amount of all Swingline Loans then outstanding, the lesser of
the Total Availability and the Total Revolving Commitment.
(d) Subject to and upon the terms and conditions herein set
forth, Chemical in its individual capacity agrees, at any time and from
time to time after the Initial Borrowing Date and prior to the Swingline
Expiry Date, to make a loan or loans (each a "Swingline Loan" and,
collectively, the "Swingline Loans") to the Borrower, which Swingline
Loans (i) shall be made and maintained as Base Rate Loans, (ii) shall not
exceed at any time outstanding the Swingline Commitment, (iii) shall not
exceed in aggregate principal amount at any time outstanding, when
combined with (x) the aggregate principal amount of all Revolving Loans
then outstanding and (y) all Letter of Credit Outstandings at such time,
the lesser of the Total Availability and the Total Revolving Commitment
then in effect, and (iv) may be repaid and reborrowed in accordance with
the provisions hereof. On the Swingline Expiry Date, all Swingline Loans
shall be repaid in full. Chemical shall not make any Swingline Loan
after receiving a written notice from the Borrower or any Lender stating
that a Default or an Event of Default exists and is continuing until such
time as Chemical shall have received written notice of (i) rescission of
all such notices from the party or parties originally delivering such
notice (which notice of rescission such Person or Persons shall give to
Chemical promptly upon the discontinuance of such Default or Event of
Default) or (ii) the waiver of such Default or Event of Default in
accordance with this Agreement. Also, Chemical shall have no obligation
to make any Swingline Loan in the event a Lender Default exists unless
Chemical has entered into arrangements satisfactory to it and the
Borrower to eliminate Chemical's risk with respect to any such Defaulting
Lender's or Lenders' obligations to fund Mandatory Borrowings, including
by collateralizing such Defaulting Lender's or Lenders' Revolving
Percentages of the Swingline Loans outstanding from time to time. On any
Business Day, Chemical may, in its sole discretion, give notice to the
Lenders that all then outstanding Swingline Loans shall be funded with a
Borrowing of Revolving Loans (provided that such notice shall be deemed
to have been automatically given upon the occurrence of an Event of
Default under Section 9.5), in which case a Borrowing of Revolving Loans
constituting Base Rate Loans (each such Borrowing, a "Mandatory
Borrowing") shall be made on the immediately succeeding Business Day by
all Lenders with a Revolving Commitment pro rata based on each
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such Lender's Revolving Percentages and the proceeds thereof shall be
applied directly to Chemical to repay such outstanding Swingline Loans.
Each Lender with a Revolving Loan Commitment hereby irrevocably agrees to
make such Revolving Loans upon one Business Day's notice pursuant to each
Mandatory Borrowing in the amount and in the manner specified in the
preceding sentence and on the date specified to it in writing by Chemical
notwithstanding
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(i) that the amount of the Mandatory Borrowing may not comply with the
minimum amount for a Borrowing specified in Section 1.2, (ii) whether any
conditions specified in Section 5 are then satisfied, (iii) the date of
such Mandatory Borrowing and (iv) any reduction in the Total Revolving
Commitment after any such Swingline Loans were made. In the event that any
Mandatory Borrowing cannot for any reason be made on the date otherwise
required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code in respect of the
Borrower), each Lender with a Revolving Commitment hereby agrees that it
shall forthwith purchase from Chemical (without recourse or warranty),
by assignment, such outstanding Swingline Loans as shall be necessary to
cause such Lenders to share in such Swingline Loans ratably based upon
their respective Revolving Percentages, provided that all interest
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payable on such Swingline Loans shall be for the account of Chemical
until the date the respective purchase is made and, to the extent
attributable to such purchase, shall be payable to such Lender purchasing
same from and after such date of purchase.
1.2 Minimum Borrowing Amounts, etc. The aggregate principal
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amount of each Borrowing under a Facility shall not be less than the Minimum
Borrowing Amount for such Facility (except that Mandatory Borrowings shall be
made in the amounts required by Section 1.1(d)). More than one Borrowing may
be incurred on any day, provided that at no time shall there be outstanding
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more than eleven Borrowings of Eurodollar Loans.
1.3 Notice of Borrowing. (a) Whenever the Borrower desires to
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incur Loans under any Facility (other than the Swingline Facility and any
Mandatory Borrowings), it shall give the Agent at its Notice Office, prior to
12:00 Noon (New York time), at least three Business Days' prior written notice
(or telephonic notice promptly confirmed in writing) of each Borrowing of
Eurodollar Loans and at least one Business Day's prior written notice (or
telephonic notice promptly confirmed in writing) of each Borrowing of Base Rate
Loans to be made hereunder. Each such notice (each a "Notice of Borrowing")
shall be in the form of Exhibit A and shall be irrevocable and shall specify
(i) the Facility pursuant to which such Borrowing is being made, (ii) the
aggregate principal amount of the Loans to be made pursuant to such Borrowing,
(iii) the date of Borrowing (which shall be a Business Day) and (iv) whether
the respective Borrowing shall consist of Base Rate Loans or Eurodollar Loans
and, if Eurodollar Loans, the Interest Period to be initially applicable
thereto. The Additional Tranche A Term Loans and Additional Tranche B Term
Loans shall be made initially as Base Rate Loans. The Agent shall promptly
give each Lender written notice (or telephonic notice promptly confirmed in
writing) of each proposed Borrowing, of such Lender's proportionate share
thereof and of the other matters covered by the Notice of Borrowing.
(b) Whenever the Borrower desires to incur Swingline Loans
hereunder, it shall give the Agent no later than 12:00 Noon (New York time) on
the day such Swingline Loan is to be made, written notice (or telephonic notice
promptly confirmed in writing) of such incurrence. Each such notice shall be
irrevocable and specify in each case (i) the date of Borrowing (which shall be
a Business Day) and (ii) the aggregate principal amount of the Swingline Loans
to be made pursuant to such Borrowing. The Agent shall promptly give Chemical
written notice (or telephonic notice promptly confirmed in writing) of each
proposed Borrowing of Swingline Loans and of the other matters covered by the
Notice of Borrowing.
(c) Mandatory Borrowings shall be made upon the notice specified
in Section 1.1(d), with the Borrower irrevocably agreeing, by its incurrence of
any Swingline Loan, to the making of Mandatory Borrowings as set forth in such
Section.
(d) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice permitted to be given hereunder, the
Agent may act prior to receipt of written confirmation without liability upon
the basis of such telephonic notice believed by the Agent in good faith to be
from an Authorized Officer of the Borrower as a person entitled to give
telephonic notices under this Agreement on behalf of the Borrower. In each
such case, the Agent's record of the terms of such telephonic notice shall be
conclusive absent manifest error.
1.4 Disbursement of Funds. (a) No later than 1:00 P.M. (2:00
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P.M. in the case of Swingline Loans) (New York time) on the date specified in
each Notice of Borrowing, each Lender with a Commitment under
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the respective Facility will make available its pro rata share of each
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Borrowing requested to be made on such date in the manner provided below. All
amounts shall be made available to the Agent in U.S. dollars and immediately
available funds at the Payment Office and the Agent promptly will make
available to the Borrower by depositing to its account at the Payment Office
the aggregate of the amounts so made available in the type of funds received.
Unless the Agent shall have been notified by any Lender prior to the date of
Borrowing that such Lender does not intend to make available to the Agent its
portion of the Borrowing or Borrowings to be made on such date, the Agent may
assume that such Lender has made such amount available to the Agent on such
date of Borrowing, and the Agent, in reliance upon such assumption, may (in its
sole discretion and without any obligation to do so) make available to the
Borrower a corresponding amount. If such corresponding amount is not in fact
made available to the Agent by such Lender and the Agent has made available
same to the Borrower, the Agent shall be entitled to recover such corresponding
amount from such Lender. If such Lender does not pay such corresponding amount
forthwith upon the Agent's demand therefor, the Agent shall promptly notify the
Borrower, and the Borrower shall immediately pay such corresponding amount to
the Agent. The Agent shall also be entitled to recover from such Lender or the
Borrower, as the case may be, interest on such corresponding amount in respect
of each day from the date such corresponding amount was made available by the
Agent to the Borrower to the date such corresponding amount is recovered by the
Agent, at a rate per annum equal to (x) if paid by such Lender, the overnight
Federal Funds Effective Rate or (y) if paid by the Borrower, the then
applicable rate of interest, calculated in accordance with Section 1.8, for the
respective Loans.
(b) Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its commitments hereunder or to prejudice any rights
which the Borrower may have against any Lender as a result of any default by
such Lender hereunder.
1.5 Notes. (a) The Borrower's obligation to pay the principal
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of, and interest on, the Loans made to it by each Lender shall be evidenced (i)
if Tranche A Term Loans, by a promissory note substantially in the form of
Exhibit B-1 with blanks appropriately completed in conformity herewith (each a
"Tranche A Term Note" and, collectively, the "Tranche A Term Notes"), (ii) if
Tranche B Term Loans, by a promissory note substantially in the form of Exhibit
B-2 with blanks appropriately completed in conformity herewith (each, a
"Tranche B Term Note" and collectively, the "Tranche B Term Notes"; together
with the Tranche A Term Notes, the "Term Notes"), (iii) if Revolving Loans, by
a promissory note substantially in the form of Exhibit B-3 with blanks
appropriately completed in conformity herewith (each a "Revolving Note" and,
collectively, the "Revolving Notes") and (iv) if Swingline Loans, by a
promissory note duly executed and delivered by the Borrower substantially in
the form of Exhibit B-4, with blanks appropriately completed in conformity
herewith (the "Swingline Note").
(b) The Tranche A Term Note issued to each Lender with a Tranche A
Term Commitment shall (i) be executed by the Borrower, (ii) be payable to the
order of such Lender and be dated the Additional Borrowing Date, (iii) be in a
stated principal amount equal to (x) the Initial Tranche A Term Loans made by
such Lender outstanding on the Additional Borrowing Date plus (y) the
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Additional Tranche A Term Loans made by such Lender on the Additional Borrowing
Date, and be payable in the principal amount of Tranche A Term Loans evidenced
thereby, (iv) mature on the Tranche A Term Facility Final Maturity Date, (v)
bear interest as provided in the appropriate clause of Section 1.8 in respect
of the Base Rate Loans and Eurodollar Loans, as the case may be, evidenced
thereby, (vi) be subject to mandatory repayment as provided in Section 4.2 and
(vii) be entitled to the benefits of this Agreement and the other Credit
Documents.
(c) The Tranche B Term Note issued to each Lender with a Tranche B
Term Commitment shall (i) be executed by the Borrower, (ii) be payable to the
order of such Lender and be dated the Additional Borrowing Date, (iii) be in a
stated principal amount equal to (x) the Initial Tranche B Term Loans made by
such Lender outstanding on the Additional Borrowing Date plus (y) the
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Additional Tranche B Term Loans made by such Lender on the Additional Borrowing
Date, and be payable in the principal amount of Tranche B Term Loans evidenced
thereby, (iv) mature on the Tranche B Term Facility Final Maturity Date, (v)
bear interest as provided in the appropriate clause of Section 1.8 in respect
of the Base Rate Loans and Eurodollar Loans, as the case may be, evidenced
thereby, (vi) be subject to mandatory repayment as provided in Section 4.2 and
(vii) be entitled to the benefits of this Agreement and the other Credit
Documents.
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(d) The Revolving Note issued to each Lender with a Revolving
Commitment shall (i) be executed by the Borrower, (ii) be payable to the order
of such Lender and be dated the Initial Borrowing Date, (iii) be in a stated
principal amount equal to the Revolving Commitment of such Lender and be
payable in the principal amount of the Revolving Loans evidenced thereby, (iv)
mature on the Revolving Facility Final Maturity Date, (v) bear interest as
provided in the appropriate clause of Section 1.8 in respect of the Base Rate
Loans and Eurodollar Loans, as the case may be, evidenced thereby, (vi) be
subject to mandatory repayment as provided in Section 4.2 and (vii) be entitled
to the benefits of this Agreement and the other Credit Documents.
(e) The Swingline Note issued to Chemical shall (i) be payable to
the order of Chemical and be dated the Initial Borrowing Date, (ii) be in a
stated principal amount equal to the Swingline Commitment and be payable in the
outstanding principal amount of the Swingline Loans evidenced thereby, (iii)
mature on the Swingline Expiry Date, (iv) bear interest as provided in the
appropriate clause of Section 1.8 in respect of the Base Rate Loans evidenced
thereby, (v) be subject to mandatory prepayment as provided in Section 4.2 and
(vi) be entitled to the benefits of this Agreement and the other Credit
Documents.
(f) Each Lender will note on its internal records the amount of
each Loan made by it and each payment in respect thereof and will, prior to any
transfer of its Note, endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
or any error in any such notation shall not affect the Borrower's obligations
in respect of such Loans.
1.6 Conversions. The Borrower shall have the option to
-----------
convert on any Business Day all or a portion at least equal to the applicable
Minimum Borrowing Amount of the outstanding principal amount of the Loans owing
pursuant to a single Facility (other than under the Swingline Facility, with
all Swingline Loans to at all times be maintained as Base Rate Loans) into a
Borrowing or Borrowings pursuant to such Facility of another Type of Loan,
provided that (i) except as otherwise provided in Section 1.10(b),
--------
Eurodollar Loans may be converted into Base Rate Loans only on the last day of
an Interest Period applicable thereto and no partial conversion of a Borrowing
of Eurodollar Loans shall reduce the outstanding principal amount of the
Eurodollar Loans made pursuant to such Borrowing to less than the Minimum
Borrowing Amount applicable thereto, (ii) Base Rate Loans may only be converted
into Eurodollar Loans if no Default or Event of Default is in existence on the
date of the conversion and (iii) Borrowings of Eurodollar Loans resulting from
this Section 1.6 shall be limited in numbers as provided in Section 1.2. Each
such conversion shall be effected by the Borrower giving the Agent at its
Notice Office, prior to 12:00 Noon (New York time), at least three Business
Days' (or one Business Day's, in the case of a conversion into Base Rate Loans)
prior written notice (or telephonic notice promptly confirmed in writing) (each
a "Notice of Conversion") specifying the Loans to be so converted, the Type of
Loans to be converted into and, if to be converted into a Borrowing of
Eurodollar Loans, the Interest Period to be initially applicable thereto. The
Agent shall give each Lender prompt notice of any such proposed conversion
affecting any of its Loans. Notwithstanding the foregoing or the provisions of
Section 1.9, if a Default under Section 9.1 or an Event of Default is in
existence at the time any Interest Period in respect of any Borrowing of
Eurodollar Loans is to expire and the Agent or the Required Lenders have
determined that a continuation of Eurodollar Loans as such is not appropriate,
such Loans may not be continued as Eurodollar Loans but instead shall be
automatically converted on the last day of such Interest Period into Base Rate
Loans.
1.7 Pro Rata Borrowings. All Borrowings of Loans under this
-------------------
Agreement shall be made by the Lenders pro rata on the basis of their
--- ----
Initial Tranche A Term Commitments, Additional Tranche A Term Commitments,
Initial Tranche B Term Commitments, Additional Tranche B Term Commitments or
Revolving Commitments, as the case may be. It is understood that no Lender
shall be responsible for any default by any other Lender in its obligation to
make Loans hereunder and that each Lender shall be obligated to make the Loans
provided to be made by it hereunder, regardless of the failure of any other
Lender to fulfill its commitments hereunder.
1.8 Interest. (a) The unpaid principal amount of each Base
--------
Rate Loan shall bear interest from the date of the Borrowing thereof until
maturity (whether by acceleration or otherwise) at a rate per annum which shall
at all times be the Applicable Base Rate Margin plus the Base Rate in effect
from time to time.
6
(b) The unpaid principal amount of each Eurodollar Loan shall bear
interest from the date of the Borrowing thereof until maturity (whether by
acceleration or otherwise) at a rate per annum which shall at all times be the
Applicable Eurodollar Margin plus the relevant Eurodollar Rate.
(c) All overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan and any other overdue amount payable
hereunder shall bear interest at a rate per annum equal to the Base Rate in
effect from time to time plus the sum of (i) 2% and (ii) the Applicable Base
Rate Margin, provided that each Eurodollar Loan shall bear interest after
--------
maturity (whether by acceleration or otherwise) until the end of the Interest
Period then applicable thereto at a rate per annum equal to 2% in excess of the
rate of interest applicable thereto at maturity.
(d) Interest shall accrue from and including the date of any
Borrowing to but excluding the date of any repayment thereof and shall be
payable (i) in respect of each Base Rate Loan, quarterly in arrears on the last
Business Day of each March, June, September and December, commencing December,
1995, (ii) in respect of each Eurodollar Loan, on the last day of each Interest
Period applicable thereto and, in the case of an Interest Period of six months,
on the date occurring three months after the first day of such Interest Period
and (iii) in respect of each Loan, on any prepayment or conversion (on the
amount prepaid or converted), at maturity (whether by acceleration or
otherwise) and, after such maturity, on demand.
(e) All computations of interest hereunder shall be made in
accordance with Section 12.7(b).
(f) The Agent, upon determining the interest rate for any
Borrowing of Eurodollar Loans for any Interest Period, shall promptly notify
the Borrower and the Lenders thereof.
1.9 Interest Periods. (a) At the time the Borrower gives a
----------------
Notice of Borrowing or Notice of Conversion in respect of the making of, or
conversion into, a Borrowing of Eurodollar Loans (in the case of the initial
Interest Period applicable thereto) or prior to 12:00 Noon (New York time) on
the third Business Day prior to the expiration of an Interest Period applicable
to a Borrowing of Eurodollar Loans, it shall have the right to elect by giving
the Agent written notice (or telephonic notice promptly confirmed in writing)
of the Interest Period applicable to such Borrowing, which Interest Period
shall, at the option of the Borrower, be a one, two, three or six month period.
Notwithstanding anything to the contrary contained above and subject to the last
sentence of Section 1.6,:
(i) the initial Interest Period for any Borrowing of Eurodollar
Loans shall commence on the date of such Borrowing (including the date of
any conversion from a Borrowing of Base Rate Loans) and each Interest
Period occurring thereafter in respect of such Borrowing shall commence
on the day on which the next preceding Interest Period expires;
(ii) if any Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period, such Interest Period shall end on the last Business Day
of such calendar month;
(iii) if any Interest Period would otherwise expire on a day which
is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, provided that if any Interest Period would
--------
otherwise expire on a day which is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iv) no Interest Period shall extend beyond the applicable Final
Maturity Date;
(v) no Interest Period with respect to any Borrowing of Term
Loans may be elected that would extend beyond any date upon which a
Scheduled Repayment in respect of such Term Loans is required to be made
if, after giving effect to the selection of such Interest Period, the
aggregate principal amount of Term Loans maintained as Eurodollar Loans
with Interest Periods ending after such date would
7
exceed the aggregate principal amount of Term Loans permitted to be
outstanding after such Scheduled Repayment; and
(vi) no Interest Period may be elected at any time when a Default
under Section 9.1 or an Event of Default is then in existence.
(b) If upon the expiration of any Interest Period, the Borrower
has failed to (or may not) elect a new Interest Period to be applicable to the
respective Borrowing of Eurodollar Loans as provided above, the Borrower shall
be deemed to have elected to convert such Borrowing into a Borrowing of Base
Rate Loans effective as of the expiration date of such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that
---------------------------------
(x) in the case of clause (i) below, the Agent or (y) in the case of clauses
(ii) and (iii) below, any Lender shall have determined (which determination
shall, absent manifest error, be final and conclusive and binding upon all
parties hereto):
(i) on any date for determining the Eurodollar Rate for any
Interest Period that, by reason of any changes arising after the date of
this Agreement affecting the interbank Eurodollar market, adequate and
fair means do not exist for ascertaining the applicable interest rate on
the basis provided for in the definition of Eurodollar Rate; or
(ii) at any time, that such Lender shall incur increased costs or
reductions in the amounts received or receivable hereunder in an amount
which such Lender deems material with respect to any Eurodollar Loans
(other than any increased cost or reduction in the amount received or
receivable resulting from the imposition of or a change in the rate of
taxes or similar charges) because of any change since the Effective Date
in any applicable law, governmental rule, regulation, guideline or order
(or in the interpretation or administration thereof and including the
introduction of any new law or governmental rule, regulation, guideline
or order) (such as, for example, but not limited to, a change in official
reserve requirements, but, in all events, excluding reserves required
under Regulation D to the extent included in the computation of the
Eurodollar Rate); or
(iii) at any time, that the making or continuance of any Eurodollar
Loan has become unlawful by compliance by such Lender in good faith with
any change since the Effective Date in any law, governmental rule,
regulation, guideline or order (or interpretation or application
thereof);
then, and in any such event, such Lender (or the Agent in the case of clause
(i) above) shall (x) on such date and (y) within ten Business Days of the date
on which such event no longer exists give notice (by telephone confirmed in
writing) to the Borrower and to the Agent of such determination (which notice
the Agent shall promptly transmit to each of the other Lenders). Thereafter
(x) in the case of clause (i) above, Eurodollar Loans shall no longer be
available until such time as the Agent notifies the Borrower and the Lenders
that the circumstances giving rise to such notice by the Agent no longer exist,
and any Notice of Borrowing or Notice of Conversion given by the Borrower with
respect to Eurodollar Loans which have not yet been incurred shall be deemed
rescinded by the Borrower or, in the case of a Notice of Borrowing, shall, at
the option of the Borrower, be deemed converted into a Notice of Borrowing for
Base Rate Loans to be made on the date of Borrowing contained in such Notice of
Borrowing, (y) in the case of clause (ii) above, the Borrower shall pay to such
Lender, upon written demand therefor, such additional amounts (in the form of
an increased rate of, or a different method of calculating, interest or
otherwise as such Lender in its sole discretion shall determine) as shall be
required to compensate such Lender for such increased costs or reductions in
amounts receivable hereunder (a written notice as to the additional amounts
owed to such Lender, showing the basis for the calculation thereof, submitted
to the Borrower by such Lender shall, absent manifest error, be final and
conclusive and binding upon all parties hereto) and (z) in the case of clause
(iii) above, the Borrower shall take one of the actions specified in Section
1.10(b) as promptly as possible and, in any event, within the time period
required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected pursuant to Section 1.10(a)(iii)
8
the Borrower shall) either (i) if the affected Eurodollar Loan is then being
made pursuant to a Borrowing, by giving the Agent telephonic notice (confirmed
promptly in writing) thereof on the same date that the Borrower was notified by
a Lender pursuant to Section 1.10(a)(ii) or (iii), cancel said Borrowing or
convert the related Notice of Borrowing into one requesting a Borrowing of Base
Rate Loans, or (ii) if the affected Eurodollar Loan is then outstanding, upon
at least one Business Day's notice to the Agent, require the affected Lender to
convert each such Eurodollar Loan into a Base Rate Loan, provided that if
--------
more than one Lender is affected at any time, then all affected Lenders must be
treated the same pursuant to this Section 1.10(b).
(c) If any Lender shall have determined that after the Effective
Date, the adoption or effectiveness of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, in each case made subsequent to
the Effective Date, has or would have the effect of reducing by an amount
deemed by such Lender to be material the rate of return on such Lender's
capital or assets as a consequence of its commitments or obligations hereunder
to a level below that which such Lender could have achieved but for such
adoption, effectiveness, change or compliance (taking into consideration such
Lender's policies with respect to capital adequacy), then from time to time,
within 15 days after demand by such Lender (with a copy to the Agent), the
Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender for such reduction. Each Lender, upon determining in
good faith that any additional amounts will be payable pursuant to this Section
1.10(c), will give prompt written notice thereof to the Borrower, which notice
shall set forth the basis of the calculation of such additional amounts,
although the failure to give any such notice shall not release or diminish any
of the Borrower's obligations to pay additional amounts pursuant to this
Section 1.10(c) upon the subsequent receipt of such notice.
(d) Notwithstanding any other provision of Section 1.10 or 2.6, no
Lender shall demand compensation for any increased cost or reduction or other
amount referred to above or in Section 2.6 if it shall not at the time be the
general policy or practice of such Lender to demand such compensation in
similar circumstances under comparable provisions of other credit agreements.
1.11 Compensation. (a) The Borrower shall compensate each
------------
Lender, upon its written request (which request shall set forth the basis for
requesting and the method of calculating such compensation), for all reasonable
losses, expenses and liabilities (including, without limitation, any loss,
expense or liability incurred by reason of the liquidation or reemployment of
deposits or other funds required by such Lender to fund its Eurodollar Loans)
which such Lender may sustain: (i) if for any reason (other than a default by
such Lender or the Agent) a Borrowing of Eurodollar Loans does not occur on a
date specified therefor in a Notice of Borrowing or Notice of Conversion
(whether or not withdrawn by the Borrower or deemed withdrawn pursuant to
Section 1.10(a)); (ii) if any repayment or conversion of any of its Eurodollar
Loans occurs on a date which is not the last day of an Interest Period
applicable thereto; (iii) if any prepayment of any of its Eurodollar Loans is
not made on any date specified in a notice of prepayment given by the Borrower;
or (iv) as a consequence of (x) any other default by the Borrower to repay its
Eurodollar Loans when required by the terms of this Agreement or (y) an
election made pursuant to Section 1.10(b).
(b) Notwithstanding anything in this Agreement to the contrary, to
the extent any notice required by Section 1.10, 2.6 or 4.4 is given by any
Lender more than 60 days after such Lender obtained, or reasonably should have
obtained, knowledge of the occurrence of the event giving rise to the
additional costs of the type described in such Section, such Lender shall not
be entitled to compensation under Section 1.10, 2.6 or 4.4 for any amounts
incurred or accruing prior to the giving of such notice to the Borrower.
1.12 Change of Lending Office. Each Lender agrees that, upon
------------------------
the occurrence of any event giving rise to the operation of Section 1.10(a)(ii)
or (iii) or 4.4 with respect to such Lender, it will, if requested by the
Borrower, use reasonable efforts (subject to overall policy considerations of
such Lender) to designate another lending office for any Loans affected by such
event, provided that such designation is made on such terms that such
--------
Lender and its lending office suffer no economic, legal or regulatory
disadvantage, with the object of avoiding the
9
consequence of the event giving rise to the operation of any such Section.
Nothing in this Section 1.12 shall affect or postpone any of the obligations of
the Borrower or the right of any Lender provided in Section 1.10 or 4.4.
1.13 Replacement of Lenders. If any Lender is owed increased
----------------------
costs or additional amounts, or the Borrower receives notice from any Lender or
the Agent, under Section 1.10, 2.6 or 4.4, or any Lender becomes a Defaulting
Lender, then the Borrower shall have the right, unless such Lender has
theretofore removed or cured the conditions which resulted in the obligation to
pay such increased costs or additional amounts or which caused it to be a
Defaulting Lender, to replace in its entirety such Lender (the "Replaced
Lender"), on ten Business Days' prior written notice to the Agent and such
Replaced Lender, with one or more other Eligible Transferee or Transferees
(collectively, the "Replacement Lender") reasonably acceptable to the Agent
(which acceptance shall not be unreasonably withheld); provided, that: (i)
--------
at the time of any replacement pursuant to this Section 1.13, the Replaced
Lender and the Replacement Lender shall enter into one or more Assignment
Agreements, substantially in the form of Exhibit D (appropriately completed),
pursuant to which the Replacement Lender shall acquire all of the Commitment
and outstanding Loans of the Replaced Lender and, in connection therewith,
shall pay to the Replaced Lender in respect thereof an amount equal to the sum
of (a) an amount equal to the principal of, and all accrued but unpaid interest
on, all outstanding Loans of the Replaced Lender and (b) an amount equal to all
accrued, but theretofore unpaid, Fees owing to the Replaced Lender pursuant to
Section 3.1 and (c) any other amounts payable to the Replaced Lender under this
Agreement (including, without limitation, amounts payable under Section 1.11)
and (ii) a Defaulting Lender shall be a Replaced Lender only to the extent
permitted by law. Upon the execution of the respective assignment
documentation, the payment of amounts referred to in the preceding sentence
and, if so requested by the Replacement Lender, delivery to the Replacement
Lender of appropriate Notes executed by the Borrower, the Replacement Lender
shall become a Lender hereunder and the Replaced Lender shall cease to
constitute a Lender hereunder, except with respect to indemnification
provisions under this Agreement, which shall survive as to such Replaced
Lender.
SECTION 2. Letters of Credit.
-----------------
2.1 Letters of Credit. (a) Subject to and upon the terms and
-----------------
conditions herein set forth, the Borrower may request the Letter of Credit
Issuer at any time and from time to time on or after the Initial Borrowing Date
and prior to the Revolving Facility Final Maturity Date to issue, for the
account of the Borrower and in support of (i) obligations of the Borrower
and/or its Subsidiaries, contingent or otherwise, incurred in the ordinary
course of their respective businesses and (ii) such other obligations of the
Borrower and/or its Subsidiaries to any other Person that are reasonably
acceptable to the Agent, and subject to and upon the terms and conditions
herein set forth the Letter of Credit Issuer agrees to issue from time to time,
irrevocable letters of credit in such form as may be approved by the Letter of
Credit Issuer and the Agent (each such letter of credit, and each letter of
credit described in Section 2.7, a "Letter of Credit" and collectively, the
"Letters of Credit").
(b) Notwithstanding the foregoing, (i) no Letter of Credit shall
be issued the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and
prior to or at the time of, the issuance of the relevant Letter of Credit) at
such time, would exceed either (x) $10,000,000 or (y) when added to the
aggregate principal amount of all Revolving Loans and Swingline Loans then
outstanding, an amount equal to the Total Revolving Commitment at such time
(after giving effect to any reductions to the Total Revolving Commitment on
such date), (ii) no Letter of Credit shall be issued the Stated Amount of
which, when added to (x) the Letter of Credit Outstandings (exclusive of Unpaid
Drawings which are repaid on the date of, and prior to or at the time of, the
issuance of the relevant Letter of Credit) at such time and (y) the aggregate
principal amount of all Revolving Loans and Swingline Loans then outstanding,
would exceed an amount equal to the Total Availability at such time, and (iii)
each Letter of Credit shall have an expiry date occurring not later than one
year after such Letter of Credit's date of issuance although any Letter of
Credit may be automatically renewable for successive periods of up to 12
months, but not beyond the fifth Business Day next preceding the Revolving
Facility Final Maturity Date, on terms acceptable to the Agent and the Letter
of Credit Issuer and in no event shall any Letter of Credit have an expiry date
occurring later than the fifth Business Day next preceding the Revolving
Facility Final Maturity Date.
10
(c) Notwithstanding the foregoing, in the event a Lender Default
exists, the Letter of Credit Issuer shall not be required to issue any Letter
of Credit unless the Letter of Credit Issuer has entered into arrangements
satisfactory to it and the Borrower to eliminate the Letter of Credit Issuer's
risk with respect to the participation in Letters of Credit of the Defaulting
Lender or Lenders, including by cash collateralizing such Defaulting Lender's
or Lenders' Revolving Percentage of the Letter of Credit Outstandings.
2.2 Minimum Stated Amount. The initial Stated Amount of each
---------------------
Letter of Credit shall be not less than $10,000 or such lesser amount
acceptable to the Agent and the Letter of Credit Issuer.
2.3 Letter of Credit Requests; Notices of Issuance. (a)
----------------------------------------------
Whenever it desires that a Letter of Credit be issued, the Borrower shall give
the Agent and the Letter of Credit Issuer written notice (including by way of
telecopier) in the form of Exhibit C thereof prior to 1:00 P.M. (New York time)
at least five Business Days (or such shorter period as may be acceptable to the
Letter of Credit Issuer) prior to the proposed date of issuance (which shall be
a Business Day) (each a "Letter of Credit Request"), which Letter of Credit
Request shall include an application for such Letter of Credit and any other
documents that the Letter of Credit Issuer customarily requires in connection
therewith. The Agent shall promptly notify each Lender of each Letter of
Credit Request.
(b) The Letter of Credit Issuer shall, on the date of each
issuance of a Letter of Credit by it, give the Agent, each Lender and the
Borrower written notice of the issuance of such Letter of Credit, accompanied
by a copy to the Agent of the Letter of Credit or Letters of Credit issued by
it.
2.4 Agreement to Repay Letter of Credit Drawings.
--------------------------------------------
(a) The Borrower hereby agrees to reimburse the Letter of Credit Issuer, by
making payment to the Agent in immediately available funds at the Payment
Office, for any payment or disbursement made by the Letter of Credit Issuer
under any Letter of Credit (each such amount so paid or disbursed until
reimbursed, an "Unpaid Drawing") immediately after, and in any event on the
date on which, such Letter of Credit Issuer notifies the Agent and the Borrower
of such payment or disbursement, with interest on the amount so paid or
disbursed by such Letter of Credit Issuer, to the extent not reimbursed prior
to 1:00 P.M. (New York time) on the date of such payment or disbursement, from
and including the date paid or disbursed to but not including the date the
Letter of Credit Issuer is reimbursed therefor at a rate per annum which shall
be the rate then applicable to Base Rate Loans (plus an additional 2% per annum
if not reimbursed by the third Business Day after the date of such payment or
disbursement), such interest also to be payable on demand.
(b) The Borrower's obligation under this Section 2.4 to reimburse
the Letter of Credit Issuer with respect to Unpaid Drawings (including, in each
case, interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to
payment which the Borrower may have or have had against the Letter of Credit
Issuer, the Agent or any Lender, including, without limitation, any defense
based upon the failure of any drawing under a Letter of Credit to conform to
the terms of the Letter of Credit or any non-application or misapplication by
the beneficiary of the proceeds of such drawing provided that, to the
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extent the Borrower has derived no benefit therefrom, the Borrower shall not be
obligated to reimburse the Letter of Credit Issuer for any wrongful payment
made by such Letter of Credit Issuer under a Letter of Credit as a result of
acts or omissions constituting willful misconduct or gross negligence on the
part of such Letter of Credit Issuer, provided, further, that the
-------- -------
foregoing shall not impair the Borrower's right to claim damages suffered as a
result of such wrongful payment made.
2.5 Letter of Credit Participations. (a) Immediately upon the
-------------------------------
issuance by the Letter of Credit Issuer of any Letter of Credit (which date
shall be the Initial Borrowing Date in the case of Existing Letters of Credit),
such Letter of Credit Issuer shall be deemed to have sold and transferred to
each Lender, and each Lender (each a "Participant") shall be deemed irrevocably
and unconditionally to have purchased and received from such Letter of Credit
Issuer, without recourse or warranty, an undivided interest and participation,
to the extent of such Lender's Revolving Percentage, in such Letter of Credit,
each substitute letter of credit, each drawing made thereunder and the
obligations of the Borrower under this Agreement with respect thereto (although
Letter of Credit Fees shall be payable directly to the Agent for the account of
the Lenders as provided in Section 3.1(b) and the Participants shall have no
right to receive any portion of any Facing Fees) and any security therefor or
guaranty
11
pertaining thereto. Upon any change in the Revolving Commitments of the
Lenders pursuant to Section 12.4(b), it is hereby agreed that, with respect to
all outstanding Letters of Credit and Unpaid Drawings, there shall be an
automatic adjustment to the participations pursuant to this Section 2.5 to
reflect the new Revolving Percentages of the assigning and assignee Lender.
(b) In determining whether to pay under any Letter of Credit, the
Letter of Credit Issuer shall not have any obligation relative to the
Participants other than to determine that any documents required to be
delivered under such Letter of Credit have been delivered and that they appear
to comply on their face with the requirements of such Letter of Credit. Any
action taken or omitted to be taken by the Letter of Credit Issuer under or in
connection with any Letter of Credit if taken or omitted in the absence of
gross negligence or willful misconduct, shall not create for the Letter of
Credit Issuer any resulting liability.
(c) In the event that the Letter of Credit Issuer makes any
payment under any Letter of Credit and the Borrower shall not have reimbursed
such amount in full to the Letter of Credit Issuer pursuant to Section 2.4(a),
the Letter of Credit Issuer shall promptly notify the Agent, and the Agent
shall promptly notify each Participant of such failure, and each Participant
shall promptly and unconditionally pay to the Agent for the account of the
Letter of Credit Issuer, the amount of such Participant's Revolving Percentage
of such payment in U.S. dollars and in same day funds, provided however
-------- -------
that no Participant shall be obligated to pay to the Agent its Revolving
Percentage of such unreimbursed amount for any wrongful payment made by the
Letter of Credit Issuer under a Letter of Credit as a result of acts or
omissions constituting willful misconduct or gross negligence on the part of
the Letter of Credit Issuer. If the Agent so notifies any Participant required
to fund a payment under a Letter of Credit prior to 11:00 A.M. (New York time)
on any Business Day, such Participant shall make available to the Agent for the
account of the Letter of Credit Issuer such Participant's Revolving Percentage
of the amount of such payment on such Business Day in same day funds. If and
to the extent such Participant shall not have so made its Revolving Percentage
of the amount of such payment available to the Agent for the account of the
Letter of Credit Issuer, such Participant agrees to pay to the Agent for the
account of the Letter of Credit Issuer, forthwith on demand such amount,
together with interest thereon, for each day from such date until the date such
amount is paid to the Agent for the account of the Letter of Credit Issuer at
the overnight Federal Funds Effective Rate. The failure of any Participant to
make available to the Agent for the account of the Letter of Credit Issuer its
Revolving Percentage of any payment under any Letter of Credit shall not
relieve any other Participant of its obligation hereunder to make available to
the Agent for the account of the Letter of Credit Issuer its Revolving
Percentage of any payment under any Letter of Credit on the date required, as
specified above, but no Participant shall be responsible for the failure of any
other Participant to make available to the Agent for the account of the Letter
of Credit Issuer such other Participant's Revolving Percentage of any such
payment.
(d) Whenever the Letter of Credit Issuer receives a payment of a
reimbursement obligation as to which the Agent has received for the account of
the Letter of Credit Issuer any payments from the Participants pursuant to
clause (c) above, the Letter of Credit Issuer shall pay to the Agent and the
Agent shall promptly pay to each Participant which has paid its Revolving
Percentage thereof, in U.S. dollars and in same day funds, an amount equal to
such Participant's Revolving Percentage of the principal amount thereof and
interest thereon accruing after the purchase of the respective participations.
(e) The obligations of the Participants to make payments to the
Agent for the account of the Letter of Credit Issuer with respect to Letters of
Credit shall be irrevocable and not subject to counterclaim, set-off or other
defense or any other qualification or exception whatsoever and shall be made in
accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement or
any of the other Credit Documents;
(ii) the existence of any claim, set-off, defense or other right
which the Borrower may have at any time against a beneficiary named in a
Letter of Credit, any transferee of any Letter of Credit (or any Person
for whom any such transferee may be acting), the Agent, the Letter of
Credit Issuer, any Lender,
12
or other Person, whether in connection with this Agreement, any Letter of
Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between the Borrower
and the beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or 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;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default.
