EXHIBIT 10.1
$51,700,000
CREDIT AGREEMENT
among
CYBEX INTERNATIONAL, INC.,
ITS SUBSIDIARIES
FROM TIME TO TIME PARTIES HERETO
as Guarantors,
THE LENDERS PARTIES HERETO,
and
FIRST UNION NATIONAL BANK,
as Administrative Agent
and
SUMMIT BANK,
as Documentation Agent
Dated as of May 21, 1998
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS......................................................1
1.1 Defined Terms....................................................1
1.2 Other Definitional Provisions...................................21
1.3 Accounting Terms................................................21
SECTION 2. THE LOANS; AMOUNT AND TERMS.....................................22
2.1 Revolving Loans.................................................22
2.2 Term Loan.......................................................24
2.3 Letter of Credit Subfacility....................................25
2.4 Conversion Options..............................................28
2.5. Minimum Principal Amount of Tranches............................28
2.6 Default Rate and Payment Dates..................................28
2.7 Reductions in Commitments and Prepayments.......................29
2.8 Fees............................................................31
2.9 Computation of Interest and Fees................................32
2.10 Pro Rata Treatment and Payments.................................32
2.11 Non-Receipt of Funds by the Administrative Agent................33
2.12. Inability to Determine Interest Rate............................34
2.13 Illegality......................................................34
2.14. Requirements of Law.............................................35
2.15 Indemnity.......................................................36
2.16. Taxes...........................................................37
2.17 Replacement of Banks............................................39
2.18 Indemnification; Nature of Issuing Lender's Duties..............39
SECTION 3. REPRESENTATIONS AND WARRANTIES..................................40
3.1 Financial Condition.............................................40
3.2 No Change.......................................................41
3.3 Existence; Compliance with Law..................................41
3.4 Power; Authorization; Enforceable Obligations...................41
3.5 No Legal Bar; No Default........................................41
3.6 No Material Litigation..........................................42
3.7 Investment Company Act..........................................42
3.8 Federal Regulations.............................................42
3.9 ERISA...........................................................42
3.10 Environmental Matters...........................................43
3.11 Purpose of Loan.................................................44
3.12 Subsidiaries....................................................44
3.13 Intellectual Property Rights....................................44
3.14 No Burdensome Restrictions......................................45
3.15 Taxes...........................................................45
3.16 Interest in Real Estate.........................................45
SECTION 4. CONDITIONS PRECEDENT............................................45
4.1 Conditions to Closing Date......................................45
4.2 Conditions to All Loans.........................................47
SECTION 5. AFFIRMATIVE COVENANTS...........................................48
5.1 Financial Statements............................................48
5.2 Certificates; Other Information.................................49
5.3 Payment of Obligations..........................................50
5.4 Conduct of Business and Maintenance of Existence................50
5.5 Maintenance of Property; Insurance..............................50
5.6 Inspection of Property; Books and Records; Discussions..........50
5.7 Notices.........................................................51
5.8 Environmental Laws..............................................51
5.9 Financial Covenants.............................................52
5.10 Covenants Regarding Patents, Trademarks and Copyrights..........53
5.11 Fees, Etc.......................................................54
5.12 Subsidiaries....................................................55
5.13 Mortgages on Real Property......................................55
5.14 Year 2000 Compatibility.........................................56
5.15 Further Assurances..............................................56
5.16 Designated Non-Material Subsidiaries............................56
5.17 IRB Letter of Credit............................................56
SECTION 6. NEGATIVE COVENANTS..............................................57
6.1 Indebtedness....................................................57
6.2 Liens...........................................................58
6.3 Guaranty Obligations............................................58
6.4 Lines of Business...............................................58
6.5 Consolidation, Merger, Sale or Purchase of Assets, etc..........58
6.6 Advances, Investments and Loans.................................59
6.7 Transactions with Affiliates....................................59
6.8 Ownership of Subsidiaries.......................................60
6.9 Fiscal Year.....................................................60
6.10 Prepayments of Indebtedness, etc................................60
6.11 Restricted Payments.............................................60
6.12 Partnership and Corporate Documents; Purchase Agreement.........61
6.13 Lease Receivables...............................................61
SECTION 7. EVENTS OF DEFAULT...............................................61
SECTION 8. THE ADMINISTRATIVE AGENT........................................64
8.1 Appointment.....................................................64
8.2 Delegation of Duties............................................64
8.3 Exculpatory Provisions..........................................64
8.4 Reliance by Administrative Agent................................65
8.5 Notice of Default...............................................65
8.6 Non-Reliance on Administrative Agent and Other Lenders..........65
8.7 Indemnification.................................................66
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8.8 Administrative Agent in Its Individual Capacity..................66
8.9 Successor Administrative Agent...................................67
SECTION 9. MISCELLANEOUS....................................................67
9.1 Amendments, Waivers and Release of Collateral....................67
9.2 Notices..........................................................68
9.3 No Waiver; Cumulative Remedies...................................69
9.4 Survival of Representations and Warranties.......................69
9.5 Payment of Expenses and Taxes....................................69
9.6 Successors and Assigns; Participations; Purchasing Lenders.......70
9.7 Adjustments; Set-off.............................................73
9.8 Table of Contents and Section Headings...........................74
9.9 Counterparts.....................................................74
9.10 Severability.....................................................74
9.11 Integration......................................................74
9.12 Governing Law....................................................74
9.13 Consent to Jurisdiction and Service of Process...................74
9.14 Arbitration......................................................75
9.15 Confidentiality..................................................76
9.16 Acknowledgments..................................................77
SECTION 10. GUARANTY........................................................77
10.1 The Guaranty.....................................................77
10.2 Bankruptcy.......................................................78
10.3 Nature of Liability..............................................78
10.4 Independent Obligation...........................................78
10.5 Authorization....................................................78
10.6 Reliance.........................................................79
10.7 Waiver...........................................................79
10.8 Limitation on Enforcement........................................80
10.9 Confirmation of Payment..........................................80
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SCHEDULES
Schedule 1.1(a) Adjustments to EBITDA
Schedule 1.1B Permitted Liens
Schedule 2.1(a) Schedule of Lenders, Commitments and Addresses
Schedule 2.1(b)(i) Form of Notice of Borrowing
Schedule 2.1(b)(iii) Form of Notice of Account Designation
Schedule 2.1(e) Form of Revolving Note
Schedule 2.2(d) Form of Term Note
Schedule 2.4 Form of Notice of Conversion
Schedule 2.16 Form of 2.16 Certificate
Schedule 3.6 Material Litigation
Schedule 3.12 Subsidiaries
Schedule 3.13 Intellectual Property
Schedule 3.15 Exceptions to Tax Representation
Schedule 3.16 Real Property
Schedule 4.1(d) Form of Secretary's Certificate
Schedule 4.1(f)(ii) Form of Solvency Certificate
Schedule 5.12 Form of Joinder Agreement
Schedule 6.1(b) Indebtedness
Schedule 9.6(c) Form of Commitment Transfer Supplement
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CREDIT AGREEMENT
CREDIT AGREEMENT, dated as of May 21, 1998, among CYBEX INTERNATIONAL,
INC., a New York corporation (the "Borrower"), the subsidiaries of the Borrower
identified as a "Guarantor" on the signature pages hereto, the several banks,
financial institutions and other investors from time to time parties to this
Agreement (the "Lenders"), FIRST UNION NATIONAL BANK, as administrative agent
for the Lenders (in such capacity, the "Agent" or the "Administrative Agent")
and SUMMIT BANK, as Documentation Agent.
W I T N E S S E T H:
WHEREAS, the Borrower has requested the Lenders to make loans in an amount
up to $55,000,000 as more particularly described herein;
WHEREAS, the Lenders are willing to make such loans on the terms and
conditions contained herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto hereby agree as follows:
SECTION 1.DEFINITIONS
1.1 DEFINED TERMS.
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As used in this Agreement, terms defined in the preamble to this Agreement
have the meanings therein indicated, and the following terms have the following
meanings:
"Acquired Assets": the stock of the Acquired Company to be acquired
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pursuant to the Purchase Agreement.
"Acquired Company": Tectrix Fitness Equipment, Inc.
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"Acquisition": the acquisition by the Borrower (or one of its wholly-
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owned Subsidiaries) of the Acquired Assets pursuant to the Purchase Agreements.
"Affiliate": as to any Person, any other Person (excluding any
---------
Subsidiary) which, directly or indirectly, is in control of, is controlled by,
or is under common control with, such Person. For purposes of this definition,
a Person shall be deemed to be "controlled by" a Person if such Person
possesses, directly or indirectly, power either (a) to vote 10% or more of the
securities having ordinary voting power for the election of directors of such
Person or (b) to direct or cause the direction of the management and policies of
such Person whether by contract or otherwise.
"Aggregate Revolving Committed Amount": the aggregate amount of all
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of the Revolving Commitments in effect from time to time, as reduced from time
to time as provided in Section 2.7.
"Agreement": this Credit Agreement, as amended, supplemented or
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modified from time to time in accordance with its terms.
"Applicable Commitment Fee Percentage": for any day, the rate per
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annum set forth below opposite the applicable Leverage Ratio then in effect:
Leverage
Ratio Percentage
greater than or equal to 2.5 0.375%
greater than or equal to 2.0 but less than 2.5 0.30%
greater than or equal to 1.5 but less than 2.0 0.25%
less than 1.5 0.20%
The Applicable Commitment Fee Percentage shall, in each case, be
determined and adjusted quarterly on the date five (5) Business Days after the
date of receipt by the Administrative Agent of the quarterly compliance
certificate and financial information provided in accordance with Sections
5.1(b) and 5.2(b) (each a "Commitment Fee Determination Date"). Such Applicable
Commitment Fee Percentage shall be effective from such Commitment Fee
Determination Date until the next such Commitment Fee Determination Date. The
initial Applicable Commitment Fee Percentage shall be .375% until the first
Commitment Fee Determination Date occurring after June 30, 1998. If the
Borrower shall fail to provide such quarterly compliance certificate and
financial information, the highest Applicable Commitment Fee Percentage shall
apply until five (5) Business Days after the date such quarterly compliance
certificate and financial information is so received by the Administrative
Agent.
"Applicable Interest Rate Percentage": for any day, the rate per
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annum set forth below opposite the applicable Leverage Ratio then in effect, it
being understood that the Applicable Interest Rate Percentage for (i) Base Rate
Loans shall be the percentage set forth under the column "Base Rate Margin", and
(ii) LIBOR Rate Loans shall be the percentage set forth under the column "LIBOR
Rate Margin":
LIBOR
Leverage Base Rate Rate
Ratio Margin Margin
greater than or equal to 3.0 1.25% 2.25%
greater than or equal to 2.5 but less than 3.0 1.00% 2.00%
greater than or equal to 2.0 but less than 2.5 0.75% 1.75%
greater than or equal to 1.5 but less than 2.0 0.50% 1.50%
less than 1.5 0.25% 1.25
The Applicable Interest Rate Percentage shall, in each case, be determined
and adjusted
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quarterly on the date five (5) Business Days after the date of receipt by the
Administrative Agent of the quarterly compliance certificate and financial
information provided in accordance with Sections 5.1(b) and 5.2(b) (each an
"Interest Determination Date"). Such Applicable Interest Rate Percentage shall
be effective from such Interest Determination Date until the next such Interest
Determination Date. The initial Applicable Interest Rate Percentages shall be
1.00% in the case of the Base Rate Margin and 2.00% in the case of the LIBOR
Rate Margin until the first Interest Determination Date occurring after June 30,
1998. If the Borrower shall fail to provide such quarterly compliance
certificate and financial information, the highest Applicable Interest Rate
Percentage shall apply until five (5) Business Days after the date such
quarterly compliance certificate and financial information is so received by the
Administrative Agent.
"Asset Disposition": any sale, lease, transfer or other disposition
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(including any such transaction effected by way of merger, amalgamation or
consolidation) by the Borrower or any of its Subsidiaries subsequent to the
Closing Date of any asset (including stock or other equity interests in
Subsidiaries of the Borrower), including without limitation any sale leaseback
transaction (whether or not involving a Capital Lease), but excluding Specified
Sales.