2.6 Increased Costs. If after the Effective Date, the
---------------
adoption or effectiveness of any applicable law, rule or regulation, or any
change therein, or any change in the interpretation or administration thereof
by any governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by the Letter of
Credit Issuer or any Lender with any request or directive (whether or not
having the force of law) by any such authority, central bank or comparable
agency (in each case made subsequent to the Effective Date) shall either (i)
impose, modify or make applicable any reserve, deposit, capital adequacy or
similar requirement against Letters of Credit issued by the Letter of Credit
Issuer or such Lender's participation therein, or (ii) shall impose on the
Letter of Credit Issuer or any Lender any other conditions affecting this
Agreement, any Letter of Credit or such Lender's participation therein; and the
result of any of the foregoing is to increase the cost to the Letter of Credit
Issuer or such Lender of issuing, maintaining or participating in any Letter of
Credit, or to reduce the amount of any sum received or receivable by the Letter
of Credit Issuer or such Lender hereunder (other than any increased cost or
reduction in the amount received or receivable resulting from the imposition of
or a change in the rate of taxes or similar charges), then, upon demand to the
Borrower by the Letter of Credit Issuer or such Lender (a copy of which notice
shall be sent by the Letter of Credit Issuer or such Lender to the Agent), the
Borrower shall pay to the Letter of Credit Issuer or such Lender such
additional amount or amounts as will compensate the Letter of Credit Issuer or
such Lender for such increased cost or reduction. A certificate submitted to
the Borrower by the Letter of Credit Issuer or any Lender, as the case may be
(a copy of which certificate shall be sent by the Letter of Credit Issuer or
such Lender to the Agent), setting forth the basis for the determination of
such additional amount or amounts necessary to compensate the Letter of Credit
Issuer or any such Lender as aforesaid shall be conclusive and binding on the
Borrower absent manifest error, although the failure to deliver any such
certificate shall not release or diminish any of the Borrower's obligations to
pay additional amounts pursuant to this Section 2.6.
2.7 Existing Letters of Credit. All Letters of Credit issued
--------------------------
or deemed issued under the Existing Credit Agreement as set forth on Annex 2.7
shall be deemed to be issued under this Agreement.
SECTION 3. Fees; Commitments.
-----------------
3.1 Fees. (a) The Borrower agrees to pay to the Agent a
----
Commitment Fee ("Commitment Fee") for the account of each Lender for the period
from and including the Allocation Date to but not including the date the Total
Commitment has been terminated, computed at a rate for each day equal to 1/2 of
1% per annum for such day on such Lender's Unutilized Commitment provided
--------
that the Commitment Fee with respect to such Lender's Additional Term
Commitment shall accrue from and including February 22, 1996 to, but not
including, the Additional Borrowing Date. Such Commitment Fee shall be due and
payable in arrears on the Initial Borrowing Date and the Additional Borrowing
Date and on the last Business Day of each March, June, September and December
and on the first date upon which all Commitments shall have been terminated,
commencing December, 1995.
(b) The Borrower agrees to pay to the Agent for the account of each
Lender pro rata on the basis of its Revolving Percentage, a fee in respect of
each Letter of Credit (the "Letter of Credit Fee") for each day computed at the
rate equal to the rate applicable for such day as determined in accordance with
Annex 7.1(d) on the Stated Amount of such Letter of Credit on such day.
Accrued Letter of Credit Fees shall be due and payable
13
quarterly in arrears on the last Business Day of each March, June, September
and December of each year and on the date upon which the Total Revolving
Commitment is terminated, commencing December, 1995.
(c) The Borrower agrees to pay to the Agent for the account of the
Letter of Credit Issuer a fee in respect of each Letter of Credit (the "Facing
Fee") computed at the rate of 1/4 of 1% per annum on the average daily Stated
Amount of such Letter of Credit. Accrued Facing Fees shall be due and payable
quarterly in arrears on the last Business Day of each March, June, September
and December of each year and on the date upon which the Total Revolving
Commitment is terminated, commencing December, 1995.
(d) The Borrower agrees to pay directly to the Letter of Credit
Issuer upon each issuance of, drawing under, and/or amendment of, a Letter of
Credit such amount as shall at the time of such issuance, drawing or amendment
be the administrative charge which the Letter of Credit Issuer is customarily
charging for issuances of, drawings under or amendments of, letters of credit
issued by it.
(e) The Borrower shall pay to the Agent (x) on the Initial
Borrowing Date and on the Additional Borrowing Date for its own account and/or
for distribution to the Lenders such fees as heretofore agreed by the Borrower
and the Agent and (y) for its own account such other fees as may be agreed to
from time to time between the Borrower and the Agent, when and as due.
(f) All computations of Fees shall be made in accordance with
Section 12.7(b).
3.2 Voluntary Reduction of Commitments. Upon at least three
----------------------------------
Business Days' prior written notice (or telephonic notice confirmed in writing)
to the Agent at its Notice Office (which notice the Agent shall promptly
transmit to each of the Lenders), the Borrower shall have the right, without
premium or penalty, to terminate or partially reduce the Total Unutilized
Revolving Commitment, provided that (x) any such termination shall apply to
--------
proportionately and permanently reduce the Revolving Commitment of each of the
Lenders with such a Commitment and (y) any partial reduction pursuant to this
Section 3.2 shall be in the amount of at least $1,000,000.
3.3 Mandatory Adjustments of Commitments, etc. (a) The
------------------------------------------
Additional Tranche A Term Commitment and Additional Tranche B Term Commitment
of each Lender shall terminate on the Expiration Date unless the Additional
Borrowing Date has occurred on or before such date.
(b)(x) The Total Initial Tranche A Term Commitment and the Total
Initial Tranche B Term Commitment of each Lender shall terminate in their
entirety on the Initial Borrowing Date (after giving effect to the making of
the Initial Term Loans on such date).
(y) The Total Additional Tranche A Term Commitment and the
Total Additional Tranche B Term Commitment of each Lender shall terminate in
their entirety on the Additional Borrowing Date (after giving effect to the
making of the Additional Term Loans on such date).
(c) The Total Revolving Commitment (and the Revolving Commitment
of each Lender) shall terminate on the earlier of the Revolving Facility Final
Maturity Date and the date on which any Change of Control occurs.
(d) The Swingline Commitment shall terminate on the Swingline
Expiry Date.
(e) The Total Revolving Commitment shall be permanently reduced at
the times and in the amounts required under Section 4.2(B)(d).
SECTION 4. Payments.
--------
4.1 Voluntary Prepayments. The Borrower shall have the right
---------------------
to prepay Term Loans and/or Revolving Loans and/or Swingline Loans, in whole or
in part, without premium or penalty, from time to time on the following terms
and conditions: (i) the Borrower shall give the Agent at the Payment Office
written notice (or
14
telephonic notice promptly confirmed in writing) of its intent to prepay the
Loans, whether such Loans are Tranche A Term Loans, Tranche B Term Loans,
Revolving Loans or Swingline Loans, the amount of such prepayment and (in the
case of Eurodollar Loans) the specific Borrowing(s) pursuant to which made,
which notice shall be received by the Agent by 11:00 A.M. (New York time) one
Business Day prior to the date of such prepayment (or 11:00 A.M. on the date of
prepayment, in the case of Swingline Loans), which notice shall promptly be
transmitted by the Agent to each of the Lenders; (ii) each partial prepayment
of any Borrowing shall be in an aggregate principal amount of at least
$1,000,000 (or $100,000 in the case of Swingline Loans), provided that no
--------
partial prepayment of Eurodollar Loans made pursuant to a Borrowing shall
reduce the aggregate principal amount of the Loans outstanding pursuant to such
Borrowing to an amount less than the Minimum Borrowing Amount applicable
thereto; (iii) each prepayment in respect of any Loans made pursuant to a
Borrowing shall be applied pro rata among such Loans; (iv) subject to
--- ----
the provisions of Section 4.2(B)(e), each prepayment of Term Loans pursuant to
this Section 4.1 shall be allocated pro rata between the Tranche A Term
--- ----
Loans and the Tranche B Term Loans based upon the respective outstanding
principal amounts thereof; and (v) each prepayment of Tranche A Term Loans or
Tranche B Term Loans pursuant to this Section 4.1 shall be applied to the then
remaining Scheduled Repayments thereof in the direct chronological order of
such Scheduled Repayments (based upon the then remaining principal amount of
each such Scheduled Repayment).
4.2 Mandatory Prepayments.
---------------------
(A) Requirements:
------------
(a) If on any date (after giving effect to any other repayments or
prepayments on such date) the sum of (i) the aggregate outstanding
principal amount of Revolving Loans and Swingline Loans plus (ii) the
aggregate amount of Letter of Credit Outstandings exceeds the Total
Revolving Commitment as then in effect, the Borrower shall repay on such
date that principal amount of Swingline Loans and, after Swingline Loans
have been paid in full, Unpaid Drawings and, after Unpaid Drawings have
been paid in full, Revolving Loans, in an aggregate amount equal to such
excess. If, after giving effect to the prepayment of all outstanding
Swingline Loans, Unpaid Drawings and Revolving Loans, the aggregate
amount of Letter of Credit Outstandings exceeds the Total Revolving
Commitment as then in effect (any such excess, a "Total Revolving
Commitment Excess Amount"), the Borrower shall pay to the Agent an amount
in cash and/or Cash Equivalents equal to such Total Revolving Commitment
Excess Amount and the Collateral Agent shall hold such payment as
security for the obligations of the Borrower hereunder pursuant to a cash
collateral agreement to be entered into in form and substance reasonably
satisfactory to the Agent and the Borrower which shall permit certain
investments in Cash Equivalents satisfactory to the Agent and the
Borrower, until the proceeds are applied to the secured obligations and
which shall provide that a portion of the balance, if any, held in a cash
collateral account established under such cash collateral agreement equal
to the amount by which such balance exceeds the Total Revolving
Commitment Excess Amount from time to time, shall be released to the
Borrower provided that (x) as a result of such release, a mandatory
--------
prepayment shall not be required under the first sentence of this
paragraph (a) unless such prepayment is made concurrently with such
release, and (y) immediately after giving effect thereto, no Default or
Event of Default shall have occurred or be continuing or would result
from such release.
(b) If on any date the sum of the aggregate outstanding principal
amount of Revolving Loans, Swingline Loans and Letter of Credit
Outstandings exceeds the Total Availability as then in effect, the
Borrower shall repay on such date that principal amount of Swingline
Loans and, after Swingline Loans have been paid in full, Unpaid Drawings
and, after Unpaid Drawings have been paid in full, Revolving Loans in an
aggregate amount equal to such excess. If, after giving effect to any
such prepayment of all outstanding Unpaid Drawings and Loans, the
aggregate amount of Letter of Credit Outstandings exceeds the Total
Availability then in effect (any such excess, the "Total Availability
Excess Amount"), the Borrower shall pay to the Agent an amount in cash
and/or Cash Equivalents equal to such Total Availability Excess Amount
and the Agent shall hold such payment as security for the obligations of
the Borrower hereunder pursuant to a cash collateral agreement to be
entered into in form and substance reasonably satisfactory to the Agent
and the Borrower which shall permit certain investments in Cash
Equivalents satisfactory to the Agent and the Borrower, until the
proceeds are applied to the secured obligations and
15
which shall provide that a portion of the balance, if any, held in a cash
collateral account established under such cash collateral agreement equal
to the amount by which such balance exceeds the Total Availability Excess
Amount from time to time, shall be released to the Borrower provided
--------
that (x) as a result of such release, a mandatory prepayment shall not be
required under the first sentence of this paragraph (b) unless such
prepayment is made concurrently with such release and (y) immediately
after giving effect thereto, no Default or Event of Default shall have
occurred or be continuing or would result from such release.
(c) The Borrower shall be required to repay (x) the principal
amount of Initial Tranche A Term Loans in 23 consecutive installments
payable on the last day of March, June, September and December of each
year and on the Tranche A Term Facility Final Maturity Date, commencing
on March 31, 1997 (after giving effect to the prepayments made on
November 24, 1995 and February 20, 1996) (each such repayment, as the
same may be reduced as provided in Sections 4.1 and 4.2(B), an "Initial
Tranche A Scheduled Repayment"), each such installment on any such date
to be in an amount equal to (i) for the year 1997, the amount set forth
below opposite each such date which occurs in 1997 and (ii) for the years
1998 through 2002, 25% of the amount set forth below opposite the year
during which such date occurs:
Year[1] Amount
------
March 31, 1997 $ 1,125,000
June 30, 1997 $ 1,937,500
September 30, 1997 $ 1,937,500
1998 8,750,000
1999 9,750,000
2000 10,750,000
2001 11,500,000
2002 11,750,000
and (y) the principal amount of Additional Tranche A Term Loans in 26
consecutive installments payable on the last day of March, June, September and
December of each year and on the Tranche A Term Facility Final Maturity Date,
commencing on June 30, 1996 (each such repayment, as the same may be reduced as
provided in Sections 4.1 and 4.2(B), an "Additional Tranche A Scheduled
Repayment"), each such installment on any such date to be in an amount equal to
(i) for the year 1996, the amount set forth below opposite each such date which
occurs in 1996 and (ii) for the years 1997 through 2002, 25% of the amount set
forth below opposite such year during which such date occurs:
Year[2] Amount
------
June 30, 1996 $ 375,000
September 30, 1996 375,000
1997 1,250,000
1998 2,250,000
1999 2,500,000
2000 2,500,000
2001 2,750,000
2002 3,000,000
--------------------
[1] For purposes of this amortization schedule, each year commences on October
1 of the prior calendar year and ends on September 30 of the current
calendar year.
[2] For purposes of this amortization schedule, each year commences on October
1 of the prior calendar year and ends on September 30 of the current
calendar year.
16
(d) The Borrower shall be required to repay: (x) the principal
amount of the Initial Tranche B Term Loans (i) in 28 consecutive installments
of $62,500 payable on the last day of March, June, September and December of
each year, commencing on December 31, 1995 and (ii) in four consecutive
quarterly installments of $5,812,500 payable on December 31, 2002, March 31,
2003, June 30, 2003 and on the Tranche B Term Facility Final Maturity Date
(each such repayment, as the same may be reduced as provided in Sections 4.1
and 4.2(B), an "Initial Tranche B Scheduled Repayment"); and (y) the principal
amount of the Additional Tranche B Term Loans (i) in two consecutive
installments of $187,500 payable on June 30, 1996 and September 30, 1996, (ii)
commencing on December 31, 1996, in 24 consecutive installments of $125,000
payable on the last day of March, June, September and December of each year and
(iii) in four consecutive quarterly installments of $12,281,250 payable on
December 31, 2002, March 31, 2003, June 30, 2003 and on the Tranche B Term
Facility Final Maturity Date (each such repayment, as the same may be reduced
as provided in Sections 4.1 and 4.2(B), an "Additional Tranche B Scheduled
Repayment").
(e) On the Business Day following the date of receipt thereof by
Holdings and/or any of its Subsidiaries of the Cash Proceeds from any Asset
Sale, an amount equal to 100% of the Net Cash Proceeds then received from such
Asset Sale shall be applied as a mandatory repayment of principal of the then
outstanding Term Loans and then in accordance with Section 4.2(B)(d),
provided that up to an aggregate of $3,500,000 of Net Cash Proceeds from
--------
Asset Sales from and after the Initial Borrowing Date, shall not be required to
be used to so repay Term Loans or applied in accordance with Section 4.2(B)(d)
to the extent the Borrower elects, as hereinafter provided, to cause such Net
Cash Proceeds to be reinvested in Reinvestment Assets (a "Reinvestment
Election"); provided further that no such repayment pursuant to this
-------- -------
Section 4.2(A)(e) will be required to be made until the aggregate Net Cash
Proceeds required to be applied pursuant to this Section 4.2(A)(e) and not yet
so applied equals $500,000, at which time all such net cash proceeds in excess
of such $500,000 shall be so applied. The Borrower may exercise its
Reinvestment Election (within the parameters specified in the preceding
sentence) with respect to an Asset Sale if (x) the Reinvestment Test is
satisfied on the date of delivering the Reinvestment Notice referred to below
and (y) the Borrower delivers a Reinvestment Notice to the Agent by the
Business Day following the date of the consummation of the respective Asset
Sale, with such Reinvestment Election being effective with respect to the Net
Cash Proceeds of such Asset Sale equal to the Anticipated Reinvestment Amount
specified in such Reinvestment Notice.
(f) On the date of the receipt thereof by Holdings and/or any of
its Subsidiaries, an amount equal to 100% of the cash proceeds (net of
underwriting discounts and commissions, other banking and investment banking
fees, attorneys' and accountants' fees and other customary fees and other costs
associated therewith) of the incurrence of Indebtedness by Holdings and/or any
of its Subsidiaries (other than Indebtedness permitted by Section 8.4), shall
be applied as a mandatory repayment of principal of the then outstanding Term
Loans and then in accordance with Section 4.2(B)(d).
(g) On each date which is 90 days after the last day of each
fiscal year of Holdings (commencing with the fiscal year ending on December 31,
1996), an amount equal to the excess, if any, of (i) a percentage of Excess
Cash Flow for such fiscal year equal to the Applicable Cash Flow Percentage for
such fiscal year of Holdings and its Subsidiaries over (ii) the aggregate
principal amount of Term Loans prepaid during such fiscal year pursuant to
Section 4.1, shall be applied as a mandatory repayment of principal of the then
outstanding Term Loans, and then in accordance with Section 4.2(B)(d).
(h) On the Reinvestment Prepayment Date with respect to a
Reinvestment Election, an amount equal to the Reinvestment Prepayment Amount,
if any, for such Reinvestment Election shall be applied as a repayment of the
principal amount of the then outstanding Term Loans.
(i) On the date of any Change of Control, the outstanding
principal amount of the Term Loans, if any, shall be due and payable in full.
17
(B) Application:
-----------
(a) Each mandatory repayment of Term Loans required to be made
pursuant to Sections 4.2(A)(e), (f), (g) or (h) shall be applied to the
repayment of the then remaining applicable Scheduled Repayments on a pro
rata basis (based upon the then remaining principal amount of each such
Scheduled Repayment).
(b) With respect to each prepayment of Loans required by Section
4.2, the Borrower may designate the Types of Loans which are to be
prepaid and the specific Borrowing(s) under the affected Facility
pursuant to which made, provided that (i) the Borrower shall first so
--------
designate all Base Rate Loans and Eurodollar Loans with Interest Periods
ending on the date of repayment prior to designating any other Eurodollar
Loans and (ii) each prepayment of any Loans made pursuant to a Borrowing
shall be applied pro rata among such Loans. If the Borrower is
--- ----
required by this Section 4.2 (other than pursuant to Sections 4.2(A)(c)
or (d)) to repay any Eurodollar Loans and such prepayment will result in
the Borrower being required to pay breakage costs under Section 1.11 (any
such Eurodollar Loans, "Affected Loans"), the Borrower may elect, by
notice to the Agent, to have the provisions of the following sentence be
applicable. At the time any Affected Loans are otherwise required to be
prepaid, the Borrower may elect to deposit 100% (or such lesser
percentage elected by the Borrower) of the principal amounts that
otherwise would have been paid in respect of the Affected Loans with the
Agent to be held as security for the obligations of the Borrower
hereunder pursuant to a cash collateral agreement to be entered into in
form and substance reasonably satisfactory to the Agent, with such cash
collateral to be released from such cash collateral account (and applied
to repay the principal amount of such Loans) upon each occurrence
thereafter of the last day of an Interest Period applicable to the
relevant Loans (or such earlier date or dates as shall be requested by
the Borrower), with the amount to be so released and applied on the last
day of each Interest Period to be the amount of the relevant Loans to
which such Interest Period applies (or, if less, the amount remaining in
such cash collateral account). In the absence of a designation and/or
election by the Borrower as described in the preceding sentences, the
Agent shall, subject to the first sentence of this paragraph, make such
designation in its sole discretion with a view, but no obligation, to
minimize breakage costs owing under Section 1.11.
(c) Subject to the provisions of Section 4.2(B)(e), each
prepayment of Term Loans required by Section 4.2(A) (e), (f), (g) and (h)
shall be allocated pro rata between the Tranche A Term Loans and
--- ----
the Tranche B Term Loans based upon the respective outstanding principal
amounts thereof. Each such prepayment shall be further allocated pro
---
rata between the Initial Term Loans and the Additional Term Loans in
----
the applicable Tranche based upon the respective outstanding principal
amounts thereof.
(d) If the Term Loans shall have been prepaid in full, then, on
each occasion that a mandatory prepayment under Sections 4.2(A)(e), (f),
(g) or (h) would have been required if Term Loans were outstanding, the
Revolving Commitments shall be reduced by the amount of the prepayment
that would have been so required.
(e) Any Lender holding Tranche B Term Loans may, to the extent
Tranche A Term Loans are outstanding, elect on not less than one Business
Day's prior written notice to the Agent with respect to any optional
prepayment made pursuant to Section 4.1 or any mandatory prepayment made
pursuant to Section 4.2(A)(e), (f), (g) and (h) not to have such
prepayment applied to such Lender's Tranche B Term Loans until all
Tranche A Term Loans shall have been paid in full in which case the
amount not so applied shall be applied to prepay Tranche A Term Loans.
4.3 Method and Place of Payment. Except as otherwise
---------------------------
specifically provided herein and subject to Section 4.2(B)(e), all payments
under this Agreement shall be made to the Agent for the ratable (based on its
pro rata share) account of the Lenders entitled thereto, not later than
--- ----
1:00 P.M. (New York time) on the date when due and shall be made in immediately
available funds and in lawful money of the United States of America at the
Payment Office, it being understood that written notice by the Borrower to the
Agent to make a payment from the funds in the Borrower's account at the Payment
Office shall constitute the making of such payment to the extent of such funds
held in such account. Any payments under this Agreement which are made later
than 1:00 P.M. (New
18
York time) shall be deemed to have been made on the next succeeding Business
Day. Whenever any payment to be made hereunder shall be stated to be due on a
day which is not a Business Day, the due date thereof shall be extended to the
next succeeding Business Day and, with respect to payments of principal,
interest shall be payable during such extension at the applicable rate in
effect immediately prior to such extension.
4.4 Net Payments. (a) All payments made by the Borrower
------------
hereunder, under any Note or any other Credit Document, will be made without
setoff, counterclaim or other defense. Except as provided for in Section
4.4(b), all such payments will be made free and clear of, and without deduction
or withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein (but excluding, except as provided in the second succeeding sentence,
any tax imposed on or measured by the net income (or any franchise tax based on
net income) of a Lender pursuant to the laws of the jurisdiction (or any
political subdivision or taxing authority thereof or therein) under which such
Lender is organized or in which the principal office or applicable lending
office of such Lender is located or under the laws of any political subdivision
or taxing authority of any such jurisdiction in which the principal office or
applicable lending office of such Lender is located) and all interest,
penalties or similar liabilities with respect thereto (collectively, "Taxes").
If any Taxes are so levied or imposed, the Borrower agrees to pay the full
amount of such Taxes and such additional amounts as may be necessary so that
every payment of all amounts due hereunder, under any Note or under any other
Credit Document, after withholding or deduction for or on account of any Taxes,
will not be less than the amount provided for herein or in such Note or in such
other Credit Document. If any amounts are payable in respect of Taxes pursuant
to the preceding sentence, then the Borrower shall also reimburse each Lender,
upon the written request of such Lender, for taxes imposed on or measured by
the net income of such Lender pursuant to the laws of the jurisdiction in which
the principal office or applicable lending office of such Lender is located or
of any political subdivision or taxing authority of any such jurisdiction and
for any withholding of income or similar taxes imposed by the United States of
America as such Lender shall determine are payable by, or withheld from, such
Lender in respect of Taxes paid to or on behalf of such Lender pursuant to this
or the preceding sentence. The Borrower will furnish to the Agent within 45
days after the date the payment of any Taxes, or any withholding or deduction
on account thereof, is due pursuant to applicable law certified copies of tax
receipts evidencing such payment by the Borrower. The Borrower will indemnify
and hold harmless the Agent and each Lender, and reimburse the Agent or such
Lender upon its written request, for the amount of any Taxes so levied or
imposed and paid or withheld by such Lender.
(b) Each Lender that is not a United States person (as such term
is defined in Section 7701(a)(30) of the Code) agrees to deliver to the
Borrower and the Agent (i) on or prior to the Additional Borrowing Date (or in
the case of a Lender that is an assignee, transferee or participant of an
interest under this Agreement pursuant to Section 12.4 hereof (unless the
respective Lender was already a Lender hereunder immediately prior to such
assignment or transfer) on the date of such assignment or transfer to such
Lender) two accurate and complete original signed copies of Internal Revenue
Service Form 4224 or 1001 (or successor forms) certifying to such Lender's
entitlement to a complete exemption from United States withholding tax with
respect to payments to be made under this Agreement and under any Note and
under any other Credit Document, or (ii) if the Lender is not a "bank" within
the meaning of Section 881(c)(3)(A) of the Code and cannot deliver either
Internal Revenue Service Form 1001 or 4224 pursuant to clause (i) above, on or
prior to the Additional Borrowing Date (or in the case of a Lender that is an
assignee, transferee or participant of an interest under this Agreement
pursuant to Section 12.4 hereof, on the date of such assignment, transfer or
participation to such Lender) (x) a duly executed certificate substantially in
the form of Exhibit F (any such certificate, a "Section 4.4(b)(ii)
Certificate") and (y) two accurate and complete original signed copies of
Internal Revenue Service Form W-8 (or successor form). Each Lender that
delivers a statement in the form of Exhibit F (or such other form of statement
as shall have been requested by the Borrower) agrees that it shall hold only
Qualified Non-U.S. Lender Notes and that it shall be the sole beneficial and
record owner of all Qualified Non-U.S. Lender Notes held by it. In addition,
each Lender agrees that from time to time upon the reasonable request by the
Borrower or the Agent after the Additional Borrowing Date, when a lapse in time
or change in circumstances renders the previous certification obsolete or
inaccurate in any material respect, it will deliver to the Borrower and the
Agent two new accurate and complete original signed copies of Internal Revenue
Service Form 4224 or 1001, or Form W-8 and a Section 4.4(b)(ii) Certificate, as
the case may be, and such other forms as may be required in order to conform or
establish the entitlement of such Lender to a continued complete exemption from
United States withholding tax with respect to payments under this Agreement and
any Note, or it shall immediately notify the
19
Borrower and the Agent of its inability to deliver any such Form or Certificate.
Notwithstanding anything to the contrary contained in Section 4.4(a), the
Borrower shall be entitled, to the extent it is required to do so by law, to
deduct or withhold income or similar taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from interest,
fees or other amounts payable hereunder, under any Note or under any other
Credit Document (without obligation under Section 4.4(a) to pay the respective
Lender such Taxes or any additional amounts with respect thereto) for the
account of any Lender which is not a United States person (as such term is
defined in Section 7701(a)(3) of the Code) for U.S. Federal income tax purposes
to the extent that such Lender has not provided to the Borrower such forms
required to be provided to the Borrower by a Lender pursuant to this Section
4.4(b), provided, that if the Borrower shall so deduct or withhold any such
--------
taxes, it shall provide a statement to the Agent and such Lender, setting forth
the amount of such taxes so deducted or withheld, the applicable rate and any
other information or documentation which such Lender may reasonably request for
assisting such Lender in obtaining any allowable credits or deductions for the
taxes so deducted or withheld in the jurisdiction or jurisdictions in which such
Lender is subject to tax. Notwithstanding anything to the contrary contained in
this Section 4.4, the Borrower agrees to pay additional amounts and to indemnify
each Lender in the manner set forth in Section 4.4(a) (without regard to the
identity of the jurisdiction requiring the deduction or withholding) in respect
of any amounts deducted or withheld by it as described in the immediately
preceding sentence as a result of any changes after the Effective Date in any
applicable law, treaty, governmental rule, regulation, guideline or order, or in
the interpretation thereof, relating to the deducting or withholding of income
or similar taxes.
(c) If a Lender shall become aware that it is entitled to claim a
refund from a Governmental Authority in respect of Taxes to which it has been
indemnified by the Borrower, or with respect to which the Borrower has paid
additional amounts, pursuant to this Section 4.4, it shall promptly notify the
Borrower of the availability of such refund claim and shall, within 60 days
after receipt of a request by the Borrower, make a claim to such Governmental
Authority for such refund at the Borrower's expense. If a Lender receives a
refund (including pursuant to a claim for refund made pursuant to the preceding
sentence) in respect of any Taxes to which it has been indemnified by the
Borrower or with respect to which the Borrower has paid additional amounts
pursuant to this Section 4.4, it shall within 30 days from the date of such
receipt pay over such refund to the Borrower (but only to the extent of
indemnity payments made, or additional amounts paid, by the Borrower under this
Section 4.4 with respect to the Taxes or other taxes giving rise to such
refund), net of all out-of-pocket expenses of such Lender and without interest
(other than interest paid by the relevant Governmental Authority with respect
to such refund); provided, however, that the Borrower, upon the request
-------- -------
of such Lender, agrees to repay the amount paid over to the Borrower (plus
penalties, interest or other charges) to such Lender in the event such Lender
is required to repay such refund to such Governmental Authority.
(d) Any Lender claiming any indemnity payment or additional
amounts payable pursuant to this Section 4.4 shall use reasonable efforts
(consistent with legal and regulatory restrictions) to file any certificate or
document reasonably requested in writing by the Borrower or to change the
jurisdiction of its applicable lending office if the making of such a filing or
change would avoid the need for or reduce the amount of any such indemnity
payment or additional amounts that may thereafter accrue and would not be
otherwise disadvantageous to such Lender in the sole determination of such
Lender).
(e) If the Borrower pays any additional amount under this Section
4.4 to a Lender and such Lender determines in its sole discretion that it has
received or realized in connection therewith any credit against its Tax
liabilities in or with respect to the taxable year in which the additional
amount is paid, such Lender shall pay to the Borrower an amount that the Lender
shall, in its sole discretion, determine is equal to the net benefit, after
tax, which was obtained by the Lender in such year as a consequence of such
credit.
Each Lender that delivers a statement in the form of Exhibit F (or such other
form of statement as shall have been requested by the Borrower) agrees that it
shall hold only Qualified Non-U.S. Lender Notes and that it shall be the sole
beneficial and record owner of all Qualified Non-U.S. Lender Notes held by it.
20
SECTION 5. Conditions Precedent.
--------------------
5.1 Conditions Precedent to Initial Borrowing Date. The
----------------------------------------------
obligation of the Lenders to make each Loan hereunder, and the obligation of
the Letter of Credit Issuer to issue Letters of Credit hereunder, in each case
on the Initial Borrowing Date are subject to the satisfaction of each of the
following conditions at such time:
(a) Execution of Original Credit Agreement. On or prior to
--------------------------------------
the Initial Borrowing Date, (i) the Original Credit Agreement shall have
been executed and delivered as provided in Section 12.10(a) and (ii)
there shall have been delivered to the Agent for the account of each
Lender the appropriate Tranche A Term Note, Tranche B Term Note,
Revolving Note and/or Swingline Note executed by the Borrower, in each
case, in the amount, maturity and as otherwise provided herein.
(b) Opinions of Counsel. On the Initial Borrowing Date, the
-------------------
Agent shall have received opinions, addressed to the Agent, the
Collateral Agent and each of the Lenders and dated the Initial Borrowing
Date, from (i) Cravath, Swaine & Xxxxx, counsel to Holdings and the
Borrower, which opinion shall cover the matters covered in Exhibit G
hereto and (ii) local counsel satisfactory to the Agent as the Agent may
request, which opinions shall cover the perfection of the security
interests granted pursuant to the Security Documents (other than the
Mortgages) and such other matters incident to the transactions
contemplated herein as the Agent may reasonably request and shall be in
form and substance reasonably satisfactory to the Agent.
(c) Corporate Proceedings. (i) On the Initial Borrowing
---------------------
Date, the Agent shall have received from each Credit Party a certificate,
dated the Initial Borrowing Date, signed by the President or any
Vice-President of each such Credit Party in the form of Exhibit E with
appropriate insertions and deletions, together with (x) copies of the
certificate of incorporation, any certificate of designation, the
by-laws, or other organizational documents of each such Credit Party, (y)
the resolutions, or such other administrative approval, of each such
Credit Party referred to in such certificate to be reasonably
satisfactory to the Agent and (z) in the case of the certificate
delivered by the Borrower, a statement that all of the applicable
conditions set forth in Sections 5.1(g), (h) and (i) and 5.3(a) exist as
of such date.
(ii) On the Initial Borrowing Date, all corporate and legal
proceedings and all instruments and agreements in connection with the
transactions contemplated by the Original Credit Agreement and the other
Documents shall be reasonably satisfactory in form and substance to the
Agent, and the Agent shall have received all information and copies of
all certificates, documents and papers, including good standing
certificates and any other records of corporate proceedings and
governmental approvals, if any, which the Agent may have reasonably
requested in connection therewith, such documents and papers, where
appropriate, to be certified by proper corporate or governmental
authorities.
(d) Plans: Collective Bargaining Agreements; Existing
--------------------------------------------------
Indebtedness Agreements; Shareholders' Agreements; Management
-------------------------------------------------------------
Agreements; Employment Agreements; Tax Sharing Agreements. On or
---------------------------------------------------------
prior to the Initial Borrowing Date, there shall have been delivered to
the Agent copies, certified as true and correct by an appropriate officer
of Holdings of:
(i) any Plans, and for each Plan (x) that is a "single-employer
plan" (as defined in Section 4001(a)(15) of ERISA) the most recently
completed actuarial valuation prepared therefor by such Plan's regular
enrolled actuary and the Schedule B, "Actuarial Information" to the IRS
Form 5500 (Annual Report) most recently filed with the Internal Revenue
Service and (y) that is a "multiemployer plan" (as defined in Section
4001(a)(3) of ERISA), each of the documents referred to in clause (x)
either in the possession of Holdings or any of its Subsidiaries, or any
ERISA Affiliate or reasonably available thereto from the sponsor or
trustees of such Plan;
(ii) any collective bargaining agreements or any other similar
agreement or arrangements covering the employees of Holdings or any of
its Subsidiaries (collectively, the "Collective Bargaining Agreements");
21
(iii) all agreements evidencing or relating to the Subordinated
Notes and other Existing Indebtedness (the "Existing Indebtedness
Agreements");
(iv) all agreements entered into by Holdings or any of its
Subsidiaries governing the terms and relative rights of its capital
stock, and any agreements entered into by members or shareholders
relating to any such entity with respect to their capital stock
(collectively, the "Shareholders' Agreements");
(v) any agreement with members of, or with respect to, the
management of Holdings or any of its Subsidiaries (collectively, the
"Management Agreements");
(vi) any employment agreements entered into by Holdings or any of
its Subsidiaries (collectively, the "Employment Agreements"); and
(vii) all tax sharing, tax allocation and other similar agreements
entered into by Holdings and/or any Subsidiary of Holdings (collectively,
the "Tax Sharing Agreements");
all of which Plans, Collective Bargaining Agreements, Existing Indebtedness
Agreements, Shareholders' Agreements, Management Agreements, Employment
Agreements and Tax Sharing Agreements shall be in form and substance
satisfactory to the Agent. The Agent acknowledges that it is satisfied with
the form and substance of each Plan, Collective Bargaining Agreement, Existing
Indebtedness Agreement, Shareholders' Agreement, Management Agreement,
Employment Agreement and Tax Sharing Agreement, as the case may be, delivered
to it on or prior to the Initial Borrowing Date in the form so delivered.
(e) Adverse Change, etc. From December 31, 1994 to the
--------------------
Initial Borrowing Date, nothing shall have occurred (and neither the Lenders
nor the Agent shall have become aware of any facts or conditions not previously
known) which the Agent or the Required Lenders on such date shall determine (a)
has, or is reasonably likely to have, a material adverse effect on the rights
or remedies of the Lenders or the Agent under the Original Credit Agreement or
any other Credit Document, or on the ability of any Credit Party to perform its
obligations to them, or (b) has, or is reasonably likely to have, a material
adverse effect on the business, properties, assets, operations, condition
(financial or otherwise) or prospects of Holdings and its Subsidiaries taken as
a whole.
(f) Litigation. On the Initial Borrowing Date, there shall be
----------
no actions, suits or proceedings pending or, to the knowledge of Holdings or
the Borrower, threatened against any Credit Party (a) with respect to this
Agreement or any other Document or the transactions contemplated hereby or
thereby (including the Merger) which could be reasonably expected to have a
material adverse effect on the rights or remedies of the Lenders under the
Credit Documents or (b) which the Agent or the Required Lenders shall determine
could reasonably be expected to (i) have a Material Adverse Effect or (ii) have
a material adverse effect on the rights or remedies of the Lenders hereunder or
under any other Credit Document or on the ability of any Credit Party to
perform its respective obligations to the Lenders hereunder or under any other
Credit Document.
(g) Approvals. On the Initial Borrowing Date, all necessary
---------
governmental approvals and all necessary authorizations, consents, approvals or
waivers of other third parties in connection with the transactions contemplated
by the Credit Documents and the other Documents shall have been obtained and
remain in effect (except where the failure to do so would not reasonably be
expected to have a Material Adverse Effect), and all applicable waiting periods
shall have expired without any action being taken by any competent authority
which restrains or prevents such transactions or imposes, in the reasonable
judgment of the Required Lenders or the Agent, materially adverse conditions
upon the consummation of such transactions.
(h) Consummation of the Merger. (i) On or prior to the
--------------------------
Initial Borrowing Date, there shall have been delivered to the Lenders true and
correct copies of the Merger Agreement, and all terms of the Merger Agreement
and the other Merger Documents shall be reasonably satisfactory in form and
substance to the Agent. The Agent acknowledges that it is satisfied with the
form and substance of the Merger Agreement and the other Merger Documents
delivered to it prior to the Initial Borrowing Date in the form so delivered.
The Merger, including all of the terms and conditions thereof, shall have been
duly approved by the board of directors and the
22
stockholders of Holdings and GH, and all Merger Documents shall have been duly
executed and delivered by the parties thereto and shall be in full force and
effect. Each of the material conditions precedent to Holdings' and GH's
obligation to consummate the Merger as set forth in the Merger Documents shall
have been satisfied, or waived, all to the reasonable satisfaction of the
Agent, and concurrently with the making of the Term Loans on the Initial
Borrowing Date the Merger shall have been consummated for an aggregate merger
consideration not to exceed $207,000,000 in accordance with the Merger
Documents, any waivers relating thereto (which, if material, have been approved
by the Agent, such approval not to be unreasonably withheld), if any, and all
applicable laws, rules and regulations.
(ii) The Agent shall be satisfied that fees and expenses relating
to the Merger shall not exceed $11,000,000.