"Authorized Signatory": Xxxxxxx X. Xxxxxx, Vice President and Chief
--------------------
Financial Officer of the Borrower, Xxxxx Xxxxxx, President of the Borrower and
such senior personnel of the Borrower as may be hereafter duly authorized and
designated in writing to execute documents, agreements and instruments on the
Borrower's behalf.
"Bankruptcy Code": the Bankruptcy Code in Title 11 of the United
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States Code, as amended, modified, succeeded or replaced from time to time.
"Base Rate": for any day, a rate per annum equal to the greater of
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(a) the Prime Rate in effect on such day and (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1%. For purposes hereof: "Prime Rate"
shall mean, at any time, the rate of interest per annum publicly announced from
time to time by First Union at its principal office in Charlotte, North Carolina
as its prime rate. Each change in the Prime Rate shall be effective as of the
opening of business on the day such change in the Prime Rate occurs. The
parties hereto acknowledge that the rate announced publicly by First Union as
its Prime Rate is an index or base rate and shall not necessarily be its lowest
or best rate charged to its customers or other banks; and "Federal Funds
Effective Rate" shall mean, for any day, the weighted average of the rates on
overnight federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published on the next succeeding Business Day, the average of the quotations for
the day of such transactions received by the Administrative Agent from three
federal funds brokers of recognized standing selected by it. If for any reason
the Administrative Agent shall have determined (which determination shall be
conclusive in the absence of manifest error) that it is unable to ascertain the
Federal Funds Effective Rate, including the inability or failure of the
Administrative Agent to obtain sufficient quotations in accordance with the
terms thereof, the Base Rate shall be determined without regard to clause (b) of
the first sentence of this definition, as appropriate, until the circumstances
giving rise to such inability no longer exist. Any change in the Base Rate due
to a change in the Prime Rate or the Federal Funds
3
Effective Rate shall be effective on the opening of business on the date of such
change.
"Base Rate Loans": portions of Revolving Loans or portions of the
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Term Loan that bear interest at an interest rate based on the Base Rate.
"Borrower": such term as defined in the first paragraph of this
--------
Agreement.
"Borrowing Date": in respect of any Loan, the date such Loan is made.
--------------
"Business": such term as defined in Section 3.10(b).
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"Business Day": a day other than a Saturday, Sunday or other day on
------------
which commercial banks in Charlotte, North Carolina or New York, New York are
authorized or required by law to close; provided, however, that when used in
connection with a rate determination, borrowing or payment in respect of a LIBOR
Rate Loan, the term "Business Day" shall also exclude any day on which banks in
London, England are not open for dealings in Dollar deposits in the London
interbank market.
"Capital Expenditures": all expenditures which in accordance with
--------------------
GAAP would be classified as capital expenditures, including without limitation,
Capital Lease Obligations and capitalized development costs.
"Capital Lease": any lease of property, real or personal, the
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obligations with respect to which are required to be capitalized on a balance
sheet of the lessee in accordance with GAAP.
"Capital Lease Obligations": the capitalized lease obligations
-------------------------
relating to a Capital Lease determined in accordance with GAAP.
"Capital Stock": any and all shares, interests, participations or
-------------
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests (including partnership and limited
liability company interests) in a Person (other than a corporation) and any and
all warrants or options to purchase any of the foregoing.
"Cash Equivalents": (i) securities issued or directly and fully
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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 twelve months from the date of acquisition ("Government Obligations"), (ii)
----------------------
U.S. dollar denominated (or foreign currency fully hedged) time deposits,
certificates of deposit, Eurodollar time deposits and Eurodollar certificates of
deposit of (y) any domestic commercial bank of recognized standing having
capital and surplus in excess of $250,000,000 or (z) any bank whose short-term
commercial paper rating from S&P is at least A-1 or the equivalent thereof or
from Xxxxx'x is at least P-1 or the equivalent thereof (any such bank being an
"Approved Bank"), in each case with maturities of not more than 364 days from
the date of acquisition, (iii) commercial paper and variable or fixed rate notes
rated A-1 (or the
4
equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or
better by Moody's and maturing within twelve months of the date of acquisition,
(iv) repurchase agreements with a bank or trust company (including a Lender) or
a recognized securities dealer having capital and surplus in excess of
$500,000,000 for direct obligations issued by or fully guaranteed by the United
States of America, (v) obligations of any state of the United States or any
political subdivision thereof for the payment of the principal and redemption
price of and interest on which there shall have been irrevocably deposited
Government Obligations maturing as to principal and interest at times and in
amounts sufficient to provide such payment, (vi) auction preferred stock rated
in the highest short-term credit rating category by S&P or Moody's and (vii)
U.S. dollar denominated time and demand deposit accounts or money market
accounts with those domestic banks meeting the requirements of item (y) or (z)
of clause (ii) above and any other domestic commercial banks insured by the FDIC
with an aggregate balance not to exceed $100,000 in the aggregate at any time at
any such bank.
"Cash Tax Liabilities": the cash tax liability for income taxes paid
--------------------
by the Borrower or any of its Subsidiaries or required to be distributed to
members of the Borrower or any of its Subsidiaries.
"Change of Control": any of the following events: (i) the sale,
-----------------
lease, transfer, conveyance or other disposition of all or substantially all of
the assets of the Borrower and its Subsidiaries; (ii) the liquidation or
dissolution of the Borrower, and (iii) any event which would be deemed to be a
"change in control" (as defined in the Securities and Exchange Commission's
Current Report on Form 8K) with respect to the Borrower.
"Closing Date": the date of this Agreement, being also the date on
------------
which each of the conditions specified in Section 4.1 are satisfied in full or
waived in accordance with this Agreement.
"Code": the Internal Revenue Code of 1986, as amended from time to
----
time.
"Commitment": the Revolving Commitment, the Term Loan Commitment and
----------
the LOC Commitment, individually or collectively, as appropriate.
"Commitment Fee: such term as defined in Section 2.8.
--------------
"Commitment Letter": the letter agreement dated as of April 15, 1998
-----------------
among the Borrower, First Union and First Union Capital Markets.
"Commitment Percentage": the Revolving Commitment Percentage, the
---------------------
Term Loan Commitment Percentage and/or the LOC Commitment Percentage, as
appropriate.
"Commitment Period": the period from and including the Closing Date
-----------------
to but not including the Termination Date.
"Commitment Transfer Supplement": a Commitment Transfer Supplement,
------------------------------
5
substantially in the form of Schedule 9.6(c).
"Commonly Controlled Entity": an entity, whether or not incorporated,
--------------------------
which is under common control with the Borrower within the meaning of Section
4001 of ERISA or is part of a group which includes the Borrower and which is
treated as a single employer under Section 414(b) or (c) of the Code, or solely
for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as
a single employer under Section 414 of the Code.
"Consolidated Capital Expenditures": Capital Expenditures of the
---------------------------------
Borrower and its Subsidiaries on a consolidated basis determined in accordance
with GAAP applied on a consistent basis.
"Consolidated Capitalization": for any applicable period of
---------------------------
computation, the sum of Consolidated Net Worth plus Consolidated Total Funded
Debt.
"Consolidated Cash Tax Liabilities": Cash Tax Liabilities of the
---------------------------------
Borrower and its Subsidiaries on a consolidated basis determined in accordance
with GAAP applied on a consistent basis.
"Consolidated EBITDA": EBITDA of the Borrower and its Subsidiaries on
-------------------
a consolidated basis determined in accordance with GAAP applied on a consistent
basis; provided, however, for the fiscal quarters ending June 30, 1998,
September 30, 1998, December 31, 1998 and March 31, 1999, EBITDA of the Borrower
and its Subsidiaries shall be computed in accordance with Schedule 1.1(a).
"Consolidated Interest Expense": Interest Expense of the Borrower and
-----------------------------
its Subsidiaries on a consolidated basis determined in accordance with GAAP
applied on a consistent basis.
"Consolidated Net Worth": at any date of determination, consolidated
----------------------
total assets less the consolidated total liabilities of the Borrower and its
Subsidiaries, as determined in accordance with GAAP.
"Consolidated Total Funded Debt": Total Funded Debt of the Borrower
------------------------------
and its Subsidiaries on a consolidated basis determined in accordance with GAAP
applied on a consistent basis.
"Contractual Obligation": as to any Person, any provision of any
----------------------
security issued by such Person or of any material agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
material property is bound.
"Copyrights": (i) all copyrights in all works, now existing or
----------
hereafter created or acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States Copyright
Office or in any similar office or agency of the United States, any State
thereof or any other country or any political subdivision thereof, or otherwise,
6
including, without limitation, any thereof referred to in Schedule 3.13 to the
Credit Agreement, and (ii) all renewals thereof.
"Credit Documents": this Agreement, each of the Notes, the Joinder
----------------
Agreements, the Security Documents, the Letters of Credit and the LOC Documents.
"Credit Parties": collectively, the Borrower and the Guarantors.
--------------
"Debt Issuance": the issuance of any Indebtedness for borrowed money
-------------
by the Borrower or any of its Subsidiaries.
"Default": any of the events specified in Section 7, whether or not
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any requirement for the giving of notice or the lapse of time, or both, or any
other condition, has been satisfied.
"Defaulting Lender": at any time, any Lender that, at such time (a)
-----------------
has failed to make a Loan required pursuant to the terms of this Agreement, (b)
has failed to pay to the Administrative Agent or any Lender an amount owed by
such Lender pursuant to the terms of this Agreement, or (c) has been deemed
insolvent or has become subject to a bankruptcy or insolvency proceeding or to a
receiver, trustee or similar official.
"Designated Non-Material Subsidiaries": the meaning given to such
------------------------------------
term in Section 5.16.
"Dollars" and "$": dollars in lawful currency of the United States of
---------------
America.
"Domestic Lending Office": initially, the office of each Lender
-----------------------
designated as such Lender's Domestic Lending Office shown on Schedule 2.1(a);
and thereafter, such other office of such Lender as such Lender may from time to
time specify to the Administrative Agent and the Borrower as the office of such
Lender at which Base Rate Loans of such Lender are to be made.
"EBITDA": of any Person for any period, net income for such period,
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plus (i) Interest Expense to the extent deducted in determining such net income,
plus (ii) depreciation, amortization and all other non-cash charges deducted in
determining such net income, all determined in accordance with GAAP consistently
applied, minus (iii) extraordinary non-cash income (including, for purposes
-----
hereof, gain from the sale of assets in the ordinary course of business, such as
obsolete equipment), plus (iv) income taxes to the extent deducted to determine
net income, plus (v) losses incurred in connection with the disposition of the
Virtual Reality product line of the Acquired Company and the disposition the
Borrower's bicycle line through September 30, 1998, plus (vi) other one-time
expenses associated with the Acquisition (including, for purposes hereof, (A)
cash adjustments through September 30, 1998 and (B) non-cash purchase accounting
adjustments and losses from the sale of the assets in the ordinary course of
business, such as obsolete inventory or equipment).
7
"Environmental Laws": any and all applicable foreign, Federal, state,
------------------
local or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees or requirements of any Governmental Authority or other
Requirement of Law (including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of human health or the
environment, as now or may at any time be in effect during the term of this
Agreement.
"Equity Transaction": (i) the issuance by the Borrower or any of its
------------------
Subsidiaries of partnership interests, limited liability company interests, new
shares of its capital stock or other equity or ownership interests, unless such
new partnership interests, limited liability company interests, shares or
ownership interests are being issued in exchange for an ownership interest in
another Person in connection with an acquisition permitted by Section 6.5, (ii)
an issuance by the Borrower or any of its Subsidiaries of partnership interests,
limited liability company interests, any shares of its capital stock or other
equity or ownership interest pursuant to the exercise of options or warrants,
and (iii) an issuance by the Borrower or any of its Subsidiaries of any
partnership interests, limited liability company interests, shares of its
capital stock or ownership interests pursuant to the conversion of any debt
securities to equity.