(i) Existing Credit Agreements; Indebtedness. (i) On the
----------------------------------------
Initial Borrowing Date, the commitments under the Existing Credit Agreement
shall have been terminated, all loans thereunder shall have been repaid in
full, together with interest thereon, all letters of credit issued thereunder
shall have been terminated or incorporated hereunder as, or supported hereunder
by, Letters of Credit, and all other amounts owing pursuant to the Existing
Credit Agreement shall have been repaid in full, and the Agent shall have
received evidence in form, scope and substance reasonably satisfactory to it
that the matters set forth in this Section 5.1(i)(i) have been satisfied at
such time.
(ii) On the Initial Borrowing Date, the creditors under the
Existing Credit Agreement shall have terminated and released all Liens on the
capital stock of and assets owned by Holdings and its Subsidiaries, and the
Agent shall have received all such releases as may have been requested by the
Agent, which releases shall be in form and substance reasonably satisfactory to
the Agent.
(iii) After giving effect to the Merger and the other transactions
contemplated hereby, Holdings, the Borrower and the Borrower's Subsidiaries
shall have no preferred stock issued or outstanding other than as set forth in
Annex 5.1(i), and shall have no Indebtedness other than pursuant to (x) the
Facilities, (y) the Subordinated Notes and (z) Indebtedness permitted under
Section 8.4.
(j) Holdings Stock Issuance. On or prior to the Initial
-----------------------
Borrowing Date, (x) Holdings shall have received cash proceeds (or
contributions of Holdings Common Stock or rollover of options outstanding
immediately prior to the Initial Borrowing Date to purchase Holdings Common
Stock, valued at the original price per share paid by the Investors, in an
aggregate amount not to exceed $9,000,000) of at least $51,000,000, in
connection with the sale of Holdings Common Stock, Holdings Preferred Stock or
options in respect thereof to the Investors, which cash proceeds, when
aggregated with the proceeds of the Term Loans, Revolving Loans made on the
Initial Borrowing Date, the Subordinated Notes and existing cash held by the
Borrower on the Initial Borrowing Date, shall be sufficient to consummate the
Merger and to pay all fees and expenses owing in connection therewith, and (y)
the Lenders shall have received complete and correct copies of all documents
executed and delivered in connection with such sale of Holdings Common Stock
and Holdings Preferred Stock, each of which shall be in full force and effect
and shall be in form and substance reasonably satisfactory to the Agent.
(k) Subordinated Notes. On the Initial Borrowing Date, (x)
------------------
the Borrower shall have received at least $75,000,000 of gross cash proceeds
from the sale or issuance of the Subordinated Notes less any underwriting
discounts and/or commissions, which cash proceeds, when aggregated with the
proceeds of the Holdings Common Stock and Holdings Preferred Stock issued on or
prior to the Initial Borrowing Date, the proceeds of the Term Loans, Revolving
Loans made on the Initial Borrowing Date and existing cash held by the Borrower
on the Initial Borrowing Date, shall be sufficient to consummate the Merger and
to pay all fees and expenses owing in connection therewith, and (y) the Lenders
shall have received true, complete and correct copies of all documents executed
and delivered in connection with such issuance, each of which shall be in full
force and effect and in form and substance reasonably satisfactory to the
Required Lenders.
(l) Security Documents; Subsidiary Guaranty. (i) On the
---------------------------------------
Initial Borrowing Date, each of Holdings, the Borrower and Domestic
Subsidiaries which own capital stock of any other Subsidiary shall have each
duly
23
authorized, executed and delivered a Pledge Agreement in the form of Exhibits
X-0, X-0, xxx X-0, respectively (each as modified, amended or supplemented from
time to time in accordance with the terms thereof and hereof and together with
the pledge agreements required under Section 7.11(d), a "Pledge Agreement" and
collectively, the "Pledge Agreements"), and each shall have delivered to the
Collateral Agent, as pledges thereunder, all of the certificates representing
the Pledged Securities referred to therein, endorsed in blank or accompanied by
executed and undated stock powers, and each Pledge Agreement shall be in full
force and effect.
(ii) On the Initial Borrowing Date, each of Holdings, the Borrower
and the Domestic Subsidiaries shall have duly authorized, executed and
delivered a Security Agreement substantially in the form of Exhibits I-1, I-2
and I-3, respectively (each as modified, supplemented or amended from time to
time in accordance with the terms thereof and hereof and together with the
security agreements required under Section 5.2(k) and 7.11(d), a "Security
Agreement" and collectively, the "Security Agreements") covering all of such
Credit Party's present and future Security Agreement Collateral, in each case
together with:
(w) executed copies of Financing Statements (Form UCC-1) in
appropriate form for filing under the UCC of each
jurisdiction as may be necessary to perfect the security
interests purported to be created by each Security Agreement;
(x) certified copies of Requests for Information or Copies (Form
UCC-11), or equivalent reports, each of recent date listing
all effective financing statements that name each such Credit
Party as debtor and that are filed in the jurisdictions
referred to in clause (w), together with copies of such
financing statements (none of which shall cover the
Collateral except (x) those with respect to which appropriate
termination statements executed by the secured lender
thereunder have been delivered to the Agent and (y) to the
extent evidencing liens permitted pursuant to Section 8.3);
(y) evidence of the completion of, or arrangements to complete,
all other recordings and filings of, or with respect to, each
Security Agreement as may be necessary or, in the opinion of
the Collateral Agent, desirable to perfect the security
interests intended to be created by such Security Agreement;
and
(z) evidence that all other actions reasonably necessary or, in
the reasonable opinion of the Collateral Agent, desirable to
perfect and protect the security interests purported to be
created by each Security Agreement have been, or are in the
process of being, taken.
(iii) On the Initial Borrowing Date, the Agent shall have received
(A) fully executed counterparts of deeds of trust, leasehold deeds of trust,
mortgages, leasehold mortgages and similar documents in each case in form and
substance reasonably satisfactory to the Agent and substantially in the form of
Exhibit M (as amended, supplemented or otherwise modified from time to time
each, a "Mortgage" and collectively, the "Mortgages") covering all the
Mortgaged Properties, and arrangements reasonably satisfactory to the
Collateral Agent shall be in place to provide that counterparts of such
Mortgages shall be recorded on the Initial Borrowing Date or promptly
thereafter in all places to the extent necessary or desirable, in the judgment
of the Collateral Agent, effectively to create a valid and enforceable first
priority Lien, subject only to Permitted Liens, on each Mortgaged Property in
favor of the Collateral Agent (or such other trustee as may be required or
desired under local law) for the benefit of the Secured Creditors, (B) a
lender's title insurance policy; paid for by the Borrower, issued by a
nationally recognized title insurance company, together with such endorsements,
coinsurance and reinsurance as may be requested by the Agent, in form and
substance acceptable to the Agent, insuring each Mortgage as a first lien on
the relevant Mortgaged Property and subject only to Liens expressly agreed to
by the Agent) and (C) such other documents and legal opinions reasonably
requested by the Agent or the Required Lenders.
(iv) On the Initial Borrowing Date, each Domestic Subsidiary shall
have duly authorized, executed and delivered a Guaranty in the form of Exhibit
J hereto (as modified, amended or supplemented from time to time in accordance
with the terms hereof and thereof and together with the subsidiary guaranties
required under Section 7.11(d), the "Subsidiary Guaranty"), and the Subsidiary
Guaranty shall be in full force and effect.
24
(m) Solvency. On the Initial Borrowing Date, the Agent shall
--------
have received from Houlihan, Lokey, Xxxxxx & Xxxxx, a solvency opinion with
respect to each of Holdings and its Subsidiaries taken as a whole and the
Borrower and its Subsidiaries taken as a whole, in each case after giving
effect to the Merger and the other transactions contemplated hereby and in form
and substance reasonably satisfactory to the Agent.
(n) Insurance Policies. On the Initial Borrowing Date, the
------------------
Collateral Agent shall have received evidence of insurance complying with the
requirements of Section 7.3 and the applicable provisions of the Security
Documents for the business and properties of the Borrower and its Subsidiaries,
in form and substance satisfactory to the Agent and, with respect to all
casualty insurance, naming the Collateral Agent as an additional insured and
loss payee. In addition, on the Initial Borrowing Date the Agent shall have
received an insurance broker's or agent's certificate certifying that the
insurance coverage to be maintained by Holdings and its Subsidiaries after the
Initial Borrowing Date will be usual and customary for similarly situated
companies in the same lines of business and that the insurance policies
maintained by Holdings and its Subsidiaries pursuant to this Agreement and the
applicable provisions of the Security Documents are endorsed or amended to
include a "standard" or "New York" lender's loss payable endorsement and name
the Collateral Agent as additional insured.
(o) Fees. On the Initial Borrowing Date, the Borrower shall
----
have paid to the Agent and the Lenders all Fees and expenses agreed upon by
such parties to be paid on or prior to such date.
(p) Environmental Reports. On or prior to the Initial
---------------------
Borrowing Date, the Agent shall have received a certificate signed by the
President or any Vice-President of the Borrower attaching a true and correct
copy of the environmental report from Pilko & Associates, Inc., dated August
10, 1995, in respect of the real property assets of the Borrower and its
Subsidiaries, and such other materials as the Borrower deems necessary in
connection with such certificate, describing the remedial action taken by the
Borrower or any of its Subsidiaries to correct any material deficiencies
identified by such environmental report.
(q) Financial Information. The Lenders shall have received
---------------------
copies of (i) audited consolidated financial statements of Holdings and its
Subsidiaries for fiscal years ending and as at December 31, 1994, 1993 and
1992, prepared in accordance with GAAP, accompanied by an unqualified report of
Ernst and Young, and the unaudited consolidated financial statements of
Holdings and its Subsidiaries dated March 31, 1995 and June 30, 1995, (ii)
audited consolidated financial statements of the Borrower and its Subsidiaries
for fiscal years ending and as at December 31, 1994, 1993 and 1992, prepared in
accordance with GAAP, accompanied by an unqualified report of Ernst and Young,
and the unaudited consolidated financial statements of the Borrower and its
Subsidiaries dated June 30, 1995, (iii) unaudited monthly financial statements,
(in form and detail comparable to the monthly financial statement previously
prepared), prepared in accordance with GAAP, for each of Holdings and its
Subsidiaries and the Borrower and its Subsidiaries for the months ended July
31, 1995 and August 30, 1995, and each other fiscal month ended prior to the
Effective Date for which such monthly financial statements are available prior
to the Effective Date, which financial statements shall not, in the reasonable
judgment of the Lenders, reflect any material adverse change in the
consolidated financial condition of the Borrower as reflected in the financial
statements or projection delivered to the Lenders or the Agent on or prior to
the dates of their respective commitments to the Facilities and (iv) the Pro
Forma Balance Sheets, together with a reconciliation thereof to the balance
sheets of Holdings and its consolidated Subsidiaries and the Borrower and its
consolidated Subsidiaries, respectively, as at the Pro Forma Date.
5.2 Conditions Precedent to Additional Borrowing Date. The
-------------------------------------------------
obligation of the Lenders to make each Additional Tranche A Term Loan and
Additional Tranche B Term Loan hereunder on the Additional Borrowing Date are
subject to the satisfaction of each of the following conditions at such time:
(a) Execution of this Agreement. On or prior to the
---------------------------
Additional Borrowing Date, (i) this Agreement shall have been executed
and delivered as provided in Section 12.10(b) and (ii) there shall have
been delivered to the Agent for the account of each Lender with a Tranche
A Term Commitment or a Tranche B Term Commitment the appropriate Tranche
A Term Note or Tranche B Term Note, executed by the Borrower in the
amount of its Tranche A Term Loan or Tranche B Term Loan, as the case may
be, after giving effect to this Agreement.
25
(b) Opinions of Counsel. On the Additional Borrowing Date,
-------------------
the Agent shall have received opinions, addressed to the Agent, the
Collateral Agent and each of the Lenders and dated the Additional
Borrowing Date, from (i) Cravath, Swaine & Xxxxx, counsel to Holdings and
the Borrower, which opinion shall cover the matters covered in Exhibit N
hereto and (ii) local counsel satisfactory to the Agent as the Agent may
request, which opinions shall cover the perfection of the security
interests granted pursuant to the Security Documents with respect to the
assets acquired in the Devon Acquisition and such other matters incident
to the Devon Acquisition as the Agent may reasonably request and shall be
in form and substance reasonably satisfactory to the Agent.
(c) Corporate Proceedings. (i) On the Additional Borrowing
---------------------
Date, the Agent shall have received from each Credit Party a certificate,
dated the Additional Borrowing Date, signed by the President or any
Vice-President of each such Credit Party in the form of Exhibit O with
appropriate insertions and deletions, together with (x) copies of the
certificate of incorporation, any certificate of designation, the
by-laws, or other organizational documents of each such Credit Party, (y)
the resolutions, or such other administrative approval, of each such
Credit Party referred to in such certificate to be reasonably
satisfactory to the Agent and (z) in the case of the certificate
delivered by the Borrower, a statement that all of the applicable
conditions set forth in Sections 5.2(g), (h) and (i) and 5.3(a) exist as
of such date.
(ii) On the Additional Borrowing Date, all corporate and legal
proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement and the other Documents shall
be reasonably satisfactory in form and substance to the Agent, and the
Agent shall have received all information and copies of all certificates,
documents and papers, including good standing certificates and any other
records of corporate proceedings and governmental approvals, if any,
which the Agent may have reasonably requested in connection therewith,
such documents and papers, where appropriate, to be certified by proper
corporate or governmental authorities.
(d) Plans of Devon; Collective Bargaining Agreements; Existing
----------------------------------------------------------
Indebtedness Agreements; Shareholders' Agreements; Management
-------------------------------------------------------------
Agreements; Employment Agreements; Tax Sharing Agreements. On or
---------------------------------------------------------
prior to the Additional Borrowing Date, there shall have been delivered
to the Agent copies, certified as true and correct by an appropriate
officer of either Holdings or the Borrower of:
(i) any Plans of Devon or any of its Subsidiaries, and for each
such Plan (x) that is a "single-employer plan" (as defined in Section
4001(a)(15) of ERISA) the most recently completed actuarial valuation
prepared therefor by such Plan's regular enrolled actuary and the
Schedule B, "Actuarial Information" to the IRS Form 5500 (Annual Report)
most recently filed with the Internal Revenue Service and (y) that is a
"multiemployer plan" (as defined in Section 4001(a)(3) of ERISA), each of
the documents referred to in clause (x) either in the possession of
Holdings or any of its Subsidiaries, or any ERISA Affiliate or reasonably
available thereto from the sponsor or trustees of such Plan;
(ii) any collective bargaining agreements or any other similar
agreement or arrangements covering the employees of Devon or any of its
Subsidiaries (collectively, the "Devon Collective Bargaining
Agreements");
(iii) all agreements evidencing or relating to the Indebtedness of
Devon or any of its Subsidiaries (the "Devon Existing Indebtedness
Agreements");
(iv) all agreements entered into by Devon or any of its
Subsidiaries governing the terms and relative rights of its capital
stock, and any agreements entered into by members or shareholders
relating to any such entity with respect to their capital stock
(collectively, the "Devon Shareholders' Agreements");
(v) any agreement with members of, or with respect to, the
management of Devon or any of its Subsidiaries (collectively, the "Devon
Management Agreements");
26
(vi) any employment agreements entered into by Devon or any of its
Subsidiaries (collectively, the "Devon Employment Agreements"); and
(vii) all tax sharing, tax allocation and other similar agreements
entered into by Devon or any of its Subsidiaries (collectively, the
"Devon Tax Sharing Agreements");
all of which Plans of Devon, Devon Collective Bargaining Agreements, Devon
Existing Indebtedness Agreements, Devon Shareholders' Agreements, Devon
Management Agreements, Devon Employment Agreements and Devon Tax Sharing
Agreements shall be in form and substance satisfactory to the Agent. The Agent
acknowledges that it is satisfied with the form and substance of each Plan of
Devon, Devon Collective Bargaining Agreement, Devon Existing Indebtedness
Agreement, Devon Shareholders' Agreement, Devon Management Agreement, Devon
Employment Agreement and Devon Tax Sharing Agreement, as the case may be,
delivered to it on or prior to the Additional Borrowing Date in the form so
delivered.
(e) Adverse Change, etc. Nothing shall have occurred (and
--------------------
neither the Lenders nor the Agent shall have become aware of any facts or
conditions not previously known) which the Agent or the Required Lenders shall
determine (i) has, or is reasonably likely to have, a material adverse effect
on the rights or remedies of the Lenders or the Agent under this Agreement or
any other Credit Document, or on the ability of any Credit Party to perform its
obligations to them from December 31, 1994 to the Additional Borrowing Date,
(ii) has, or is reasonably likely to have, a material adverse effect on the
business, properties, assets, operations, condition (financial or otherwise) or
prospects of Holdings and its Subsidiaries taken as a whole from December 31,
1995 to the Additional Borrowing Date or (iii) has, or is reasonably likely to
have, a material adverse effect on the business, properties, assets,
operations, condition (financial or otherwise) or prospects of Devon and its
Subsidiaries taken as a whole from December 31, 1995 to the Additional
Borrowing Date.
(f) Litigation. On the Additional Borrowing Date, there shall
----------
be no actions, suits or proceedings pending or, to the knowledge of Holdings or
the Borrower, threatened against any Credit Party (a) with respect to this
Agreement or any other Document or the transactions contemplated hereby or
thereby (including the Devon Acquisition) which could be reasonably expected to
have a material adverse effect on the rights or remedies of the Lenders under
the Credit Documents or (b) which the Agent or the Required Lenders shall
determine could reasonably be expected to (i) have a Material Adverse Effect or
(ii) have a material adverse effect on the rights or remedies of the Lenders
hereunder or under any other Credit Document or on the ability of any Credit
Party to perform its respective obligations to the Lenders hereunder or under
any other Credit Document.
(g) Approvals. On the Additional Borrowing Date, all
---------
necessary governmental approvals and all necessary authorizations, consents,
approvals or waivers of other third parties in connection with the transactions
contemplated by the Credit Documents and the other Documents shall have been
obtained and remain in effect (except where the failure to do so would not
reasonably be expected to have a Material Adverse Effect), and all applicable
waiting periods shall have expired without any action being taken by any
competent authority which restrains or prevents such transactions or imposes,
in the reasonable judgment of the Required Lenders or the Agent, materially
adverse conditions upon the consummation of such transactions.
(h) Consummation of the Devon Acquisition. (i) On or prior
-------------------------------------
to the Additional Borrowing Date, there shall have been delivered to the
Lenders true and correct copies of the Devon Acquisition Agreement, and all
terms of the Devon Acquisition Agreement and the other Devon Acquisition
Documents shall be reasonably satisfactory in form and substance to the Agent.
The Agent acknowledges that it is satisfied with the form and substance of the
Devon Acquisition Agreement and the other Devon Acquisition Documents delivered
to it prior to the Additional Borrowing Date in the form so delivered. The
Devon Acquisition, including all of the terms and conditions thereof, shall
have been duly approved by the board of directors of the Borrower and the board
of directors and shareholders of Devon, and all Devon Acquisition Documents
shall have been duly executed and delivered by the parties thereto and shall be
in full force and effect. Each of the material conditions precedent to the
Borrower's obligation to consummate the Devon Acquisition as set forth in the
Devon Acquisition Documents shall have been satisfied, or waived, all to the
reasonable satisfaction of the Agent, and concurrently with the making of the
Additional Term Loans on the Additional Borrowing Date the Devon Acquisition
shall have been
27
consummated for an aggregate share purchase consideration not to exceed
$94,000,000 in accordance with the Devon Acquisition Documents, any waivers
relating thereto (which, if material, have been approved by the Agent, such
approval not to be unreasonably withheld), if any, and all applicable laws,
rules and regulations.
(ii) The Agent shall be satisfied that fees and expenses relating
to the Devon Acquisition shall not exceed $7,000,000.
(i) Existing Devon Credit Agreements; Indebtedness. (i) On
----------------------------------------------
the Additional Borrowing Date, the commitments under the Existing Devon Credit
Agreements shall have been terminated, all loans thereunder shall have been
repaid in full, together with interest thereon, all letters of credit issued
thereunder shall have been terminated, or supported hereunder by, Letters of
Credit, and all other amounts owing pursuant to the Existing Devon Credit
Agreements shall have been repaid in full, and the Agent shall have received
evidence in form, scope and substance reasonably satisfactory to it that the
matters set forth in this Section 5.2(i)(i) have been satisfied at such time.
(ii) On the Additional Borrowing Date, the creditors under the
Existing Devon Credit Agreements shall have terminated and released all Liens
on the capital stock of and assets owned by Devon and its Subsidiaries, and the
Agent shall have received all such releases as may have been requested by the
Agent, which releases shall be in form and substance reasonably satisfactory to
the Agent.
(iii) After giving effect to the Devon Acquisition and the other
transactions contemplated hereby, Holdings, the Borrower and the Borrower's
Subsidiaries shall have no preferred stock issued or outstanding other than as
set forth in Annex 5.2(i), and shall have no Indebtedness other than pursuant
to (x) the Facilities, (y) the Subordinated Notes and (z) Indebtedness
permitted under Section 8.4.
(j) Borrower Stock Issuance. On or prior to the Additional
-----------------------
Borrowing Date (x) Holdings shall have received cash proceeds of at least
$31,500,000 in connection with the sale of Holdings Common Stock and Holdings
Preferred Stock to the Investors in connection with the Devon Acquisition, (y)
the Borrower shall have received cash proceeds of at least $31,500,000 in
connection with the sale of capital stock of the Borrower or options in respect
thereof to Holdings (or as a capital contribution from Holdings), which cash
proceeds, when aggregated with the proceeds of the Additional Tranche A Term
Loans and Additional Tranche B Term Loans made on the Additional Borrowing Date
and existing cash held by the Borrower on the Additional Borrowing Date, shall
be sufficient to consummate the Devon Acquisition and to pay all fees and
expenses owing in connection therewith and (z) the Lenders shall have received
complete and correct copies of all documents executed and delivered in
connection with such sale of Holdings Common Stock and Holdings Preferred Stock
and capital stock of the Borrower (or such capital contribution from Holdings)
each of which shall be in full force and effect and shall be in form and
substance reasonably satisfactory to the Agent.
(k) Security Documents. (i) On the Additional Borrowing Date,
------------------
(x) Holdings shall have duly authorized, executed and delivered Supplement No.
1 to Pledge Agreement in the form of Exhibit P-1 and (y) the Borrower shall
have duly authorized, executed and delivered the Amendment to Pledge Agreement
in the form of Exhibit P-2, and shall have delivered to the Collateral Agent,
as a pledgee thereunder, all of the certificates representing the Pledged
Securities referred to therein, endorsed in blank or accompanied by executed
and undated stock powers, and the Amendment to Pledge Agreement shall be in
full force and effect.
(ii) On the Additional Borrowing Date, (x) each of Holdings, the
Borrower and each of Tronomed, Inc. and Tronomed Express, Inc. shall have duly
authorized, executed and delivered each respective Supplement No. 1 to Security
Agreement substantially in the form of Exhibits Q-1, Q-2, Q-3 and Q-4,
respectively, covering all of each of Holdings', the Borrower's and the
Domestic Subsidiaries' present and future Security Agreement Collateral,
respectively, and (y) Devon shall have duly authorized, executed and delivered
the Subsidiary Security Agreement substantially in the form of Exhibit Q-5
covering all of Devon's and its Subsidiaries' present and future Security
Agreement Collateral together with:
28
(A) executed copies of Financing Statements (Form UCC-1) in
appropriate form for filing under the UCC of each
jurisdiction as may be necessary to perfect the security
interests purported to be created by such Security Agreement;
(B) certified copies of Requests for Information or Copies (Form
UCC-11), or equivalent reports, each of recent date listing
all effective financing statements that name Devon or any of
its Subsidiaries as debtor and that are filed in the
jurisdictions referred to in clause (w), together with copies
of such financing statements (none of which shall cover the
Collateral except (x) those with respect to which appropriate
termination statements executed by the secured lender
thereunder have been delivered to the Agent and (y) to the
extent evidencing liens permitted pursuant to Section 8.3);
(C) evidence of the completion of, or arrangements to complete,
all other recordings and filings of, or with respect to, such
Security Agreement as may be necessary or, in the opinion of
the Collateral Agent, desirable to perfect the security
interests intended to be created by such Security Agreement;
and
(D) evidence that all other actions reasonably necessary or, in
the reasonable opinion of the Collateral Agent, desirable to
perfect and protect the security interests purported to be
created by such Security Agreement have been, or are in the
process of being, taken.
(iii) On the Additional Borrowing Date, (x) each of Tronomed, Inc.
and Tronomed Express, Inc. shall have duly authorized, executed and delivered
each respective Supplement No. 1 to Subsidiary Guaranty in the form of Exhibits
R-1 and R-2, respectively, hereto and each such Supplement No. 1 to Subsidiary
Guaranty shall be in full force and effect and (y) Devon shall have duly
authorized, executed and delivered the Subsidiary Guaranty in the form of
Exhibit R-3 hereto and such Subsidiary Guaranty shall be in full force and
effect.
(iv) On the Additional Borrowing Date, (x) the Borrower shall have
duly authorized, executed and delivered Supplement No. 1 to Patent Security
Agreement in the form of Exhibit S-1 hereto and Supplement No. 1 to Patent
Security Agreement shall be in full force and effect and (y) Devon shall have
duly authorized, executed and delivered the Subsidiary Patent Security
Agreement in the form of Exhibit S-2 hereto and such Subsidiary Patent Security
Agreement shall be in full force and effect.
(v) On the Additional Borrowing Date, (x) the Borrower shall have
duly authorized, executed and delivered Supplement No. 1 to Trademark Security
Agreement in the form of Exhibit T-1 hereto and Supplement No. 1 to Trademark
Security Agreement shall be in full force and effect and (y) Devon shall have
duly authorized, executed and delivered the Subsidiary Trademark Security
Agreement in the form of Exhibit T-2 hereto and such Subsidiary Trademark
Security Agreement shall be in full force and effect.
(vi) On the Additional Borrowing Date, the Borrower shall have
duly authorized, executed and delivered amendments to Mortgages on the
Mortgaged Properties with appropriate title policy endorsements in the form of
Exhibit U.
(l) Solvency Certificate. On the Additional Borrowing Date,
--------------------
the Agent shall have received a solvency certificate, executed by the chief
financial officer or president of the Borrower, substantially in the form of
Exhibit V.
(m) Insurance Policies. On the Additional Borrowing Date, the
------------------
Collateral Agent shall have received an insurance report from Xxxxxxx & Xxxxxxx
with respect to insurance arrangements for Devon.
(n) Fees. On the Additional Borrowing Date, the Borrower
----
shall have paid to the Agent and the Lenders all Fees and expenses agreed upon
by such parties to be paid on or prior to such date.
29
(o) Financial Information. The Lenders shall have received
---------------------
copies of (i) audited consolidated financial statements of Devon for fiscal
years ending and as at December 31, 1995, 1994 and 1993, prepared in accordance
with GAAP, accompanied by an unqualified report of Price-Waterhouse L.L.P., and
(ii) the Devon Pro Forma Balance Sheets, together with a reconciliation thereof
to the balance sheets of Holdings and its consolidated Subsidiaries and the
Borrower and its consolidated Subsidiaries, respectively, as at the Devon Pro
Forma Date.
(p) Compliance Requirements. Holdings shall be in compliance,
-----------------------
on a pro forma basis after giving effect to the Devon Acquisition with
--- -----
the covenants contained in Sections 8.11, 8.12, 8.13, 8.14 and 8.15 as if the
Devon Acquisition had occurred on the first day of each relevant period for
testing such compliance. For purposes of determining such compliance, (i) such
covenants for the relevant periods ending March 31, 1996 shall be required to
be complied with and (ii) calculations for such covenants shall be computed as
at December 31, 1995. On or prior to the Additional Borrowing Date, Holdings
shall have delivered to the Agent an officers' certificate setting forth the
calculations required to establish such compliance.
(q) Consent. This Agreement shall have been executed by the
-------
Required Lenders and, without duplication, the Lenders with Additional Term
Commitments.
(r) Borrowing Base Certificate; Total Availability
-----------------------------------------------
Certificate. Each of the Borrowing Base Certificate and the Total
-----------
Availability Certificate for the month ending January 31, 1996 shall have been
delivered to each Lender in accordance with Section 7.1(g).
5.3 Conditions Precedent to All Credit Events. The
-----------------------------------------
obligation of the Lenders to make each Loan hereunder, and the obligation of
the Letter of Credit Issuer to issue Letters of Credit hereunder, is subject,
at the time of each such Credit Event, to the satisfaction of the following
condition:
(a) No Default; Representations and Warranties. At the time
------------------------------------------
of each Credit Event and also after giving effect thereto, (i) there
shall exist no Default or Event of Default and (ii) all representations
and warranties contained herein or in the other Credit Documents in
effect at such time shall be true and correct in all material respects
with the same effect as though such representations and warranties had
been made on and as of the date of such Credit Event, except to the
extent that such representations and warranties expressly relate to an
earlier date.
The acceptance of the benefits of each Credit Event shall
constitute a representation and warranty by Holdings and the Borrower to each
of the Lenders that all of the applicable conditions specified in Section 5.1
and/or 5.2 and/or 5.3, as the case may be (other than the required satisfaction
of the Agent or any Lender as specified therein), exist as of that time. All
of the certificates, legal opinions and other documents and papers referred to
in this Section 5, unless otherwise specified, shall be delivered to the Agent
at its Notice Office for the account of each of the Lenders and, except for the
Notes, in sufficient counterparts for each of the Lenders and shall be
satisfactory in form and substance to the Agent.
SECTION 6. Representations, Warranties and Agreements.
------------------------------------------
In order to induce the Lenders to enter into this Agreement and to
make the Loans and issue and/or participate in Letters of Credit provided for
herein, each of Holdings and the Borrower makes the following representations
and warranties to, and agreements with, the Lenders, all of which shall survive
the execution and delivery of this Agreement and the making of the Loans (with
the making of each Credit Event thereafter being deemed to constitute a
representation and warranty that the matters specified in this Section 6 are
true and correct in all material respects on and as of the date of each such
Credit Event unless such representation and warranty expressly indicates that
it is being made as of any specific date):
6.1 Corporate Status. Each of Holdings and its Subsidiaries
----------------
(i) is a duly organized and validly existing corporation in good standing under
the laws of the jurisdiction of its organization and has the corporate power
and authority to own its property and assets and to transact the business in
which it is engaged and presently proposes to engage and (ii) has duly
qualified and is authorized to do business and is in good standing in all
30
jurisdictions where it is required to be so qualified and where the failure to
be so qualified would have a Material Adverse Effect.
6.2 Corporate Power and Authority. Each Credit Party has the
-----------------------------
corporate power and authority to execute, deliver and carry out the terms and
provisions of the Documents to which it is a party and has taken all necessary
corporate action to authorize the execution, delivery and performance of the
Documents to which it is a party. Each Credit Party has duly executed and
delivered each Document to which it is a party and each such Document
constitutes the legal, valid and binding obligation of such Person enforceable
in accordance with its terms.
6.3 No Violation. Neither the execution, delivery and
------------
performance by any Credit Party of the Documents to which it is a party nor
compliance with the terms and provisions thereof, nor the consummation of the
transactions contemplated therein (i) will contravene any applicable provision
of any law, statute, rule, regulation, order, writ, injunction or decree of any
court or governmental instrumentality, (ii) will conflict or be inconsistent
with or result in any breach of, any of the terms, covenants, conditions or
provisions of, or constitute a default under, or (other than pursuant to the
Security Documents) result in the creation or imposition of (or the obligation
to create or impose) any Lien upon any of the property or assets of Holdings,
the Borrower or any of their Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, agreement or other instrument to which
Holdings, the Borrower or any of their Subsidiaries is a party or by which it
or any of its property or assets are bound or to which it may be subject or
(iii) will violate any provision of the Charter or By-Laws of Holdings, the
Borrower or any of their Subsidiaries.
6.4 Litigation. Except as set forth in Annex 6.4, there are
----------
no actions, suits or proceedings pending or threatened with respect to
Holdings, the Borrower or any of their Subsidiaries (i) that are likely to have
a Material Adverse Effect or (ii) that could reasonably be expected to have a
material adverse effect on (a) the rights or remedies of the Lenders or on the
ability of any Credit Party to perform its obligations to them hereunder and
under the other Credit Documents to which it is a party or (b) the ability to
consummate the Transaction or (c) the ability to consummate the Devon
Acquisition or the transactions contemplated by this Agreement.
6.5 Use of Proceeds; Margin Regulations. (a) The proceeds of
-----------------------------------
Initial Tranche A Term Loans and Initial Tranche B Term Loans together with the
entire amount of the proceeds of the issuance of Holdings Common Stock
described in Section 5.1(j), Holdings Preferred Stock and the Subordinated
Notes shall be utilized for the purposes described in clause (ii) or (iii)
below or paid as a dividend or advanced by the Borrower to Holdings on the
Initial Borrowing Date and used by Holdings on the Initial Borrowing Date
solely (i) to pay the consideration to be paid in connection with the Merger
(or for general corporate purposes to the extent that a portion of the
consideration is paid from cash of the Borrower or Holdings held prior to the
Initial Borrowing Date), (ii) to refinance existing Indebtedness of the
Borrower and its Subsidiaries and (iii) to pay costs and expenses related to
the Transaction.
(b) The proceeds of the Additional Tranche A Term Loans and the
Additional Tranche B Term Loans together with the entire amount of the proceeds
of the issuance of Holdings Common Stock and Holdings Preferred Stock described
in Section 5.2(j) shall be used by the Borrower on the Additional Borrowing
Date solely (i) to pay the consideration to be paid in connection with the
Devon Acquisition (or for general corporate purposes to the extent that a
portion of the consideration is paid from cash of the Borrower or Devon held
prior to the Additional Borrowing Date), (ii) to refinance existing
Indebtedness of Devon and its Subsidiaries and (iii) to pay costs and expenses
related to the Devon Transaction.
(c) The proceeds of all Revolving Loans shall be utilized (i) for
general corporate purposes of the Borrower and its Subsidiaries and (ii) to
finance Permitted Business Acquisitions; provided that proceeds of
--------
Revolving Loans used to fund Contingent Payments (as defined in the Devon
Acquisition Agreement) shall not exceed the lesser of (x) $3,500,000 plus
accrued interest thereon, if any, and (y) 50% of the Contingent Payments
required to be paid under Section 10 of the Devon Acquisition Agreement.
(d) Neither the making of any Loan hereunder, nor the use of the
proceeds thereof, will violate or be inconsistent with the provisions of
Regulation G, T, U or X of the Board of Governors of the Federal Reserve
31
System and no part of the proceeds of any Loan will be used to purchase or
carry any Margin Stock in violation of Regulation U or to extend credit for the
purpose of purchasing or carrying any Margin Stock.
6.6 Governmental Approvals. No order, consent, approval,
----------------------
license, authorization, or validation of, or filing, recording or registration
with, or exemption by, any foreign or domestic governmental or public body or
authority, or any subdivision thereof, is required to authorize or is required
in connection with (i) the execution, delivery and performance of any Credit
Document or (ii) the legality, validity, binding effect or enforceability of
any Credit Document.
6.7 Investment Company Act. None of Holdings, the Borrower or
----------------------
any of their Subsidiaries is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "ICA") or a company
"controlled" by an "investment company" within the meaning of the ICA (other
than any investment company (including, without limitation, Bessemer and its
Affiliates) which has been exempted from all provisions of the ICA pursuant to
an order of the SEC under Section 6(c) of the ICA).
6.8 Public Utility Holding Company Act. None of Holdings, the
----------------------------------
Borrower or any of their Subsidiaries is a "holding company," or a "subsidiary
company" of a "holding company," or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
6.9 True and Complete Disclosure. (a) All information and
----------------------------
data (excluding projections) concerning each of Holdings and the Borrower and
the transactions contemplated herein which have been prepared by Holdings and
the Borrower and that have been made available to the Agent or any Lender by or
on behalf of Holdings and the Borrower prior to the Effective Date in
connection with the Transaction or prior to the Amended and Restated Credit
Agreement Effective Date in connection with the Devon Transaction, when taken
as a whole, do not and will not contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
contained therein not materially misleading and all financial projections that
have been prepared by Holdings and the Borrower and that have been made
available prior to the Effective Date or prior to the Amended and Restated
Credit Agreement Effective Date, as the case may be, to the Agent and/or any
Lender by Holdings and the Borrower have been prepared in good faith based upon
assumptions believed by Holdings and the Borrower at the time to be reasonable.
Without limiting the foregoing, the Agent and each of the Lenders acknowledge
that certain of the information provided to the Agent and each such Lender in
respect of Holdings and the Borrower has been prepared by GH and/or its advisors
and not by Holdings or the Borrower.
(b) All other factual information (taken as a whole) furnished on
or after the Effective Date or (in respect of the Devon Transaction) on or
after the Amended and Restated Credit Agreement Effective Date by or on behalf
of Holdings, the Borrower or any of their Subsidiaries in writing to the Agent
or any Lender (including, without limitation, all information contained in the
Documents) for purposes of or in connection with this Agreement or any
transaction contemplated herein is, and will be, true and accurate in all
material respects on the date as of which such information is dated or
certified and not incomplete by omitting to state any material fact necessary
to make such information (taken as a whole) not misleading at such time in
light of the circumstances under which such information was provided. The
projections and pro forma financial information contained in such
--- -----
materials are based on good faith estimates and assumptions believed by such
Persons to be reasonable at the time made, it being recognized by the Lenders
that such projections as to future events are not to be viewed as facts and
that actual results during the period or periods covered by any such
projections may differ from the projected results. There is no fact known to
any Credit Party which materially and adversely affects the business,
operations, property, assets or condition (financial or otherwise) of any such
Credit Party and its respective Subsidiaries, taken as a whole, which has not
been disclosed herein or in such other documents, certificates and statements
furnished to the Lenders for use in connection with the transactions
contemplated hereby.
6.10 Financial Condition; Financial Statements. (a) On and as
-----------------------------------------
of the Initial Borrowing Date, on a pro forma basis after giving effect
--- -----
to the Transaction and to all Indebtedness incurred, and to be incurred, and
Liens created, and to be created, by each Credit Party and its respective
Subsidiaries taken as a whole in connection therewith, (x) the sum of the
assets, at a fair valuation, of each Credit Party and its respective
Subsidiaries taken as
32
a whole will exceed its debts, (y) no such Credit Party and its Subsidiaries
taken as a whole will have incurred or intended to, or believes that it will,
incur debts beyond its ability to pay such debts as such debts mature and (z)
each such Credit Party and its Subsidiaries taken as a whole will have
sufficient capital with which to conduct its business. On and as of the
Additional Borrowing Date, on a pro forma basis after giving effect to
--- -----
the Devon Transaction and to all Indebtedness incurred, and to be incurred, and
Liens created, and to be created, by each Credit Party and its respective
Subsidiaries taken as a whole in connection therewith, (x) the sum of the
assets, at a fair valuation, of each Credit Party and its respective
Subsidiaries taken as a whole will exceed its debts, (y) no such Credit Party
and its Subsidiaries taken as a whole will have incurred or intended to, or
believes that it will, incur debts beyond its ability to pay such debts as such
debts mature and (z) each such Credit Party and its Subsidiaries taken as a
whole will have sufficient capital with which to conduct its business. For
purposes of this Section 6.10, "debt" means any liability on a claim, and
"claim" means (i) right to payment whether or not such a right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured; or (ii) right to
an equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.