"ERISA": the Employee Retirement Income Security Act of 1974, as
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amended from time to time.
"Eurodollar Reserve Percentage": for any day, the percentage
-----------------------------
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves) in
respect of Eurocurrency liabilities, as defined in Regulation D of such Board as
in effect from time to time, or any similar category of liabilities for a member
bank of the Federal Reserve System in New York City.
"Event of Default": any of the events specified in Section 7;
----------------
provided, however, that any requirement for the giving of notice or the lapse of
time, or both, or any other condition, has been satisfied.
"Excess Cash Flow": with respect to any fiscal year period of the
----------------
Borrower and its Subsidiaries on a consolidated basis, an amount equal to (i)
Consolidated EBITDA for such period minus (ii) Consolidated Capital Expenditures
for such period minus (iii) Consolidated Interest Expense for such period minus
(iv) taxes actually paid during such period minus (v) principal payments on
Consolidated Total Funded Debt (other than voluntary or mandatory prepayments)
minus (vi) any increase in net working capital minus (vii) non-cash items
comprising Consolidated EBITDA minus (viii) any earn-out payments paid to the
Seller pursuant to Section 2(a) of the Purchase Agreement.
"Federal Funds Effective Rate": such term as defined in the
----------------------------
definition of "Base Rate".
8
"Fee Letter": the letter agreement dated as of April 15, 1998 among
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the Borrower, First Union and First Union Capital Markets.
"First Union": First Union National Bank, a national banking
-----------
association.
"GAAP": generally accepted accounting principles in effect in the
----
United States of America applied on a consistent basis, subject, however, in the
case of determination of compliance with the financial covenants set out in
Section 5.9 to the provisions of Section 1.3.
"Governmental Authority": any nation or government, any state or
----------------------
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guarantee Obligation": as to any Person (the "guaranteeing person"),
--------------------
any obligation of (a) the guaranteeing person or (b) another Person (including,
without limitation, any bank under any letter of credit) to induce the creation
of which the guaranteeing person has issued a reimbursement, counterindemnity or
similar obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
of any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefor,
(ii) to advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the lower of (a) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (b) the maximum amount
for which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary obligation
and the maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person's maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.
"Guarantors": the Subsidiaries of the Borrower identified as a
----------
"Guarantor" on the signature pages hereto and any Subsidiary acquired or formed
subsequent to the Closing Date.
"Indebtedness": of any Person at any date, (a) all indebtedness of
-----------
such Person for borrowed money or for the deferred purchase price of property or
services (other than trade liabilities and other normal accrued liabilities
incurred in the ordinary course of business and payable in accordance with
customary practices), (b) any other indebtedness of such Person
9
which is evidenced by a note, bond, debenture or similar instrument, (c) all
obligations of such Person under Capital Leases, (d) all obligations of such
Person in respect of acceptances issued or created for the account of such
Person, (e) all liabilities secured by any Lien on any property owned by such
Person even though such Person has not assumed or otherwise become liable for
the payment thereof (other than liabilities securing carriers', warehousemen's,
mechanics', repairmen's or other like nonconsensual statutory Liens arising in
the ordinary course of business), (f) all obligations of such Person under
conditional sale or other title retention agreements relating to property
purchased by such Person (other than customary reservations or retentions of
title under agreements with suppliers entered into in the ordinary course of
business), (g) all obligations of such Person under take-or-pay or similar
arrangements or under commodities agreements (other than supply agreements and
other similar arrangements entered into in the ordinary course of business), (h)
all Guarantee Obligations of such Person, (i) all obligations of such Person in
respect of interest rate protection agreements, foreign currency exchange
agreements, commodity purchase or option agreements or other interest or
exchange rate or commodity price hedging agreements, and (j) the maximum amount
of all letters of credit issued for the account of such Person and, without
duplication, all drafts drawn thereunder (to the extent not theretofore
reimbursed). For purposes of this Agreement, Indebtedness shall not include any
Indebtedness owing by the Borrower to any of its Subsidiaries or by any
Subsidiary of the Borrower to the Borrower or by any Subsidiary of the Borrower
to any other Subsidiary of the Borrower or any contingent obligation in respect
thereof. It is understood and agreed that the amount of any Indebtedness
described in clause (e) shall be the lower of the amount of the obligation or
the fair market value of the collateral securing such obligation, and the amount
of any obligation described in clause (i) shall be the termination payments that
would be required to be paid to a counterparty upon early termination (in
accordance with customary industry standards) rather than any notional amount
with regard to which payments may be calculated.
"Insolvency": with respect to any Multiemployer Plan, the condition
----------
that such Plan is insolvent within the meaning of such term as used in Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
---------
"Intellectual Property": such term as defined in Section 3.13.
---------------------
"Interest Coverage Ratio": as of the last day of any fiscal quarter,
-----------------------
the ratio of Consolidated EBITDA for the four (4) consecutive quarters then
ending to Consolidated Interest Expense for the four (4) consecutive quarters
then ending (after giving effect to the Interim Adjustments for the calculations
occurring on June 30, 1998, September 30, 1998, December 31, 1998 and March 31,
1999).
"Interest Expense": for any Person for any period, the sum of all
----------------
interest and fee expense including amortization of debt discount and premium and
the interest component under Capital Leases for such Person; provided that there
shall be added to and included in Interest Expense for purposes hereof the net
amount payable (other than amounts payable in respect of up-front or one-time
fees, which shall be excluded from Interest Expense) by such Person in respect
of any Interest Protection Agreement entered into with any Person and Interest
Expense
10
shall be reduced by the net amount receivable by such Person under any Interest
Protection Agreement in respect of such period.
"Interest Payment Date": (a) as to any Base Rate Loan, the last
---------------------
Business Day of each March, June, September and December to occur while such
Loan is outstanding, (b) as to any LIBOR Rate Loan having an Interest Period of
three months or less, the last day of such Interest Period and (c) as to any
LIBOR Rate Loan having an Interest Period longer than three months, each day
which is three months after the first day of such Interest Period and the last
day of such Interest Period.
"Interest Period": with respect to any LIBOR Rate Loan,
---------------
(i) initially, the period commencing on the Borrowing Date
or conversion date, as the case may be, with respect to such LIBOR Rate Loan and
ending one, two, three or six months thereafter, as selected by the Borrower in
the notice of borrowing or notice of conversion given with respect thereto; and
(ii) thereafter, each period commencing on the last day of
the immediately preceding Interest Period applicable to such LIBOR Rate Loan and
ending one, two, three or six months thereafter, as selected by the Borrower by
irrevocable notice to the Administrative Agent not less than three Business Days
prior to the last day of the then current Interest Period with respect thereto;
provided that the foregoing provisions are subject to the following:
--------
(A) if any Interest Period pertaining to a LIBOR Rate Loan would
otherwise end on a day that is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless the result of such extension
would be to carry such Interest Period into another calendar month in which
event such Interest Period shall end on the immediately preceding Business Day;
(B) any Interest Period pertaining to a LIBOR Rate Loan that begins
on the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the relevant calendar month;
(C) if the Borrower shall fail to give notice as provided above,
the Borrower shall be deemed to have selected a Base Rate Loan to replace the
affected LIBOR Rate Loan as provided in Section 2.4(b);
(D) any Interest Period in respect of any Revolving Loan or any
portion of the Term Loan that would otherwise extend beyond the Termination Date
shall end on the Termination Date; and
(E) no more than 10 LIBOR Rate Loans may be in effect at any time
11
and the Borrower shall not be entitled to select any Interest Period pertaining
to a LIBOR Rate Loan until 3 Business Days after the Closing Date. For purposes
hereof, LIBOR Rate Loans with different Interest Periods shall be considered as
separate LIBOR Rate Loans, even if they shall begin on the same date and have
the same duration, although borrowings, extensions and conversions may, in
accordance with the provisions hereof, be combined at the end of existing
Interest Periods to constitute a new LIBOR Rate Loan with a single Interest
Period.
"Interest Protection Agreement": any interest rate protection
-----------------------------
agreement or interest rate future, option, cap, collar or other hedging
arrangement.
"Interim Adjustments": for the first four fiscal quarters following
-------------------
the Closing Date, the Interest Coverage Ratio shall be calculated using the
adjustments and assumptions regarding Interest Expense set forth below:
(a) for the fiscal quarters ending June 30, 1998, September
30, 1998, December 31, 1998 and March 31, 1999, Interest Expense for the twelve
month period for which the Interest Coverage Ratio is being calculated shall be
deemed to be the result obtained by multiplying (i) the actual Interest Expense
for the period from the Closing Date through the last day of such fiscal quarter
times (ii) a ratio equal to (A) 365 divided by (B) the number of days elapsed
from the Closing Date until the last day of such quarter; and
(b) for the fiscal quarter ending June 30, 1999 and each
fiscal quarter thereafter, Interest Expense shall be the actual Interest Expense
for the twelve month period ending on such date.
"IRB Letter of Credit": the Letter of Credit, dated February 28,
--------------------
1996, issued by Summit Bank for the account of Xxxxxxx, Inc. in favor of the
holders of the $4,300,000 aggregate principal amount Massachusetts Finance
Agency Industrial Revenue Bonds - United Medical Corporation Issue - Series
1992, in the original amount of $3,779,069 or any successor letter of credit
issued in accordance with Section 5.17 hereof.
"Issuing Lender": First Union
--------------
"Issuing Lender Fees": such term as defined in Section 2.8(c).
-------------------
"Joinder Agreement": a Joinder Agreement substantially in the form of
-----------------
Schedule 5.12, executed and delivered by a Subsidiary in accordance with the
provisions of Section 5.12.
"Letters of Credit": any letter of credit issued by the Issuing
-----------------
Lender pursuant to the terms hereof, as such Letters of Credit may be amended,
modified, extended, renewed or replaced from time to time. The term "Letters of
Credit" shall include the IRB Letter of Credit upon such letter of credit
becoming a "Letter of Credit" hereunder pursuant to Section 5.17 hereof.
"Letter of Credit Fee": such term as defined in Section 2.8(b).
--------------------
12
"Leverage Ratio": as of the last day of any fiscal quarter, the ratio
--------------
(x) of Consolidated Total Funded Debt as of the last day of such fiscal quarter
to (y) Consolidated EBITDA for the four (4) consecutive fiscal quarters then
ending.
"LIBOR": the arithmetic mean (rounded to the nearest 1/100th of 1%)
-----
of the offered rates for deposits in Dollars for a period equal to the Interest
Period selected which appears on the Telerate Page 3750 at approximately 11:00
A.M. London time, two (2) Business Days prior to the commencement of the
applicable Interest Period. If, for any reason, such rate is not available,
then "LIBOR" shall mean the rate per annum at which, as determined by the
Administrative Agent, Dollars in the amount of $5,000,000 are being offered to
leading banks at approximately 11:00 A.M. London time, two (2) Business Days
prior to the commencement of the applicable Interest Period for settlement in
immediately available funds by leading banks in the London interbank market for
a period equal to the Interest Period selected.
"LIBOR Lending Office": initially, the office of each Lender
--------------------
designated as such Lender's LIBOR Lending Office shown on Schedule 2.1(a); and
thereafter, such other office of such Lender as such Lender may from time to
time specify to the Administrative Agent and the Borrower as the office of such
Lender at which the LIBOR Rate Loans of such Lender are to be made.
"LIBOR Rate": a rate per annum (rounded upwards, if necessary, to the
----------
next higher 1/100th of 1%) determined by the Administrative Agent pursuant to
the following formula:
LIBOR Rate = LIBOR
-----
1.00 - Eurodollar Reserve Percentage
"LIBOR Rate Loan": Revolving Loans or portions of the Term Loan the
---------------
rate of interest applicable to which is based on the LIBOR Rate.
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
----
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any Capital Lease having
substantially the same economic effect as any of the foregoing).
"Loans" or "Loan": the Revolving Loans and/or the Term Loan,
---------------
collectively or individually, as appropriate.
"LOC Commitment": the commitment of the Issuing Lender to issue
--------------
Letters of Credit and with respect to each Lender, the commitment of such Lender
to purchase participation interests in the Letters of Credit up to such Lender's
LOC Committed Amount as specified in Schedule 2.1(a), as such amount may be
reduced from time to time in accordance with the provisions hereof.
13
"LOC Commitment Percentage": for each Lender, the percentage
-------------------------
identified as its LOC Commitment Percentage on Schedule 2.1(a), as such
percentage may be modified in connection with any assignment made in accordance
with the provisions of Section 9.6(c).
"LOC Committed Amount": collectively, the aggregate amount of all of
--------------------
the LOC Commitments of the Lenders to issue and participate in Letters of Credit
as referenced in Section 2.3 and, individually, the amount of each Lender's LOC
Commitment as specified in Schedule 2.1(a).
"LOC Documents": with respect to any Letter of Credit, such Letter of
-------------
Credit, any amendments thereto, any documents delivered in connection therewith,
any application therefor, and any agreements, instruments, guarantees or other
documents (whether general in application or applicable only to such Letter of
Credit) governing or providing for (i) the rights and obligations of the parties
concerned or (ii) any collateral security for such obligations.
"LOC Obligations": at any time, the sum of (i) the maximum amount
---------------
which is, or at any time thereafter may become, available to be drawn under
Letters of Credit then outstanding, assuming compliance with all requirements
for drawings referred to in such Letters of Credit plus (ii) the aggregate
amount of all drawings under Letters of Credit honored by the Issuing Lender but
not theretofore reimbursed.
"Majority Lenders": Lenders holding in the aggregate more than 50% of
----------------
the sum of (i) all Loans and LOC Obligations then outstanding at such time and
(ii) the aggregate unused Revolving Commitments at such time; provided, however,
that if any Lender shall be a Defaulting Lender at such time, then there shall
be excluded from the determination of Majority Lenders those Loans and LOC
Obligations owing to such Defaulting Lender and such Defaulting Lender's
Revolving Commitments, or after termination of the Revolving Commitments, the
principal balance of the Loans and LOC Obligations owing to such Defaulting
Lender.
"Mandatory Borrowing": such term as defined in Section 2.3(e).
-------------------
"Material Adverse Effect": a material adverse effect on (a) the
-----------------------
business, operations, property, condition (financial or otherwise) or prospects
of the Borrower and its Subsidiaries taken as a whole, exclusive of events or
occurrences affecting the economy generally, (b) the ability of the Borrower and
its Subsidiaries to perform their Obligations, when such Obligations are
required to be performed, under this Agreement or any of the Notes or (c) the
validity or enforceability in any material respect of this Agreement, any of the
Notes or any of the other Credit Documents or the rights or remedies of the
Administrative Agent or the Lenders hereunder or thereunder.
"Material Subsidiary" means (i) any Subsidiary which owns 10% or more
-------------------
of the consolidated assets of the Borrower and its Subsidiaries or (ii) any
Subsidiary which generates 10% or more of the consolidated revenues of the
Borrower and its Subsidiaries during any consecutive 12-month period.
14
"Materials of Environmental Concern": any gasoline or petroleum
----------------------------------
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
"Moody's": Xxxxx'x Investors Service, Inc.
-------
"Mortgages": the mortgages and deeds of trust, if any, granted by the
---------
Borrower and its Subsidiaries to the Administrative Agent (for the benefit of
the Lenders) pursuant to Section 5.13.
"Multiemployer Plan": a Plan which is a multiemployer plan as defined
------------------
in Section 4001(a)(3) of ERISA.
"Net Sales Proceeds": the gross cash proceeds (including cash by way
------------------
of deferred payment pursuant to a promissory note, receivable or otherwise, but
only as and when received) received from the sale, lease, conveyance,
disposition or other transfer of assets or from a Recovery Event (if and to the
extent not used to repair or replace the property which was the subject of the
Recovery Event), net of (i) reasonable transactions costs payable to third
parties, (ii) the estimated taxes payable with respect to such proceeds (based
upon the highest marginal federal and state tax rates), whether payable by a
Borrower or its direct or indirect members (including, without duplication,
withholding taxes), (iii) Indebtedness (other than Indebtedness of the Lenders
pursuant to this Agreement and the other Credit Documents) which is secured by,
or otherwise related to, the assets which are the subject of such event to the
extent such Indebtedness is paid with a portion of the proceeds therefrom, (iv)
proceeds needed to pay liabilities directly related to the assets which are the
subject of such event to the extent such liabilities are not assumed by a
purchaser of the assets and are paid with a portion of the proceeds received
from the disposition of such assets and (v) other costs which may occur as a
result of, and are reasonably associated with, discontinuing operations, shut-
downs or otherwise resulting from, the disposition of such assets.
"Non-Material Subsidiaries": Subsidiaries which are not Material
-------------------------
Subsidiaries.
"Note" or "Notes": the Revolving Notes and/or the Term Notes,
---------------
collectively, separately or individually, as appropriate.
"Notice of Account Designation": such term as defined in Section
-----------------------------
2.1(b)(iii).
"Notice of Borrowing": the written notice of borrowing as referenced
-------------------
and defined in Section 2.1(b)(i).
"Notice of Conversion": the written notice of extension or conversion
--------------------
as referenced and defined in Section 2.4.
"Obligations": without duplication, (i) all of the obligations of the
-----------
Credit Parties
15
to the Lenders (including the Issuing Lender) and the Agent, whenever arising,
under this Agreement, the Notes or any of the other Credit Documents (including,
but not limited to, any interest accruing after the occurrence of a filing of a
petition of bankruptcy under the Bankruptcy Code with respect to any Credit
Party, regardless of whether such interest is an allowed claim under the
Bankruptcy Code) and (ii) all liabilities and obligations, whenever arising,
owing from the Borrower or any of its Subsidiaries to any Lender, or any
affiliate of a Lender, arising under any Interest Rate Protection Agreement with
such Lender or such affiliate.
"Participant": such term as defined in Section 9.6(b).
-----------
"Participation Interest": the purchase by a Lender of a participation
----------------------
interest in Letters of Credit as provided in Section 2.3.
"Patents": (i) all letters patent of the United States or any other
-------
country, now existing or hereafter arising, and all improvement patents,
reissues, reexaminations, patents of additions, renewals and extensions thereof,
including, without limitation, any thereof referred to in Schedule 3.13 to the
Credit Agreement, and (ii) all applications for letters patent of the United
States or any other country, now existing or hereafter arising, and all
provisionals, divisions, continuations and continuations-in-part and substitutes
thereof, including, without limitation, any thereof referred to in Schedule 3.13
to the Credit Agreement.
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
----
to Subtitle A of Title IV of ERISA.
"Permitted Acquisition": such term as defined in Section 6.5(b)(ii).
---------------------
"Permitted Investments": (i) cash and Cash Equivalents, (ii)
---------------------
receivables owing to the Borrower or any of its Subsidiaries or any receivables
and advances to suppliers, in each case if created, acquired or made in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms, (iii) loans and/or investments in and to the Borrower or
any of its Subsidiaries, (iv) investments (including debt obligations, stock,
securities or other property) 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, (v) investments, acquisitions or transactions
permitted under Section 6.5(b) and (vi) loans and advances to the Borrower's and
the Guarantors' dealers and distributors provided the aggregate outstanding
amount of such loans and advances shall not exceed $1,000,000 at any time. As
used herein, "investment" means all investments, in cash or by delivery of
property made, directly or indirectly in, to or from any Person, whether by
acquisition of shares of capital stock or partnership interest or other equity
interest, property, assets, indebtedness or other obligations or securities or
by loan advance, capital contribution or otherwise.
"Permitted Liens":
---------------
(i) Liens created by or otherwise existing under or in connection with
this
16
Agreement or the other Credit Documents in favor of the Administrative Agent
for the benefit of the Lenders;
(ii) Liens in favor of the Administrative Agent for the benefit
of a Lender hereunder as the provider of interest rate protection relating to
the Loans hereunder, but only (A) to the extent such Liens secure obligations
under such Interest Rate Protection Agreements permitted under Section 6.1, (B)
to the extent such Liens are on the same collateral as to which the Lenders also
have a Lien (or shall have been offered the opportunity to have a Lien in such
collateral) and (C) if such provider and the Lenders shall share pari passu in
the collateral subject to such Liens;
(iii) Liens on assets securing purchase money indebtedness and
Capital Leases (and refinancings thereof) to the extent permitted under
subsection (d) of Section 6.1;
(iv) Liens for taxes, assessments, charges or other governmental
levies not yet due or as to which the period of grace (not to exceed 60 days),
if any, related thereto has not expired or which are being contested in good
faith by appropriate proceedings, provided that adequate reserves with respect
thereto are maintained on the books of the Borrower or any of its Subsidiaries,
as the case may be, in conformity with GAAP (or, in the case of Subsidiaries
with significant operations outside of the United States of America, generally
accepted accounting principles in effect from time to time in their respective
jurisdictions of incorporation);
(v) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business which
are not overdue for a period of more than 60 days or which are being contested
in good faith by appropriate proceedings;
(vi) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security legislation and
deposits securing liability to insurance carriers under insurance or self-
insurance arrangements;
(vii) deposits to secure the performance of bids, trade contracts,
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature incurred
in the ordinary course of business;
(viii) Liens in connection with attachments or judgments (including
judgment or appeal bonds), provided that the judgments secured shall, within 60
days after the entry thereof, have been discharged or execution thereof stayed
pending appeal, or shall have been discharged within 60 days after the
expiration of any such stay;
(ix) easements, rights-of-way, restrictions (including zoning
restrictions), minor defects or irregularities in title and other similar
charges or encumbrances not, in any material respect, impairing the use of the
encumbered property for its intended purpose;
(x) leases or subleases of real property granted to others not
interfering in any material respect with the business of the Borrower or any of
its Subsidiaries;
17
(xi) liens in connection with any equipment leases or security
agreements or financing agreements in the nature of a financing lease or
installment sales contract and chattel paper related thereto now or hereafter
sold, transferred, pledged or assigned to a third party or financed with a third
party (other than the Lenders);
(xii) liens existing as of the Closing Date set forth in Schedule
1.1B; and
(xiii) any extension, renewal or replacement (or successive
extensions, renewals or replacements), in whole or in part, of any Lien
referred to in the foregoing clauses; provided that such extension, renewal or
replacement Lien shall be limited to all or a part of the property which secured
the Lien so extended, renewed or replaced (plus improvements on such property).
"Person": an individual, partnership, corporation, limited liability
------
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.
"Plan": at any particular time, any employee benefit plan which is
----
covered by Title IV of ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA.
"Pledge Agreement": the Pledge Agreement by and among the Borrower
----------------
and its Subsidiaries as pledgors, pledging their stock in their respective
Subsidiaries in favor of the Agent for the benefit of the Lenders, as such
Pledge Agreement is amended, supplemented or otherwise modified from time to
time.
"Prime Rate": such term as defined in the definition of Base Rate.
----------
"Properties": such term as defined in Section 3.10(a).
----------
"Purchase Agreement": the final purchase agreements to be executed in
------------------
connection with the acquisition of the Acquired Assets by the Borrower.
"Purchasing Lenders": such term as defined in Section 9.6(c).
------------------
"Recovery Event": the receipt by the Borrower or any of its
--------------
Subsidiaries of any cash insurance proceeds or condemnation award payable by
reason of theft, loss, physical destruction or damage, taking or similar event
with respect to any property or assets of the Borrower or any of its
Subsidiaries.
"Register": such term as defined in Section 9.6(d).
--------
"Reorganization": with respect to any Multiemployer Plan, the
--------------
condition that such Plan is in reorganization within the meaning of such term as
used in Section 4241 of ERISA.
18
"Reportable Event": any of the events set forth in Section 4043(b) of
----------------
ERISA, other than those events as to which the thirty-day notice period is
waived under subsections .11, .12, .13, .14, .16, .18, .19 or .20 of PBGC Reg.
(S)4043.
"Requirement of Law": as to any Person, the Certificate of
------------------
Incorporation and By-laws, partnership agreement, operating agreement or other
organizational or governing documents of such Person, and each law, treaty, rule
or regulation or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its material property is subject.