(b) (i) The audited consolidated balance sheets of the Borrower
and its Subsidiaries dated as of December 31, 1994 and December 31, 1993,
copies of which have been heretofore furnished to each Lender, were prepared in
accordance with GAAP applied on a consistent basis in accordance with the past
practice of the Borrower except for any changes required by GAAP and fairly
present the consolidated financial position of the Borrower and its
Subsidiaries as of their respective dates.
(ii) The audited consolidated statements of operations, statements
of changes in shareholder's deficit and statements of cash flows of the
Borrower and its Subsidiaries for the 12-month periods ended December 31, 1994
and 1993, copies of which have been heretofore furnished to each Lender, were
prepared in accordance with GAAP applied on a consistent basis in accordance
with the past practice of the Borrower except for any changes required by GAAP
and fairly present the consolidated results of operations, the cash flows and
changes in shareholder's deficit of the Borrower and its Subsidiaries for such
period.
(iii) The audited consolidated balance sheets of Holdings and its
Subsidiaries dated as of December 31, 1994 and December 31, 1993, copies of
which have been heretofore furnished to each Lender, were prepared in
accordance with GAAP applied on a consistent basis in accordance with the past
practice of Holdings except for any changes required by GAAP and fairly present
the consolidated financial position of Holdings and the Subsidiaries as of
their respective dates.
(iv) The audited consolidated statements of operations, statements
of changes in shareholder's deficit and statements of cash flows of Holdings
and its Subsidiaries for the 12-month periods ended December 31, 1994 and 1993,
copies of which have been heretofore furnished to each Lender, were prepared in
accordance with GAAP applied on a consistent basis in accordance with the past
practice of Holdings and fairly present the consolidated results of operations,
the cash flows and changes in shareholder's deficit of Holdings and the
Subsidiaries for such period.
(v) (x) The pro forma consolidated balance sheets of each
--- -----
of Holdings and its Subsidiaries and the Borrower and its Subsidiaries (the
"Pro Forma Balance Sheets"), dated as of June 30, 1995 (the "Pro Forma Date"),
copies of which have heretofore been furnished to each Lender, present a good
faith estimate of the consolidated pro forma financial condition of the
--- -----
respective entities as of the Pro Forma Date (after giving effect to the
Transaction and the related financing thereof).
(y) The pro forma consolidated balance sheets of each
--- -----
of Holdings and its Subsidiaries and the Borrower and its Subsidiaries (the
"Devon Pro Forma Balance Sheets"), dated as of December 31, 1995 (the "Devon
Pro Forma Date"), copies of which have heretofore been furnished to each
Lender, present a good faith estimate of the consolidated pro forma
--- -----
financial condition of the respective entities as of the Devon Pro Forma Date
(after giving effect to the Devon Transaction and the related financing
thereof).
33
(vi) Except for the incurrence of Indebtedness to finance the
Transaction or to finance the Devon Transaction, nothing has occurred since
September 30, 1995 that has had a Material Adverse Effect.
(vii) The audited consolidated balance sheets of Devon and its
Subsidiaries dated as of December 31, 1995, December 31, 1994 and December 31,
1993, copies of which have been heretofore furnished to each Lender, were
prepared in accordance with GAAP applied on a consistent basis in accordance
with the past practice of Devon and fairly present the consolidated financial
position of Devon and its Subsidiaries as of their respective dates.
(viii) The audited consolidated statements of operations,
statements of changes in shareholder's deficit and statements of cash flows of
Devon and its Subsidiaries for the 12-month periods ended December 31, 1995,
1994 and 1993, copies of which have been heretofore furnished to each Lender,
were prepared in accordance with GAAP applied on a consistent basis in
accordance with the past practice of Devon and fairly present the consolidated
results of operations, the cash flows and changes in shareholder's deficit of
Devon and its Subsidiaries for such periods.
(c) Except as fully reflected in the financial statements and the
notes thereto described in Section 6.10(b), there were as of the Initial
Borrowing Date and as of the Additional Borrowing Date no material Contingent
Obligations, contingent liability or liability for taxes, or any long-term
lease or unusual forward or long-term commitment, including, without
limitation, interest rate or foreign currency swap or exchange transaction with
respect to Holdings or any of its Subsidiaries which, either individually or in
aggregate, would be material to Holdings, Devon or the Borrower and its
Subsidiaries taken as a whole, except as incurred by the Borrower in the
ordinary course of business consistent with past practices subsequent to
September 30, 1995 and except agreements entered into subsequent to the Initial
Borrowing Date in compliance with Section 7.12.
6.11 Security Interests. (a) On and after the Initial
------------------
Borrowing Date, each of the Security Documents creates, as security for the
Obligations purported to be secured thereby, a valid and enforceable perfected
security interest in and Lien on all of the Collateral subject thereto,
superior to and prior to the rights of all third Persons and subject to no
other Liens (except (x) that the Security Agreement Collateral may be subject
to the security interests evidenced by Permitted Liens relating thereto and (y)
the Mortgaged Properties may be subject to Permitted Liens relating thereto)),
in favor of the Collateral Agent for the benefit of the Lenders. No filings or
recordings are required in order to perfect the security interests created
under any Security Document except for filings or recordings required in
connection with any such Security Document (other than the Pledge Agreement)
which shall have been made, or for which satisfactory arrangements have been
made, upon or prior to the execution and delivery thereof.
(b) On and after the Additional Borrowing Date, all of the
Security Documents (including, without limitation, the patent and trademark
security agreements executed and delivered by each of the Borrower and Devon)
create, as security for the Obligations purported to be secured thereby, a
valid and enforceable perfected security interest in and Lien on all of the
Collateral subject thereto, superior to and prior to the rights of all third
Persons and subject to no other Liens (except that (x) the Security Agreement
Collateral may be subject to the security interests evidenced by Permitted
Liens relating thereto and (y) the Mortgaged Properties may be subject to
Permitted Liens relating thereto), in favor of the Collateral Agent for the
benefit of the Lenders. No filings or recordings are required in order to
perfect the security interests created under any such Security Document except
for filings or recordings required in connection with any such Security
Document (other than the Pledge Agreement of the Borrower) which shall have
been made, or for which satisfactory arrangements have been made, upon or prior
to the execution and delivery thereof.
6.12 Representations and Warranties in Documents. (a) All
-------------------------------------------
representations and warranties of Holdings, the Borrower and GH under the
Merger Agreement and the Subordinated Note Documents were true and correct in
all material respects as of the time such representations and warranties were
made and shall be true and correct in all material respects as of the Initial
Borrowing Date as if such representations and warranties were made on and as of
such date, unless stated to relate to a specific earlier date, in which case
such representations and warranties shall be true and correct in all material
respects as of such earlier date.
34
(b) All representations and warranties of the Borrower and Devon
under the Devon Acquisition Agreement were true and correct in all material
respects as of the time such representations and warranties were made and shall
be true and correct in all material respects as of the Additional Borrowing
Date as if such representations and warranties were made on and as of such
date, unless stated to relate to a specific earlier date, in which case such
representations and warranties shall be true and correct in all material
respects as of such earlier date.
6.13 Consummation of Merger; Issuance of Subordinated Notes;
--------------------------------------------------------
Consummation of Devon Acquisition. (a) As of the Initial Borrowing Date,
---------------------------------
the Merger has been consummated in accordance with the terms and conditions of
the Merger Documents (as satisfied or waived) and the Subordinated Notes have
been issued in accordance with the terms and conditions of the Subordinated
Note Documents (as satisfied or waived). All consents and approvals of, and
filings and registrations with, and all other actions in respect of, all
governmental agencies, authorities or instrumentalities required in order to
consummate the Merger in accordance with the terms and conditions of the Merger
Documents and all applicable laws have been, or prior to the time required,
will have been, obtained, given, filed, taken, or waived, and are, or will be
at the time required, in full force and effect. All applicable waiting periods
with respect thereto have, or, prior to the time when required, will have,
expired or been terminated without, in all such cases, any action being taken
by any competent authority which restrains, prevents, or imposes material
adverse conditions upon the consummation of the Merger. As of the Initial
Borrowing Date, there does not exist any judgment, order, or injunction
prohibiting or imposing material adverse conditions upon the Merger or the
making of Loans or the issuance of the Subordinated Notes or the performance by
any Credit Party of their respective obligations under the Documents.
(b) As of the Additional Borrowing Date, the Devon Acquisition has
been consummated in accordance with the terms and conditions of the Devon
Acquisition Documents (as satisfied or waived). All consents and approvals of,
and filings and registrations with, and all other actions in respect of, all
governmental agencies, authorities or instrumentalities required in order to
consummate the Devon Acquisition in accordance with the terms and conditions of
the Devon Acquisition Documents and all applicable laws have been, or prior to
the time required, will have been, obtained, given, filed, taken, or waived,
and are, or will be at the time required, in full force and effect. All
applicable waiting periods with respect thereto have, or, prior to the time
when required, will have, expired or been terminated without, in all such
cases, any action being taken by any competent authority which restrains,
prevents, or imposes material adverse conditions upon the consummation of the
Devon Acquisition. As of the Additional Borrowing Date, there does not exist
any judgment, order, or injunction prohibiting or imposing material adverse
conditions upon the Devon Acquisition or the making of Loans or the performance
by any Credit Party of their respective obligations under the Devon Acquisition
Documents or any other Document.
(c) All Obligations of the Borrower, including Obligations
consisting of the Additional Term Loans and interest thereon, constitute Senior
Indebtedness under the Subordinated Note Indenture and, after giving effect to
this Agreement, no default under the Subordinated Note Indenture shall have
occurred.
(d) Each Subsidiary's Guaranty of the Subordinated Notes is by its
terms subordinated to the obligations of such Subsidiary under the Subsidiary
Guaranty pursuant to subordination provisions no less favorable to the Lenders
than set forth in the Subordinated Note Indenture.
6.14 Tax Returns and Payments. Each of Holdings and its
------------------------
Subsidiaries has filed all federal income tax returns and all other material
tax returns, domestic and foreign, required to be filed by it and has paid all
material taxes and assessments payable by it which have become due, other than
those not yet delinquent and except for those contested in good faith.
Holdings and each of its Subsidiaries have paid, or have provided adequate
reserves (in the good faith judgment of the management of Holdings) for the
payment of, all federal, state and foreign income taxes applicable for all
prior fiscal years and for the current fiscal year to the date hereof.
6.15 Compliance with ERISA. Each Plan is in substantial
---------------------
compliance with ERISA and the Code; no Reportable Event has occurred with
respect to a Plan; no Plan is insolvent or in reorganization; no Plan has an
Unfunded Current Liability; no Plan has an accumulated or waived funding
deficiency, has permitted decreases in its funding standard account or has
applied for an extension of any amortization period within the meaning of
Section
35
412 of the Code; all contributions required to be made with respect to a Plan
have been timely made; neither a Credit Party, nor any Subsidiary of a Credit
Party, nor any ERISA Affiliate has incurred any material liability to or on
account of a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063,
4064, 4069, 4201 or 4204 of ERISA or Section 4971 or 4975 of the Code or
expects to incur any liability (including any indirect, contingent or secondary
liability) under any of the foregoing Sections with respect to any Plan; no
proceedings have been instituted to terminate or appoint a trustee to
administer any Plan; no condition exists which presents a material risk to a
Credit Party or any Subsidiary of a Credit Party or any ERISA Affiliate of
incurring a liability to or on account of a Plan pursuant to the foregoing
provisions of ERISA and the Code; no lien imposed under the Code or ERISA on
the assets of a Credit Party, or any Subsidiary of a Credit Party or any ERISA
Affiliate exists or is reasonably likely to arise on account of any Plan; and
the Credit Parties and their Subsidiaries do not maintain or contribute to any
employee welfare benefit plan (as defined in Section 3(1) of ERISA) which
provides benefits to retired employees (other than as required by Section 601
of ERISA) or any employee pension benefit plan (as defined in Section 3(2) of
ERISA) the obligations with respect to which could reasonably be expected to
have a material adverse effect on the ability of Holdings, the Borrower or any
other Credit Party to perform its obligations under this Agreement and the
other Documents to which it is a party, except to the extent that all events
described in the preceding clauses of this Section 6.15 and then in existence
would not, in the aggregate, be likely to have a Material Adverse Effect. With
respect to Plans that are multiemployer plans (within the meaning of Section
4001(a)(3) of ERISA) the representations and warranties in this Section 6.15
are made to the best knowledge of Holdings and the Borrower.
6.16 Subsidiaries. (a) Annex 6.16 hereto lists each
------------
Subsidiary of Holdings and of the Borrower (and the direct and indirect
ownership interest of Holdings therein), in each case existing on the Amended
and Restated Credit Agreement Effective Date. Holdings and the Borrower will
at all times own directly or indirectly the percentages specified in said Annex
6.16 of the outstanding capital stock of all of said entities except to the
extent otherwise permitted pursuant to Section 8.2.
(b) There are no restrictions on Holdings or any of its
Subsidiaries which prohibit or otherwise restrict the transfer of cash or other
assets from any Subsidiary of the Borrower to the Borrower, other than
prohibitions or restrictions existing under or by reason of (i) this Agreement,
the other Credit Documents and the Subordinated Note Documents, (ii) applicable
law, (iii) customary non-assignment provisions entered into in the ordinary
course of business and consistent with past practices, (iv) any restriction or
encumbrance with respect to a Subsidiary of the Borrower imposed pursuant to an
agreement which has been entered into for the sale or disposition of all or
substantially all of the capital stock or assets of such Subsidiary, so long as
such sale or disposition is permitted under this Agreement, and (v) any
documents or instruments governing the terms of any Indebtedness or other
obligations secured by Liens permitted by Section 8.3, provided that such
--------
prohibitions or restrictions apply only to the assets subject to such Liens.
6.17 Intellectual Property. The Borrower and each of its
---------------------
Subsidiaries owns, or is licensed to use, all material trademarks, trade names,
copyrights, technology, know-how, patents, servicemarks, licenses and processes
and other rights ("Intellectual Property") free from burdensome restrictions
that are necessary for the conduct of their business taken as a whole as
currently conducted and as proposed to be conducted.
6.18 Pollution and Other Regulations. Except as set forth
--------------------------------
on Annex 6.18, (a) each of Holdings and its Subsidiaries is, and has been, in
compliance with all Environmental Laws governing or relating to its business,
and to the knowledge of Holdings and its Subsidiaries, there is no condition or
circumstance that would be likely to prevent or interfere with such compliance
in the future, except to the extent that such failure to comply and any
resulting costs, including but not limited to, remediation expenses, penalties,
fines or forfeitures are not reasonably likely to, individually, or in the
aggregate, have a Material Adverse Effect. All licenses, permits,
registrations or approvals required for the business of Holdings and each of
its Subsidiaries, as conducted as of the Initial Borrowing Date and as of the
Additional Borrowing Date, under any Environmental Law have been secured and
Holdings and each of its Subsidiaries is, and has been, in substantial
compliance therewith, except for such licenses, permits, registrations or
approvals the failure to secure or to comply therewith is not reasonably likely
individually, or in the aggregate, to have a Material Adverse Effect. Neither
Holdings nor any of its Subsidiaries has received any written communication
from any Person alleging that it is in noncompliance with, breach of or default
under any applicable writ, order, judgment, injunction, or decree to which
Holdings or such Subsidiary is a
36
party or which would affect the ability of Holdings or such Subsidiary to
operate its business or any real property, except in each such case, such
noncompliance, breaches or defaults as are not reasonably likely to,
individually or in the aggregate, have a Material Adverse Effect. There are,
as of the Initial Borrowing Date and as of the Additional Borrowing Date, no
Environmental Claims pending or, to the knowledge of Holdings or its
Subsidiaries, threatened, including, without limitation, those which question
the validity, term or entitlement of Holdings or any of its Subsidiaries for
any permit, license, order, registration or approval required under any
Environmental Law for the operation of any facility which Holdings or any of
its Subsidiaries currently operates and wherein an unfavorable decision, ruling
or finding would be reasonably likely, individually or in the aggregate, to
have a Material Adverse Effect. There are no facts, circumstances, conditions
or occurrences relating to the business of Holdings or any of its Subsidiaries
or, to the knowledge of Holdings or any of its Subsidiaries, on or relating to
any Real Property or, on any property adjacent to any such Real Property or at
any other location that could reasonably be expected (i) to form the basis of
an Environmental Claim against Holdings, any of its Subsidiaries or any Real
Property of Holdings or any of its Subsidiaries, or (ii) to cause such Real
Property to be subject to any restrictions on the ownership, occupancy, use or
transferability of such Real Property under any Environmental Law, except in
each such case, such Environmental Claims or restrictions that individually or
in the aggregate are not reasonably likely to have a Material Adverse Effect.
(b) Hazardous Materials have not at any time been (i) generated,
used, treated or stored on, or transported to or from, any Real Property of
Holdings or any of its Subsidiaries or (ii) released on or from any Real
Property, in each case where such occurrence or event is reasonably likely,
individually or in the aggregate, to have a Material Adverse Effect.
6.19 Properties. Holdings, the Borrower and each of their
----------
Subsidiaries have good and marketable title to all material properties owned by
them, including all property reflected in the most recent consolidated balance
sheets of Holdings and its Subsidiaries and Devon and its Subsidiaries as
referred to in Section 6.10(b), free and clear of all Liens, other than (i) as
referred to in such consolidated balance sheet or in the notes thereto or (ii)
otherwise permitted by Section 8.2 or 8.3. Annex 6.19 contains a true and
complete list of each Real Property owned or leased by Holdings or any of its
Subsidiaries on the Amended and Restated Credit Agreement Effective Date and
the type of interest therein held by Holdings or the respective Subsidiary.
6.20 Collective Bargaining Agreements. Set forth on Annex
--------------------------------
6.20 hereto is a list and description (including dates of termination) of all
Collective Bargaining Agreements or similar agreements between or applicable to
the Borrower and its Subsidiaries and any union, labor organization or other
bargaining agent in respect of the employees of the Borrower and its
Subsidiaries on the Amended and Restated Credit Agreement Effective Date.
6.21 Holding Company Status. Holdings does not engage in any
----------------------
business or operations other than owning capital stock of the Borrower and
activities incidental thereto.
SECTION 7. Affirmative Covenants. Each of Holdings and the
---------------------
Borrower covenants and agrees that on the Initial Borrowing Date and thereafter
and until the Commitments have terminated, no Letters of Credit or Notes are
outstanding and the Loans and Unpaid Drawings, together with interest, Fees and
all other Obligations incurred hereunder, are paid in full:
7.1 Information Covenants. Holdings will furnish to each
---------------------
Lender:
(a) Annual Financial Statements. Within 90 days after the
---------------------------
close of each fiscal year of Holdings, the consolidated balance sheet of
Holdings and its Subsidiaries and of the Borrower and its Subsidiaries,
as at the end of such fiscal year and the related consolidated statements
of operations and of changes in shareholder's deficit and of cash flows
for such fiscal year, in each case setting forth comparative consolidated
figures for the preceding fiscal year, and examined by independent
certified public accountants of recognized national standing whose
opinion shall not be qualified as to the scope of audit and as to the
status of Holdings or any of its Subsidiaries or of the Borrower or any
of its Subsidiaries as a going concern, together with a certificate of
such accounting firm stating that in the course of its regular audit of
the business of Holdings and of the Borrower, which audit was conducted
in accordance with
37
generally accepted auditing standards, such accounting firm has obtained
no knowledge of any Default or Event of Default which has occurred and is
continuing or, if in the opinion of such accounting firm such a Default or
Event of Default has occurred and is continuing, a statement as to the
nature thereof, all of the foregoing to be in form and substance
satisfactory to the Required Lenders.
(b) Quarterly Financial Statements. As soon as available and
------------------------------
in any event within 45 days after the close of each of the first three
quarterly accounting periods in each fiscal year, the consolidated
balance sheet of each of Holdings and its Subsidiaries and the Borrower
and its Subsidiaries, as at the end of such quarterly period and the
related consolidated statements of operations and of changes in
shareholder's deficit and of cash flows for such quarterly period and for
the elapsed portion of the fiscal year ended with the last day of such
quarterly period, and in each case setting forth comparative consolidated
figures for the related periods in the prior fiscal year, all of which
shall be certified by the chief financial officer, controller, chief
accounting officer or other Authorized Officer of Holdings or the
Borrower, as the case may be, subject to changes resulting from audit and
normal year-end audit adjustments.
(c) Budgets; etc. Not more than 75 days after the
-------------
commencement of each fiscal year of Holdings budgets of the Borrower and
its Subsidiaries in reasonable detail for each of the four fiscal
quarters of such fiscal year, as customarily prepared by management for
its internal use, setting forth, with appropriate discussion, the
principal assumptions upon which such budgets are based. Together with
each delivery of consolidated financial statements pursuant to Section
7.1(a) and (b), a comparison of the current year to date financial
results (other than in respect of the balance sheets included therein)
against the budgets required to be submitted pursuant to this clause (c)
shall be presented.
(d) Officer's Certificates. At the time of the delivery of
----------------------
the financial statements provided for in Section 7.1(a) and (b), a
certificate of the chief financial officer, controller, chief accounting
officer or other Authorized Officer of Holdings to the effect that no
Default or Event of Default exists or, if any Default or Event of Default
does exist, specifying the nature and extent thereof, which certificate,
in the case of the certificate delivered pursuant to Section 7.1(a) and
(b), shall set forth the calculations required to establish (I) the
applicable Level then in effect under Annex 7.1(d) for the Measured
Period (as defined in Annex 7.1(d)) ending on the last day of such fiscal
period or year and (II) whether Holdings and its Subsidiaries were in
compliance with the provisions of Sections 8.5, 8.7, 8.9(a) (but only to
the extent Holdings has made payments of the type described in clause
(ii) thereof in such period or year), 8.11, 8.12, 8.13, 8.14 and 8.15 as
at the end of such fiscal period or year, as the case may be.
(e) Notice of Default or Litigation. Promptly, and in any
-------------------------------
event within three Business Days after Holdings or any of its
Subsidiaries obtains knowledge thereof, notice of (x) the occurrence of
any event which constitutes a Default or Event of Default which notice
shall specify the nature thereof, the period of existence thereof and
what action Holdings or such Subsidiary proposes to take with respect
thereto and (y) the commencement of or any significant development in any
litigation or governmental proceeding pending against Holdings or any of
its Subsidiaries which is likely to have a material adverse effect on the
business, properties, assets, operations, condition (financial or
otherwise) or prospects of Holdings and its Subsidiaries taken as a whole
or is likely to have a material adverse effect on the ability of Holdings
or any Credit Party to perform its obligations hereunder or under any
other Credit Document.
(f) Auditors' Reports. Promptly upon receipt thereof, a copy
-----------------
of each other report or "management letter" submitted to Holdings or the
Borrower by its independent accountants in connection with any annual,
interim or special audit made by it of the books of Holdings or the
Borrower.
(g) Borrowing Base Certificate; Total Availability
-----------------------------------------------
Certificate. (i) (A) Promptly and in any event no later than October
-----------
31, 1995, (B) not later than 15 days after the end of each month,
commencing October, 1995 (each such last day being called a
"Determination Date"), and (C) on the date which is 10 Business Days
prior to the consummation of a Permitted Business Acquisition to be
financed (to the extent permitted under this Agreement) by the Revolving
Facility (such date, the "Permitted Business Acquisition Determination
Date"), a borrowing base certificate substantially in the form of Exhibit
K-1 hereto (a
38
"Borrowing Base Certificate") and applicable supporting documentation,
setting forth, as of a recent date satisfactory to the Agent, such
Determination Date or such Permitted Business Acquisition Determination
Date (or as of such other date provided in the definition of "Borrowing
Base"), the Borrowing Base.
(ii) (A) Not later than 15 days after the end of each month,
commencing October, 1995 (each such last day being called a
"Determination Date"), and (B) on each Permitted Business Acquisition
Determination Date, a total availability certificate substantially in the
form of Exhibit K-2 hereto (a "Total Availability Certificate") and
applicable supporting documentation, setting forth, as of such
Determination Date or such Permitted Business Acquisition Determination
Date (or as of such other date provided in the definition of "Total
Availability"), the Total Availability.
(h) Other Information. Promptly upon transmission thereof,
-----------------
copies of any filings and registrations with, and reports to, the
Securities and Exchange Commission or any successor thereto (the "SEC")
by Holdings or any of its Subsidiaries and, with reasonable promptness,
such other information or documents (financial or otherwise) as the Agent
on its own behalf or on behalf of the Required Lenders may reasonably
request from time to time.
7.2 Books, Records and Inspections. Holdings will, and will
------------------------------
cause its Subsidiaries to, permit, upon notice to the chief financial officer,
controller or any other Authorized Officer of Holdings, (x) officers and
designated representatives of the Agent or the Required Lenders to visit and
inspect any of the properties or assets of Holdings and any of its Subsidiaries
in whomsoever's possession, and to examine the books of account of Holdings and
any of its Subsidiaries and discuss the affairs, finances and accounts of
Holdings and of any of its Subsidiaries with, and be advised as to the same by,
its and their officers and independent accountants, all at such reasonable
times and intervals and to such reasonable extent as the Agent or the Required
Lenders may desire, including, without limitation, at such time as the Borrower
notifies the Agent that it expects to request a Borrowing to fund a Permitted
Business Acquisition and (y) the Agent, or a third party designated by the
Agent, to conduct, at the Borrower's expense (including, without limitation,
the fees and expenses associated with services performed by the Collateral
Agent's Collateral Monitoring Department (or its equivalent)), an audit and/or
collateral examination of the accounts receivable, inventories and Borrowing
Base and an independent appraisal of the property of Holdings and its
Subsidiaries at such times as the Agent shall reasonably require, including,
without limitation, at such time as the Borrower notifies the Agent that it
expects to request a Borrowing to fund a Permitted Business Acquisition.
7.3 Maintenance of Insurance. Holdings will, and will cause
------------------------
each of its Subsidiaries to, at all times maintain in full force and effect
insurance in such amounts, covering such risks and liabilities and with such
deductibles or self-insured retentions as are in accordance with normal
industry practice, provided that in no event will any such deductible or
--------
self-insured retention in respect of liability claims or in respect of casualty
damage, exceed, in each such case, (i) $1,000,000 per occurrence or (ii)
$5,000,000 in the aggregate per fiscal year. At any time that insurance at the
levels described in Annex 7.3 is not being maintained by Holdings and its
Subsidiaries, Holdings will notify the Lenders in writing thereof and, if
thereafter notified by the Agent to do so, Holdings will, and will cause its
Subsidiaries to, obtain insurance at such levels at least equal to those set
forth in Annex 7.3 to the extent then generally available (but in any event
within the deductible or self-insured retention limitations set forth in the
preceding sentence) or otherwise as are acceptable to the Agent. Holdings
will, and will cause each of its Subsidiaries to, furnish on the Initial
Borrowing Date and annually thereafter to the Agent a summary of the insurance
carried together with certificates of insurance and other evidence of such
insurance, if any, naming the Collateral Agent as an additional insured and/or
loss payee to the extent appropriate.
7.4 Payment of Taxes. Holdings will pay and discharge, and
----------------
will cause each of its Subsidiaries to pay and discharge, all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any properties belonging to it, prior to the date on
which penalties attach thereto, and all lawful claims which, if unpaid, might
become a Lien or charge upon any properties of Holdings or any of its
Subsidiaries, provided that neither Holdings nor any Subsidiary shall be
--------
required to pay any such tax, assessment, charge, levy or claim which is being
contested in good faith and by proper proceedings if it has maintained adequate
reserves (in the good faith judgment of the management of Holdings) with
respect thereto in accordance with GAAP.
39
7.5 Consolidated Corporate Franchises. Holdings will do, and
---------------------------------
will cause each Subsidiary to do, or cause to be done, all things necessary to
preserve and keep in full force and effect its existence, rights and authority,
provided that any transaction permitted by Section 8.2 will not constitute
--------
a breach of this Section 7.5.
7.6 Compliance with Laws, Statutes, etc. Holdings will, and
------------------------------------
will cause each Subsidiary to, comply with all applicable laws, statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property (including, without limitation, (x)
all applicable federal, state and local statutes, regulations, standards,
guidelines and orders issued or administered by the United States Food and Drug
Administration (the "FDA"), or any state or local agency similar in its purpose
to the FDA (including good manufacturing practice regulations set forth in 21
CFR Part 820 and all FDA guidelines and other policies implementing such
regulations) and (y) all Environmental Laws) other than those the
non-compliance with which would not have a Material Adverse Effect or would not
have a material adverse effect on the ability of any Credit Party to perform
its obligations under any Credit Document to which it is party.
7.7 ERISA; FDA. (a) As soon as possible and, in any event,
----------
within 15 days after a Credit Party or any of its Subsidiaries or any ERISA
Affiliate knows or has reason to know of the occurrence of any of the
following, Holdings will deliver to each of the Lenders a certificate of the
chief financial officer of Holdings setting forth details as to such occurrence
and such action, if any, which the Credit Party, such Subsidiary or such ERISA
Affiliate is required or proposes to take, together with any notices required
or proposed to be given to or filed with or by the Credit Party, the
Subsidiary, the ERISA Affiliate, the PBGC, a Plan participant (other than
notices relating to an individual participant's benefits) or the Plan
administrator with respect thereto: that a Reportable Event has occurred; that
an accumulated funding deficiency has been incurred or an application is
reasonably likely to be or has been made to the Secretary of the Treasury for a
waiver or modification of the minimum funding standard (including any required
installment payments) or an extension of any amortization period under Section
412 of the Code with respect to a Plan; that a contribution required to be made
to a Plan has not been timely made; that a Plan which has an Unfunded Current
Liability has been or may be terminated, reorganized, partitioned or declared
insolvent under Title IV of ERISA; that a Plan has an Unfunded Current
Liability and there is a failure to make a required contribution, which gives
rise to a lien under ERISA or the Code; that proceedings are reasonably likely
to be or have been instituted to terminate a Plan which has an Unfunded Current
Liability or to appoint a trustee to administer a Plan; that a proceeding has
been instituted pursuant to Section 515 of ERISA to collect a delinquent
contribution to a Plan; that a Credit Party, any Subsidiary of a Credit Party
or any ERISA Affiliate will or is reasonably likely to incur any material
liability (including any indirect, contingent or secondary liability) to or on
account of the termination of or withdrawal from a Plan under Section 4062,
4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan under
Section 401(a)(29), 4971, 4975 or 4980 of the Code or Section 409, 502(1) or
502(i) of ERISA, or that a Credit Party or any Subsidiary of a Credit Party is
reasonably likely to incur any material liability pursuant to any employee
welfare benefit plan (as defined in Section 3(1) of ERISA) that provides
benefits to retired employees (other than as required by Section 601 of ERISA)
or any employee pension benefit plan (as defined in Section 3(2) of ERISA).
Upon request of a Lender, Holdings will deliver to such Lender a complete copy
of the annual report (Form 5500) of each Plan required to be filed with the
Internal Revenue Service. In addition to any certificates or notices delivered
to the Lenders pursuant to the previous sentences hereof, copies of any
material notices received by a Credit Party or any Subsidiary of a Credit Party
or any ERISA Affiliate, with respect to a Plan shall be delivered to the
Lenders no later than 15 days after such are received by Holdings, the
Subsidiary or the ERISA Affiliate, as applicable.
(b) Holdings will promptly notify the Agent of any
determination by the FDA of material non-compliance of Holdings or any of its
Subsidiaries with applicable federal, state and local statutes, regulations,
standards, guidelines and orders administered by the FDA, to the extent such
material non-compliance has not been or is not expected to be promptly
corrected.
7.8 Good Repair. Holdings will, and will cause each of its
-----------
Subsidiaries to, ensure that its properties and equipment used or useful in its
business in whomsoever's possession they may be, are kept in good repair,
working order and condition, normal wear and tear excepted, and, subject to
Section 8.5, that from time to time there are made in such properties and
equipment all needful and proper repairs, renewals, replacements,
40
extensions, additions, betterments and improvements thereto, to the extent and
in the manner useful or customary for companies in similar businesses.
7.9 End of Fiscal Years; Fiscal Quarters. Holdings will, for
------------------------------------
financial reporting purposes, cause (i) each of its, and each of its
Subsidiaries' fiscal years to end on December 31 of each year and (ii) each of
its, and each of its Subsidiaries', fiscal quarters to end on March 31, June
30, September 30 and December 31 of each year.
7.10 Use of Proceeds. All proceeds of the Loans shall be used
---------------
as provided in Section 6.5.
7.11 Additional Security; Further Assurances. (a) The
---------------------------------------
Borrower will, and will cause its Domestic Subsidiaries to, grant to the
Collateral Agent security interests and mortgages (an "Additional Mortgage") in
such owned or leased Real Property of the Borrower and its Domestic
Subsidiaries (other than any Real Property which secures Indebtedness permitted
under Section 8.4 and subject to a Lien permitted under Section 8.3, to the
extent prohibited by such Lien or the terms of such Indebtedness) as are
acquired after the Initial Borrowing Date by the Borrower or such Subsidiary
and that, together with any improvements thereof, individually have a value of
at least $2,500,000, and as may be requested from time to time by the Agent or
the Required Lenders, as additional security for the Obligations. Such
Mortgages shall be granted pursuant to documentation reasonably satisfactory in
form and substance to the Agent and shall constitute valid and enforceable
perfected Liens superior to and prior to the rights of all third Persons other
than such Persons holding Liens permitted by Section 8.3 and subject to no
other Liens except as are permitted by Section 8.3 at the time of perfection
thereof. The Additional Mortgages or instruments related thereto shall be duly
recorded or filed in such manner and in such places as are required by law to
establish, perfect, preserve and protect the Liens in favor of the Collateral
Agent required to be granted pursuant to the Additional Mortgages and all
taxes, fees and other charges payable in connection therewith shall be paid in
full. If requested by the Agent or the Required Lenders, the Borrower shall
provide a lender's title policy with respect to each such Additional Mortgage
conforming to the requirements of Section 5.1(1)(iii).
(b) At the request of the Agent or the Required Lenders, Holdings
shall provide to the Agent appraisals satisfying and to the extent required by
applicable requirements of the Real Estate Appraisal Reform Amendments of the
Financial Institution Reform, Recovery and Enforcement Act of 1989 in respect
of the Real Property of the Borrower and its Subsidiaries constituting
Collateral (other than the original Mortgaged Properties), in form and
substance satisfactory to the Agent.
(c) With respect to any assets of the type covered by the
Security Agreements and acquired after the Initial Borrowing Date, and, upon
the occurrence of an Event of Default and at the request of the Required
Lenders, with respect to any other assets or property of Holdings and its
Domestic Subsidiaries, as to which the Collateral Agent, for the benefit of the
Lenders, does not have a perfected Lien, each of Holdings and its Domestic
Subsidiaries agrees to (i) execute and deliver to the Collateral Agent such
amendments to this Agreement or the Security Agreements or such other Security
Documents as the Collateral Agent reasonably requests in order to grant to the
Collateral Agent, for the benefit of the Lenders, a security interest in such
assets, and (ii) take all actions reasonably requested by the Collateral Agent
to grant to the Collateral Agent, for the benefit of the Lenders, a security
interest in such assets that is perfected to the same extent as and with the
same priority as the comparable security interests previously granted under the
Security Documents, including without limitation, the filing of UCC financing
statements in such jurisdictions as may be required by the appropriate Security
Agreements or by law or as may be requested by the Agent.
(d) With respect to any Domestic Subsidiary or any Foreign
Subsidiary owned directly by the Borrower or any Domestic Subsidiary and
created or acquired after the Initial Borrowing Date, (i) the Borrower or the
applicable Subsidiary shall cause to be executed and delivered to the
Collateral Agent a pledge agreement, in form, scope and substance reasonably
satisfactory to the Agent, granting to the Collateral Agent, for the benefit of
the Lenders, a perfected first priority security interest in all of the capital
stock of such Domestic Subsidiary or 65% of the capital stock of such Foreign
Subsidiary, as applicable, (ii) the Borrower shall deliver to the Collateral
Agent the certificates representing such capital stock, together with undated
stock powers, executed in blank, (iii) the Borrower shall cause such Domestic
Subsidiary to execute and deliver a Subsidiary Guaranty, (iv) the Borrower
shall cause such Domestic Subsidiary to execute and deliver a Security
Agreement and (v) the Borrower shall execute and
41
deliver such amendments to this Agreement requested by the Agent to reflect the
existence of such Domestic Subsidiary.
(e) Holdings and the Borrower agree that each action required
above by this Section 7.11 shall be completed as soon as possible, but in no
event later than 60 days (75 days in the case of clause (b) above) after such
action is requested to be taken by the Agent or the Required Lenders,
provided that in no event shall Holdings or any of its Subsidiaries be
--------
required to take any action, other than using its commercially reasonable
efforts, to obtain consents from third parties with respect to their compliance
with this Section 7.11.
7.12 Interest Rate Agreements. The Borrower shall no later
------------------------
than 90 days following the Additional Borrowing Date enter into Interest Rate
Agreements, reasonably acceptable to the Agent, establishing a fixed or maximum
interest rate based on a eurodollar rate in respect of at least 50% of the
aggregate principal amount of Term Loans for a period which shall be
satisfactory to the Agent.
SECTION 8. Negative Covenants. Each of Holdings and the
------------------
Borrower hereby covenants and agrees that as of the Initial Borrowing Date and
thereafter until the Commitments have terminated, no Letters of Credit or Notes
are outstanding and the Loans and Unpaid Drawings, together with interest, Fees
and all other Obligations incurred hereunder, are paid in full:
8.1 Changes in Business. Except as otherwise permitted by
-------------------
Section 8.2, Holdings will not, and will not permit any of its Subsidiaries to,
substantively alter the character of the business of the Borrower and its
Subsidiaries from that conducted at the Additional Borrowing Date (after giving
effect to the consummation of the Devon Acquisition). Holdings will: engage
in no business or activity other than the ownership of all of the capital stock
of the Borrower and activities incidental thereto; own no capital stock other
than capital stock of the Borrower; not contract, create, incur, assume or
suffer to exist any Indebtedness except pursuant to the Documents and as
permitted by Section 8.4; and not own any assets other than capital stock of
the Borrower and de minimis amounts of other assets incidental to the
-- -------
conduct of its business.
8.2 Consolidation, Merger, Sale or Purchase of Assets, etc.
-------------------------------------------------------
Holdings will not, and will not permit any Subsidiary to, wind up, liquidate or
dissolve its affairs, or enter into any transaction of merger or consolidation,
sell or otherwise dispose of all or any part of its property or assets (other
than inventory or obsolete equipment or excess equipment no longer needed in
the conduct of the business in the ordinary course of business) or purchase,
lease or otherwise acquire (in one transaction or a series of related
transactions) all or any part of the property, assets or capital stock of any
Person (other than purchases or other acquisitions of inventory, leases,
materials and equipment in the ordinary course of business) or agree to do any
of the foregoing at any future time, except that the following shall be
permitted:
(a) except as otherwise provided in the Security Documents, any
Subsidiary of the Borrower may be merged or consolidated with or into, or
be liquidated into, the Borrower or a Wholly-Owned Subsidiary of the
Borrower (so long as (i) the Borrower or such Wholly-Owned Subsidiary is
the surviving corporation and (ii) if any such merger or consolidation
involves a Domestic Subsidiary, a Domestic Subsidiary is the surviving
corporation), or all or any part of its business, properties and assets
may be conveyed, leased, sold or transferred to the Borrower or a
Wholly-Owned Subsidiary of the Borrower (which must be a Domestic
Subsidiary if the transaction involves the conveyance, lease, sale or
transfer of all or substantially all the properties and assets of a
Domestic Subsidiary), provided that the Borrower may not be a party
--------
to any merger, consolidation or liquidation otherwise permitted by this
clause (a) involving a Subsidiary that is not a Wholly-Owned Subsidiary,
and provided further that in each case all Liens created pursuant
-------- -------
to a Security Document on any assets of a Subsidiary affected by any of
the foregoing events (other than Liens on the capital stock issued by a
Subsidiary that does not survive such event if, in connection therewith,
such capital stock is cancelled) shall remain in full force and effect
after giving effect thereto;
(b) capital expenditures to the extent within the limitations set
forth in Section 8.5 hereof;
42
(c) the investments, acquisitions and transfers or dispositions of
properties permitted pursuant to Section 8.6;
(d) Qualified Sale/Leaseback Transactions to the extent the Net
Cash Proceeds thereof are applied to repay the Loans as and to the extent
provided in Section 4.2(A)(e);
(e) other sales or dispositions of assets by the Borrower and its
Subsidiaries (including by way of mergers and consolidations and
including those effected in connection with the closing of a plant or
facility owned or leased by the Borrower or any of its Subsidiaries on
the Initial Borrowing Date or the consolidation of two or more such
plants and/or facilities), provided that (w) the aggregate Net Cash
--------
Proceeds received from all such sales and dispositions shall not exceed
$15,000,000 in the aggregate, (x) each such sale (other than sales not
exceeding $750,000 in any fiscal year of the Borrower and $3,000,000 in
the aggregate) shall be in an amount at least equal to the fair market
value thereof (as determined by the Board of Directors of Holdings) and
for proceeds of cash alone, (y) such sale or disposition shall be
permitted pursuant to the Subordinated Note Indenture and (z) the Net
Cash Proceeds of any such sale are applied to repay the Loans as and to
the extent provided in Section 4.2(A)(e), and, provided further,
-------- -------
that the sale or disposition of the capital stock of (i) the Borrower
shall be prohibited and (ii) any Subsidiary of the Borrower shall be
prohibited unless it is for all of the outstanding capital stock of such
Subsidiary owned (directly or indirectly) by the Borrower;
(f) other sales or dispositions of assets (including those
effected in connection with the closing of a plant or facility owned or
leased by the Borrower or any of its Subsidiaries or the consolidation of
two or more such plants and/or facilities), in each case to the extent
the Required Lenders have consented in writing thereto and subject to
such conditions as may be set forth in such consent;
(g) the license of intellectual property in the ordinary course of
business of the Borrower or any of its Subsidiaries;
(h) leases or subleases by the Borrower and its Subsidiaries not
materially interfering with the ordinary course of conduct of the
business of the Borrower or any of its Subsidiaries;
(i) the Merger; and
(j) the Devon Acquisition.
8.3 Liens. Holdings will not, and will not permit any of its
-----
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets of any kind (real or personal, tangible or
intangible) of Holdings or any such Subsidiary whether now owned or hereafter
acquired, or sell any such property or assets subject to an understanding or
agreement, contingent or otherwise, to repurchase such property or assets
(including sales of accounts receivable or notes with recourse to Holdings or
any of its Subsidiaries) or assign any right to receive income, or file or
permit the filing of any financing statement under the UCC or any other similar
notice of Lien under any similar recording or notice statute, except:
(a) Liens for taxes and assessments not yet due and payable or
Liens for taxes being contested in good faith and by appropriate
proceedings for which adequate reserves (in the good faith judgment of
the management of Holdings) have been established;
(b) Liens in respect of property or assets of Holdings or any of
its Subsidiaries imposed by law which were incurred in the ordinary
course of business, such as carriers', warehousemen's and mechanics'
Liens, statutory landlord's Liens, and other similar Liens arising in the
ordinary course of business, and (x) which do not in the aggregate
materially detract from the value of such property or assets or
materially impair the use thereof in the operation of the business of
Holdings or any Subsidiary or (y) which are being contested in good faith
by appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the property or asset subject to
such Lien;
43
(c) Liens created by or pursuant to this Agreement or the other
Credit Documents;
(d) Liens on assets of Holdings and its Subsidiaries existing on
the Initial Borrowing Date and listed on Annex 8.3(d) hereto together
with each Lien on the assets of Devon existing on the Additional
Borrowing Date listed on Annex 8.3(d) as described in each officer's
certificate delivered pursuant to Sections 5.1(c) and 5.2(c),
respectively, in each case without giving effect to any subsequent
extensions or renewals thereof;
(e) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section 9.9;
(f) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, trade contracts, leases, government
contracts, performance and return-of-money bonds and other similar
obligations incurred in the ordinary course of business (exclusive of
obligations in respect of the payment for borrowed money);
(g) Leases or subleases granted to others not interfering in any
material respect with the business of Holdings or any of its
Subsidiaries;
(h) Easements, encroachments, covenants, rights-of-way,
restrictions, minor defects or irregularities in title and other similar
charges or encumbrances not interfering in any material respect with the
ordinary conduct of the business of Holdings or any of its Subsidiaries
and municipal and zoning ordinances;
(i) Liens arising from UCC financing statements regarding leases
permitted by this Agreement;
(j) Purchase money Liens securing payables arising from the
purchase by the Borrower or any of its Subsidiaries of any equipment or
goods in the normal course of business, provided that such payables
--------
shall not constitute Indebtedness;
(k) Any interest or title of a lessor under any lease permitted by
this Agreement;
(l) Liens arising pursuant to purchase money mortgages relating
to, or security interests securing Indebtedness representing the purchase
price of assets acquired by the Borrower or any of its Subsidiaries after
the Initial Borrowing Date, provided that any such Liens attach only to
the assets so acquired and/or Liens existing on assets acquired by the
Borrower or any of its Subsidiaries after the Initial Borrowing Date
which are not incurred in connection with such acquisition and which do
not attach to any other property of the Borrower and/or any of its
Subsidiaries, provided that all Indebtedness secured by Liens created
pursuant to this clause (1), when aggregated with the principal amount of
Indebtedness outstanding pursuant to Section 8.4(o), shall not exceed
$12,500,000 at any time outstanding;
(m) Liens arising in connection with Qualified Sale/Leaseback
Transactions;
(n) Liens created pursuant to Capital Leases permitted pursuant to
Section 8.4(d);
(o) Liens on assets of Foreign Subsidiaries, provided that
--------
such Liens do not extend to, or encumber, assets which constitute
Collateral or the capital stock of the Borrower or any of its
Subsidiaries;
(p) repurchase agreements related to inventory executed by the
Borrower or any of its Subsidiaries to any third parties not to exceed
$5,000,000 in the aggregate at any time outstanding; and
44
(q) Liens on cash collateral consisting of the proceeds of
drawings under a Letter of Credit in an aggregate principal amount not to
exceed $3,000,000 (and earnings thereon and investments thereof) to
secure reimbursement obligations in respect of Existing Letters of Credit
and related fees and expenses.
8.4 Indebtedness. Holdings will not, and will not permit any
------------
of its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
(b) Indebtedness owing by (i) any Subsidiary to another
Subsidiary, provided that, if the obligee Subsidiary is a Domestic
--------
Subsidiary, then the obligor Subsidiary shall not be a Foreign Subsidiary
with Indebtedness outstanding pursuant to Section 8.4(k), and (ii)
Holdings to the Borrower to the extent the proceeds of such Indebtedness
are used promptly upon the incurrence thereof to pay when due (x) fees
owing to Bessemer and/or its Affiliates permitted pursuant to Section
8.10, (y) taxes and normal operating expenses and (z) the repurchase
price for Holdings Common Stock or Holdings Preferred Stock as permitted
by Section 8.9(a)(ii);
(c) Indebtedness owing by any Subsidiary to the Borrower,
provided such Subsidiary is not a Foreign Subsidiary with
--------
Indebtedness outstanding pursuant to Section 8.4(k);
(d) Capitalized Lease Obligations of the Borrower or any of its
Subsidiaries, provided that the aggregate Capitalized Lease
--------
Obligations under all Capital Leases entered into after the Initial
Borrowing Date shall not at any time exceed $10,000,000;
(e) existing Indebtedness listed on Annex 8.4(e) hereto ("Existing
Indebtedness") and any renewals, extensions, refundings or refinancings
of such Indebtedness (other than the Subordinated Notes), provided the
amount thereof is not increased and the maturity of principal thereof is
not shortened (unless to a maturity occurring after the Tranche B Term
Facility Final Maturity Date);
(f) Indebtedness under Interest Rate Agreements listed on Annex
8.4(f) hereto and under Interest Rate Agreements entered into after the
Initial Borrowing Date;
(g) Indebtedness of Holdings represented by the obligations of
Holdings to make payments with respect to the cancellation or repurchase
of certain stock or stock options or warrants in respect of Holdings
Common Stock or Holdings Preferred Stock granted to management investors
pursuant to the Management Common Stock Agreements and the Employment
Agreements;
(h) Indebtedness secured by Liens permitted by Section 8.3(1);
(i) the repurchase agreements permitted by Section 8.3(p);
(j) unsecured Indebtedness of the Borrower evidenced by the
Subordinated Notes, provided that such Indebtedness shall not exceed
--------
$75,000,000 in aggregate principal amount at any time outstanding;
(k) Indebtedness of any Foreign Subsidiary, provided that such
--------
Indebtedness is incurred solely for working capital purposes and is not
guaranteed by, or secured by the assets of, any entity other than the
Foreign Subsidiary incurring such Indebtedness or any other Foreign
Subsidiary;
(l) Indebtedness of the Borrower in respect of industrial revenue
bonds issued after the Initial Borrowing Date, provided that such
--------
Indebtedness shall not exceed $5,000,000 in aggregate principal amount
outstanding at any time;
(m) letters of credit issued in the ordinary course of business
for the account of the Borrower or any of its Subsidiaries to the extent
(i) the reimbursement obligations of the Borrower and/or such
45
Subsidiary in respect thereof are unsecured and (ii) the sum of (x) the
aggregate stated amount thereof, (y) the aggregate amount of all unpaid
drawings in respect thereof and (z) the Letter of Credit Outstandings
will not exceed, when added to the aggregate principal amount of all
Revolving Loans and Swingline Loans then outstanding, either (A) the
Total Revolving Commitment in effect as of the Initial Borrowing Date or
(B) the Total Availability at the time of issuance;
(n) Stock Repurchase Notes; and
(o) additional Indebtedness of the Borrower or any of its
Subsidiaries not to exceed, when aggregated with the aggregate amount of
Indebtedness subject to a Lien pursuant to Section 8.3(1), an aggregate
outstanding principal amount of $12,500,000 at any time.
8.5 Capital Expenditures. (a) Holdings will not, and will
--------------------
not permit any of its Subsidiaries to, incur Consolidated Capital Expenditures,
provided that the Borrower and its Subsidiaries may make Consolidated
--------
Capital Expenditures during each fiscal year of the Borrower in an amount not
in excess of (x) the sum of (A) as the case may be, (1) for fiscal year 1995,
$4,000,000 or (2) for each fiscal year thereafter, $8,500,000 plus (B) in the
case of each fiscal year commencing with the fiscal year beginning January 1,
1997, the Retained Percentage Amount for the prior fiscal year minus (y) the
amount of such Retained Percentage Amount expended by the Borrower in such
fiscal year in respect of repurchases of Subordinated Notes pursuant to Section
8.8(a).
(b) Notwithstanding anything to the contrary contained in clause
(a) above, to the extent that Consolidated Capital Expenditures made by the
Borrower and its Subsidiaries during any fiscal year are less than the amount
permitted to be made for such fiscal year pursuant to clause (a) (without
taking into account any increase in the amount permitted during such period as
a result of this clause (b)) 100% of such unused amount may be carried forward
to the immediately succeeding fiscal year and utilized to make Consolidated
Capital Expenditures in excess of the amount permitted above in such following
fiscal year.
8.6 Advances, Investments and Loans. Holdings will not, and
-------------------------------
will not permit any of its Subsidiaries to, lend money or credit or make
advances to any Person, or purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital contribution to
any Person, except:
(a) Holdings or any of its Subsidiaries may invest in cash and
Cash Equivalents;
(b) the Borrower and any of its Subsidiaries may acquire and hold
receivables owing to them, if created or acquired in the ordinary course
of business and payable or dischargeable in accordance with customary
trade terms;
(c) the intercompany Indebtedness described in Sections 8.4(b) and
(c) shall be permitted to the extent evidenced by promissory notes (if
owed to the Borrower or another Domestic Subsidiary) that are pledged
pursuant to a Pledge Agreement;
(d) the investments owned by the Borrower and each of its
Subsidiaries on the Initial Borrowing Date and set forth in Annex 8.6(d)
may continue to be owned by the Borrower and such Subsidiary;
(e) loans and advances to employees in the ordinary course of
business in an aggregate principal amount not to exceed $1,000,000 at any
time outstanding shall be permitted;
(f) the Borrower and any of its Subsidiaries may acquire and own
investments (including debt obligations) received in connection with the
bankruptcy or reorganization of suppliers and customers and in settlement
of delinquent obligations of, and other disputes with, customers and
suppliers arising in the ordinary course of business;
(g) Interest Rate Agreements permitted by Section 8.4(f) shall be
permitted;
46
(h) the Borrower may make additional capital contributions or
advances to or investments in any Person not to exceed $1,000,000 for any
Person and $3,000,000 to all Persons;
(i) Holdings may make capital contributions to the Borrower and
the Borrower and its Subsidiaries may make capital contributions to, or
purchase additional shares of capital stock of, their respective
Wholly-Owned Subsidiaries; provided that the aggregate amount of
--------
capital contributions to, and consideration paid for the purchase of
capital stock of, Foreign Subsidiaries by the Borrower and its Domestic
Subsidiaries on and after the Initial Borrowing Date shall not at any
time exceed the sum of (i) $250,000 plus (ii) the aggregate amount of
dividends and other distributions received by the Borrower and its
Domestic Subsidiaries from Foreign Subsidiaries on and after the Initial
Borrowing Date;
(j) the Borrower may make guarantees of certain financial
obligations of a distributor of the Borrower, in the ordinary course of
business and consistent with past practice in an aggregate principal
amount not to exceed $5,000,000 at any time outstanding;
(k) (i) the Merger shall be permitted and (ii) the Devon
Acquisition shall be permitted;
(l) the Borrower and its Subsidiaries may make Permitted Business
Acquisitions, provided that the aggregate amount of consideration
--------
(whether cash or property, as valued in good faith by the Board of
Directors of the Borrower) for all Permitted Business Acquisitions
acquired after the Initial Borrowing Date (other than the Devon
Acquisition) shall not exceed (net of any return representing return of
capital of (but not return on) any such investment) at any time the
amount set forth on Annex 7.1(d) for the Level that is in effect at such
time (it being agreed that any such investment permitted when made shall
not cease to be permitted as a result of the applicable Level
subsequently changing); and
(m) the foregoing shall not prevent the redemption or repurchase
by Holdings of Holdings Common Stock or Holdings Preferred Stock (and any
options or warrants relating thereto) in accordance with Section
8.9(a)(ii).
8.7 Leases. Holdings will not permit the aggregate payments
------
(including, without limitation, any property taxes paid by Holdings and its
Subsidiaries as additional rent or lease payments) by Holdings and its
Subsidiaries on a consolidated basis under agreements in effect as of the
Initial Borrowing Date and/or entered into after the Initial Borrowing Date
(including any such agreement that is an extension, replacement, substitution,
or renewal of any agreement entered into prior to such date) to rent or lease
any real or personal property (exclusive of Capitalized Lease Obligations) to
exceed $17,500,000 in any fiscal year of Holdings.
8.8 Prepayments of Indebtedness; Amendments to Documents, etc.
----------------------------------------------------------
Holdings will not, and will not permit any of its Subsidiaries to:
(a) make (or give any notice in respect thereof) any voluntary or
optional payment or prepayment or redemption or acquisition for value of
(including, without limitation, by way of depositing with the trustee
with respect thereto money or securities before due for the purpose of
paying when due) or exchange of any Existing Indebtedness or the
Subordinated Notes except that, commencing with the fiscal year beginning
January 1, 1997, the Borrower may repurchase and/or redeem Subordinated
Notes so long as (x) the aggregate amount paid by the Borrower in any
fiscal year for all such repurchases and redemptions shall not exceed an
amount equal to (A) in the case of each fiscal year commencing with the
fiscal year beginning January 1, 1997, the Retained Percentage Amount for
the immediately preceding fiscal year minus (B) the amount of such
-----
Retained Percentage Amount utilized by the Borrower to make Consolidated
Capital Expenditures in such fiscal year, (y) no Subordinated Notes shall
be purchased or redeemed at a price which exceeds 105% of the principal
amount thereof plus interest accrued thereon and (z) no Default under
Section 9.1 or Event of Default shall exist at the time of any such
repurchase and redemptions or would exist immediately after giving effect
thereto;
47
(b) amend or modify, or permit the amendment or modification of,
any provisions of any Subordinated Note Document, any Merger Document or
any Devon Acquisition Document in any manner adverse to the interests of
the Lenders;
(c) designate any Indebtedness incurred by Holdings or any of its
Subsidiaries after the Initial Borrowing Date (other than Indebtedness
hereunder) as "Designated Senior Indebtedness" (as such term is defined
in the Subordinated Note Indenture) without the prior written consent of
the Agent;
(d) exercise its legal or covenant defeasance option under the
Subordinated Note Indenture without the consent of the Required Lenders;
or
(e) amend, modify or change in any manner adverse to the interests
of the Lenders the Certificate of Incorporation (including, without
limitation, by the filing of any certificate of designation other than
that filed with respect to the Holdings Preferred Stock on or prior to
the Initial Borrowing Date) or By-Laws of Holdings, the Borrower or any
other Credit Party, or any agreement entered into by Holdings, the
Borrower or any other Credit Party with respect to its capital stock, or
enter into any new agreement in any manner adverse to the interests of
the Lenders, with respect to the capital stock of Holdings, the Borrower
or any other Credit Party.
8.9 Dividends, etc. (a) Holdings will not, and will not
---------------
permit any of its Subsidiaries to, declare or pay any dividends (other than
dividends payable solely in capital stock of such Person) or return any capital
to, its stockholders or authorize or make any other distribution, payment or
delivery of property or cash to its stockholders as such, or redeem, retire,
purchase or otherwise acquire, directly or indirectly, for consideration, any
shares of any class of its capital stock now or hereafter outstanding (or any
warrants for or options or stock appreciation rights in respect of any of such
shares), or set aside any funds for any of the foregoing purposes, or permit
any of its Subsidiaries to purchase or otherwise acquire for consideration any
shares of any class of the capital stock of the Borrower or any other
Subsidiary, as the case may be, now or hereafter outstanding (or any options or
warrants or stock appreciation rights issued by such Person with respect to its
capital stock) (all of the foregoing "Dividends"), except that:
(i) any Subsidiary of the Borrower may pay dividends to its
shareholders;
(ii) Holdings may redeem or repurchase Holdings Common Stock or
Holdings Preferred Stock (and any options or warrants relating thereto)
from management investors upon the death, permanent disability,
retirement or termination of employment of any such management investor
(any such event in respect of a management investor, a "Repurchase
Triggering Event"), provided that (x) no Default under Section 9.1 or
--------
Event of Default is then in existence or would arise therefrom, (y) the
aggregate amount of all cash paid in respect of such shares so redeemed
or repurchased from all management investors and all principal payments
made in respect of Stock Repurchase Notes shall not exceed $3,000,000 in
the aggregate during the period from the Initial Borrowing Date through
the second anniversary thereof and $5,000,000 in the aggregate thereafter
(it being understood that the amount of Stock Repurchase Notes that may
be issued for such redemptions and repurchases is not limited by the
foregoing restrictions), and, provided further that in the event
-------- -------
that Holdings subsequently resells to any member of its, the Borrower's
or any Subsidiary's management, or to a party acceptable to the Agent
provided that any such party shall simultaneously transfer all such
shares purchased by it to a member of management of Holdings, the
Borrower or of such Subsidiary, or for the benefit of one or more members
of management (to the extent that such shares are, simultaneously with
such transfer, reserved for issuance to such members of management
pursuant to an employee incentive plan), any shares redeemed or
repurchased pursuant to this clause (ii), the amount of repurchases
Holdings may make from management investors pursuant to this clause (ii)
and permitted principal payments in respect of Stock Repurchase Notes
shall be increased by an amount equal to any cash received by Holdings
upon the resale of such shares;
(iii) the Borrower may pay cash dividends to Holdings at such times
and in such amounts as are necessary to enable Holdings to (A) make
required tax payments, (B) pay normal operating expenses
48
incurred in the ordinary course of business, and/or (C) effect the
payments permitted pursuant to Section 8.9(ii) and Section 8.10,
provided that in the event that Holdings has not utilized the
--------
proceeds of such dividend for the purposes for which such dividend was
paid within thirty days after the receipt of proceeds of such dividend,
Holdings shall be required to immediately utilize the proceeds of such
dividend to make a capital contribution in the Borrower;
(iv) the Borrower may pay a cash dividend to Holdings on the
Initial Borrowing Date to be used by Holdings as set forth in Sections
5.1(h), (j) and (k) and 6.5; and
(v) Holdings may pay Dividends to its stockholders (or holders of
options for Holdings Common Stock) on the Initial Borrowing Date as
required by the terms of the Merger Agreement.
(b) Holdings will not, and will not permit any of its Subsidiaries
to, create or otherwise cause or suffer to exist any encumbrance or restriction
which prohibits or otherwise restricts (A) the ability of any Subsidiary to (a)
pay dividends or make other distributions or pay any Indebtedness owed to the
Borrower or any Subsidiary, (b) make loans or advances to the Borrower or any
Subsidiary, (c) transfer any of its properties or assets to the Borrower or any
Subsidiary or (B) the ability of the Borrower or any other Subsidiary of
Holdings to create, incur, assume or suffer to exist any Lien upon its property
or assets to secure the Obligations, other than prohibitions or restrictions
existing under or by reason of:
(i) this Agreement, the other Credit Documents and the
Subordinated Note Documents;
(ii) applicable law;
(iii) customary non-assignment provisions entered into in the
ordinary course of business and consistent with past practices;
(iv) any restriction or encumbrance with respect to a Subsidiary
of the Borrower imposed pursuant to an agreement which has been entered
into for the sale or disposition of all or substantially all of the
capital stock or assets of such Subsidiary, so long as such sale or
disposition is permitted under this Agreement; and
(v) Liens permitted under Section 8.3 and any documents or
instruments governing the terms of any Indebtedness or other obligations
secured by any such Liens, provided that such prohibitions or
--------
restrictions apply only to the assets subject to such Liens.
8.10 Transactions with Affiliates. Holdings will not, and
----------------------------
will not permit any Subsidiary to, enter into any transaction or series of
transactions, whether or not in the ordinary course of business, with any
Affiliate other than on terms and conditions substantially as favorable to
Holdings or such Subsidiary as would be obtainable by Holdings or such
Subsidiary at the time in a comparable arm's-length transaction with a Person
other than an Affiliate, provided that the foregoing restrictions shall not
--------
apply to (i) transactions with Bessemer and its Affiliates set forth in Annex
8.10 hereto in such amounts and at such times as is permitted pursuant to the
terms of the Subordinated Note Indenture, provided that no amount shall be paid
by Holdings or any Subsidiary in connection with such transactions during the
continuation of an Event of Default, (ii) payments among Holdings and its
Subsidiaries pursuant to any Tax Sharing Agreement, (iii) employment
arrangements entered into in the ordinary course of business with officers of
the Borrower and its Subsidiaries, (iv) customary fees paid to members of the
Board of Directors of Holdings and of its Subsidiaries, (v) transactions
between or among any of the Borrower and its Wholly-Owned Domestic
Subsidiaries, (vi) between the Borrower and its Wholly-Owned Subsidiaries in
the ordinary course of business and (vii) payments by the Borrower to Xxxxxx
and the other Selling Shareholders required by the Devon Acquisition Agreement
as in effect on the date hereof, provided that at least 50% of each
--------
Contingent Payment (as defined in the Devon Acquisition Agreement) required to
be made pursuant to Section 10(d) of the Devon Acquisition Agreement shall be
made from the proceeds of additional equity contributed to the Borrower through
Holdings by the Investors for that purpose.
49
8.11 Consolidated Net Worth. Holdings will not (a) permit
----------------------
Consolidated Net Worth as of the end of any fiscal quarter ending on or before
December 31, 1995 of Holdings to be less than an amount equal to the sum of (x)
85% of Initial Consolidated Net Worth plus (y) the aggregate of 50% of
Consolidated Net Income, if positive, for each quarter during the period
commencing on October 1, 1995 and ending at the close of the fiscal quarter
then last ended and (b) permit Consolidated Net Worth as of the end of any
fiscal quarter of Holdings ending on or after March 31, 1996 to be less than an
amount equal to the sum of (w) $43,774,000 (which is 85% of Consolidated Net
Worth as at December 31, 1995) plus (x) $26,775,000 (which is 85% of the cash
proceeds of equity contributed to the Borrower through Holdings by the
Investors in connection with the Devon Acquisition) plus (y) the aggregate of
50% of Consolidated Net Income, if positive, for each quarter during the period
commencing on January 1, 1996 and ending at the close of the fiscal quarter
then last ended.
8.12 Debt Service Coverage Ratio. Holdings will not permit
---------------------------
the ratio of (i) Consolidated Cash Flow Available for Debt Service to (ii)
Consolidated Debt Service Expense for any Test Period to be less than 1.0 to
1.0.
8.13 Cash Interest Coverage Ratio. Holdings will not
------
permit the Cash Interest Coverage Ratio for any Test Period set forth below to
be less than the ratio set forth opposite such Test Period:
Test Period Ending Ratio
------------------ -----
December 31, 1995 1.75 to 1.00
March 31, 1996 1.75 to 1.00
June 30, 1996 1.75 to 1.00
September 30, 1996 1.75 to 1.00
December 31, 1996 1.75 to 1.00
March 31, 1997 2.00 to 1.00
June 30, 1997 2.00 to 1.00
September 30,1997 2.00 to 1.00
December 31, 1997 2.00 to 1.00
March 31, 1998 2.50 to 1.00
June 30, 1998 2.50 to 1.00
September 30, 1998 2.50 to 1.00
December 31, 1998 2.50 to 1.00
March 31, 1999 2.50 to 1.00
June 30, 1999 2.50 to 1.00
September 30, 1999 2.50 to 1.00
December 31, 1999 2.50 to 1.00
March 31, 2000 2.50 to 1.00
June 30, 2000 2.50 to 1.00
September 30, 2000 2.50 to 1.00
December 31, 2000 2.50 to 1.00
March 31, 2001 and each 3.00 to 1.00
March 31, June 30,
September 30 and
December 31 thereafter
8.14 Leverage Ratio. Commencing with the fiscal quarter
--------------
ending December 31, 1995, Holdings will not permit the Leverage Ratio as of the
end of any fiscal quarter of Holdings ending during the fiscal year set forth
below to be more than the ratio set forth opposite such fiscal quarter:
50
Fiscal Quarter Ratio
-------------- -----
December 31, 1995 3.00 to 1.00
March 31, 1996 3.85 to 1.00
June 30, 1996 3.85 to 1.00
September 30, 1996 3.75 to 1.00
December 31, 1996 3.75 to 1.00
March 31, 1997 3.50 to 1.00
June 30, 1997 3.50 to 1.00
September 30, 1997 2.75 to 1.00
December 31, 1997 2.75 to 1.00
March 31, 1998 2.50 to 1.00
June 30, 1998 2.50 to 1.00
September 30, 1998 2.25 to 1.00
December 31, 1998 2.25 to 1.00
March 31, 1999 1.75 to 1.00
June 30, 1999 1.75 to 1.00
September 30, 1999 1.75 to 1.00
December 31, 1999 1.75 to 1.00
March 31, 2000 and thereafter 1.50 to 1.00
8.15 Current Ratio. Holdings will not permit the ratio of (x)
-------------
Consolidated Current Assets to (y) Consolidated Current Liabilities at the end
of any fiscal quarter of Holdings to be less than 1.25 to 1.00.
8.16 Issuance of Stock. Holdings will not permit any of its
-----------------
Subsidiaries directly or indirectly to issue, sell, assign, pledge or otherwise
encumber or dispose of any shares of its capital stock or other securities (or
warrants, rights or options to acquire shares or other equity securities) of
such Subsidiary, except to the extent permitted by Section 8.6, to the Borrower
or a Wholly-Owned Subsidiary thereof or to qualify directors if required by
applicable law and except for pledges thereof pursuant to the Pledge
Agreements.
SECTION 9. Events of Default. Upon the occurrence of any of
-----------------
the following specified events (each an "Event of Default"):
9.1 Payments. The Borrower shall (i) default in the payment
--------
when due of any principal of the Loans or (ii) default, and such default shall
continue for five or more days, in the payment when due of any Unpaid Drawing,
any interest on the Loans or any Fees or any other amounts owing hereunder or
under any other Credit Document; or
9.2 Representations etc. Any representation, warranty or
--------------------
statement made by any Credit Party herein or in any other Credit Document or in
any statement or certificate delivered or required to be delivered pursuant
hereto or thereto shall prove to be untrue in any material respect on the date
as of which made or deemed made; or
9.3 Covenants. Any Credit Party shall (a) default in the due
---------
performance or observance by it of any term, covenant or agreement contained in
Sections 7.10 or 8, or (b) default in the due performance or observance by it
of any term, covenant or agreement (other than those referred to in Section
9.1, 9.2 or clause (a) of this Section 9.3) contained in this Agreement and
such default shall continue unremedied for a period of at least 30 days after
notice to the defaulting party by the Agent or the Required Lenders; or
51
9.4 Default Under Other Agreements. Any Credit Party or any
------------------------------
of their Subsidiaries shall (i) default in any payment with respect to any
Indebtedness (other than the Obligations) or (ii) default in the observance or
performance of any agreement or condition relating to any such Indebtedness or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit the holder or
holders of such Indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause any such Indebtedness to become due prior to its stated
maturity; provided that it shall not constitute an Event of Default
--------
pursuant to this Section 9.4 unless the principal amount of any one issue of
such Indebtedness exceeds $3,000,000 or the aggregate amount of all
Indebtedness referred to in this Section 9.4 exceeds $5,000,000 at any one
time; or
9.5 Bankruptcy, etc. Any Credit Party or any of its Material
----------------
Subsidiaries shall commence a voluntary case concerning itself under Title 11
of the United States Code entitled "Bankruptcy", as now or hereafter in effect,
or any successor thereto (the "Bankruptcy Code"); or an involuntary case is
commenced against any Credit Party or any of its Material Subsidiaries and the
petition is not controverted within 10 days, or is not dismissed within 60
days, after commencement of the case; or a custodian (as defined in the
Bankruptcy Code) is appointed for, or takes charge of, all or substantially all
of the property of any Credit Party or any of its Material Subsidiaries; or any
Credit Party or any of its Material Subsidiaries commences any other proceeding
under any reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to any Credit Party or any of its
Material Subsidiaries; or there is commenced against any Credit Party or any of
its Material Subsidiaries any such proceeding which remains undismissed for a
period of 60 days; or any Credit Party or any of its Material Subsidiaries is
adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or any Credit Party or any of
its Material Subsidiaries suffers any appointment of any custodian or the like
for it or any substantial part of its property to continue undischarged or
unstayed for a period of 60 days; or any Credit Party or any of its Material
Subsidiaries makes a general assignment for the benefit of creditors; or any
corporate action is taken by any Credit Party or any of its Material
Subsidiaries for the purpose of effecting any of the foregoing; or
9.6 ERISA. (a) A Plan which is a single-employer plan (as
-----
defined in Section 4001(a)(15) of ERISA) shall fail to satisfy the minimum
funding standard required by Section 412 of the Code for any plan year or a
waiver of such standard or extension of any amortization period is sought or
granted under Section 412 of the Code or shall provide security to induce the
issuance of such waiver or extension, (b) any Plan is or shall have been or is
likely to be terminated or the subject of termination proceedings under ERISA
or an event has occurred entitling the PBGC to terminate a Plan under Section
4042(a) of ERISA, (c) any Plan shall have had or is likely to have a trustee
appointed to administer such Plan, (d) a contribution required to be made to a
Plan has not been timely made, (e) any Plan shall have an Unfunded Current
Liability or (f) a Credit Party or a Subsidiary of a Credit Party or any ERISA
Affiliate has incurred or is likely to incur a material liability to or on
account of a termination of or a withdrawal from a Plan under Section 515,
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29) of
the Code; and there shall result from any such event or events described in the
preceding clauses of this Section 9.6 the imposition of a lien upon the assets
of Holdings or any Subsidiary of a Credit Party, the granting of a security
interest, or a liability or a material risk of incurring a liability to the
PBGC or a Plan or a trustee appointed under ERISA or a penalty under Section
4971 of the Code, which lien, security interest, liability or penalty would
have a Material Adverse Effect; or
9.7 Security Documents. Any Security Document shall cease to
------------------
be in full force and effect, or shall cease to give the Collateral Agent the
Liens purported to be created thereby with respect to assets that are material,
individually or in the aggregate, to Holdings and its Subsidiaries, taken as a
whole, (except to the extent resulting from the failure of the Collateral Agent
to maintain possession of Collateral as to which the Liens thereon are
perfected by possession or from a sale or other disposition of such Collateral
permitted hereby) in favor of the Collateral Agent or any Credit Party shall
default (after, in the case of Mortgages only, the expiration of any applicable
grace period contained in any such Mortgage) in any material respect in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to any such Security Document; or
52
9.8 Guaranty. Any Guaranty or any provision thereof shall
--------
cease to be in full force or effect, except in each case to the extent
resulting from a sale or liquidation of the applicable Guarantor permitted
hereby, or any Guarantor or any Person acting by or on behalf of such Guarantor
shall deny or disaffirm such guarantor's obligations under such Guaranty or any
Guarantor shall default in the due performance or observance of any material
term, covenant or agreement on its part to be performed or observed pursuant to
the relevant Guaranty; or
9.9 Judgments. One or more judgments or decrees shall be
---------
entered against any Credit Party or any of its Material Subsidiaries involving
a liability of $3,000,000 or more in the case of any one such judgment or
decree and $5,000,000 or more in the aggregate for all such judgments and
decrees (other than any judgment or decree in connection with which such Credit
Party has provided reserves on its consolidated balance sheet as of the Initial
Borrowing Date (x) not to exceed $3,000,000 in the case of any one such
judgment or decree and, (y) not to exceed $5,000,000 in any fiscal year for all
such judgments and decrees) for all Credit Parties and their Material
Subsidiaries (not paid or to the extent not covered by insurance or by an
indemnity) and any such judgments or decrees shall not have been vacated,
discharged or stayed or bonded pending appeal within 60 days from the entry
thereof; or
9.10 Subordination Provisions. The Obligations of the
------------------------
Borrower and of Holdings shall cease to constitute senior indebtedness under
the subordination provisions of the Stock Repurchase Notes or the Subordinated
Note Indenture or such subordination provisions shall be invalidated or
otherwise cease to be legal, valid and binding obligations of the parties
thereto, enforceable in accordance with their terms;
then, and in any such event, and at any time thereafter, if any Event of
Default shall then be continuing, the Agent shall, upon the written request of
the Required Lenders, by written notice to the Borrower, take any or all of the
following actions, without prejudice to the rights of the Agent or any Lender
to enforce its claims against the Borrower, except as otherwise specifically
provided for in this Agreement (provided that, if an Event of Default
--------
specified in Section 9.5 shall occur with respect to the Borrower, the result
which would occur upon the giving of written notice by the Agent as specified
in clauses (i) and (ii) below shall occur automatically without the giving of
any such notice): (i) declare the Total Commitment terminated, whereupon the
Commitment of each Lender shall forthwith terminate immediately and any
Commitment Fee shall forthwith become due and payable without any other notice
of any kind; (ii) declare the principal of and any accrued interest in respect
of all Loans and all obligations owing hereunder (including Unpaid Drawings)
and thereunder to be, whereupon the same shall become, forthwith due and
payable without presentment, demand, protest or other notice of any kind, all
of which are hereby waived by Holdings and the Borrower; (iii) enforce, as
Collateral Agent (or direct the Collateral Agent to enforce), any or all of the
Liens and security interests created pursuant to the Security Documents; (iv)
terminate any Letter of Credit which may be terminated in accordance with its
terms; and (v) direct the Borrower to pay (and the Borrower hereby agrees upon
receipt of such notice, or upon the occurrence of any Event of Default
specified in Section 9.5 in respect of the Borrower, it will pay) to the
Collateral Agent at the Payment Office such additional amounts of cash, to be
held as security for the Borrower's reimbursement obligations in respect of
Letters of Credit then outstanding equal to the aggregate Stated Amount of all
Letters of Credit then outstanding.
Except as expressly provided in this Section and in the Security
Documents, presentment, demand, protest and all other notices of any kind are
hereby expressly waived with respect to the exercise of remedies upon an Event
of Default.
SECTION 10. Definitions. As used herein, the following terms
-----------
shall have the meanings herein specified unless the context otherwise requires.
Defined terms in this Agreement shall include in the singular number the plural
and in the plural the singular:
"Account Debtor" shall mean, with respect to any Receivable, the
obligor with respect to such Receivable.
"Additional Borrowing Date" shall mean the date upon which the
Additional Tranche A Term Loans and the Additional Tranche B Term Loans are
borrowed.
53
"Additional Mortgage" shall have the meaning provided in Section
7.11.
"Additional Term Commitment" shall mean with respect to each
Lender, the collective reference to its Additional Tranche A Term Commitment
and Additional Tranche B Term Commitment.
"Additional Term Loans" shall mean the collective reference to the
Additional Tranche A Term Loans and the Additional Tranche B Term Loans.
"Additional Tranche A Scheduled Repayment" shall have the meaning
provided in Section 4.2(A)(c).