"Restricted Payment": (i) any payment by the Borrower or any of its
------------------
Subsidiaries of a payment, distribution or dividend (other than a dividend or
distribution payable solely in stock or equity interest of the Borrower) on, or
any payment on account of the purchase, redemption, defeasance or retirement of,
or any other distribution on, any partnership interest, limited liability
company interest, share of any class of stock or other ownership interest in the
Borrower or any of its Subsidiaries (including any such payment or distribution
in cash or in property or obligations of a Borrower or any of its Subsidiaries),
(ii) any loan or advance by the Borrower or any of its Subsidiaries to any
Affiliate of the Borrower or any of its Subsidiaries other than as permitted by
Sections 6.6 or 6.7, or (iii) the payment by the Borrower or any of its
Subsidiaries of any management or administrative fee to any Affiliate of the
Borrower or any of its Subsidiaries or of any salary, bonus or other form of
compensation other than in the ordinary course of business to any Person who is
a significant partner, shareholder, member, owner or executive officer of any
such Affiliate other than as permitted by Section 6.7.
"Revolving Commitment": as to any Lender, the obligation of such
--------------------
Lender to make Revolving Loans to the Borrower hereunder in an aggregate
principal amount at any one time outstanding not to exceed the amount set forth
opposite such Lender's name on Schedule 2.1(a), as such amount may be reduced
from time to time in accordance with the provisions of this Agreement.
"Revolving Commitment Percentage": for each Lender, a fraction
-------------------------------
(expressed as a percentage) the numerator of which is the Revolving Commitment
of such Lender at such time and the denominator of which is the aggregate
Revolving Committed Amount at such time. The initial Revolving Commitment
Percentages are set out on Schedule 2.1(a).
"Revolving Committed Amount": collectively, the aggregate amount of
--------------------------
all of the Revolving Commitments as referenced in Section 2.1(a) and,
individually, the amount of each Lender's Revolving Commitment as specified in
Schedule 2.1(a).
"Revolving Loans": such term as defined in Section 2.1.
---------------
"Revolving Note" or "Revolving Notes": the promissory notes of the
-----------------------------------
Borrower in favor of each of the Lenders evidencing the Revolving Loans provided
pursuant to Section 2.1(e), individually or collectively, as appropriate, as
such promissory notes may be amended,
19
modified, supplemented, extended, renewed or replaced from time to time.
"S&P": Standard & Poor's Ratings Group, a division of McGraw Hill,
---
Inc.
"Security Agreement": the Security Agreement by and among the
------------------
Borrower and the Guarantors, as amended, supplemented or otherwise modified from
time to time.
"Security Documents": collectively, the Security Agreement, the
------------------
Pledge Agreement, the Mortgages and all other security documents hereafter
delivered to the Administrative Agent granting a Lien on any asset or assets of
any Person to secure the Obligations of the Borrower and the Guarantors
hereunder and under any of the other Credit Documents, including UCC financing
statements and other similar instruments.
"Seller": the persons named on Exhibit A to the Purchase Agreement.
------
"Seller Letter of Credit": the Letter of Credit to be issued by First
-----------------------
Union for the benefit of the Seller in the original amount of $2,372,175.
"Seller Note": the promissory note to be executed by the Borrower in
-----------
favor of the representatives of the Seller in the original principal amount of
$2,340,000 minus certain balance sheet adjustments as set forth in the Purchase
Agreement.
"Single Employer Plan": any Plan which is not a Multi-Employer Plan.
--------------------
"Specified Sales": (i) the sale, transfer, lease or other disposition
---------------
of inventory and materials in the ordinary course of business (including
obsolete and/or unnecessary), (ii) the sale, transfer, lease or other
disposition of machinery, parts and equipment (including obsolete and/or
unnecessary equipment) in the ordinary course of business, (iii) the sale,
transfer or other disposition of articles in the ordinary course of business or
the granting of permission for reprints in the ordinary course of business and
(iv) the sale, lease or disposition of space and related property and assets in
the ordinary course of business.
"Subsidiary": as to any Person, a corporation, partnership or other
----------
entity of which shares of stock or other ownership interests having ordinary
voting power (other than stock or such other ownership interests having such
power only by reason of the happening of a contingency) to elect a majority of
the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise qualified, all references to a "Subsidiary" or
to "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries
of a Borrower.
"Taxes": such term as defined in Section 2.16.
-----
"Term Loan": such term as defined in Section 2.2(a).
---------
20
"Term Loan Commitment": the commitment of each Lender to make its
--------------------
portion of the Term Loan as specified in Schedule 2.1(a) (and for purposes of
making determinations of Majority Lenders hereunder after the Closing Date, the
principal amount outstanding on the Term Loan).
"Term Loan Commitment Percentage": for each Lender, a fraction
-------------------------------
(expressed as a percentage) the numerator of which is the Term Loan Commitment
(and after the Closing Date, the outstanding principal amount of such Lender's
Term Loan) of such Lender at such time and the denominator of which is the
aggregate amount of the Term Loan Commitments (and after the Closing Date, the
aggregate outstanding principal amount of the Term Loan) at such time. The
initial Term Loan Commitment Percentages are set out on Schedule 2.1(a).
"Term Loan Committed Amount": collectively, the aggregate amount of
--------------------------
all of the Term Loan Commitments and, individually, the amount of each Lender's
Term Loan Commitment as specified in Schedule 2.1(a).
"Term Note" or "Term Notes": the promissory notes of the Borrower in
-------------------------
favor of each of the Lenders evidencing the Term Loan provided pursuant to
Section 2.2(d), individually or collectively, as appropriate, as such promissory
notes may be amended, modified, supplemented, extended, renewed or replaced from
time to time.
"Termination Date": the earlier of (a) May 21, 2004 or (b) the date
----------------
on which the Revolving Commitments shall terminate in accordance with the
provisions of this Agreement.
"Total Funded Debt": of any Person at any date, the aggregate of the
-----------------
following (without duplication) (a) all indebtedness of such Person for borrowed
money, (b) all obligations of such Person under Capital Leases, (c) all
Guarantee Obligations of such Person, and (d) the maximum amount of all letters
of credit issued or bankers' acceptances created for the account of such Person
and, without duplication, all drafts drawn thereunder (to the extent not
theretofore reimbursed).
"Trademarks": (i) all trademarks, trade names, corporate names,
----------
company names, business names, fictitious business names, service marks, logos
and other source or business identifiers, together with the goodwill of the
business symbolized by said marks, names, logos and identifiers now existing or
hereafter adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
State thereof or any other country or any political subdivision thereof, or
otherwise, including, without limitation, any thereof referred to in Schedule
3.13 to the Credit Agreement, and (ii) all renewals thereof including, without
limitation, any thereof referred to in Schedule 3.13 to the Credit Agreement.
"Tranche": the collective reference to LIBOR Rate Loans whose
-------
Interest Periods begin and end on the same day. A Tranche may sometimes be
referred to as a "Eurodollar Tranche".
21
"Transfer Effective Date": such term as defined in each Commitment
-----------------------
Transfer Supplement.
"2.16 Certificate": such term as defined in Section 2.16.
----------------
"Type": as to any Loan, its nature as a Base Rate Loan or LIBOR Rate
----
Loan, as the case may be.
1.2 OTHER DEFINITIONAL PROVISIONS.
-----------------------------
(a) Unless otherwise specified therein, all terms defined in this
Agreement shall have the defined meanings when used in the Notes or other Credit
Documents or any certificate or other document made or delivered pursuant
hereto.
(b) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(c) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
1.3 ACCOUNTING TERMS.
----------------
Unless otherwise specified herein, all accounting terms used herein shall
be interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP applied on a basis consistent (except for changes concurred
with by the Borrower's certified independent public accountants) with the most
recent audited financial statements of the Borrower delivered to the Lenders;
provided that, if the Borrower notifies the Administrative Agent that it wishes
to amend any covenant in Section 5.9 to eliminate the effect of any change in
GAAP on the operation of such covenant (or if the Administrative Agent notifies
the Borrower that the Majority Lenders wish to amend Section 5.9 for such
purpose), then the Borrower's compliance with such covenant shall be determined
on the basis of GAAP in effect immediately before the relevant change in GAAP
became effective, until either such notice is withdrawn or such covenant is
amended in a manner satisfactory to the Borrower and the Majority Lenders.
SECTION 2. THE LOANS; AMOUNT AND TERMS
2.1 REVOLVING LOANS.
---------------
(a) Revolving Commitment. During the Commitment Period, subject to
--------------------
the terms and conditions hereof, each Lender severally agrees to make revolving
credit loans ("Revolving Loans") to the Borrower from time to time for the
---------------
purposes hereinafter set forth; provided, however, that (i) with regard to each
-------- -------
Lender individually, the sum of such Lender's
22
share of outstanding Revolving Loans plus such Lender's LOC Commitment
----
Percentage of LOC Obligations shall not exceed such Lender's Revolving Committed
Amount, and (ii) with regard to the Lenders collectively, the sum of the
aggregate amount of outstanding Revolving Loans plus LOC Obligations shall not
exceed TWENTY-SIX MILLION SEVEN HUNDRED THOUSAND DOLLARS ($26,700,000) (as such
aggregate maximum amount may be reduced from time to time as provided herein,
the "Revolving Committed Amount"); provided, that the Revolving Committed Amount
may be increased in accordance with Section 5.17 hereof. Revolving Loans may
consist of Base Rate Loans or LIBOR Rate Loans, or a combination thereof, as the
Borrower may request, and may be repaid and reborrowed in accordance with the
provisions hereof; provided, however, that no LIBOR Rate Loans shall be
outstanding on or after the Closing Date through and including the third
Business Day following the Closing Date (the "Initial Loan Period"); and
provided, further, that notwithstanding any provision in this Agreement to the
contrary, any Base Rate Loans outstanding during the Initial Loan Period shall
bear interest at the Base Rate less 0.50 %. LIBOR Rate Loans shall be made by
each Lender at its LIBOR Lending Office and Base Rate Loans at its Domestic
Lending Office.
(b) Revolving Loan Borrowings.
-------------------------
(i) Notice of Borrowing. The Borrower shall request a Revolving
-------------------
Loan borrowing by written notice (or telephone notice promptly confirmed in
writing which confirmation may be by fax) to the Administrative Agent not
later than 11:00 A.M. (Charlotte, North Carolina time) on the same Business
Day of the requested borrowing in the case of Base Rate Loans, and on the
third Business Day prior to the date of the requested borrowing in the case
of LIBOR Rate Loans. Each such request for borrowing shall be irrevocable
and shall specify (A) that a Revolving Loan is requested, (B) the date of
the requested borrowing (which shall be a Business Day), (C) the aggregate
principal amount to be borrowed, and (D) whether the borrowing shall be
comprised of Base Rate Loans, LIBOR Rate Loans or a combination thereof,
and if LIBOR Rate Loans are requested, the Interest Period(s) therefor. A
form of Notice of Borrowing (a "Notice of Borrowing") is attached as
-------------------
Schedule 2.1(b)(i). If the Borrower shall fail to specify in any such
------------------
Notice of Borrowing (I) an applicable Interest Period in the case of a
LIBOR Rate Loan, then such notice shall be deemed to be a request for an
Interest Period of one month, or (II) the type of Revolving Loan requested,
then such notice shall be deemed to be a request for a Base Rate Loan
hereunder. The Administrative Agent shall give notice to each Lender
promptly upon receipt of each Notice of Borrowing, the contents thereof and
each such Lender's share thereof.
(ii) Minimum Amounts. Each Revolving Loan borrowing shall be in a
---------------
minimum aggregate amount of $500,000, in the case of Base Rate Loans and
integral multiples of $100,000 in excess thereof, and $1,000,000, in the
case of LIBOR Rate Loans and integral multiples of $100,000 in excess
thereof (or the remaining amount of the Revolving Commitment, if less).
(iii) Advances. Each Lender will make its Revolving Commitment
--------
Percentage of each Revolving Loan borrowing available to the Administrative
Agent for the account
23
of the Borrower at the office of the Administrative Agent specified in
Section 9.2, or at such other office as the Administrative Agent may
designate in writing, by 1:00 P.M. (Charlotte, North Carolina time) on the
date specified in the applicable Notice of Borrowing in Dollars and in
funds immediately available to the Administrative Agent. The Borrower
hereby irrevocably authorizes the Administrative Agent to disburse the
proceeds of each Borrowing requested pursuant to this Section 2.1 in
immediately available funds by crediting such proceeds to a deposit account
of the Borrower maintained with the Administrative Agent or by wire
transfer to any other account of the Borrower in each such case as may be
specified by the Borrower from time to time in a written notice in the form
attached hereto as Schedule 2.1(b)(iii) (a "Notice of Account
-----------------
Designation"). Unless otherwise specified by the Borrower, the Notice of
-----------
Account Designation most recently provided to the Administrative Agent
shall control.
(c) Repayment. The principal amount of all Revolving Loans shall be due
---------
and payable in full on the Termination Date.
(d) Interest. Subject to the provisions of Section 2.6, Revolving Loans
--------
shall bear interest as follows:
(i) Base Rate Loans. During such periods as Revolving Loans shall
be comprised of Base Rate Loans, each such Base Rate Loan shall bear
interest at a per annum rate equal to the sum of the Base Rate plus the
Applicable Interest Rate Percentage; and
(ii) LIBOR Rate Loans. During such periods as Revolving Loans shall
be comprised of LIBOR Rate Loans, each such LIBOR Rate Loan shall bear
interest at a per annum rate equal to the sum of the LIBOR Rate plus the
Applicable Interest Rate Percentage.
Interest on Revolving Loans shall be payable in arrears on each Interest
Payment Date.
(e) Revolving Notes. The Revolving Loans shall be evidenced by a duly
---------------
executed promissory note of the Borrower to each Lender in substantially the
form of Schedule 2.1(e). Each Lender is hereby authorized to record the date,
Type and amount of each Revolving Loan made by such Lender, each continuation
thereof, each conversion of all or a portion thereof to another Type, the date
and amount of each payment or prepayment of principal thereof and, in the case
of LIBOR Rate Loans, the length of each Interest Period with respect thereto, on
the schedule annexed to and constituting a part of its Revolving Note, and any
such recordation shall constitute prima facie evidence of the accuracy of the
information so recorded; provided that neither the failure to make, nor any
error in the making of, any such recordation shall limit or otherwise affect the
Obligations of the Borrower hereunder or under such Revolving Note with respect
to any Revolving Loan and payments of principal or interest on such Revolving
Note.
2.2 Term Loan.
---------
24
(a) Term Loan Commitments. Subject to and upon the terms and conditions
---------------------
hereof, each Lender severally agrees to make its Term Loan Commitment Percentage
of a term loan (the "Term Loan") to the Borrower on the Closing Date (upon which
date the Term Loan Commitment shall terminate at the close of business on such
date), in the aggregate principal amount of TWENTY-FIVE MILLION DOLLARS
($25,000,000) for the purposes hereinafter set forth. Each Lender will make its
Term Loan Commitment Percentage of the Term Loan available to the Administrative
Agent on the Closing Date. The Term Loan may consist of Base Rate Loans or
LIBOR Rate Loans, or a combination thereof, as the Borrower may request;
provided, however, no LIBOR Rate Loans shall be outstanding on or after the
Closing Date through and including the third Business Day following the Closing
Date.
(b) Repayment of Term Loan. The aggregate principal amount of the Term
----------------------
Loan shall be repaid (without a premium) as follows:
Payment Date Principal Payment
March 31, 1999 $ 750,000
June 30, 1999 750,000
September 30, 1999 750,000
December 31, 1999 750,000
March 31, 2000 1,000,000
June 30, 2000 1,000,000
September 30, 2000 1,000,000
December 31, 2000 1,000,000
March 31, 2001 1,250,000
June 30, 2001 1,250,000
September 30, 2001 1,250,000
December 31, 2001 1,250,000
March 31, 2002 1,500,000
June 30, 2002 1,500,000
September 30, 2002 1,500,000
December 31, 2002 1,500,000
March 31, 2003 1,750,000
June 30, 2003 1,750,000
September 30, 2003 1,750,000
December 31, 2003 1,750,000
$25,000,000
(c) Interest. Subject to the provisions of Section 2.6, the Term Loan
--------
shall bear interest as follows:
(i) Base Rate Loans. During such periods as the Term Loan shall be
comprised of Base Rate Loans, each such Base Rate Loan shall bear interest
at a per annum rate equal to the sum of the Base Rate plus the Applicable
Interest Rate Percentage; and
25
(ii) LIBOR Rate Loans. During such periods as the Term Loan shall be
comprised of LIBOR Rate Loans, each such LIBOR Rate Loan shall bear
interest at a per annum rate equal to the sum of the LIBOR Rate plus the
Applicable Interest Rate Percentage.
Interest on the Term Loan shall be payable in arrears on each Interest
Payment Date.
(d) Term Notes. The Term Loan of each Lender shall be evidenced by a duly
----------
executed promissory note of the Borrower to such Lender in substantially the
form of Schedule 2.2(d).
2.3 LETTER OF CREDIT SUBFACILITY.
----------------------------
(a) Issuance. Subject to the terms and conditions hereof and of the LOC
--------
Documents, if any, and any other terms and conditions which the Issuing Lender
may reasonably require, during the Commitment Period the Issuing Lender shall
issue, and the Lenders shall participate in, Letters of Credit for the account
of the Borrower from time to time upon request in a form acceptable to the
Issuing Lender; provided, however, that (i) the aggregate amount of LOC
-------- -------
Obligations shall not at any time exceed TEN MILLION DOLLARS ($10,000,000) (the
"LOC Committed Amount"); provided, however, that the LOC Committed Amount shall
be increased to TWELVE MILLION DOLLARS ($12,000,000) upon the IRB Letter of
Credit becoming a "Letter of Credit" hereunder pursuant to Section 5.17 hereof,
(ii) the sum of the aggregate amount of Revolving Loans plus LOC Obligations
shall not at any time exceed the aggregate Revolving Committed Amount then in
effect, (iii) all Letters of Credit shall be denominated in U.S. Dollars and
(iv) Letters of Credit shall be issued for the purpose of supporting obligations
incurred in connection with the Acquisition and for general corporate purposes.
Except as otherwise expressly agreed upon by all the Lenders, no Letter of
Credit shall have an original expiry date more than one (1) year from the date
of issuance (other than the IRB Letter of Credit, upon such letter of credit
becoming a "Letter of Credit" hereunder, which has an original expiry date of
three (3) years and ten (10) months and the Seller Letter of Credit which may
have original expiry date of up to three (3) years and three (3) months) and no
Letter of Credit shall have an expiry date extending beyond the Termination
Date. Each Letter of Credit shall comply with the related LOC Documents. The
issuance and expiry date of each Letter of Credit shall be a Business Day. No
Letter of Credit will be in the original amount of less than $100,000.
(b) Notice and Reports. The request for the issuance of a Letter of Credit
------------------
shall be submitted to the Issuing Lender at least five (5) Business Days prior
to the requested date of issuance. The Issuing Lender will promptly upon
request provide to the Agent for dissemination to the Lenders a detailed report
specifying the Letters of Credit which are then issued and outstanding and any
activity with respect thereto which may have occurred since the date of any
prior report, and including therein, among other things, the account party, the
beneficiary, the face amount, expiry date as well as any payments or expirations
which may have occurred. The Issuing Lender will further provide to the Agent
promptly upon request copies of the Letters of Credit. The Issuing Lender will
provide to the Agent promptly upon request a summary report of
26
the nature and extent of LOC Obligations then outstanding.
(c) Participations. Each Lender, upon issuance of a Letter of Credit,
--------------
shall be deemed to have purchased without recourse a risk participation from the
Issuing Lender in such Letter of Credit and the obligations arising thereunder
and any collateral relating thereto, in each case in an amount equal to its LOC
Commitment Percentage of the obligations under such Letter of Credit and shall
absolutely, unconditionally and irrevocably assume, as primary obligor and not
as surety, and be obligated to pay to the Issuing Lender therefor and discharge
when due, its LOC Commitment Percentage of the obligations arising under such
Letter of Credit. Without limiting the scope and nature of each Lender's
participation in any Letter of Credit, to the extent that the Issuing Lender has
not been reimbursed as required hereunder or under any LOC Document, each such
Lender shall pay to the Issuing Lender its LOC Commitment Percentage of such
unreimbursed drawing in same day funds on the day of notification by the Issuing
Lender of an unreimbursed drawing pursuant to the provisions of subsection (d)
hereof. The obligation of each Lender to so reimburse the Issuing Lender shall
be absolute and unconditional and shall not be affected by the occurrence of a
Default, an Event of Default or any other occurrence or event. Any such
reimbursement shall not relieve or otherwise impair the obligation of the
Borrower to reimburse the Issuing Lender under any Letter of Credit, together
with interest as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any Letter of Credit,
-------------
the Issuing Lender will promptly notify the Borrower and the Agent. The
Borrower shall reimburse the Issuing Lender on the day of drawing under any
Letter of Credit (either with the proceeds of a Revolving Loan obtained
hereunder or otherwise) in same day funds as provided herein or in the LOC
Documents. If the Borrower shall fail to reimburse the Issuing Lender as
provided herein, the unreimbursed amount of such drawing shall bear interest at
a per annum rate equal to the Base Rate plus two percent (2%). Unless the
Borrower shall immediately notify the Issuing Lender and the Agent of its intent
to otherwise reimburse the Issuing Lender, the Borrower shall be deemed to have
requested a Revolving Loan in the amount of the drawing as provided in
subsection (e) hereof, the proceeds of which will be used to satisfy the
reimbursement obligations. The Borrower's reimbursement obligations hereunder
shall be absolute and unconditional under all circumstances irrespective of any
rights of set-off, counterclaim or defense to payment the Borrower may claim or
have against the Issuing Lender, the Agent, the Lenders, the beneficiary of the
Letter of Credit drawn upon or any other Person, including without limitation
any defense based on any failure of the Borrower to receive consideration or the
legality, validity, regularity or unenforceability of the Letter of Credit. The
Issuing Lender will promptly notify the other Lenders of the amount of any
unreimbursed drawing and each Lender shall promptly pay to the Agent for the
account of the Issuing Lender in Dollars and in immediately available funds, the
amount of such Lender's LOC Commitment Percentage of such unreimbursed drawing.
Such payment shall be made on the day such notice is received by such Lender
from the Issuing Lender if such notice is received at or before 2:00 P.M.
(Charlotte, North Carolina time), otherwise such payment shall be made at or
before 12:00 Noon (Charlotte, North Carolina time) on the Business Day next
succeeding the day such notice is received. If such Lender does not pay such
amount to the Issuing Lender in full upon such request, such Lender shall, on
demand, pay to the Agent for the account of the Issuing Lender interest on the
27
unpaid amount during the period from the date of such drawing until such Lender
pays such amount to the Issuing Lender in full at a rate per annum equal to, if
paid within two (2) Business Days of the date of drawing, the Federal Funds
Effective Rate and thereafter at a rate equal to the Base Rate. Each Lender's
obligation to make such payment to the Issuing Lender, and the right of the
Issuing Lender to receive the same, shall be absolute and unconditional, shall
not be affected by any circumstance whatsoever and without regard to the
termination of this Agreement or the Commitments hereunder, the existence of a
Default or Event of Default or the acceleration of the Obligations hereunder and
shall be made without any offset, abatement, withholding or reduction
whatsoever.