"Additional Tranche A Term Commitment" shall mean, with respect to
each Lender, the amount set forth opposite such Lender's name in Annex 1.1
hereto directly below the column entitled "Additional Tranche A Term
Commitment", as the same may be reduced or terminated pursuant to Section 3.3.
"Additional Tranche A Term Facility" shall mean the Facility
evidenced by the Total Additional Tranche A Term Commitment.
"Additional Tranche A Term Loan" shall have the meaning provided in
Section 1.1(a).
"Additional Tranche B Scheduled Repayment" shall have the meaning
provided in Section 4.2(A)(d).
"Additional Tranche B Term Commitment" shall mean, with respect to
each Lender, the amount set forth opposite such Lender's name in Annex 1.1
hereto directly below the column entitled "Additional Tranche B Term
Commitment", as the same may be reduced or terminated pursuant to Section 3.3.
"Additional Tranche B Term Facility" shall mean the Facility
evidenced by the Total Additional Tranche B Term Commitment.
"Additional Tranche B Term Loan" shall have the meaning provided in
Section 1.1(b).
"Adjusted Cash Flow" for any fiscal year shall mean Consolidated
Net Income for such fiscal year (after provision for taxes) plus the amount of
all net non-cash charges (including, without limitation, depreciation, deferred
tax expense, non-cash interest expense, write-downs of inventory and other
non-cash charges) that were deducted in arriving at Consolidated Net Income for
such fiscal year less (x) the amount of all net noncash gains and gains from
sales of assets (other than sales of inventory in the ordinary course of
business) that were added in arriving at Consolidated Net Income for such
fiscal year and (y) all other net non-cash credits included in arriving at
Consolidated Net Income.
"Adjusted Certificate of Deposit Rate" shall mean, on any day, the
sum (rounded to the nearest 1/100 of 1%) of (1) the rate obtained by dividing
(x) the most recent weekly average dealer offering rate for negotiable
certificates of deposit with a three-month maturity in the secondary market as
published in the most recent Federal Reserve System publication entitled
"Select Interest Rates," published weekly on Form H.15 as of the date hereof,
or if such publication or a substitute containing the foregoing rate
information shall not be published by the Federal Reserve System for any week,
the weekly average offering rate determined by the Agent on the basis of
quotations for such certificates received by it from three certificate of
deposit dealers in New York of recognized standing or, if such quotations are
unavailable, then on the basis of other sources reasonably selected by the
Agent, by (y) a percentage equal to 100% minus the stated maximum rate of all
reserve requirements as specified in Regulation D applicable on such day to a
three-month certificate of deposit of a member bank of the Federal Reserve
System in excess of $100,000 (including, without limitation, any marginal,
emergency, supplemental, special or other reserves), plus (2) the annual
assessment rate in effect of such day which is payable by a member of the Bank
Insurance Fund maintained by the Federal Deposit Insurance Corporation (the
"FDIC") (or any successor) classified as well-capitalized and within
supervisory subgroup "B" (or such higher subgroup classification as may be in
effect
54
from time to time for the Agent) (or a comparable successor assessment risk
classification) within the meaning of 12 C.F.R. (S)327.3(d) (or any successor
provision) to the FDIC (or any successor) for the FDIC's (or such successor's)
insuring time deposits at offices of such institution in the United States.
"Affected Loan" shall have the meaning provided in Section
4.2(B)(b).
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling (including but not limited to all
directors and officers of such Person), controlled by, or under direct or
indirect common control with such Person. A Person shall be deemed to control
a corporation if such Person possesses, directly or indirectly, the power (i)
to vote 10% or more of the securities having ordinary voting power for the
election of directors of such corporation or (ii) to direct or cause the
direction of the management and policies of such corporation, whether through
the ownership of voting securities, by contract or otherwise.
"Agent" shall have the meaning provided in the first paragraph of
this Agreement and shall include any successor to the Agent appointed pursuant
to Section 11.9.
"Agreement" shall mean this Credit Agreement, as the same may be
from time to time further modified, amended and/or supplemented.
"Allocation Date" shall mean the earlier of (i) the Effective Date
and (ii) the Business Day prior to the Effective Date on which the Initial
Tranche A Term Commitment, the Initial Tranche B Term Commitment and the
Revolving Commitment have been allocated among the Lenders.
"Amended and Restated Credit Agreement Effective Date" shall have
the meaning provided in Section 12.10(b).
"Anticipated Reinvestment Amount" shall mean, with respect to any
Reinvestment Election, the amount specified in the Reinvestment Notice
delivered by the Borrower in connection therewith as the amount of the Net Cash
Proceeds from the related Asset Sale that the Borrower intends to use to
purchase, construct or otherwise acquire Reinvestment Assets.
"Applicable Base Rate Margin" shall mean (i) for Revolving Loans,
Swingline Loans and Tranche A Term Loans, the rate determined in accordance
with Annex 7.1(d), and (ii) for Tranche B Term Loans, 2.00%.
"Applicable Cash Flow Percentage" for any fiscal year shall mean
the percentage for such fiscal year determined in accordance with Annex 7.1(d).
"Applicable Eurodollar Margin" shall mean (i) for Revolving Loans
and Tranche A Term Loans, the rate determined in accordance with Annex 7.1(d),
and (ii) for Tranche B Term Loans, 3.00%.
"Asset Sale" shall mean the sale, transfer or other disposition by
Holdings or any Subsidiary of any asset or property to any Person other than
Holdings or any Subsidiary (other than sales, transfers or other dispositions
in the ordinary course of business of inventory and/or obsolete or excess
equipment).
"Authorized Officer" shall mean any senior officer of Holdings or
the Borrower, as the case may be, designated as such in writing to the Agent by
Holdings or the Borrower, as the case may be, in each case to the extent
acceptable to the Agent.
"Bankruptcy Code" shall have the meaning provided in Section 9.5.
"Base Rate" at any time shall mean the highest of (i) the rate
which is 1% in excess of the Adjusted Certificate of Deposit Rate, (ii) the
rate which is 1/2 of 1% in excess of the Federal Funds Effective Rate and (iii)
the Prime Lending Rate.
55
"Base Rate Loan" shall mean each Loan bearing interest at the rates
provided in Section 1.8(a).
"Bessemer" shall mean Bessemer Holdings, L.P., a Delaware limited
partnership.
"Borrower" shall have the meaning provided in the first paragraph
of this Agreement.
"Borrowing" shall mean the incurrence of one Type of Loan pursuant
to a single Facility by the Borrower from all of the Lenders having Commitments
with respect to such Facility on a pro rata basis on a given date (or
--- ----
resulting from conversions on a given date), having in the case of Eurodollar
Loans the same Interest Period; provided that Base Rate Loans incurred
--------
pursuant to Section 1.10(b) shall be considered part of any related Borrowing
of Eurodollar Loans.
"Borrowing Base" shall mean an amount equal to the sum, without
duplication of (a) 85% of Eligible Receivables of the Borrower and its Domestic
Subsidiaries, (b) 60% of the Eligible Inventory value that consists of paper
raw materials and (c) 50% of the Eligible Inventory value that consists of
other Inventory reduced by (i) a rolling two-week average of freight charges
incurred (calculated by averaging actual freight charges incurred by all Credit
Party domestic operations for transporting inventory between Credit Party
locations over the two most recent fiscal months) and (ii) all unpaid
liabilities to creditors supplying freight and/or inventory transportation
services to the domestic operations of all Credit Parties in excess of the
amount calculated in clause (i) provided that if the Borrower fails to
--------
deliver any Borrowing Base Certificate in the form and at the times required by
Section 7.1(g), the Borrowing Base shall, at the close of business on the fifth
Business Day following the date on which such Borrowing Base Certificate was
required to be delivered, be reduced to $0 and shall remain $0 until such time
as a Borrowing Base Certificate in proper form is delivered, at which time the
Borrowing Base shall be calculated as set forth herein.
"Borrowing Base Certificate" shall have the meaning provided in
Section 7.1(g).
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day excluding Saturday, Sunday and any day
which shall be in the City of New York a legal holiday or a day on which
banking institutions are authorized by law or other governmental actions to
close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, any day
which is a Business Day described in clause (i) and which is also a day for
trading by and between banks in U.S. dollar deposits in the interbank
Eurodollar market.
"CABSC" shall mean Chemical Bank, Agent Bank Services.
"capital stock" of any Person shall mean any and all shares,
interests, rights to purchase, warrants, options, participation or other
equivalents of or interests in (however designated) equity of such Person,
including any preferred stock, any limited or general partnership interest and
any limited liability company membership interest.
"Capital Lease" as applied to any Person shall mean any lease of
any property (whether real, personal or mixed) by that Person as lessee which,
in conformity with GAAP, is accounted for as a capital lease on the balance
sheet of that Person.
"Capitalized Lease Obligations" shall mean all obligations under
Capital Leases of Holdings or any of its Subsidiaries in each case taken at the
amount thereof accounted for as liabilities in accordance with GAAP.
"Cash Equivalents" shall mean (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the
--------
United States of America is pledged in support thereof) having maturities of
not more than six months from the date of acquisition, (ii) U.S. dollar
denominated time deposits, certificates of deposit and bankers' acceptances of
(x) any domestic commercial bank of recognized standing having capital and
surplus in excess of $500,000,000 or (y) any bank whose short-term commercial
paper rating from Standard & Poor's Ratings Group or its successor or assign
which remains in the business of rating creditworthiness of commercial paper
("S&P") is at least A-1 or the
56
equivalent thereof or from Xxxxx'x Investors Service, Inc. or its successor or
assign which remains in the business of rating creditworthiness of commercial
paper ("Xxxxx'x") is at least P-1 or the equivalent thereof (any such bank, an
"Approved Lender"), in each case with maturities of not more than six months
from the date of acquisition and (iii) commercial paper issued by any Lender or
Approved Lender or by the parent company of any Lender or Approved Lender and
commercial paper issued by, or guaranteed by, any industrial or financial
company with a short-term commercial paper rating of at least A-1 or the
equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody's,
or guaranteed by any industrial company with a long term unsecured debt rating
of at least A or A2, or the equivalent of each thereof, from S&P or Moody's, as
the case may be, and in each case maturing within six months after the date of
acquisition.
"Cash Interest Coverage Ratio" shall mean for any period the ratio
of Consolidated EBITDA for such period to Consolidated Cash Interest Expense
for such period.
"Cash Proceeds" shall mean, with respect to any Asset Sale, the
aggregate cash payments (including any cash received by way of deferred payment
pursuant to a note receivable issued in connection with such Asset Sale, other
than the portion of such deferred payment constituting interest, but only as
and when so received) received by Holdings and/or any Subsidiary from such
Asset Sale.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. (S) 9601 et
--
seq.
---
"Change of Control" shall mean and include (i) any "Change of
Control" as defined in the Subordinated Note Indenture, (ii) Bessemer and its
Affiliates shall cease to own directly at least 35% (on a fully diluted basis)
of the total of all equity interests of Holdings and at least 35% of the
combined voting power of all securities of Holdings entitled to vote in the
election of directors, (iii) any Person or two or more Persons acting in
concert other than Bessemer and its Affiliates shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 and 13d-5 of the Exchange Act),
directly or indirectly, of Voting Stock of Holdings (or other securities
convertible into such Voting Stock), representing a greater percentage of the
combined voting power of all Voting Stock of Holdings owned directly, or
indirectly by Bessemer and its Affiliates, (iv) any Person or two or more
Persons acting in concert other than Bessemer and its Affiliates shall have
acquired by contract or otherwise, or shall have entered into a contract or
arrangement that, upon consummation, will result in its or their acquisition
of, the power to exercise directly or indirectly, a controlling influence over
the management or policies of Holdings or (v) Holdings shall cease to own all
of the capital stock of the Borrower, free of Liens and other claims except
Liens created by or permitted under the Pledge Agreements.
"Chemical" shall mean Chemical Bank, a New York banking
corporation.
"Co-Agents" shall have the meaning provided in the first paragraph
of this Agreement and shall include any successor to such Co-Agent appointed
pursuant to Section 11.9.
"Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time and the regulations promulgated and the rulings issued
thereunder. Section references to the Code are to the Code, as in effect at
the Effective Date and any subsequent provisions of the Code, amendatory
thereof, supplemental thereto or substituted therefor.
"Collateral" shall mean all of the Collateral as defined in each of
the Security Documents.
"Collateral Agent" shall mean the Agent acting as collateral agent
for the Lenders.
"Collective Bargaining Agreement" shall have the meaning provided
in Section 5.1(d).
"Commitment" shall mean, with respect to each Lender, such Lender's
Initial Tranche A Term Commitment, Additional Tranche A Term Commitment,
Initial Tranche B Term Commitment, Additional Tranche B Term Commitment and
Revolving Commitment and, in the case of Chemical, the Swingline Commitment.
57
"Commitment Fee" shall have the meaning provided in Section 3.1(a).
"Consolidated Capital Expenditures" shall mean, for any period, the
aggregate of all expenditures (whether paid in cash or accrued as liabilities
and including in all events all amounts capitalized during such period under
Capital Leases but excluding any amount representing capitalized interest) by
Holdings and its Subsidiaries during that period that, in conformity with GAAP,
are or are required to be included in the property, plant or equipment
reflected in the consolidated balance sheet of Holdings and its Subsidiaries,
provided that Consolidated Capital Expenditures shall exclude the purchase
--------
price paid in connection with Permitted Business Acquisitions, and,
provided further, that notwithstanding anything contained in the
-------- -------
immediately preceding proviso, with respect to any transaction permitted
pursuant to Section 8.2(e) and (f) and relating to sales or dispositions in
connection with the closing of a plant or facility, Consolidated Capital
Expenditures shall not include the reasonable relocation costs and expenses
(including the reasonable costs and expenses relating to reinstalling any
machinery and equipment moved from the closed plant or facility in an existing
plant or facility theretofore owned by the Borrower) incurred in connection
with such transaction.
"Consolidated Cash Capital Expenditures" shall mean, for any
period, Consolidated Capital Expenditures but excluding, however, the amount
thereof not actually paid in cash during such period.
"Consolidated Cash Flow Available for Debt Service" shall mean, for
any period, (A) Consolidated EBITDA minus (B) the sum of the amounts for
-----
such period of (i) an amount of Consolidated Cash Capital Expenditures equal to
the lesser of (v) $4,000,000 and (w) the actual amount of Consolidated Cash
Capital Expenditures made during such period and (ii) provisions for taxes
based on income other than (x) changes in deferred taxes, (y) taxes on gains
resulting from sales of assets (other than sales in the ordinary course of
business) and (z) taxes on gains on extraordinary items, all as determined on a
consolidated basis for Holdings and its Subsidiaries in accordance with GAAP.
"Consolidated Cash Interest Expense" shall mean, for any period,
Consolidated Interest Expense, but excluding, however, interest expense not
payable in cash, amortization of discount and deferred financing costs.
"Consolidated Current Assets" shall mean, as to any Person at any
time, the current assets (other than cash and Cash Equivalents) of such Person
and its Subsidiaries determined on a consolidated basis in accordance with
GAAP.
"Consolidated Current Liabilities" shall mean, as to any Person at
any time, the current liabilities of such Person and its Subsidiaries
determined on a consolidated basis in accordance with GAAP, but excluding all
short-term Indebtedness for borrowed money and the current portion of any
long-term Indebtedness of such Person or its Subsidiaries, in each case to the
extent otherwise included therein and any current portion of deferred taxes.
"Consolidated Debt Service Expense" shall mean, for any period, the
sum, without duplication, of the amounts for such period of (i) Consolidated
Cash Interest Expense, (ii) scheduled principal payments made during such
period on Term Loans pursuant to Section 4.2(A)(c) and Section 4.2(A)(d) and
(iii) scheduled principal payments made during such period on other long-term
Indebtedness, all as determined on a consolidated basis for Holdings and its
Subsidiaries.
"Consolidated EBIT" shall mean, for any period, (A) the sum of the
amounts for such period of (i) Consolidated Net Income, (ii) provisions for
taxes based on income, (iii) Consolidated Interest Expense, (iv) amortization
or write-off of deferred financing costs to the extent deducted in determining
Consolidated Net Income and (v) losses on sales of assets (excluding sales in
the ordinary course of business) and other extraordinary losses less (B)
----
the amount for such period of gains on sales of assets (excluding sales in the
ordinary course of business) and other extraordinary gains, all as determined
on a consolidated basis in accordance with GAAP.
"Consolidated EBITDA" shall mean, for any period, the sum, without
duplication, of the amounts for such period of (i) Consolidated EBIT, (ii)
non-cash depreciation expense, (iii) non-cash amortization expense and (iv) any
other non-cash charges, all as determined on a consolidated basis in accordance
with GAAP.
58
Notwithstanding the foregoing, for purposes of calculating the Consolidated
Cash Flow Available for Debt Service, Cash Interest Coverage Ratio and Leverage
Ratio as of the last day of any fiscal quarter in 1996, the actual results of
Devon, as adjusted in accordance with Annex 10, shall be included for the
period of four fiscal quarters ending on such day and shall be deemed to be the
following amounts: for the fiscal quarter ending March 31, 1995, $4,115,000;
for the fiscal quarter ending June 30, 1995, $1,555,000; for the fiscal quarter
ending September 30, 1995, $2,303,000; and for the fiscal quarter ending
December 31, 1995, $1,412,000.
"Consolidated Interest Expense" shall mean, for any period, total
interest expense (including that attributable to Capital Leases in accordance
with GAAP) of Holdings and its Subsidiaries on a consolidated basis with
respect to all outstanding Indebtedness of Holdings and its Subsidiaries,
including, without limitation, all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance
financing and net costs under Interest Rate Agreements, but excluding, however,
any amortization of deferred financing costs, all as determined in accordance
with GAAP, provided that there shall be excluded all of the foregoing of
--------
any Person accrued prior to the date it becomes a Subsidiary of the Borrower or
is merged into or consolidated with the Borrower or any of its Subsidiaries or
that Person's assets are acquired by the Borrower or any of its Subsidiaries.
"Consolidated Net Income" shall mean for any period, the net income
(or loss) of Holdings and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP,
provided that there shall be excluded (i) the income (or loss) of any
--------
Person (other than Subsidiaries of the Borrower) in which any other Person
(other than the Borrower or any of its Subsidiaries) has a joint interest,
except to the extent of the amount of dividends or other distributions actually
paid to the Borrower or any of its Subsidiaries by such Person during such
period, (ii) the income (or loss) of any Person accrued prior to the date it
becomes a Subsidiary of the Borrower or is merged into or consolidated with the
Borrower or any of its Subsidiaries or that Person's assets are acquired by the
Borrower or any of its Subsidiaries and (iii) the income of any Subsidiary of
the Borrower to the extent that the declaration or payment of dividends or
similar distributions by that Subsidiary of that income is not at the time
permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary and provided further that in calculating
-------- -------
Consolidated Net Income for 1996, amounts aggregating up to $4,000,000 incurred
or expended to achieve cost savings at the Borrower as related to facility
consolidations and/or relocations and factory and warehouse systems upgrades
and to integrate the operations of Devon with the operations of the Borrower
which would otherwise be deducted in calculating Consolidated Net Income shall
not be required to be deducted.
"Consolidated Net Worth" shall mean at any time for the
determination thereof all amounts which, in conformity with GAAP, would be
included under the caption "total shareholders' equity" (or any like caption)
on a consolidated balance sheet of Holdings and its Subsidiaries as at such
date (including, to the extent not otherwise included, the Holdings Preferred
Stock).
"Consolidated Senior Debt" shall mean, as at any date of
determination, the aggregate stated balance sheet amount of all Indebtedness
(other than Indebtedness described in clause (iii), (vii) or (viii) of the
definition of Indebtedness and other than the Subordinated Notes and any Stock
Repurchase Notes), of Holdings and its Subsidiaries determined on a
consolidated basis in accordance with GAAP.
"Consolidated Working Capital" shall mean the excess of
Consolidated Current Assets over Consolidated Current Liabilities.
"Contingent Obligations" shall mean as to any Person any obligation
of such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(a) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (b) to advance or supply funds (i) for the
purchase or payment of any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make
59
payment of such primary obligation, (d) issued pursuant to Section 8.6(j) or
(e) otherwise to assure or hold harmless the owner of such primary obligation
against loss in respect thereof, provided however, that the term
-------- -------
Contingent Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Contingent Obligation
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform
thereunder) as determined by such Person in good faith.
"Credit Documents" shall mean this Agreement, the Notes, the
Security Documents and each Subsidiary Guaranty.
"Credit Event" shall mean and include the making of a Loan or the
issuance of a Letter of Credit.
"Credit Party" shall mean Holdings, the Borrower and each
Subsidiary Guarantor.
"Default" shall mean any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" shall mean any Lender with respect to which a
Lender Default is in effect.
"Determination Date" shall have the meaning provided in Section
7.1(g).
"Devon" shall mean Devon Industries, Inc., a California
corporation.
"Devon Acquisition" shall mean the acquisition by the Borrower,
pursuant to the terms of the Devon Acquisition Agreement, of all of the capital
stock of Devon.
"Devon Acquisition Agreement" shall mean the Share Purchase
Agreement, dated as of December 23, 1995, by and among the Borrower, as
purchaser, Xxxxxx and the Selling Shareholders set forth therein, pursuant to
which the Devon Acquisition is effected.
"Devon Acquisition Documents" shall mean the Devon Acquisition
Agreement and all other documents entered into or delivered by the Borrower,
Xxxxxx and/or the Selling Shareholders in connection with the Devon Acquisition
Agreement.
"Devon Pro Forma Balance Sheets" shall be as defined in Section
6.10(b)(v).
"Devon Pro Forma Date" shall be as defined in Section 6.10(b)(v).
"Devon Transaction" shall mean, collectively, (a) the issuance on
or prior to the Additional Borrowing Date of capital stock of the Borrower as
required by Section 5.2(j), (b) the consummation of the Devon Acquisition, (c)
the termination of the commitments under the Existing Devon Credit Agreements
and the repayment of all loans outstanding thereunder and (d) the incurrence of
the Loans hereunder on the Additional Borrowing Date.
"Dividends" shall have the meaning provided in Section 8.9.
"Documents" shall mean, collectively, (a) the Credit Documents, (b)
the Merger Documents and (c) the Devon Acquisition Documents.
"Domestic Subsidiary" shall mean each Subsidiary of Holdings other
than the Foreign Subsidiaries.
"Effective Date" shall have the meaning provided in Section
12.10(a).
60
"Eligible Inventory" shall mean all raw materials and finished
goods inventory of the Borrower or any of its Domestic Subsidiaries valued at
the lower of (i) cost determined in accordance with GAAP (excluding any LIFO
reserve) and stated on a basis consistent with the historical practices of the
Borrower and its Domestic Subsidiaries as of the Initial Borrowing Date or, in
the case of Devon and its Subsidiaries, on the Additional Borrowing Date, or
(ii) market value, that the Agent, in its reasonable discretion, shall deem
eligible, reduced, in the case of Inventory valued at cost, by (w) any profits
accrued in connection with transfers of Inventory between any Credit Party and
its Subsidiaries or between Subsidiaries of any Credit Party, (x) favorable
production material, production manufacturing, purchase price or other
variances that result when standard costs are greater than actual costs, (y) in
the case of Tronomed and Devon, the value of reserves which have been recorded
by the Borrower with respect to slow moving, obsolete, or excess Inventory and
in the case of IPD and MPD, respectively, a reserve equal to the sum of
write-offs in the previous 12 months with respect to slow moving, obsolete, or
excess Inventory, and (z) such other reserves as the Agent, in its reasonable
discretion after consultation with the Borrower, shall deem appropriate. The
Agent agrees, not less than 30 days prior to any revision by the Agent in any
material respect of standards of eligibility of Eligible Inventory, to notify
the Borrower and/or the relevant Subsidiary thereof. Unless otherwise approved
from time to time in writing by the Agent, no item of Inventory shall be
Eligible Inventory if:
(a) such item of Inventory is not assignable or a first priority
security interest in such item of Inventory in favor of the Collateral
Agent for the benefit of the Lenders has not been obtained and fully
perfected by filing UCC financing statements against the Borrower or the
relevant Domestic Subsidiary, as the case may be;
(b) such item of Inventory is subject to any Lien whatsoever,
other than Permitted Liens;
(c) such item of Inventory (i) is damaged or not in good condition
(to the extent not provided for by reserves as described above) or (ii)
does not meet all material standards imposed by any Governmental
Authority having regulatory authority over such item of Inventory, its
use or its sale;
(d) such item of Inventory is not currently either readily usable
or salable in the normal course of the business of the Borrower or the
relevant Domestic Subsidiary, as the case may be (to the extent not
provided for by reserves as described above);
(e) any event shall have occurred or any condition shall exist
with respect to such item of Inventory which would result in such item
being a discontinued item or substantially impede the ability of the
Borrower or the relevant Domestic Subsidiary, as the case may be, to
continue to use or sell such item of Inventory in the normal course of
business;
(f) any claim disputing the title of the Borrower or the relevant
Domestic Subsidiary, as the case may be, to, or right to possession of or
dominion over, such item of Inventory shall have been asserted;
(g) any representation or warranty contained in this Agreement or
in any other Credit Document applicable to either Inventory in general or
to any such specific item of Inventory has been breached with respect to
such item of Inventory;
(h) the Borrower or the relevant Domestic Subsidiary, as the case
may be, does not have good and marketable title as sole owner of such
item of Inventory;
(i) such item of Inventory is held on consignment, is owned by the
Borrower or any of its Domestic Subsidiaries and has been consigned to
other Persons, or is located at, or in the possession of, a vendor of the
Borrower or such Domestic Subsidiary, or is in transit to or from, or
held or stored by, third parties except for Inventory in transit between
Domestic Subsidiaries of Holdings;
(j) such item of Inventory is work-in-process;
61
(k) (i) in the case of any determination of the Borrowing Base
made after the date which is three months after the Initial Borrowing
Date, such item of Inventory other than Inventory of Devon and its
Subsidiaries is located on a leasehold as to which the lessor has not
entered into a landlord's waiver and consent, satisfactory in form and
substance to the Agent, providing a waiver of any applicable landlord's
Lien; and (ii) in the case of any determination of the Borrowing Base
made after the date which is three months after the Additional Borrowing
Date, such item of Inventory is Inventory of Devon or any of its
Subsidiaries and is located on a leasehold as to which the lessor has not
entered into a landlord's waiver and consent, satisfactory in form and
substance to the Agent, providing a waiver of any applicable landlord's
Lien;
(l) such item of Inventory is located outside of the United
States;
(m) such item of Inventory is evidenced by a Receivable;
(n) such item of Inventory is subject to any licensing, patent,
royalty, trademark, trade name or copyright agreements with any third
party from whom the Borrower or any of its Domestic Subsidiaries has
received notice of a dispute in respect of any such agreement that
adversely effects the marketability of such item of Inventory;
(o) such item of Inventory consists of packing, packaging and/or
shipping supplies or materials; or
(p) such item of Inventory has been otherwise determined by the
Agent (after consultation with the Borrower), exercising its commercially
reasonable discretion, to be unacceptable because the Agent believes that
such item of Inventory is not readily salable under the customary terms
on which it is usually sold.
Notwithstanding the foregoing, Inventory owned by the Borrower's
Foreign Subsidiary in Canada which conforms with all eligibility criteria set
forth herein other than as set forth in clause (a) or (l) shall be Eligible
Inventory provided that (i) such Inventory is financed by loans of the
--------
Borrower or a Wholly Owned Domestic Subsidiary to the extent permitted under
this Agreement, such loans to be evidenced by a promissory note, in form and
substance satisfactory to the Agent, issued to the Borrower or such Subsidiary,
as applicable, and secured by a valid and perfected first priority security
interest in such Inventory in favor of the Borrower or such Subsidiary, as the
case may be (which security interest shall be duly assigned to the Collateral
Agent), (ii) such promissory note shall be pledged to the Collateral Agent
under the applicable Security Document and (iii) the lesser of (x) the
outstanding principal balance of such promissory note and (y) the value of such
Inventory (as determined as provided above) financed by such loans (as
determined in accordance with GAAP) shall constitute "Eligible Inventory."
"Eligible Receivables" shall mean, with respect to the Borrower and
its consolidated Subsidiaries, on any date, all Receivables of such Person on
such date that (i) have been invoiced and represent the bona fide sale and
delivery of merchandise, in each case in the ordinary course of business of
such person in connection with its trade operations, and (ii) are deemed by the
Agent reasonably and in its exclusive and good faith judgment to be eligible
for inclusion in the calculation of the Borrowing Base. The Agent agrees, not
less than 30 days prior to any revision by the Agent in any material respect of
standards of eligibility of Eligible Receivables, to notify the Borrower and/or
the relevant Subsidiary thereof. Without limiting the foregoing, to qualify as
an Eligible Receivable, a Receivable shall indicate as sole payee and as sole
remittance party the Borrower or a Subsidiary Guarantor. In determining the
amount to be so included, the face amount of Receivables shall be reduced by
(a) the amount of all accrued and actual returns, disputes, discounts, claims,
credits, charges, chargebacks, price adjustments or other allowances (including
any amount that the Borrower or applicable Subsidiary Guarantor may be
obligated to rebate to a customer, such as recorded and unrecorded medical
distributor rebates, pursuant to the terms of any agreement or understanding
(written or oral)) and (b) the aggregate amount of all reserves, limits and
deductions provided for in this definition and elsewhere in this Agreement.
Unless otherwise approved from time to time in writing by the Agent, no
Receivable shall be an Eligible Receivable if:
62
(a) the Borrower or applicable Subsidiary Guarantor does not have
sole lawful and absolute title to such Receivable;
(b) it arises out of sale made by any Person to an Affiliate
(including the Borrower or a Guarantor);
(c) (i) it is unpaid more than 60 days from the due date of such
Receivable for IPD and MPD or it is unpaid for more than 90 days from the
invoice date of such Receivable for Tronomed, or (ii) it is unpaid more
than 60 days from the due date of such Receivable or more than 90 days
from the invoice date of such Receivable for any other Receivables or
(iii) it has been written off the books of such Person or has been
otherwise designated as uncollectible;
(d) more than 50% in face amount of all Receivables of the same
Account Debtor and its known affiliates, taken together, are ineligible
pursuant to clause (c) above;
(e) the Account Debtor (i) is a creditor of any Credit Party
(including distributors of the Borrower whose financial obligations are
guaranteed by the Borrower), (ii) has or has asserted a right of setoff
against any Credit Party or (iii) has disputed its liability (whether by
chargeback or otherwise) or made any claim with respect to the Receivable
or any other Receivable of any Credit Party which has not been resolved,
in each case, without duplication, to the extent of the amount owed by
such Credit Party to the Account Debtor, the amount of such actual or
asserted right of setoff, or the amount of such dispute or claim, as the
case may be;
(f) the Account Debtor is insolvent or the subject of any
bankruptcy or insolvency proceeding of any kind;
(g) the Receivable is not payable in dollars or the Account Debtor
is either not incorporated under the laws of the United States of America
or any State thereof or is located outside or has its principal place of
business or substantially all of its assets outside the continental
United States, except to the extent the Receivable is supported by an
irrevocable letter of credit reasonably satisfactory to the Agent (as to
form, substance and issuer) and assigned to and directly drawable by the
Collateral Agent;
(h) the sale to the Account Debtor generating the Receivable is on
a xxxx-and-hold, guaranteed sale, sale-and-return, ship-and-return, sale
on approval or consignment or other similar basis or made pursuant to any
other written agreement providing for repurchase or return of any
merchandise which has been claimed to be defective or otherwise
unsatisfactory;
(i) the Account Debtor is the United States of America or any
department, agency or instrumentality thereof and the Receivables balance
outstanding from all such Account Debtors exceeds $600,000, unless the
Borrower or applicable Subsidiary Guarantor duly assigns its rights to
payment of such Receivable to the Collateral Agent pursuant to the
Assignment of Claims Act of 1940, as amended, which assignment and
related documents and filings shall be in form and substance reasonably
satisfactory to the Agent;
(j) the goods giving rise to such Receivable have not been shipped
and delivered to and accepted by the Account Debtor, or otherwise do not
represent a completed sale;
(k) the Receivable does not comply in all material respects with
all requirements of applicable law, including without limitation the
Federal Consumer Credit Protection Act, the Federal Truth in Lending Act
and Regulation Z of the Board of Governors of the Federal Reserve System;
(l) the Receivable is subject to any adverse security deposit,
progress payment or other similar advance made by or for the benefit of
the Account Debtor to the extent thereof;
63
(m) either (i) such Receivable is not subject to a valid and
perfected first priority Lien in favor of the Collateral Agent for the
benefit of the Lenders, subject to no other Liens other than the Liens
(if any) permitted by the Credit Documents, or (ii) such Receivable does
not otherwise conform to the representations and warranties contained in
the Credit Documents; or
(n) as to all or any part of such Receivable 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.
Without limiting the foregoing in determining the aggregate amount
of Receivables from the same Account Debtor and any affiliates thereof that are
unpaid more than 60 days from the due date of such Receivable for IPD and MPD
and other Receivables or that are unpaid for more than 90 days from the invoice
date of such Receivable for Tronomed and other Receivables, pursuant to clause
(c) above, there shall be excluded the amount of any net credit balances
relating to Receivables with due dates for MPD and IPD and other Receivables
more than 60 days prior to the date of determination and with invoice dates for
Tronomed and other Receivables more than 90 days prior to the date of
determination.
Notwithstanding the foregoing, Receivables owned by the Borrower's
Foreign Subsidiary in Canada which conform with all eligibility criteria set
forth herein other than as set forth in clause (g) or (m) shall be Eligible
Receivables provided that (i) such Receivables are financed by loans of the
--------
Borrower or a Wholly Owned Domestic Subsidiary to the extent permitted under
this Agreement, such loans to be evidenced by a promissory note, in form and
substance satisfactory to the Agent, issued to the Borrower or such Subsidiary,
as applicable, and secured by a valid and perfected first priority security
interest in such Receivables in favor of the Borrower or such Subsidiary, as
the case may be (which security interest shall be duly assigned to the
Collateral Agent), (ii) such promissory note shall be pledged to the Collateral
Agent under the applicable Security Document and (iii) the lesser of (x) the
outstanding principal balance of such promissory note and (y) the value of such
Receivables (as determined as provided above) financed by such loans (as
determined in accordance with GAAP) shall constitute "Eligible Receivables."
"Eligible Transferee" shall mean and include a commercial bank,
financial institution or other "accredited investor" (as defined in SEC
Regulation D), in each case which is not a direct competitor of the Borrower or
any of its Subsidiaries or engaged in the same or similar business as the
Borrower or any of its Subsidiaries and is not an Affiliate of any such
competitors of the Borrower or any of its Subsidiaries.
"Employment Agreements" shall have the meaning provided in Section
5.1(d).
"Environmental Claims" means any and all administrative, regulatory
or judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigations or proceedings relating in any way
to any Environmental Law or any permit issued, or any approval given, under any
such Environmental Law (hereafter, "Claims"), including, without limitation,
(a) any and all Claims by governmental or regulatory authorities for
enforcement, cleanup, removal, response, remedial or oexir actions or damages
pursuant to any Environmental Law, and (b) any and all Claims by any third
party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from Hazardous Materials arising
from alleged injury or threat of injury to health, safety or the environment.
"Environmental Law" means any applicable Federal, state, foreign or
local statute, law, rule, regulation, ordinance, code, guide, policy and rule
of common law now or hereafter in effect and in each case as amended, and any
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, relating to the environment,
health, safety or Hazardous Materials, including, without limitation, CERCLA;
RCRA; the Federal Water Pollution Control Act, as amended, 33 U.S.C. (S)(S)1251
et seq.; the Toxic Substances Control Act, 15 U.S.C. (S)(S) 7401 et
-- --- --
seq.; the Clean Air Act, 42 U.S.C. (S)(S) 7401 et seq.; the Safe
--- -- ---
Drinking Water Act, 42 U.S.C. (S)(S) 3808 et seq.; the Oil Pollution Act of
-- ---
1990, 33 U.S.C. (S)(S) 2701 et seq. and any applicable state and local or
-- ---
foreign counterparts or equivalents.
64
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at
the Effective Date and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section
3(9) of ERISA) which together with a Credit Party or a Subsidiary of a Credit
Party would be deemed to be a "single employer" within the meaning of Section
414(b), (c), (m) and (o) of the Code.
"Eurodollar Loans" shall mean each Loan bearing interest at the
rates provided in Section 1.8(b).
"Eurodollar Rate" shall mean with respect to each Interest Period
for a Eurodollar Loan, (i) the offered quotation to first-class banks in the
interbank Eurodollar market by the Agent for dollar deposits of amounts in same
day funds comparable to the outstanding principal amount of the Eurodollar Loan
of the Agent for which an interest rate is then being determined with
maturities comparable to the Interest Period to be applicable to such
Eurodollar Loan, determined as of 10:00 A.M. (New York time) on the date which
is two Business Days prior to the commencement of such Interest Period divided
(and rounded upward to the next whole multiple of 1/16 of 1%) by (ii) a
percentage equal to 100% minus the then stated maximum rate of all reserve
requirements (including without limitation any marginal, emergency,
supplemental, special or other reserves) applicable to any member bank of the
Federal Reserve System in respect of Eurocurrency liabilities as defined in
Regulation D (or any successor category of liabilities under Regulation D).
"Event of Default" shall have the meaning provided in Section 9.
"Excess Cash Flow" shall mean, for any fiscal year, the excess of
(a) the sum, without duplication of, (i) Adjusted Cash Flow for such fiscal
year, (ii) cash generated (if any) by the decrease, if any, in Consolidated
Working Capital of Holdings for such fiscal year, (iii) any net amounts
received by Holdings and its Subsidiaries in settlement of, or in payment of
any judgments resulting from, legal proceedings with respect to Holdings or any
such Subsidiary during such fiscal year, and (iv) any amounts received by
Holdings or any of its Subsidiaries from the repayment or redemption of any
long-term promissory notes or preferred stock of other Persons held by Holdings
or any of its Subsidiaries over (b) the sum, without duplication, of (i) the
increase, if any, in Consolidated Working Capital of Holdings for such fiscal
year, (ii) the aggregate amount of all repayments during such period of
Capitalized Lease Obligations of Holdings and its Subsidiaries (other than any
portion thereof allocable to Consolidated Cash Interest Expense), all
repayments during such period of the principal of Indebtedness of Holdings or
any Subsidiary in respect of which a Lien described in Section 8.3(1) is
incurred and all principal payments of long-term Indebtedness of Holdings and
its Subsidiaries made during such fiscal year, (iii) the amount of Consolidated
Capital Expenditures of Holdings and its Subsidiaries during such period
(excluding the principal amount of Indebtedness incurred in connection with
such expenditures), (iv) the aggregate amount of all prepayments of Revolving
Loans to the extent of accompanying permanent reductions of the Total Revolving
Commitment and all payments of the Term Loans except pursuant to Sections 4.1,
4.2(A)(e) and (f), (v) the aggregate amount paid during such period as the
purchase price of Permitted Business Acquisitions, (vi) costs paid in cash
during such period in connection with the establishment of any Interest Rate
Agreement with respect to the Loans, (vii) cash expenditures of Holdings during
such period pursuant to Section 8.9(a)(ii) (less the amount of cash received by
Holdings during such period from the sale of shares of Holdings Common Stock or
Holdings Preferred Stock to or for the benefit of management investors) and
Section 8.10(i) hereof and (viii) to the extent not deducted in the calculation
of Consolidated Net Income for such fiscal year, amounts aggregating up to
$4,000,000 incurred or expended to achieve cost savings at the Borrower as
related to facility consolidations and/or relocations and factory and warehouse
systems upgrades and to integrate the operations of Devon with the operations
of the Borrower.
"Existing Credit Agreement" shall mean the Amended and Restated
Credit Agreement, dated as of September 15, 1992 among the Borrower, the
financial institutions from time to time party thereto and Citicorp USA, Inc.,
as agent.
"Existing Devon Credit Agreements" shall mean the agreements set
forth on Annex 5.2(i).
65
"Existing Indebtedness" shall have the meaning provided in Section
8.4(e).
"Existing Indebtedness Agreements" shall have the meaning provided
in Section 5.1(d).
"Existing Letters of Credit" shall have the meaning provided in
Section 2.7.
"Expiration Date" shall mean the earlier to occur of (i) March 31,
1996 and (ii) the date of termination (taking into account any extensions
thereof) of the Devon Acquisition Agreement.
"Facility" shall mean any of the credit facilities established
under this Agreement, i.e., any Term Facility, the Revolving Facility or
----
the Swingline Facility.
"Facing Fee" shall have the meaning provided in Section 3.1(c).
"Federal Funds Effective Rate" shall mean for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal Funds transactions with members of
the Federal Reserve System arranged by Federal Funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of the quotations
for such day on such transactions received by the Agent from three Federal
Funds brokers of recognized standing selected by the Agent.
"Fees" shall mean all amounts payable pursuant to, or referred to
in, Section 3.1.
"Final Maturity Date" shall mean the collective reference to the
Tranche A Term Facility Final Maturity Date, the Tranche B Term Facility Final
Maturity Date and the Revolving Facility Final Maturity Date.
"Foreign Subsidiary" shall mean each Subsidiary of Holdings
incorporated or organized, and doing business, in a jurisdiction other than the
United States or any state or territory thereof.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time; it being understood
and agreed that determinations in accordance with GAAP for purposes of Section
8, including defined terms as used therein, are subject (to the extent provided
therein) to Section 12.7(a).
"GH" shall mean GH Acquisition Corporation, a Delaware corporation.
"Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining government.
"Guaranties" shall mean the guaranty provided by Holdings pursuant
to Section 13 of this Agreement and each Subsidiary Guaranty.
"Guarantor" shall mean each of Holdings and the Subsidiary
Guarantors.
"Hazardous Materials" means (a) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment
that contains electric fluid containing levels of polychlorinated biphenyls,
and radon gas and (b) any chemicals, materials or substances defined as or
included in the definition of "hazardous substances," "hazardous waste,"
"hazardous materials," "extremely hazardous waste," "restricted hazardous
waste," "toxic substances," "toxic pollutants," "contaminants," or
"pollutants," or words of similar import, under any Environmental Law.
"Holdings" shall have the meaning provided in the first paragraph
of this Agreement.
66
"Holdings Common Stock" shall mean the common stock of Holdings.
"Holdings Preferred Stock" shall mean the 15% Cumulative Redeemable
Preferred Stock, Series A, of Holdings having a stated value per share of $100.
"ICA" shall have the meaning provided in Section 6.7.
"Indebtedness" of any Person shall mean without duplication (i) all
indebtedness of such Person for borrowed money, (ii) the deferred purchase
price of assets or services which in accordance with GAAP would be shown on the
liability side of the balance sheet of such Person, (iii) the face amount of
all letters of credit issued for the account of such Person and, without
duplication, all drafts drawn thereunder, (iv) all Indebtedness of a second
Person secured by any Lien on any property owned by such first Person, whether
or not such indebtedness has been assumed, (v) all Capitalized Lease
Obligations of such Person, (vi) all obligations of such Person to pay a
specified purchase price for goods or services whether or not delivered or
accepted, i.e., take-or-pay and similar obligations, (vii) all obligations
----
of such Person under Interest Rate Agreements and (viii) all Contingent
Obligations of such Person, provided that Indebtedness shall not include
--------
trade payables and accrued expenses, in each case arising in the ordinary
course of business.
"Initial Borrowing Date" shall mean September 28, 1995.
"Initial Consolidated Net Worth" shall mean the Consolidated Net
Worth of Holdings on the Initial Borrowing Date after giving effect to the
Transaction.
"Initial Term Loans" shall mean the collective reference to the
Initial Tranche A Term Loans and the Initial Tranche B Term Loans.
"Initial Tranche A Scheduled Repayment" shall have the meaning
provided in Section 4.2(A)(c).
"Initial Tranche A Term Commitment" shall mean, with respect to
each Lender, the amount set forth opposite such Lender's name in Annex 1.1
hereto directly below the column entitled "Initial Tranche A Term Commitment",
as the same may be reduced or terminated pursuant to Section 3.3.
"Initial Tranche A Term Facility" shall mean the Facility evidenced
by the Total Initial Tranche A Term Commitment.
"Initial Tranche A Term Loan" shall have the meaning provided in
Section 1.1(a).
"Initial Tranche B Scheduled Repayment" shall have the meaning
provided in Section 4.2(A)(d).
"Initial Tranche B Term Commitment" shall mean, with respect to
each Lender, the amount set forth opposite such Lender's name in Annex 1.1
hereto directly below the column entitled "Tranche B Term Commitment", as the
same may be reduced or terminated pursuant to Section 3.3.
"Initial Tranche B Term Facility" shall mean the Facility evidenced
by the Total Initial Tranche B Term Commitment.
"Initial Tranche B Term Loan" shall have the meaning provided in
Section 1.1(b).
"Interest Period" with respect to any Loan shall mean the interest
period applicable thereto, as determined pursuant to Section 1.9.
"Interest Rate Agreement" shall mean any interest rate swap
agreement, any interest rate cap agreement, any interest rate collar agreement
or other similar agreement or arrangement designed to protect against
fluctuations in interest rates.
67
"Inventory" shall have the meaning set forth in Section 9-109 of
the UCC as in effect in the State of New York on the Initial Borrowing Date.
"Investors" shall mean, collectively, Bessemer and its Affiliates,
certain of the officers and employees of Holdings and the Borrower and other
investors approved by the Agent (which approval shall not be unreasonably
withheld).
"IPD" shall mean the Industrial Products Division of the Borrower.
"Leasehold" of any Person means all of the right, title and
interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"Lender" shall have the meaning provided in the first paragraph of
this Agreement.
"Lender Default" shall mean (i) the refusal (which has not been
retracted) of a Lender to make available its portion of any incurrence of
Revolving Loans or to fund its portion of any unreimbursed payment under
Section 2.5(c) or (ii) a Lender having notified the Agent and/or the Borrower
that it does not intend to comply with its obligations under Section 1.1 or
under Section 2.5(c), in the case of either (i) or (ii) as a result of the
appointment of a receiver or conservator with respect to such Lender at the
direction or request of any regulatory agency or authority.
"Letter of Credit" shall have the meaning provided in Section
2.1(a).
"Letter of Credit Fee" shall have the meaning provided in Section
3.1(b).
"Letter of Credit Issuer" shall mean and include Chemical or, at
the option of Chemical, any affiliate of Chemical.
"Letter of Credit Outstandings" shall mean, at any time, the sum
of, without duplication, (i) the aggregate Stated Amount of all outstanding
Letters of Credit and (ii) the aggregate amount of all unpaid drawings in
respect of all Letters of Credit.
"Letter of Credit Request" shall have the meaning provided in
Section 2.3(a).
"Leverage Ratio" shall mean at any date the ratio of Consolidated
Senior Debt at such date to Consolidated EBITDA for the four consecutive fiscal
quarters ending on or immediately preceding such date.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing, any conditional sale or other title retention agreement or any
lease in the nature thereof).
"Loan" shall have the meaning provided in Section 1.1.
"Loan Parties" shall mean the Borrower and the Guarantors.
"Management Agreements" shall have the meaning provided in Section
5.1(d).
"Management Common Stock Agreements" shall mean each of the common
stock agreements, stockholders agreements and/or common stock option or warrant
agreements entered into by GH or Holdings and individuals who are employees of
the Borrower or any of its Subsidiaries, as in effect on the Effective Date or
otherwise in form and substance reasonably satisfactory to the Required
Lenders.
"Mandatory Borrowing" shall have the meaning provided in Section
1.1(d).
68
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean a material adverse effect on
the business, property, assets, operations or condition (financial or
otherwise) of Holdings and its Subsidiaries taken as a whole or of the Borrower
and its Subsidiaries taken as a whole, in each case after giving effect to the
Merger.
"Material Subsidiary" shall mean and include, at any time, any
Subsidiary of Holdings that (x) has assets at such time comprising 5% or more
of the consolidated assets of Holdings or (y) had net income in the then most
recently ended fiscal year of Holdings comprising 5% or more of the
consolidated net income of the Borrower for such fiscal year and shall in any
event include (x) the Borrower and (y) any other Subsidiary of Holdings that at
such time would constitute a "Significant Subsidiary" as defined in SEC Rule
1-02 promulgated under SEC Regulation S-X, as amended or any replacement rule.
"Merger" shall mean the merger, pursuant to the terms of the Merger
Agreement, of GH into Holdings with Holdings as the surviving corporation.
"Merger Agreement" shall mean the Agreement and Plan of Merger,
dated as of August 3, 1995, among GH, the Borrower and Holdings, pursuant to
which the Merger is effected.
"Merger Documents" shall mean the Merger Agreement and all other
documents entered into or delivered by Holdings and the Borrower in connection
with the Merger Agreement.
"Minimum Borrowing Amount" shall mean (i) for Base Rate Loans,
$1,000,000, (ii) for Eurodollar Loans, $2,500,000 and (iii) for Swingline Loans
$100,000.
"Mortgage" shall have the meaning provided in Section 5.1(1).
"Mortgaged Properties" shall mean and include the Real Properties
owned or leased by the Borrower and each Subsidiary Guarantor to the extent
designated as such on Annex 5.1(l).
"MPD" shall mean the Medical Products Division of the Borrower.
"Net Cash Proceeds" shall mean, with respect to any Asset Sale, the
Cash Proceeds resulting therefrom net of expenses of sale (including, without
limitation, attorneys', accountants', other advisors' and banking and
investment banking fees, environmental and solvency related fees, all legal,
title and recording tax expenses, commissions and other fees and expenses
incurred, and all Federal, state, provincial, foreign and local taxes paid or
reasonably estimated to be payable, as a consequence of such Asset Sale and the
payment of principal, premium and interest of Indebtedness secured by the asset
which is the subject of the Asset Sale and required to be, and which is, repaid
under the terms thereof as a result of such Asset Sale), and incremental income
taxes paid or payable as a result thereof, provided that with respect to
--------
any Asset Sale resulting from a transaction permitted pursuant to Section
8.2(e) and (f) and relating to sales or dispositions in connection with the
closing of a plant or facility, the Net Cash Proceeds resulting therefrom shall
be further reduced by the reasonable closing, severance and relocation costs
and expenses (including, without limitation, the reasonable costs and expenses
relating to re-installing any machinery and equipment moved from the closed
plant or facility in an existing plant or facility theretofore owned by the
Borrower or a Subsidiary) incurred in connection with such transaction.
"Non-Defaulting Lender" shall mean each Lender other than a
Defaulting Lender.
"Note" shall mean and include each Term Note, each Revolving Note
and Swingline Note.
"Notice of Borrowing" shall have the meaning provided in Section
1.3.
"Notice of Conversion" shall have the meaning provided in Section
1.6.
69
"Notice Office" shall mean the office of the Agent at 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx or such other office as the Agent may designate to
the Borrower from time to time.
"Obligations" shall mean all amounts, direct or indirect,
contingent or absolute, of every type or description, and at any time existing,
owing to the Agent, the Collateral Agent or any Lender pursuant to the terms of
this Agreement or any other Credit Document.
"Operating Lease" shall mean, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the lessee at
any time) of any property (whether real, personal or mixed) which is not a
Capital Lease other than any such lease under which that Person is the lessor.
"Participant" shall have the meaning provided in Section 2.5(a).
"Payment Office" shall mean the office of the Agent at 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx or such other office as the Agent may designate to
the Borrower from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Business Acquisition" shall mean any acquisition of all
or substantially all the assets of, or shares or other equity interests in, a
Person or division or line of business of a Person or other significant assets
of a Person (other than inventory, leases, materials and equipment in the
ordinary course of business) if immediately after giving effect thereto: (a)
no Default or Event of Default shall have occurred and be continuing or would
result therefrom, (b) all transactions related thereto shall be consummated in
all material respects in accordance with applicable laws, (c) at least 90% of
the capital stock of any acquired or newly formed corporation, partnership,
association or other business entity are owned directly by the Borrower or a
Domestic Subsidiary and all actions required to be taken, if any, with respect
to such acquired or newly formed subsidiary under Section 7.11 shall have been
taken and (d)(i) Holdings shall be in compliance, on a pro forma basis
--- -----
after giving effect to such acquisition or formation, with the covenants
contained in Sections 8.11, 8.12, 8.13, 8.14 and 8.15 recomputed as at the last
day of the most recently ended fiscal quarter of Holdings as if such
acquisition had occurred on the first day of each relevant period for testing
such compliance, and Holdings shall have delivered to the Agent an officers'
certificate to such effect, together with all relevant financial information
for such subsidiary or assets (to the extent reasonably available), and (ii)
after giving effect to such transaction, any acquired or newly formed
subsidiary shall not be liable for any Indebtedness (except for Indebtedness
permitted by Section 8.4).
"Permitted Business Acquisition Determination Date" shall have the
meaning provided in Section 7.1(g).
"Permitted Liens" shall mean Liens described in clauses (a), (b),
(c), (d) and (h) of Section 8.3.
"Person" shall mean any individual, partnership, joint venture,
firm, corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
"Plan" shall mean any multiemployer or single-employer plan as
defined in Section 4001 of ERISA, which is maintained or contributed to by (or
to which there is an obligation to contribute of) a Credit Party, a Subsidiary
of a Credit Party or an ERISA Affiliate, and each such plan for the five year
period immediately following the latest date on which a Credit Party, a
Subsidiary of a Credit Party or an ERISA Affiliate maintained, contributed to
or had an obligation to contribute to such plan.
"Pledge Agreements" shall have the meaning provided in Section
5.1(l).
"Pledged Securities" shall mean all the Pledged Securities as
defined in the relevant Pledge Agreement.
70
"Prime Lending Rate" shall mean the rate which the Agent announces
from time to time as its prime lending rate, the Prime Lending Rate to change
when and as such prime lending rate changes. The Prime Lending Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. The Agent may make commercial loans or other
loans at rates of interest at, above or below the Prime Lending Rate.
"Pro Forma Balance Sheets" shall be as defined in Section
6.10(b)(v).
"Pro Forma Date" shall be as defined in Section 6.10(b)(v).
"Qualified Non-U.S. Lender Notes" shall mean Notes registered as
provided in Section 12.4 and substantially in the form of Exhibit B-5.
"Qualified Sale/Leaseback Transactions" shall mean sale-leaseback
transactions involving plants and/or facilities owned by the Borrower or any
Subsidiary, provided that (i) such transaction shall be permitted pursuant
--------
to the terms of the Subordinated Note Indenture, (ii) the termination date
(without giving effect to any extension option) of any such lease shall not
occur prior to the Tranche B Term Facility Final Maturity Date, (iii) the Net
Cash Proceeds of any such sale shall be applied as and to the extent required
by Section 4.2(A)(f) and (iv) the resulting lease shall be permitted by Section
8.4(d) or 8.7, as the case may be.
"RCRA" shall mean the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. (S)(S) 6901 et seq.
-- ---
"Real Property" of any Person shall mean all of the right, title
and interest of such Person in and to land, improvements and fixtures,
including Leaseholds.
"Receivable" shall have the meaning assigned to the term "account"
provided in the UCC.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing margin requirements.
"Reinvestment Assets" shall mean any assets to be employed in the
business of the Borrower and its Subsidiaries as described in Section
4.2(A)(e).
"Reinvestment Election" shall have the meaning provided in Section
4.2(A)(e).
"Reinvestment Notice" shall mean a written notice signed by an
Authorized Officer of the Borrower stating that the Borrower, in good faith,
intends and expects to use all or a specified portion of the Net Cash Proceeds
of an Asset Sale to purchase, construct or otherwise acquire Reinvestment
Assets as provided in Section 4.2(A)(e).
"Reinvestment Prepayment Amount" shall mean, with respect to any
Reinvestment Election, the amount, if any, on the Reinvestment Prepayment Date
relating thereto by which (a) the Anticipated Reinvestment Amount in respect of
such Reinvestment Election exceeds (b) the aggregate amount thereof expended by
the Borrower and its Subsidiaries to acquire Reinvestment Assets as provided in
Section 4.2(A)(e).
"Reinvestment Prepayment Date" shall mean, with respect to any
Reinvestment Election, the earliest of (i) the date, if any, upon which the
Agent, on behalf of the Required Lenders, shall have delivered a written
termination notice with respect to such Reinvestment Election to the Borrower,
provided that such notice may only be given while an Event of Default exists,
(ii) the date occurring one year after such Reinvestment Election and (iii) the
date on which the Borrower shall have determined not to, or shall have
otherwise ceased to, proceed with the
71
purchase, construction or other acquisition of Reinvestment Assets with the
related Anticipated Reinvestment Amount.
"Reinvestment Test" shall be satisfied if no Default or Event of
Default then exists.
"Replaced Lender" shall have the meaning provided in Section 1.13.
"Replacement Lender" shall have the meaning provided in Section
1.13.
"Reportable Event" shall mean an event described in Section 4043(b)
of ERISA with respect to a Plan as to which the 30 day notice requirement has
not been waived by the PBGC.
"Repurchase Triggering Event" shall have the meaning provided in
Section 8.9(a)(ii).
"Required Lenders" shall mean Non-Defaulting Lenders whose
outstanding Term Loans (or, if prior to the Initial Borrowing Date, Term
Commitments) and Revolving Commitments (or, if after the Total Revolving
Commitment has been terminated, outstanding Revolving Loans) constitute at
least 51% of the sum of (i) the total outstanding Term Loans of Non-Defaulting
Lenders (or, if prior to the Initial Borrowing Date, the Total Term Commitment)
and (ii) the Total Revolving Commitment less the aggregate Revolving
Commitments of Defaulting Lenders (or, if after the Total Revolving Commitment
has been terminated, the total outstanding Revolving Loans of Non-Defaulting
Lenders).
"Retained Percentage Amount" shall mean, for each fiscal year, an
amount equal to the excess, if any, of the amount of the Excess Cash Flow for
such fiscal year over the amount of mandatory prepayments of the Term Loans
required to be made in respect of such Excess Cash Flow pursuant to Section
4.2(A)(g) of this Agreement provided that there shall be no Retained
--------
Percentage Amount for fiscal year 1995.
"Revolving Commitment" shall mean, with respect to each Lender, the
amount set forth opposite such Lender's name in Annex 1.1 hereto directly below
the column entitled "Revolving Commitment", as the same may be reduced from
time to time pursuant to Section 3.2, 3.3 and/or 9 or (y) adjusted from time to
time as a result of assignments to or from such Lender pursuant to Section
12.4.
"Revolving Facility" shall mean the Facility evidenced by the Total
Revolving Commitment.
"Revolving Facility Final Maturity Date" shall mean the date which
is the seventh anniversary of the Initial Borrowing Date.
"Revolving Loan" shall have the meaning provided in Section 1.1(c).
"Revolving Note" shall have the meaning provided in Section 1.5(a).
"Revolving Obligations" shall mean "Revolving Obligations" under
and as defined in the Subsidiary Guaranty.
"Revolving Percentage" shall mean at any time for each Lender with
a Revolving Commitment, the percentage obtained by dividing such Lender's
Revolving Commitment by the Total Revolving Commitment, provided that if
--------
the Total Revolving Commitment has been terminated, the Revolving Percentage of
each Lender shall be determined by dividing such Lender's Revolving Commitment
immediately prior to such termination by the Total Revolving Commitment
immediately prior to such termination.
"Xxxxxx" shall have the meaning provided in the Devon Acquisition
Agreement.
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"Scheduled Repayment" shall mean the Initial Tranche A Scheduled
Repayment, the Initial Tranche B Scheduled Repayment, the Additional Tranche A
Scheduled Repayment or the Additional Tranche B Scheduled Repayment, as
applicable.
"SEC" shall have the meaning provided in Section 7.1(h).
"SEC Regulation D" shall mean Regulation D as promulgated under the
Securities Act of 1933, as amended, as the same may be in effect from time to
time.
"Secured Creditors" shall have the meaning provided in the Security
Documents.
"Security Agreement Collateral" shall mean all "Collateral" as
defined in the relevant Security Agreement.
"Security Agreements" shall have the meaning provided in Section
5.1(l).
"Security Documents" shall mean each Pledge Agreement, each
Security Agreement, each Mortgage and each Additional Mortgage, if any.
"Selling Shareholders" shall have the meaning provided in the Devon
Acquisition Agreement.
"Shareholders' Agreement" shall have the meaning provided in
Section 5.1(d).
"Stated Amount" of each Letter of Credit shall mean the maximum
available to be drawn thereunder (regardless of whether any conditions for
drawing could then be met).
"Stock Repurchase Notes" shall mean any promissory notes or other
evidence of Indebtedness issued by Holdings in consideration of the redemption
or repurchase of Holdings Common Stock or Holdings Preferred Stock (or options
or warrants relating thereto) in connection with a Repurchase Triggering Event,
provided that (i) the Indebtedness evidenced thereby is unsecured, (ii) so
--------
long as any Obligations remain outstanding, such Indebtedness is payable only
to the extent of amounts permitted to be paid in accordance with clause (ii) of
Section 8.9(a) and (iii) such Indebtedness is by its terms subordinated to the
Obligations pursuant to subordination provisions no less favorable to the
Lenders than those set forth in the Subordinated Note Indenture.
"Subordinated Note Documents" shall mean and include each of the
documents, instruments (including the Subordinated Notes and the offering memo
therefor) and other agreements entered into by the Borrower (including, without
limitation, the Subordinated Note Indenture) relating to the issuance by the
Borrower of the Subordinated Notes, as in effect on the Initial Borrowing Date
and as the same may be supplemented, amended or modified from time to time in
accordance with the terms hereof and thereof.
"Subordinated Note Indenture" shall mean the Indenture entered into
by and between the Borrower and The United States Trust Company of New York, as
trustee thereunder, with respect to the Subordinated Notes as in effect on the
Initial Borrowing Date and as the same may be modified, amended or supplemented
from time to time in accordance with the terms hereof and thereof.
"Subordinated Notes" shall mean the Senior Subordinated Notes due
2005 issued by the Borrower under the Subordinated Note Indenture, as in effect
on the Initial Borrowing Date and as the same may be supplemented, amended or
modified from time to time in accordance with the terms thereof and hereof.
"Subsidiary" of any Person shall mean and include (i) any
corporation more than 50% of whose stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the directors of
such corporation (irrespective of whether or not at the time stock of any class
or classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time owned by such Person
directly or indirectly through Subsidiaries and (ii) any partnership,
association, joint venture or other entity
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in which such Person directly or indirectly through Subsidiaries, has more than
a 50% equity interest at the time. Unless otherwise expressly provided, all
references herein to "Subsidiary" shall mean a Subsidiary of Holdings, including
the Borrower.
"Subsidiary Guarantor" shall mean any Subsidiary of Holdings
providing a Subsidiary Guaranty to the Agent, for the ratable benefit of the
Lenders.
"Subsidiary Guaranty" shall have the meaning provided in Section
5.1(l).
"Swingline Commitment" shall mean $10,000,000
"Swingline Expiry Date" shall mean the date which is one Business
Day prior to the Revolving Facility Final Maturity Date.
"Swingline Facility" shall mean the Facility evidenced by the
Swingline Commitment.
"Swingline Loan" shall have the meaning provided in Section 1.1(d).
"Swingline Note" shall have the meaning provided in Section 1.5(a).
"Tax Sharing Agreement" shall have the meaning provided in Section
5.1(d).
"Taxes" shall have the meaning provided in Section 4.4.
"Term Commitment" shall mean, with respect to each Lender, the
collective reference to its Tranche A Term Commitment and Tranche B Term
Commitment.
"Term Facilities" shall be the collective reference to the Initial
Tranche A Term Facility, the Additional Tranche A Term Facility, the Initial
Tranche B Term Facility and the Additional Tranche B Term Facility.
"Term Loan" shall mean the collective reference to the Tranche A
Term Loans and the Tranche B Term Loans.
"Term Note" shall have the meaning provided in Section 1.5(a).
"Test Period" shall mean for any determination the four consecutive
fiscal quarters of Holdings (taken as one accounting period) then last ended,
provided, however, that for purposes of Sections 8.12 and 8.13
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Consolidated Cash Interest Expense and Consolidated Debt Service Expense as of
the last day of each of the fiscal quarters ending on March 31, 1996, June 30,
1996, September 30, 1996 and December 31, 1996 shall be determined by
multiplying such amount (a) for the period commencing October 1, 1995, and
ending as of the end of such fiscal period by 2, in the case of the fiscal
quarter ending March 31, 1996 and (b) for the period commencing April 1, 1996,
and ending as of the end of such fiscal period by (i) 4, in the case of the
fiscal quarter ending June 30, 1996, (ii) 2, in the case of the fiscal quarter
ending September 30, 1996 and (iii) 4/3, in the case of the fiscal quarter
ending December 31, 1996, provided, further, that interest accrued on
-------- -------
the Subordinated Notes during such Test Period shall be included in the
calculation of Consolidated Cash Interest Expense in lieu of actual cash
interest expense payments made in respect of the Subordinated Notes during such
Test Period.
"Total Additional Tranche A Term Commitment" shall mean the sum of
the Additional Tranche A Term Commitments of each of the Lenders.
"Total Additional Tranche B Term Commitment" shall mean the sum of
the Additional Tranche B Term Commitments of each of the Lenders.
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"Total Availability" shall mean the sum of (a) the Borrowing Base
and (b) from and including the date of consummation of a Permitted Business
Acquisition funded by the Revolving Facility and completion of an examination
of the acquired assets performed by or for the Agent to the satisfaction of the
Agent, and unless and until such assets are sold or otherwise disposed of in
accordance with Section 8.2, 50% of the net book value of property, plant and
equipment (as determined in accordance with GAAP) of such Person or division or
line of business of such Person acquired pursuant to a Permitted Business
Acquisition to the extent the aggregate amount so calculated for all such
Permitted Business Acquisitions does not exceed $5,000,000 at any time and to
the extent the assets so acquired are subject to a valid and perfected first
priority Lien in favor of the Collateral Agent for the benefit of the Lenders,
subject to no other Liens other than the Liens (if any) permitted by the Credit
Documents; provided that, if the Borrower fails to deliver any Total
--------
Availability Certificate in the form and at the times required by Section
7.1(g), Total Availability shall, at the close of business on the fifth Business
Day following the date on which such Total Availability Certificate was required
to be delivered, be reduced to $0 and shall remain $0 until such time as a Total
Availability Certificate in proper form is delivered, at which time Total
Availability shall be calculated as set forth herein. For the purposes of a
Borrowing to fund a Permitted Business Acquisition, Total Availability shall be
adjusted (subject to completion of a collateral examination of the applicable
receivables and inventory performed by or for the Agent to the satisfaction of
the Agent and an independent appraisal of the property, plant and equipment to
be acquired to the satisfaction of the Agent) to give effect to such Permitted
Business Acquisition.
"Total Availability Certificate" shall have the meaning provided in
Section 7.1(g).
"Total Commitment" shall mean the sum of the Total Term Commitment
and the Total Revolving Commitment.
"Total Initial Tranche A Term Commitment" shall mean the sum of the
Initial Tranche A Term Commitments of each of the Lenders.
"Total Initial Tranche B Term Commitment" shall mean the sum of the
Initial Tranche B Term Commitments of each of the Lenders.
"Total Revolving Commitment" shall mean the sum of the Revolving
Commitments of each of the Lenders.
"Total Term Commitment" shall mean the sum of the Total Tranche A
Term Commitment and the Total Tranche B Term Commitment.
"Total Tranche A Term Commitment" shall mean the sum of the Total
Initial Tranche A Term Commitment and the Total Additional Tranche A Term
Commitment.
"Total Tranche B Term Commitment" shall mean the sum of the Total
Initial Tranche B Term Commitment and the Total Additional Tranche B Term
Commitment.
"Total Unutilized Revolving Commitment" shall mean, at any time,
(i) the Total Revolving Commitment at such time less (ii) the sum of the
aggregate principal amount of all Revolving Loans at such time plus the Letter
of Credit Outstandings at such time.
"Tranche" shall mean the Initial Tranche A Term Facility, the
Additional Tranche A Term Facility, the Initial Tranche B Term Facility or the
Additional Tranche B Term Facility, as the context requires.
"Tranche A Term Commitment" shall mean, with respect to each
Lender, the sum of such Lender's Initial Tranche A Term Commitment and
Additional Tranche A Term Commitment.
"Tranche A Term Facility" shall mean the sum of the Initial Tranche
A Term Facility and the Additional Tranche A Term Facility.
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"Tranche A Term Facility Final Maturity Date" shall mean September
28, 2002.
"Tranche A Term Loan" shall mean an Initial Tranche A Term Loan or
an Additional Tranche A Term Loan, as the context requires.
"Tranche A Term Note" shall have the meaning provided in Section
1.5(a).
"Tranche B Term Commitment" shall mean, with respect to each
Lender, the sum of such Lender's Initial Tranche B Term Commitment and
Additional Tranche B Term Facility.
"Tranche B Term Facility" shall mean the sum of the Initial Tranche
B Term Facility and the Additional Tranche B Term Facility.
"Tranche B Term Facility Final Maturity Date" shall mean September
28, 2003.
"Tranche B Term Loan" shall mean an Initial Tranche B Term Loan or
Additional Tranche B Term Loan, as the context requires.
"Tranche B Term Note" shall have the meaning provided in Section
1.5(a).
"Transaction" shall mean, collectively, (a) the issuance on or
prior to the Initial Borrowing Date of Holdings Common Stock as required by
Section 5.1(j), (b) the consummation of the Merger, (c) the termination of the
commitments under the Existing Credit Agreement and the repayment of all loans
outstanding thereunder, (d) the incurrence of the Loans hereunder on the
Initial Borrowing Date and (e) the issuance of the Subordinated Notes on the
Initial Borrowing Date.
"Tronomed" shall mean the collective reference to Tronomed, Inc.
and Tronomed Express, Inc., each a Wholly-Owned Domestic Subsidiary of the
Borrower.
"Type" shall mean any type of Loan determined with respect to the
interest option applicable thereto, i.e., a Base Rate Loan or Eurodollar
----
Loan.
"UCC" shall mean the Uniform Commercial Code.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the actuarial present value of the accumulated plan benefits
under the Plan as of the close of its most recent plan year exceeds the fair
market value of the assets allocable thereto, each determined in accordance
with Statement of Financial Accounting Standards No. 35, based upon the
actuarial assumptions used by the Plan's actuary in the most recent annual
valuation of the Plan.
"Unpaid Drawing" shall have the meaning provided in Section 2.4(a).
"Unutilized Commitment" for any Lender at any time shall mean the
excess of (i) the Commitment of such Lender over (ii) the sum of (x) the
aggregate outstanding principal amount of Loans made by such Lender plus (y) an
amount equal to such Lender's Revolving Percentage, if any, of the Letter of
Credit Outstandings at such time provided that solely for purposes of
--------
calculating the Commitment Fee pursuant to Section 3.1(a) Swingline Loans shall
be deemed not to be outstanding and the Swingline Commitment shall not
constitute a "Commitment".
"Voting Stock" shall mean with respect to any Person, outstanding
capital stock of such Person ordinarily (and apart from rights exercisable upon
the occurrence of any contingency) having the power to vote in the election of
directors (or persons performing similar functions) of such Person, even though
the right so to vote has been suspended by the happening of such contingency.
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"Wholly-Owned Subsidiary" of any Person shall mean any Subsidiary
of such Person to the extent all of the capital stock or other ownership
interests in such Subsidiary, other than directors' qualifying shares, is owned
directly or indirectly by such Person.
"Written" or "in writing" shall mean any form of written
communication or a communication by means of telex, facsimile transmission,
telegraph or cable.
SECTION 11. The Agent and Co-Agents.
-----------------------
11.1 Appointment. Each Lender hereby irrevocably designates
-----------
and appoints Chemical as Agent of such Lender (such term to include for
purposes of this Section 11, Chemical acting as Collateral Agent) and The First
National Bank of Chicago, as successor to NBD Bank and Fleet Bank
Massachusetts, N.A. as Co-Agents to act as specified herein and in the other
Credit Documents, and each such Lender hereby irrevocably authorizes Chemical
as the Agent for such Lender, to take such action on its behalf under the
provisions of this Agreement and the other Credit Documents and to exercise
such powers and perform such duties as are expressly delegated to the Agent by
the terms of this Agreement and the other Credit Documents, together with such
other powers as are reasonably incidental thereto. The Agent and each Co-Agent
agrees to act as such upon the express conditions contained in this Section 11.
Notwithstanding any provision to the contrary elsewhere in this Agreement,
neither the Agent nor any Co-Agent shall have any duties or responsibilities,
except those expressly set forth herein or in the other Credit Documents, or
any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or otherwise exist against the Agent or any Co-Agent. The
provisions of this Section 11 are solely for the benefit of the Agent, the
Co-Agents and the Lenders, and, except as provided in Section 11.9, no Credit
Party shall have any rights as a third party beneficiary of any of the
provisions hereof. In performing its functions and duties under this
Agreement, the Agent and each Co-Agent shall act solely as agent of the Lenders
and does not assume and shall not be deemed to have assumed any obligation or
relationship of agency or trust with or for any Credit Party. Neither of the
Co-Agents, in such capacity, shall have any duties, responsibilities,
obligations, liabilities or functions under this Agreement or the other Credit
Documents.
11.2 Delegation of Duties. The Agent may execute any of its
--------------------
duties under this Agreement or any other Credit Document by or through agents
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Without limiting the foregoing, Chemical as
Agent may appoint CABSC as its agent to perform the functions of the Agent
hereunder relating to the advancing of funds to the Borrower and distribution
of funds to the Lenders and to perform such other related functions of the
Agent hereunder as are reasonably incidental to such functions. The Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care except to the extent
otherwise required by Section 11.3.
11.3 Exculpatory Provisions. Neither the Agent, any Co-Agent
----------------------
nor any of their officers, directors, employees, agents, attorneys-in-fact or
affiliates (including, without limitation, CABSC) shall be (i) liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement (except for its or such Person's own gross
negligence or willful misconduct) or (ii) responsible in any manner to any of
the Lenders for any recitals, statements, representations or warranties made by
Holdings or any Subsidiary or any of their respective officers contained in
this Agreement, any other Document or in any certificate, report, statement or
other document referred to or provided for in, or received by the Agent or any
Co-Agent under or in connection with, this Agreement or any other Document or
for any failure of Holdings or any Subsidiary or any of their respective
officers to perform its obligations hereunder or thereunder. Neither the Agent
nor any Co-Agent 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 to inspect the properties, books or
records of Holdings, the Borrower or any Subsidiary. Neither the Agent nor any
Co-Agent shall be responsible to any Lender for the effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement or
any Credit Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statement or
in any financial or other statements, instruments, reports, certificates or any
other documents in connection herewith or therewith furnished or made by the
Agent or any Co-Agent to the Lenders or by or on behalf of the Borrower to the
Agent or any Co-Agent or any Lender or be required to ascertain or inquire as
to the
77
performance or observance of any of the terms, conditions, provisions, covenants
or agreements contained herein or therein or as to the use of the proceeds of
the Loans or of the existence or possible existence of any Default or Event of
Default.
11.4 Reliance by Agent and Co-Agents. Each of the Agent, the
-------------------------------
Co-Agents and CABSC shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, facsimile transmission, telex or
teletype message, statement, order or other document or conversation believed
by it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Credit Parties), independent
accountants and other experts selected by the Agent or any of the Co-Agents.
Each of the Agent, the Co-Agents and CABSC shall be fully justified in failing
or refusing to take any action under this Agreement or any other Credit
Document unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate or it shall first be indemnified to
its satisfaction by the Lenders against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such
action. Each of the Agent, the Co-Agents and CABSC shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Credit Documents in accordance with a request of the Required Lenders,
and such request and any action taken or failure to act pursuant thereto shall
be binding upon all the Lenders.
11.5 Notice of Default. Neither the Agent nor any Co-Agent
-----------------
shall be deemed to have knowledge or notice of the occurrence of any Default or
Event of Default hereunder unless the Agent or any Co-Agent has received notice
from a Lender or the Borrower or any other Credit Party referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". In the event that the Agent or any Co-Agent
receives such a notice, the Agent or any such Co-Agent shall give prompt notice
thereof to the Lenders. The Agent or any such Co-Agent shall take such action
with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders, provided that unless and until the Agent
--------
or any such Co-Agent shall have received such directions, the Agent or any such
Co-Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it
shall deem advisable in the best interests of the Lenders.
11.6 Non-Reliance on Agent, Co-Agents and Other Lenders. Each
--------------------------------------------------
Lender expressly acknowledges that neither the Agent, any Co-Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or affiliates
have made any representations or warranties to it and that no act by the Agent
or any Co-Agent hereinafter taken, including any review of the affairs of
Holdings or any Subsidiary, shall be deemed to constitute any representation or
warranty by the Agent or any Co-Agent to any Lender. Each Lender represents to
the Agent and each Co-Agent that it has, independently and without reliance
upon the Agent, any Co-Agent or any other Lender, and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, assets, operations, property, financial and
other conditions, prospects and creditworthiness of Holdings and its
Subsidiaries and made its own decision to make its Loans hereunder and enter
into this Agreement. Each Lender also represents that it will, independently
and without reliance upon the Agent or any Co-Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement, and to make such
investigation as it deems necessary to inform itself as to the business,
assets, operations, property, financial and other conditions, prospects and
creditworthiness of Holdings and its Subsidiaries. Neither the Agent nor any
Co-Agent shall have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, operations, assets,
property, financial and other conditions, prospects or creditworthiness of
Holdings or any Subsidiary which may come into the possession of the Agent, any
Co-Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.