(e) Repayment with Revolving Loans. On any day on which the Borrower shall
------------------------------
have requested, or been deemed to have requested, a Revolving Loan to reimburse
a drawing under a Letter of Credit, the Agent shall give notice to the Lenders
that a Revolving Loan has been requested or deemed requested in connection with
a drawing under a Letter of Credit, in which case a Revolving Loan borrowing
comprised entirely of Base Rate Loans (each such borrowing, a "Mandatory
Borrowing") shall be immediately made (without giving effect to any termination
of the Commitments pursuant to Section 2.7) pro rata based on each Lender's
respective Revolving Commitment Percentage (determined before giving effect to
any termination of the Commitments pursuant to Section 2.7) and the proceeds
thereof shall be paid directly to the Issuing Lender for application to the
respective LOC Obligations. Each Lender hereby irrevocably agrees to make such
Revolving Loans immediately upon any such request or deemed request on account
of each Mandatory Borrowing in the amount and in the manner specified in the
preceding sentence and on the same such date notwithstanding (i) the amount of
Mandatory Borrowing may not comply with the minimum amount for borrowings of
Revolving Loans otherwise required hereunder, (ii) whether any conditions
specified in Section 4.2 are then satisfied, (iii) whether a Default or an Event
of Default then exists, (iv) failure for any such request or deemed request for
Revolving Loan to be made by the time otherwise required in Section 2.1(b), (v)
the date of such Mandatory Borrowing, or (vi) any reduction in the Revolving
Committed Amount after any such Letter of Credit may have been drawn upon;
provided, however, that in the event any such Mandatory Borrowing should be less
than the minimum amount for borrowings of Revolving Loans otherwise provided in
Section 2.1(b)(ii), the Borrower shall pay to the Agent for its own account an
administrative fee of $500. 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 with respect to the Borrower), then each such Lender hereby agrees that it
shall forthwith fund (as of the date the Mandatory Borrowing would otherwise
have occurred, but adjusted for any payments received from the Borrower on or
after such date and prior to such purchase) its Participation Interests in the
outstanding LOC Obligations; provided, further, that in the event any Lender
shall fail to fund its Participation Interest on the day the Mandatory Borrowing
woul otherwise have occurred, then the amount of such Lender's unfunded
Participation Interest therein shall bear interest payable to the Issuing Lender
upon demand, at the rate equal to, if paid within two (2) Business Days of such
date, the Federal Funds Effective Rate, and thereafter at a rate equal to the
Base Rate.
(f) Modification, Extension. The issuance of any supplement, modification,
-----------------------
28
amendment, renewal, or extension to any Letter of Credit shall, for purposes
hereof, be treated in all respects the same as the issuance of a new Letter of
Credit hereunder.
(g) Uniform Customs and Practices. The Issuing Lender shall have the
Letters of Credit be subject to The Uniform Customs and Practice for Documentary
Credits, as published as of the date of issue by the International Chamber of
Commerce (the "UCP"), in which case the UCP may be incorporated therein and
deemed in all respects to be a part thereof.
2.4 CONVERSION OPTIONS.
------------------
(a) The Borrower may, in the case of Revolving Loans or the Term Loan (or
portions of the Term Loan), elect from time to time to convert Base Rate Loans
to LIBOR Rate Loans, by giving the Administrative Agent at least three Business
Days' prior irrevocable written notice of such election. A form of Notice of
Conversion is attached as Schedule 2.4. If the date upon which a Base Rate Loan
------------
is to be converted to a LIBOR Rate Loan is not a Business Day, then such
conversion shall be made on the next succeeding Business Day and during the
period from such last day of an Interest Period to such succeeding Business Day
such Revolving Loan or Term Loan shall bear interest as if it were a Base Rate
Loan. All or any part of outstanding LIBOR Rate Loans and Base Rate Loans may
be converted as provided herein, provided that (i) a Revolving Loan or Term Loan
may be converted into a LIBOR Rate Loan only if no Event of Default has occurred
and is continuing, (ii) partial conversions into a LIBOR Rate Loan shall be in
an aggregate principal amount of $1,000,000 or a whole multiple of $100,000 in
excess thereof and (iii) partial conversions into a Base Rate Loan shall be in
an aggregate principal amount of $500,000 or a whole multiple of $100,000 in
excess thereof.
(b) Any LIBOR Rate Loans may be continued as such upon the expiration of an
Interest Period with respect thereto by compliance by the Borrower with the
notice provisions contained in Section 2.4(a); provided, that a LIBOR Rate Loan
may be continued as such only if no Event of Default has occurred and is
continuing, in which case such Loan shall be automatically converted to a Base
Rate Loan at the end of the applicable Interest Period with respect thereto.
Where the Borrower shall fail to give timely notice of an election to continue a
LIBOR Rate Loan, or where continuation of LIBOR Rate Loans is not permitted
hereunder, such LIBOR Rate Loans shall be automatically converted to Base Rate
Loans at the end of the applicable Interest Period with respect thereto.
2.5. MINIMUM PRINCIPAL AMOUNT OF TRANCHES.
------------------------------------
All borrowings, payments and voluntary prepayments in respect of Revolving
Loans shall be in such amounts and be made pursuant to such elections so that
after giving effect thereto the aggregate principal amount of the Revolving
Loans comprising any Tranche shall not be less than $500,000, in the case of
Base Rate Loans and integral multiples of $100,000 in excess thereof, and
$1,000,000, in the case of LIBOR Rate Loans, and integral multiples of $100,000
in excess thereof.
29
2.6 DEFAULT RATE AND PAYMENT DATES.
------------------------------
(a) If all or a portion of the principal amount of any Loan which is a
LIBOR Rate Loan shall not be paid when due or continued as a LIBOR Rate Loan in
accordance with the provisions of Section 2.4 (whether at the stated maturity,
by acceleration or otherwise), such overdue principal amount of such Loan shall
be converted to a Base Rate Loan at the end of the Interest Period applicable
thereto.
(b) If all or a portion of (i) the principal amount of any Loan, (ii)
any interest payable thereon or (iii) any fee or other amount payable hereunder
shall not be paid when due (whether at the stated maturity, by acceleration or
otherwise), such overdue amount shall bear interest at a rate per annum which is
in the case of overdue principal, the rate that would otherwise be applicable
thereto plus 2% or in the case of overdue interest, fees or other amounts, the
Base Rate plus 2%, in each case from the date of such non-payment until such
amount is paid in full (as well after as before judgment).
(c) Interest on each Loan shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to paragraph (b) of this
subsection shall be payable from time to time on demand.
2.7 REDUCTIONS IN COMMITMENTS AND PREPAYMENTS.
-----------------------------------------
(a) Voluntary Reduction in Revolving Commitment. The Borrower may from
-------------------------------------------
time to time permanently reduce the aggregate amount of the Revolving
Commitments in whole or in part without premium or penalty except as provided in
Section 2.15 upon three (3) Business Days' prior written notice to the
Administrative Agent; provided that after giving effect to any such voluntary
reduction the sum of the Revolving Loans and LOC Obligations then outstanding
shall not exceed the Aggregate Revolving Committed Amount, as reduced. Partial
reductions in the aggregate Revolving Commitment shall in each case be in a
minimum aggregate amount of $500,000 and integral multiples of $500,000 in
excess thereof.
30
(b) Mandatory Prepayments.
---------------------
(i) Net Sales Proceeds. The Borrower shall make a prepayment of the
------------------
Loans in an amount equal to 100% of the Net Sales Proceeds from Asset
Dispositions in excess of $250,000.00 in any calendar year which are not
reinvested by the Borrower in businesses permitted to be engaged in by the
Borrower and its Subsidiaries pursuant to Section 6.4 within six months
after the applicable date of disposition. Any such required prepayment of
Net Sales Proceeds shall be made on the date six months from the date of
the applicable Asset Disposition and shall be applied first, to the
outstanding principal balance on the Term Loan (pro rata among the
remaining payments) and second, if the Leverage Ratio is greater than 2.75
to 1.0 as of the last day of fiscal quarter immediately preceding the date
of such prepayment, to the outstanding principal balance of the Revolving
Loans and (after all Revolving Loans have been repaid) to a cash collateral
account in respect of LOC Obligations. Subject to the foregoing
provisions, such prepayments shall be applied first to Base Rate Loans, if
any, and then to Eurodollar Loans in direct order of Interest Period
maturities.
(ii) Excess Cash Flow. On the date 120 days after the end of each
----------------
fiscal year beginning for fiscal year 1998, the Borrower shall make a
prepayment of the Term Loan in an aggregate amount equal to (A) fifty
percent (50%) of Excess Cash Flow for the immediately preceding fiscal year
if the Leverage Ratio on the last day of such fiscal year is greater than
2.75 to 1.0 or (B) zero (0.0%) of Excess Cash Flow for the immediately
preceding fiscal year if the Leverage Ratio on the last day of such fiscal
year is equal to or less than 2.75 to 1.0. Any such payments of Excess
Cash Flow shall be applied to the outstanding principal balance of the Term
Loan (pro rata among remaining payments). Subject to the foregoing
provisions, such prepayments shall be applied first to Base Rate Loans, if
any, and then to Eurodollar Loans in direct order of Interest Period
maturities.
(iii) Debt Issuance; Equity Transaction. Immediately upon receipt by
---------------------------------
the Borrower of net cash proceeds from any Debt Issuance (other than any
Debt Issuance relating to Indebtedness permitted by Section 6.1) or Equity
Transaction (other than any Equity Transaction relating to the exercise of
employee stock options in the ordinary course of business), the Borrower
shall make a prepayment of the Loans in an amount equal to fifty percent
(50%) of such proceeds if the Leverage Ratio on the last day of the fiscal
quarter immediately preceding the proposed date of such prepayment is
greater than 2.75 to 1.0; provided, however, in no event shall such
prepayment relating to any Equity Transaction exceed an amount which when
applied to the Obligations would reduce the Leverage Ratio as of the last
day of such immediately preceding fiscal quarter to 2.75 to 1.0 or less.
Any such prepayments shall be applied first, to the outstanding principal
balance on the Term Loan (pro rata among remaining payments) and second, to
the outstanding principal balance of the Revolving Loans and (after all
Revolving Loans have been repaid) to a cash collateral account in respect
of LOC Obligations. Subject to the foregoing provisions, such prepayments
shall be applied first to Base Rate Loans, if any, and then to Eurodollar
Loans in direct order of Interest Period maturities.
31
(iv) Mandatory Prepayment on Revolving Loans. If at any time the
---------------------------------------
aggregate amount of Revolving Loans and LOC Obligations then outstanding
shall exceed the Aggregate Revolving Committed Amount, as reduced from time
to time, the Borrower shall immediately make payment on the Revolving Loans
in an amount sufficient to eliminate the excess and (after all Revolving
Loans have been repaid) cash collateralize the LOC Obligations, in an
amount sufficient to eliminate such excess. Any such payments shall be
applied first to Base Rate Loans and then to LIBOR Rate Loans in direct
order of their Interest Period maturities.
(c) Voluntary Prepayments.
---------------------
(i) Revolving Loans. Revolving Loans may be prepaid in whole or in
---------------
part without premium or penalty; provided that (i) LIBOR Rate Loans may be
prepaid other than at the end of the Interest Period applicable thereto
only upon payment of amounts owing under Section 2.15 and only then on
three (3) Business Days' prior written notice to the Administrative Agent,
(ii) Base Rate Loans may be prepaid on one (1) Business Day's prior written
notice to the Administrative Agent if such notice is received by 11:00 A.M.
(Charlotte, North Carolina time) on the Business Day prior to the date of
prepayment, and (iii) each such partial prepayment shall be in a minimum
aggregate principal amount of $500,000, in the case of Base Rate Loans and
integral multiples of $500,000 in excess thereof, and $500,000, in the case
of LIBOR Rate Loans, and integral multiples of $500,000 in excess thereof.
Amounts prepaid on the Revolving Loans may be reborrowed in accordance with
the provisions hereof.
(ii) Term Loan. The Term Loan may be prepaid in whole or in part
---------
without premium or penalty; provided that (i) LIBOR Rate Loans may be
prepaid other than at the end of the Interest Period applicable thereto
only upon payment of amounts owing under Section 2.15 and only then on
three (3) Business Days' prior written notice to the Administrative Agent
(ii) Base Rate Loans may be prepaid on one (1) Business Day's prior written
notice to the Administrative Agent if such notice is received by 11:00 A.M.