11.7 Indemnification. The Lenders agree to indemnify the
---------------
Agent in its capacity as such ratably according to their respective
"percentages" as used in determining Required Lenders at such time (with such
"percentages" to be determined as if there are no Defaulting Lenders), from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, reasonable expenses or disbursements of any
kind whatsoever which may at any time (including without limitation at any time
following the payment of the Obligations) be imposed on, incurred by or
asserted against the Agent in its capacity as such in any way relating to
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or arising out of this Agreement or any other Credit Document, or any documents
contemplated by or referred to herein or the transactions contemplated hereby or
any action taken or omitted to be taken by the Agent under or in connection
with any of the foregoing, but only to the extent that any of the foregoing is
not paid by Holdings or any of its Subsidiaries; provided that no Lender
--------
shall be liable to the Agent for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting solely from the Agent's gross
negligence or willful misconduct. The agreements in this Section 11.7 shall
survive the payment of all Obligations.
11.8 The Agent and Co-Agents in their Individual Capacity.
----------------------------------------------------
The Agent, its affiliates and each Co-Agent may make loans to, accept deposits
from and generally engage in any kind of business with Holdings and its
Subsidiaries as though the Agent and each Co-Agent were not the Agent and
Co-Agent hereunder. With respect to the Loans made by it and all Obligations
owing to it, the Agent and each Co-Agent shall have the same rights and powers
under this Agreement as any Lender and may exercise the same as though it were
not the Agent and Co-Agents, and the terms "Lender" and "Lenders" shall include
the Agent and each Co-Agent in their individual capacity.
11.9 Successor Agent. The Agent or any Co-Agent may resign as
---------------
the Agent upon 20 days' notice to Holdings and the Lenders. The Required
Lenders shall appoint from among the Lenders a successor Agent or Co-Agent for
the Lenders subject to prior approval by Holdings (such approval not to be
unreasonably withheld), whereupon such successor agent shall succeed to the
rights, powers and duties of the Agent and/or such Co-Agent, and the term
"Agent" shall include such successor agent effective upon its appointment, and
the resigning Agent's rights, powers and duties as the Agent shall be
terminated, without any other or further act or deed on the part of such former
Agent or any of the parties to this Agreement. After the retiring Agent's
resignation hereunder as the Agent, the provisions of this Section 11 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement.
SECTION 12. Miscellaneous.
-------------
12.1 Payment of Expenses, etc. The Borrower agrees to: (i)
-------------------------
whether or not the transactions herein contemplated are consummated, pay all
reasonable out-of-pocket costs and expenses of the Agent in connection with the
syndication of the Facilities, the negotiation, preparation, execution and
delivery of the Credit Documents and the documents and instruments referred to
therein and any amendment, waiver or consent relating thereto (including,
without limitation, the reasonable fees and disbursements of Xxxxxxx Xxxxxxx &
Xxxxxxxx, counsel to the Agent) and the creation and perfection of the Liens
created under the Security Documents and of the Agent and each of the Lenders
in connection with the enforcement (including pursuant to the administration of
any bankruptcy proceeding relating to Holdings or the Borrower) of the Credit
Documents and the documents and instruments referred to therein (including,
without limitation, the reasonable fees and disbursements of counsel for the
Agent, the Letter of Credit Issuer and for each of the Lenders); (ii) pay and
hold each of the Lenders harmless from and against any and all present and
future stamp and other similar taxes with respect to the foregoing matters and
save each of the Lenders and the Letter of Credit Issuer harmless from and
against any and all liabilities with respect to or resulting from any delay or
omission (other than to the extent attributable to such Lender or such Letter
of Credit Issuer) to pay such taxes; and (iii) indemnify each Lender and the
Letter of Credit Issuer, its officers, directors, employees, representatives
and agents (collectively, the "Indemnities") from and hold each of them
harmless against any and all losses, costs, liabilities, claims, damages or
expenses incurred by any of them as a result of, or arising out of, or in any
way related to, or by reason of, any investigation, litigation or other
proceeding (whether or not any Lender or the Letter of Credit Issuer is a party
thereto) related to the entering into and/or performance of any Document or the
use of the proceeds of any Loans or Letters of Credit hereunder or the
Transaction or the Devon Transaction or the consummation of any transactions
contemplated in any Credit Document, including, without limitation, the
reasonable fees, charges and disbursements of counsel incurred in connection
with any such investigation, litigation or other proceeding (but excluding any
such losses, costs, liabilities, claims, damages or expenses to the extent
incurred by reason of the gross negligence or willful misconduct of the Person
to be indemnified or of any other Indemnitee who is such Person or an affiliate
of such Person).
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12.2 Right of Setoff. In addition to any rights now or
---------------
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence of an Event of Default, each
Lender is hereby authorized at any time or from time to time, without
presentment, demand, protest or other notice of any kind to any Credit Party or
to any other Person, any such notice being hereby expressly waived, to set off
and to appropriate and apply any and all deposits (general or special) and any
other Indebtedness at any time held or owing by such Lender (including without
limitation by branches and agencies of such Lender wherever located) to or for
the credit or the account of any Credit Party against and on account of the
Obligations and liabilities of such Credit Party to such Lender under this
Agreement or under any of the other Credit Documents, including, without
limitation, all interests in Obligations of such Credit Party purchased by such
Lender pursuant to Section 12.6(b), and all other claims of any nature or
description arising out of or connected with this Agreement or any other Credit
Document, irrespective of whether or not such Lender shall have made any demand
hereunder and although said Obligations, liabilities or claims, or any of them,
shall be contingent or unmatured.
12.3 Notices. Except as otherwise expressly provided herein,
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all notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered, if to a Credit Party, at
the address specified opposite its signature below or in the other relevant
Credit Documents, as the case may be; if to any Lender, at its address
specified for such Lender on Annex 1.1 hereto; or, at such other address as
shall be designated by any party in a written notice to the other parties
hereto. All such notices and communications shall be mailed, telegraphed,
telexed, telecopied, or cabled or sent by overnight courier, and shall be
effective when received.
12.4 Benefit of Agreement. (a) This Agreement shall be binding
--------------------
upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto, provided that no Credit Party
--------
may assign or transfer any of its rights or obligations hereunder without the
prior written consent of all the Lenders. Each Lender may at any time grant
participations in any of its rights hereunder or under any of the Notes to
another financial institution, provided that in the case of any such
--------
participation, the participant shall not have any rights under this Agreement
or any of the other Credit Documents (the participant's rights against such
Lender in respect of such participation to be those set forth in the agreement
executed by such Lender in favor of the participant relating thereto) and all
amounts payable by the Borrower hereunder shall be determined as if such Lender
had not sold such participation, except that the participant shall be entitled
to the benefits of Sections 1.10, 1.11, 2.6 and 4.4 of this Agreement to the
extent that such Lender would be entitled to such benefits if the participation
had not been entered into or sold, and, provided, further, that no
-------- -------
Lender shall transfer, grant or assign any participation under which the
participant shall have rights to approve any amendment to or waiver of this
Agreement or any other Credit Document except to the extent such amendment or
waiver would (i) waive any Scheduled Repayment or extend the final scheduled
maturity of any Loan or Note in which such participant is participating (it
being understood that any waiver of the application of any prepayment or the
method of any application of any prepayment to, the amortization of the Term
Loans shall not constitute a waiver of any Scheduled Repayment or an extension
of the final maturity date), or reduce the rate or extend the time of payment
of interest or Fees thereon (except in connection with a waiver of the
applicability of any post-default increase in interest rates), or reduce the
principal amount thereof, or increase such participant's participating interest
in any Commitment over the amount thereof then in effect (it being understood
that a waiver of any Default or Event of Default or of a mandatory reduction in
the Total Commitment, or a mandatory prepayment, shall not constitute a change
in the terms of any Commitment), (ii) release any Guarantor from its
obligations under its Guaranty except in accordance with the terms thereof,
(iii) release all or substantially all of the Collateral or (iv) consent to the
assignment or transfer by any Credit Party of any of its rights and obligations
under this Agreement or any other Credit Document.
(b) Notwithstanding the foregoing, with the consent of the Agent
and the Borrower (each of which consents shall not be unreasonably withheld),
(x) any Lender may assign all or a portion of its Loans and/or Commitments and
its rights and obligations hereunder to another Lender, and (y) any Lender may
assign all or a portion of its Loans and/or Commitments and its rights and
obligations hereunder to one or more Eligible Transferees (including one or
more Lenders). Any assignment pursuant to this Section 12.4(b) need not be
ratable as among the Tranche A Term Loans, the Tranche B Term Loans and the
Revolving Commitments of the assigning Lender except as provided in the next
sentence. No assignment pursuant to the immediately preceding sentence (i)
shall to the extent such assignment represents an assignment to an institution
other than one or more Lenders hereunder, be in
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an aggregate amount less than $5,000,000 unless the entire Commitment and Loans
of the assigning Lender are so assigned or (ii) shall be effective if the result
thereof is that any Lender has a different percentage interest in the Initial
Tranche A Term Facility than it has in the Revolving Facility. If any Lender so
sells or assigns all or a part of its rights hereunder or under the Notes, any
reference in this Agreement or the Notes to such assigning Lender shall
thereafter refer to such Lender and to the respective assignee to the extent of
their respective interests and the respective assignee shall have, to the extent
of such assignment (unless otherwise provided therein), the same rights and
benefits as it would if it were such assigning Lender. Each assignment pursuant
to this Section 12.4(b) shall be effected by the assigning Lender and the
assignee Lender executing an Assignment Agreement substantially in the form of
Exhibit D (appropriately completed). In the event of any such assignment to a
Person not previously a Lender hereunder, either the assigning or the assignee
Lender shall pay to the Agent a nonrefundable assignment fee of $3,500, and at
the time of any assignment pursuant to this Section 12.4(b), (i) Annex 1.1 shall
be deemed to be amended to reflect the Commitment of the respective assignee
(which shall result in a direct reduction to the Commitment of the assigning
Lender) and of the other Lenders, and (ii) if any such assignment occurs after
the Initial Borrowing Date, the Borrower will issue new Notes to the respective
assignee and to the assigning Lender in conformity with the requirements of
Section 1.5. Each Lender and the Borrower agree to execute such documents
(including without limitation amendments to this Agreement and the other Credit
Documents) as shall be necessary to effect the foregoing. Nothing in this clause
(b) shall prevent or prohibit any Lender from pledging its Notes or Loans to a
Federal Reserve Bank in support of borrowings made by such Lender from such
Federal Reserve Bank.
(c) Notwithstanding any other provisions of this Section 12.4, no
transfer or assignment of the interests or obligations of any Lender hereunder
or any grant of participation therein shall be permitted if such transfer,
assignment or grant would require the Borrower or Holdings to file a
registration statement with the SEC or to qualify the Loans under the "Blue
Sky" laws of any State.
(d) Each Lender initially party to this Agreement hereby
represents, and each Person that became a Lender pursuant to an assignment
permitted by this Section 12 will, upon its becoming party to this Agreement,
represent that it is a commercial lender, other financial institution or other
"accredited" investor (as defined in SEC Regulation D) which makes or acquires
loans in the ordinary course of its business and that it will make or acquire
Loans for its own account in the ordinary course of such business, provided
--------
that subject to the preceding clauses (a) and (b), the disposition of any
promissory notes or other evidences of or interests in Indebtedness held by
such Lender shall at all times be within its exclusive control.
(e) The Agent acting on behalf of and as agent for the Borrower
shall maintain at its Payment Office a copy of each Assignment Agreement
delivered to it (as required hereby) and a register (the "Register") for
--------
the recordation of the names and addresses of the Lenders and the registered
owners of the Qualified Non-U.S. Lender Notes (including Qualified Non-U.S.
Lender Noteholders) and the Commitment of, and principal amount of the
Revolving Credit Loans, the Initial Tranche A Term Loans, the Initial Tranche B
Term Loans, the Additional Tranche A Term Loans and the Additional Tranche B
Term Loans owing to, each Lender from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Agent and the Lenders may treat each Person whose name is
recorded in the Register as the owner of the Loan or Qualified Non-U.S. Lender
Note recorded therein for all purposes of this Agreement, notwithstanding any
notice to the contrary. The Register shall be available for inspection by the
Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(f) Any Non-U.S. Lender that could become completely exempt from
withholding of any United States federal income taxes in respect of payment of
any interest due to such Non-U.S. Lender under this Agreement or the Notes if
the Note(s) held by such Non-U.S. Lender were in registered form for United
States federal income tax purposes may request the Borrower (through the
Agent), and the Borrower agrees thereupon, to exchange any Note(s) held by such
Non-U.S. Lender, or to issue to such Non-U.S. Lender on the date it becomes a
Lender, Qualified Non-U.S. Lender Notes. Qualified Non-U.S. Lender Notes may
not be exchanged for promissory notes that are not Qualified Non-U.S. Lender
Notes.
(g) A Qualified Non-U.S. Lender Note may be assigned or otherwise
transferred in whole or in part only by registration of such assignment or
transfer of such Qualified Non-U.S. Lender Note on the Register
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(each Qualified Non-U.S. Lender Note shall expressly so provide). Any assignment
or transfer of all or part of such Qualified Non-U.S. Lender Note shall be
registered on the Register only upon surrender for registration of the
assignment or transfer of the Qualified Non-U.S. Lender Note(s), duly endorsed
by (or accompanied by a written instrument of assignment or transfer duly
executed by) the holder thereof (a "Qualified Non-U.S. Lender Noteholder"); and
thereupon one or more new Qualified Non-U.S. Lender Note(s) in the same
aggregate principal amount shall be issued to the designated assignee(s) and the
old Qualified Non-U.S. Lender Note(s) shall be returned to the Borrower marked
"canceled." No assignment of a Qualified Non-U.S. Lender Note shall be effective
until it is recorded in the Register as provided in this paragraph (g) of
Section 12.4.
(h) In the event any Lender's long-term credit rating is
downgraded to BBB+ or lower by S&P or Baa1 or lower by Xxxxx'x, the Letter of
Credit Issuer may replace such Lender with an Eligible Transferee. Such
assignment shall be effected in accordance with the terms of Section 12.4(b).
12.5 No Waiver; Remedies Cumulative. No failure or delay on
------------------------------
the part of the Agent or any Lender in exercising any right, power or privilege
hereunder or under any other Credit Document and no course of dealing between
any Credit Party and the Agent or any Lender shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, power or privilege
hereunder or under any other Credit Document preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which the Agent or any
Lender would otherwise have. No notice to or demand on any Credit Party in any
case shall entitle any Credit Party to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Agent or the Lenders to any other or further action in any circumstances
without notice or demand.
12.6 Payments Pro Rata. (a) The Agent agrees that promptly
-----------------
after its receipt of each payment from or on behalf of any Credit Party in
respect of any Obligations of such Credit Party hereunder, it shall distribute
such payment to the Lenders (other than any Lender that has expressly waived
its right to receive its pro rata share thereof) pro rata based upon
--- ----
their respective shares, if any, of the Obligations with respect to which such
payment was received.
(b) Each of the Lenders agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon security,
by the exercise of the right of setoff or banker's lien, by counterclaim or
cross action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans, Fees or reimbursement obligations in respect of the Letters of
Credit, of a sum which with respect to the related sum or sums received by
other Lenders is in a greater proportion than the total of such Obligation then
owed and due to such Lender bears to the total of such Obligation then owed and
due to all of the Lenders immediately prior to such receipt (or, after
acceleration of the Loans pursuant to Section 9, with respect to any
Obligation), then such Lender receiving such excess payment shall purchase for
cash without recourse or warranty from the other Lenders an interest in the
Obligations of the respective Credit Party to such Lenders in such amount as
shall result in a proportional participation by all of the Lenders in such
amount, provided that if all or any portion of such excess amount is
--------
thereafter recovered from such Lender, such purchase shall be rescinded and the
purchase price restored to the extent of such recovery, but without interest.
12.7 Calculations; Computations. (a) The financial statements
--------------------------
to be furnished to the Lenders pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by Holdings to the Lenders), provided that except as otherwise specifically
--------
provided herein, all computations determining compliance with Section 8,
including definitions used therein, shall utilize accounting principles and
policies in effect at the time of the preparation of, and in conformity with
those used to prepare, (x) in respect of Holdings, the Borrower and their
Subsidiaries other than Devon, the December 31, 1994 historical financial
statements of Holdings delivered to the Lenders pursuant to Section 6.10 and
(y) in respect of Devon, the December 31, 1995 historical financial statements
of Devon delivered to the Lenders pursuant to Section 6.10, but shall not give
effect to (i) adjustments in component amounts required or permitted by APB 16
or 17 as a result of the Merger, provided that in determining gains and
--------
losses from the sale or disposition of assets such adjustment shall be given
effect, (ii) amortization of goodwill and intangible assets resulting from the
Merger and (iii) the amortization or write-off of any expenses incurred in
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connection with the Merger or the financing thereof, or in connection with the
issuance of the Subordinated Notes, provided that the computations under
--------
Section 8 may utilize FAS 96, but shall not give effect to any cumulative
effect adjustment relating to the adoption thereof, and, provided,
--------
further, that if at any time the computations determining compliance with
-------
Section 8 utilize accounting principles different from those utilized in the
financial statements furnished to the Lenders, such financial statements shall
be accompanied by reconciliation work-sheets.
(b) All computations of (x) interest on Eurodollar Loans, Base Rate
Loans not based on the Prime Lending Rate and Fees hereunder shall be made on
the actual number of days elapsed over a year of 360 days and (y) interest on
Base Rate Loans based on the Prime Lending Rate shall be made on the actual
number of days elapsed over a year of 365 or 366 days, as the case may be.
12.8 Governing Law; Submission to Jurisdiction; Venue; Waiver of
------------------------------------------------------------
Jury Trial. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
----------
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW
YORK. Any legal action or proceeding with respect to this Agreement or any
other Credit Documents may be brought in the courts of the State of New York or
of the United States for the Southern District of New York, and, by execution
and delivery of this Agreement, each Credit Party hereby irrevocably accepts
for itself and in respect of its property, generally and unconditionally, the
jurisdiction of the aforesaid courts. Each Credit Party further irrevocably
consents to the service of process out of any of the aforementioned courts in
any such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to each Credit Party located outside New York
City and by hand delivery to each Credit Party located within New York City, at
its address for notices pursuant to Section 12.3, such service to become
effective 30 days after such mailing. Each Credit Party hereby irrevocably
appoints Holdings as its agent for service of process in respect of any such
action or proceeding. Nothing herein shall affect the right of the Agent or
any Lender to serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against any Credit Party in any other
jurisdiction.
(b) Each Credit Party hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Agreement or any other Credit Document brought in the courts referred to in
clause (a) above and hereby further irrevocably waives and agrees not to plead
or claim in any such court that any such action or proceeding brought in any
such court has been brought in an inconvenient forum.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
12.9 Counterparts. This Agreement may be executed in any
------------
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. A set of counterparts executed by all the parties hereto shall be
lodged with Holdings and the Agent.
12.10 Effectiveness. (a) The Original Credit Agreement became
-------------
effective on September 29, 1995 (the "Effective Date").
(b) This Agreement shall become effective on the date (the
"Amendment and Restatement Effective Date") on which (i) each of Holdings and
the Borrower and each of the Lenders required under Section 5.2(q) shall have
signed a copy of this Agreement (whether the same or different copies) and
shall have delivered the same to the Agent at the Payment Office of the Agent
or, in the case of the Lenders, shall have given to the Agent telephonic
(confirmed in writing), written telex or facsimile transmission notice
(actually received) at such office that the same has been signed and mailed to
it and (ii) the conditions set forth in Sections 5.2 and 5.3(a) shall have been
satisfied.
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12.11 Headings Descriptive. The headings of the several
--------------------
sections and subsections of this Agreement are inserted for convenience only
and shall not in any way affect the meaning or construction of any provision of
this Agreement.
12.12 Amendment or Waiver. Neither this Agreement nor any
-------------------
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination
is in writing signed by Holdings, the Borrower and the Required Lenders,
provided that no such change, waiver, discharge or termination shall (i)
--------
waive any Scheduled Repayment or extend the Final Maturity Date (it being
understood that any waiver of the application of any prepayment of or the method
of application of any prepayment to the amortization of the Loans shall not
constitute a waiver of any such Scheduled Repayment or any such extension), or
reduce the rate or extend the time of payment of interest (other than as a
result of waiving the applicability of any post-default increase in interest
rates) or Fees thereon, or reduce the principal amount thereof, or increase the
Commitment of any Lender over the amount thereof then in effect (it being
understood that a waiver of any Default or Event of Default or of a mandatory
reduction in the Total Commitment shall not constitute a change in the terms of
any Commitment of any Lender), without the consent of each Lender (other than a
Defaulting Lender) directly affected thereby, (ii) defer any Scheduled Repayment
without the consent of (A) in the case of an Initial Tranche A Scheduled
Repayment, Lenders holding Initial Tranche A Term Loans representing at least 66
2/3% of the aggregate principal amount of the then outstanding Initial Tranche A
Term Loans, (B) in the case of an Initial Tranche B Scheduled Repayment, Lenders
holding Initial Tranche B Term Loans representing at least 66 2/3% of the
aggregate principal amount of the then outstanding Initial Tranche B Term Loans,
(C) in the case of an Additional Tranche A Scheduled Repayment, Lenders holding
Additional Tranche A Term Loans representing at least 66 2/3% of the aggregate
principal amount of the then outstanding Additional Tranche A Term Loans and (D)
in the case of an Additional Tranche B Scheduled Repayment, Lenders holding
Additional Tranche B Term Loans representing at least 66 2/3% of the aggregate
principal amount of the then outstanding Additional Tranche B Term Loans, (iii)
release all or substantially all of the Collateral or release any Guarantor from
its Guaranty (in each case except as expressly provided in the Credit Documents)
without the consent of each Lender (other than a Defaulting Lender) directly
affected thereby, (iv) amend, modify or waive any provision of this Section
without the consent of each Lender (other than a Defaulting Lender) directly
affected thereby, (v) reduce the percentage specified in, or otherwise modify,
the definition of Required Lenders without the consent of each Lender (other
than a Defaulting Lender) directly affected thereby, (vi) consent to the
assignment or transfer by any Credit Party of any of its rights and obligations
under this Agreement without the consent of each Lender (other than a Defaulting
Lender) directly affected thereby, (vii) effect any waiver, amendment or
modification that by its terms subordinates (including, without limitation, by
altering priority of distribution of payments or proceeds of Collateral)
directly or indirectly the rights in respect of payments or Collateral of
Lenders participating in any Tranche differently from those of Lenders
participating in other Tranches, without the consent of each Lender whose rights
would be subordinated by such waiver, amendment or modification, or change the
relative rights in respect of payments or Collateral of the Lenders
participating in different Tranches without the consent of each Lender
participating in each affected Tranche or (viii) alter any allocation of
mandatory prepayments under Section 4.2 among either Tranche or the Revolving
Facility without the consent of a majority in interest of the Lenders of each
Tranche or the Revolving Facility, as the case may be, adversely affected
thereby. No provision of Section 2 or 11 may be amended without the consent of
the Letter of Credit Issuer or the Agent, respectively.
12.13 Survival. All indemnities set forth herein including,
--------
without limitation, in Section 1.10, 1.11, 2.6, 4.4, 11.7 or 12.1 shall survive
the execution and delivery of this Agreement and the making and repayment of
the Loans.
12.14 Domicile of Loans. Each Lender may transfer and carry
-----------------
its Loans at, to or for the account of any branch office, subsidiary or
affiliate of such Lender, provided that the Borrower shall not be
--------
responsible for costs arising under Section 1.10, 2.6 or 4.4 resulting from any
such transfer (other than a transfer pursuant to Section 1.12) to the extent
not otherwise applicable to such Lender prior to such transfer.
12.15 Confidentiality. Subject to Section 12.4, the Lenders
---------------
shall hold all non-public information obtained pursuant to the requirements of
this Agreement which has been identified as such by Holdings or the Borrower in
accordance with its customary procedure for handling confidential information
of this nature and in
84
accordance with safe and sound banking and/or investment practices and in any
event may make disclosure reasonably required by any bona fide transferee or
---- ----
participant in connection with the contemplated transfer of any Loans or
participation therein (provided, that each such prospective transferee and/or
--------
participant shall execute an agreement for the benefit of the Holdings and
Borrower with such prospective transferor Lender containing provisions
substantially identical to those contained in this Section 12.15) or as required
or requested by any governmental agency or representative thereof or pursuant to
legal process, provided that, unless specifically prohibited by applicable law
--------
or court order, each Lender shall notify Holdings of any request by any
governmental agency or representative thereof (other than any such request in
connection with an examination of the financial condition of such Lender by such
governmental agency) for disclosure of any such non-public information prior to
disclosure of such information, and provided further that in no event
-------- -------
shall any Lender be obligated or required to return any materials furnished by
Holdings or any Subsidiary.
12.16 Release of Liens and Guarantees. In the event that
-------------------------------
Holdings, the Borrower or any Subsidiary conveys, sells, leases, assigns,
transfers or otherwise disposes of all or any portion of any of the capital
stock, assets or property of Holdings, the Borrower or any of the Subsidiaries
in a transaction not prohibited by this Agreement or any other Credit Document,
the Agent and the Collateral Agent shall promptly (and the Lenders hereby
authorize the Agent and the Collateral Agent to) take such action and execute
any such documents as may be reasonably requested by the Borrower and at the
Borrower's expense to release any Liens created by any Credit Document in
respect of such capital stock, assets, property, including the release and
satisfaction of record of any mortgage or deed or trust granted in connection
herewith, and, in the case of a disposition of all or substantially all the
capital stock or assets of any Subsidiary Guarantor, terminate such Subsidiary
Guarantor's obligations under the Subsidiary Guarantee and release all Liens on
the assets of such Subsidiary Guarantor. In addition, the Agent and the
Collateral Agent agree to take such actions as are reasonably requested by the
Borrower and at the Borrower's expense to terminate the Liens and security
interests created by the Credit Documents when all the Obligations are paid in
full and all Letters of Credit and Commitments are terminated. Any
representation, warranty or covenant contained in any Credit Document relating
to any such capital stock, assets, property or Subsidiary shall no longer be
deemed to be made once such Capital Stock, assets or property is conveyed,
sold, leased, assigned, transferred or disposed of.
12.17 Pre-Closing Funding Arrangements. (a) The Lenders
--------------------------------
hereby agree to fund the Initial Tranche A Term Facility, the Initial Tranche B
Term Facility and the Revolving Facility in accordance with the pre-closing
escrow letter between the Agent and GH dated September 27, 1995.
(b) The Lenders with an Additional Tranche A Term Commitment or an
Additional Tranche B Term Commitment, as the case may be, hereby agree to fund
the Additional Tranche A Term Facility and/or the Additional Tranche B Term
Facility, as the case may be, in accordance with the pre-closing escrow letter
between the Agent and the Borrower dated February 28, 1996.
SECTION 13. Guaranty.
--------
13.1 The Guaranty. In order to induce the Lenders to enter
------------
into this Agreement and to extend credit hereunder and in recognition of the
direct benefits to be received by Holdings from the proceeds of the Loans,
Holdings hereby agrees with the Lenders as follows: Holdings hereby
unconditionally and irrevocably, guarantees as primary obligor and not merely
as surety the full and prompt payment when due, whether upon maturity, by
acceleration or otherwise, of any and all indebtedness of the Borrower to the
Lenders. If any or all of the indebtedness of the Borrower to the Lenders
becomes due and payable hereunder, Holdings unconditionally promises to pay
such indebtedness to the Lenders, or order, on demand, together with any and
all expenses which may be incurred by the Agent or the Lenders in collecting
any of the indebtedness. The word "indebtedness" is used in this Section 13 in
its most comprehensive sense and includes any and all advances, debts,
obligations and liabilities of the Borrower arising in connection with this
Agreement or under any Interest Rate Agreement with a Lender, in each case,
heretofore, now, or hereafter made, incurred or created, whether voluntarily or
involuntarily, absolute or contingent, liquidated or unliquidated, determined
or undetermined, whether or not such indebtedness is from time to time reduced,
or extinguished and thereafter increased or incurred, whether the Borrower may
be liable individually or jointly with others, whether or not recovery upon
such indebtedness may be or hereafter become
85
barred by any statute of limitations, and whether or not such indebtedness may
be or hereafter become otherwise unenforceable.
13.2 Bankruptcy. Additionally, Holdings unconditionally and
----------
irrevocably guarantees the payment of any and all indebtedness of the Borrower
to the Lenders whether or not due or payable by the Borrower upon the
occurrence in respect of the Borrower of any of the events specified in Section
9.5, and unconditionally promises to pay such indebtedness to the Lenders, or
order, on demand, in lawful money of the United States.
13.3 Nature of Liability. The liability of Holdings hereunder
-------------------
is exclusive and independent of any security for or other guaranty of the
indebtedness of the Borrower whether executed by Holdings, any other guarantor
or by any other party, and the liability of Holdings hereunder shall not be
affected or impaired by (a) any direction as to application of payment by the
Borrower or by any other party, or (b) any other continuing or other guaranty,
undertaking or maximum liability of a guarantor or of any other party as to the
indebtedness of the Borrower, or (c) any payment on or in reduction of any such
other guaranty or undertaking, or (d) any dissolution, termination or increase,
decrease or change in personnel by the Borrower, or (e) any payment made to the
Agent or the Lenders on the indebtedness which the Agent or such Lenders repay
the Borrower pursuant to court order in any bankruptcy, reorganization,
arrangement, moratorium or other debtor relief proceeding, and Holdings waives
any right to the deferral or modification of its obligations hereunder by
reason of any such proceeding.
13.4 Independent Obligation. The obligations of Holdings
----------------------
hereunder are independent of the obligations of any other guarantor or the
Borrower, and a separate action or actions may be brought and prosecuted
against Holdings whether or not action is brought against any other guarantor
or the Borrower and whether or not any other guarantor or the Borrower be
joined in any such action or actions. Holdings waives, to the fullest extent
permitted by law, the benefit of any statute of limitations affecting its
liability hereunder or the enforcement thereof. Any payment by the Borrower or
other circumstance which operates to toll any statute of limitations as to the
Borrower shall operate to toll the statute of limitations as to Holdings.
13.5 Authorization. Holdings authorizes the Agent and the
-------------
Lenders without notice or demand (except as shall be required by applicable
statute and cannot be waived), and without affecting or impairing its liability
hereunder, from time to time to (a) renew, compromise, extend, increase,
accelerate or otherwise change the time for payment of, or otherwise change the
terms of the indebtedness or any part thereof in accordance with this
Agreement, including any increase or decrease of the rate of interest thereon,
(b) take and hold security from any guarantor or any other party for the
payment of this guaranty or the indebtedness and exchange, enforce, waive and
release any such security, (c) apply such security and direct the order or
manner of sale thereof as the Agent and the Lenders in their discretion may
determine and (d) release or substitute any one or more endorsers, guarantors,
the Borrower or other obligors.
13.6 Reliance. It is not necessary for the Agent or the
--------
Lenders to inquire into the capacity or powers of the Borrower or its
Subsidiaries or the officers, directors, partners or agents acting or
purporting to act on its behalf, and any indebtedness made or created in
reliance upon the professed exercise of such powers shall be guaranteed
hereunder.
13.7 Subordination. Any indebtedness of the Borrower now or
-------------
hereafter held by Holdings is hereby subordinated to the indebtedness of the
Borrower to the Agent and the Lenders; and such indebtedness of the Borrower to
Holdings, if Agent, after an Event of Default has occurred, so requests, shall
be collected, enforced and received by Holdings as trustee for the Lenders and
be paid over to the Lenders on account of the indebtedness of the Borrower to
the Lenders, but without affecting or impairing in any manner the liability of
Holdings under the other provisions of this Guaranty. Prior to the transfer by
Holdings of any note or negotiable instrument evidencing any indebtedness of
the Borrower to Holdings, Holdings shall xxxx such note or negotiable
instrument with a legend that the same is subject to this subordination.
13.8 Waiver. (a) Holdings waives any right (except as shall
------
be required by applicable statute and cannot be waived) to require the Agent or
the Lenders to (i) proceed against the Borrower, any other guarantor or any
other
86
party, (ii) proceed against or exhaust any security held from the Borrower, any
other guarantor or any other party or (iii) pursue any other remedy in the
Agent's or the Lenders' power whatsoever. Holdings waives any defense based on
or arising out of any defense of the Borrower, any other guarantor or any other
party other than payment in full of the indebtedness, including without
limitation any defense based on or arising out of the disability of the
Borrower, any other guarantor or any other party, or the unenforceability of the
indebtedness or any part thereof from any cause, or the cessation from any cause
of the liability of the Borrower other than payment in full of the indebtedness.
The Agent and the Lenders may, at their election, foreclose on any security held
by the Agent or the Lenders by one or more judicial or nonjudicial sales,
whether or not every aspect of any such sale is commercially reasonable (to the
extent such sale is permitted by applicable law), or exercise any other right or
remedy the Agent and the Lenders may have against the Borrower or any other
party, or any security, without affecting or impairing in any way the liability
of Holdings hereunder except to the extent the indebtedness has been paid.
Holdings waives any defense arising out of any such election by the Agent and
the Lenders, even though such election operates to impair or extinguish any
right of reimbursement or subrogation or other right or remedy of Holdings
against the Borrower or any other party or any security.
(b) Holdings waives all presentments, demands for performance,
protests and notices, including without limitation notices of nonperformance,
notice of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation or incurring of new or additional
indebtedness. Holdings assumes all responsibility for being and keeping itself
informed of the Borrower's financial condition and assets, and of all other
circumstances bearing upon the risk of nonpayment of the indebtedness and the
nature, scope and extent of the risks which Holdings assumes and incurs
hereunder, and agrees that the Agent and the Lenders shall have no duty to
advise Holdings of information known to them regarding such circumstances or
risks.
(c) Holdings hereby waives all rights of subrogation which it may
at any time otherwise have as a result of this Guaranty (whether contractual,
under Section 509 of the Bankruptcy Code, or otherwise) to the claims of the
Lenders against the Borrower or any other guarantor of the Obligations
(collectively, the "Other Parties") and all contractual, statutory or common
law rights of reimbursement, contribution or indemnity from any Other Party
which it may at any time otherwise have as a result of this Guaranty. Holdings
hereby further waives any right to enforce any other remedy which the Lenders
now have or may hereafter have against any Other Party, any endorser or any
other guarantor of all or any part of the indebtedness of the Borrower and any
benefit of, and any right to participate in, any security or collateral given
to or for the benefit of the Lenders to secure payment of the indebtedness of
the Borrower.
(d) Notwithstanding the provisions of the preceding clause (c),
Holdings shall have and be entitled to (i) all rights of subrogation otherwise
provided by law in respect of any payment it may make or be obligated to make
under this Guaranty and (ii) all claims (as defined in the Bankruptcy Code) it
would have against any Other Party in the absence of the preceding clause (c),
and to assert and enforce same, in each case on and after, but at no time prior
to, the date (the "Subrogation Trigger Date") on which all indebtedness of the
Borrower owing to all of the Lenders has been paid in full if and only if
--------------
the Obligations have been paid and performed in full, the Commitments have
terminated and the Letters of Credit have expired or been returned to the
Letter of Credit Issuer, the Collateral shall be released by the Collateral
Agent, and this Agreement shall have terminated.
13.9 Limitation on Enforcement. The Lenders agree that this
-------------------------
Guaranty may be enforced only by the action of the Agent or the Collateral
Agent, in each case acting upon the instructions of the Required Lenders and
that no Lender shall have any right individually to seek to enforce or to
enforce this Guaranty or to realize upon the security to be granted by any
Security Document, it being understood and agreed that such rights and remedies
may be exercised by the Agent or the Collateral Agent for the benefit of the
Lenders upon the terms of this Agreement and any Security Document. The
Lenders further agree that the Guaranty may not be enforced against any
director, officer, employee or stockholder of Holdings.
87
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the date
first above written.
Address: GRAPHIC HOLDINGS, INC.
x/x Xxxxxxxx Xxxxxxxx, X.X.
000 Xxxxx Xxxxxx By: /s/ Xxxxx X. Xxxxxx
-------------------
Xxx Xxxx, Xxx Xxxx 00000 Title: President
Attention: General Partner
000 Xxx Xxxxxxxxxx Xxxxxx GRAPHIC CONTROLS CORPORATION
Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx
With a copy to: By: /s/ Xxxxxxx Xxxxxxxx
--------------------
Graphic Holdings, Inc. Title: Vice President-Finance
x/x Xxxxxxxx Xxxxxxxx, X.X.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 CHEMICAL BANK, as Agent, as Letter
Attention: General Partner of Credit Issuer and as a Lender
By: /s/ Xxxxxx X. Xxxxxx
--------------------
Title: Vice President
THE FIRST NATIONAL BANK OF CHICAGO, as
Co-Agent and as a Lender
By: /s/ Xxxx X. Xxxxxx
------------------
Title: Assistant Vice President
FLEET BANK OF MASSACHUSETTS, N.A.,
as Co-Agent and as a Lender
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------
Title: Vice President
XXXXXXX XXXXX PRIME RATE PORTFOLIO
By: Xxxxxxx Xxxxx Asset Management, L.P.,
as Investment Advisor
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Title: Authorized Signatory
88
RESTRUCTURED OBLIGATIONS BACKED
BY SENIOR ASSETS B.V.
By: its Managing Director
ABN TRUSTCOMPANY (NEDERLAND) B.V.
By: /s/ X.X. Xxxxxxx
-----------------
Title: Proxyholder
By: /s/ R.G.M. Verhoef
------------------
Title: Proxyholder
SENIOR DEBT PORTFOLIO
By: Boston Management and Research,
as Investment Advisor
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
Title: Vice President
XXX XXXXXX AMERICAN CAPITAL PRIME RATE
INCOME TRUST
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------
Title: Vice President-Portfolio Manager
CAISSE NATIONALE DE CREDIT AGRICOLE
By: /s/ Xxxx Xxxxxx
---------------
Title: Senior Vice President-Branch
Manager
COMERICA BANK
By: /s/ Xxxxx Xxxxxxxxxxxx
----------------------
Title: Vice President
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ C. Xxxxxx Xxxxxxxx
----------------------
Title: Vice President
89
MANUFACTURERS AND TRADERS TRUST
COMPANY
By: /s/ Xxxx XxXxxx
---------------
Title: Vice President
SOCIETE GENERALE, NEW YORK BRANCH
By: /s/ Xxxx X. Xxxxxx
------------------
Title: Vice President
PILGRIM PRIME RATE TRUST
By: /s/ Xxxxxx Tiffen
-----------------
Title: Senior Vice President
NATIONAL CITY BANK
By: /s/ Xxxxxx X. Xxxx
------------------
Title: Vice President
XXXXXXX XXXXX SENIOR FLOATING RATE FUND,
INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Title: Authorized Signatory