(Charlotte, North Carolina time) on the Business Day prior to the date of
prepayment, in each case at an amount equal to the principal amount so
prepaid. Amounts prepaid on the Term Loan under this subsection (c)(ii)
shall be applied pro rata to principal installments. Any partial prepayment
shall be in a minimum aggregate principal amount of $500,000 and integral
multiples of $500,000 in excess thereof, in the case of Base Rate Loans,
and $500,000, in the case of LIBOR Rate Loans and integral multiples of
$500,000 in excess thereof. Amounts prepaid on the Term Loan may not be
reborrowed.
(d) Notice. The Borrower will provide notice to the Administrative Agent
------
of any prepayment by 11:00 A.M. (Charlotte, North Carolina time) one or three
Business Days prior to the date of prepayment as specified herein.
2.8 FEES.
----
(a) Commitment Fee. In consideration of the Revolving Commitments,
--------------
the
32
Borrower agrees to pay to the Administrative Agent for the ratable benefit
of the Lenders a commitment fee (the "Commitment Fee") for each calendar quarter
--------------
(or portion thereof) during the Commitment Period, computed at the rate of the
Applicable Commitment Fee Percentage on the average daily amount by which the
Aggregate Revolving Committed Amount exceeds the aggregate principal amount of
Revolving Loans and Letter of Credit Obligations outstanding (for the subject
calendar quarter). The Commitment Fee shall be payable quarterly in arrears on
the last Business Day of each March, June, September and December (commencing
March 31, 1998) and on the Termination Date, commencing on the first of such
dates to occur after the date hereof.
(b) Letter of Credit Fee. In consideration of the LOC Commitments,
--------------------
the Borrower agrees to pay to the Agent (for the ratable benefit of the Lenders)
a fee (the "Letter of Credit Fee") equal to the Applicable Interest Rate
Percentage for LIBOR Rate Loans calculated on the average daily maximum amount
available to be drawn under each Letter of Credit from the date of issuance to
the date of expiration thereof. The Agent shall promptly pay to the Lenders
their pro rata portion of the Letter of Credit Fee. The Letter of Credit Fee
shall be payable quarterly in arrears on the last day of each calendar quarter
for such calendar quarter, commencing on July 1, 1998, and on the Termination
Date.
(c) Issuing Lender Fees. The Borrower shall pay to the Agent for the
-------------------
account of the Issuing Bank without sharing by the other Lenders a fronting fee
equal to 0.125% calculated on the average daily maximum amount available to be
drawn under each Letter of Credit from the date of the issuance to the date of
the expiration thereof. The fronting fee shall be payable quarterly in arrears
on the last day of each calendar quarter for such calendar quarter, commencing
on July 1, 1998 and on the Termination Date. In addition to the fronting fee,
the Borrower shall pay to the Agent for the account of the Issuing Bank without
sharing by the other Lenders, issuance and drawing fees specified from time to
time by the Issuing Lender and the reasonable and customary charges from time to
time of the Issuing Lender with respect to the amendment, transfer,
administration, cancellation and conversion of, such Letters of Credit (all such
fees described in this section (c), collectively, the "Issuing Lender Fees").
2.9 COMPUTATION OF INTEREST AND FEES.
--------------------------------
(a) Interest payable hereunder with respect to LIBOR Rate Loans shall be
calculated on the basis of a year of 360 days for the actual days elapsed. All
other fees, interest and all other amounts payable hereunder shall be calculated
on the basis of a 365-366 day year for the actual days elapsed. The
Administrative Agent shall as soon as practicable notify the Borrower and the
Lenders of each determination of a LIBOR Rate on the Business Day of the
determination thereof. Any change in the interest rate on a Loan resulting from
a change in the Base Rate shall become effective as of the opening of business
on the day on which such change in the Base Rate shall become effective. The
Administrative Agent shall as soon as practicable notify the Borrower and the
Lenders of the effective date and the amount of each such change.
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the
33
Lenders in the absence of manifest error.
2.10 PRO RATA TREATMENT AND PAYMENTS.
-------------------------------
Each borrowing of Revolving Loans and any reduction of the Revolving
Commitments shall be made pro rata according to the respective Revolving
Commitment Percentages of the Lenders. Each payment under this Agreement or any
Note shall be applied, first, in the case of a payment on the Revolving Notes
(or in respect of the Revolving Loans), to any fees then due and owing by the
Borrower pursuant to Section 2.8, second, to interest then due and owing in
respect of the Notes of the Borrower and, third, to principal then due and owing
hereunder and under the Notes of the Borrower. Except as otherwise provided
herein, each payment on account of any fees pursuant to Section 2.8 shall be
made to the Administrative Agent (for the benefit of the Lenders) in accordance
with the respective amounts due and owing (except as to the portion of the
Letter of Credit retained by the Issuing Lender and the Issuing Lender Fees).
Each payment by the Borrower on account of principal of and interest on the
Revolving Loans and on the Term Loan shall be made to the Administrative Agent
for the pro rata benefit of the Lenders according to the respective amounts due
and owing to the Lenders. Each prepayment on account of principal of the Loans
shall be applied to such of the Loans as the Borrower may designate (to be
applied pro rata among the Lenders); provided, that prepayments made pursuant to
Section 2.7(b)(iii), 2.11(a) or 2.13 shall be applied in accordance with such
Section. All payments (including prepayments) to be made by the Borrower on
account of principal, interest and fees shall be made without defense, set-off
or counterclaim (except as provided in Section 2.16(b)) and shall be made to the
Administrative Agent for the account of the Lenders at the Administrative
Agent's office specified in Section 9.2 in Dollars and in immediately available
funds no later than 2:00 p.m. (Charlotte time) on the date when due. The
Administrative Agent shall distribute such payments to the Lenders entitled
thereto promptly upon receipt in like funds as received. If any payment
hereunder becomes due and payable on a day other than a Business Day, such
payment shall be extended to the next succeeding Business Day, and, with respect
to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension.
2.11 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT.
------------------------------------------------
(a) Unless the Administrative Agent shall have been notified by a Lender
prior to the date a Revolving Loan is to be made by such Lender (which notice
shall be effective upon receipt) that such Lender does not intend to make the
proceeds of such Revolving Loan available to the Administrative Agent, the
Administrative Agent may assume that such Lender has made such proceeds
available to the Administrative Agent on such date, and the Administrative Agent
may in reliance upon such assumption (but shall not be required to) make
available to the Borrower a corresponding amount. If such amount is made
available to the Administrative Agent on a date after such Borrowing Date, such
Lender shall pay to the Administrative Agent on demand an amount equal to the
product of (i) the daily average Federal Funds Effective Rate during such
period, times (ii) the amount of such Lender's Revolving Commitment Percentage
of such borrowing, times (iii) a fraction, the numerator of which is the number
of days that elapse from and including such Borrowing Date to the date on which
such Lender's Commitment
34
Percentage of such borrowing shall have become immediately available to the
Administrative Agent and the denominator of which is 360. If such Lender's
Revolving Commitment Percentage is not in fact made available to the
Administrative Agent by such Lender within two (2) Business Days of such
Borrowing Date, the Administrative Agent shall be entitled to recover such
amount with interest thereon at the rate per annum applicable to Base Rate Loans
hereunder, on demand, from the Borrower.
(b) Unless the Administrative Agent shall have been notified by the
Borrower, prior to the date on which any payment is due from it hereunder (which
notice shall be effective upon receipt) that the Borrower does not intend to
make such payment, the Administrative Agent may assume that the Borrower has
made such payment when due, and the Administrative Agent may in reliance upon
such assumption (but shall not be required to) make available to each Lender on
such payment date an amount equal to the portion of such assumed payment to
which such Lender is entitled hereunder, and if the Borrower has not in fact
made such payment to the Administrative Agent, such Lender shall, on demand,
repay to the Administrative Agent the amount made available to such Lender. If
such amount is repaid to the Administrative Agent on a date after the date such
amount was made available to such Lender, such Lender shall pay to the
Administrative Agent on demand an amount equal to the product of (i) the daily
average Federal Funds Effective Rate during such period, times (ii) the amount
made available to such Lender by the Administrative Agent pursuant to this
paragraph (b), times (iii) a fraction, the numerator of which is the number of
days that elapse from and including the date on which such amount was made
available to such Lender to the date on which such amount shall have been repaid
to the Administrative Agent by such Lender and become immediately available to
the Administrative Agent and the denominator of which is 360.
(c) A certificate of the Administrative Agent submitted to the Borrower or
any Lender with respect to any amount owing under this subsection shall be
conclusive in the absence of manifest error.
2.12. INABILITY TO DETERMINE INTEREST RATE.
------------------------------------
Notwithstanding any other provision of this Agreement, if (i) the
Administrative Agent shall reasonably determine (which determination shall be
conclusive and binding absent manifest error) that, by reason of circumstances
affecting the relevant market, reasonable and adequate means do not exist for
ascertaining LIBOR for such Interest Period, or (ii) the Majority Lenders shall
reasonably determine (which determination shall be conclusive and binding absent
manifest error) that the LIBOR Rate does not adequately and fairly reflect the
cost to such Lenders of funding LIBOR Rate Loans that the Borrower has requested
be outstanding as a Eurodollar Tranche during such Interest Period, the
Administrative Agent shall forthwith give telephone notice of such
determination, confirmed in writing, to the Borrower, and the Lenders at least
two Business Days prior to the first day of such Interest Period. Unless the
Borrower shall have notified the Administrative Agent upon receipt of such
telephone notice that it wishes to rescind or modify its request regarding such
LIBOR Rate Loans, any Loans that were requested to be made as LIBOR Rate Loans
shall be made as Base Rate Loans and any Loans that were requested to be
converted into or continued as LIBOR Rate Loans shall be converted into Base
35
Rate Loans. Until any such notice has been withdrawn by the Administrative
Agent, no further Loans shall be made as, continued as, or converted into, LIBOR
Rate Loans for the Interest Periods so affected.
2.13 ILLEGALITY.
----------
Notwithstanding any other provision of this Agreement, if the adoption of
or any change in any Requirement of Law or in the interpretation or application
thereof, in each case occurring after the Closing Date, by the relevant
Governmental Authority to any Lender shall make it unlawful for such Lender or
its LIBOR Lending Office to make or maintain LIBOR Rate Loans as contemplated by
this Agreement or to obtain in the interbank eurodollar market through its LIBOR
Lending Office the funds with which to make such Loans, (a) such Lender shall
promptly notify the Administrative Agent and the Borrower thereof, (b) the
commitment of such Lender hereunder to make LIBOR Rate Loans or continue LIBOR
Rate Loans as such shall forthwith be suspended until the Administrative Agent
shall give notice that the condition or situation which gave rise to the
suspension shall no longer exist, and (c) such Lender's Loans then outstanding
as LIBOR Rate Loans, if any, shall be converted on the last day of the Interest
Period for such Loans or within such earlier period as required by law to Base
Rate Loans. The Borrower hereby agrees promptly to pay any Lender, upon its
demand, any additional amounts necessary to compensate such Lender for actual
and direct costs (but not including anticipated profits) reasonably incurred by
such Lender in making any repayment in accordance with this subsection
including, but not limited to, any interest or fees payable by such Lender to
lenders of funds obtained by it in order to make or maintain its LIBOR Rate
Loans hereunder. A certificate as to any additional amounts payable pursuant to
this subsection submitted by such Lender, through the Administrative Agent, to
the Borrower shall be conclusive in the absence of manifest error. Each Lender
agrees to use reasonable efforts (including reasonable efforts to change its
LIBOR Lending Office) to avoid or to minimize any amounts which may otherwise be
payable pursuant to this subsection; provided, however, that such efforts shall
not cause the imposition on such Lender of any additional costs or legal or
regulatory burdens deemed by such Lender to be material.
2.14. REQUIREMENTS OF LAW.
-------------------
(a) If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof or compliance by any Lender with any
request or directive (whether or not having the force of law) from any central
bank or other Governmental Authority, in each case made subsequent to the date
hereof:
(i) shall subject such Lender to any tax of any kind whatsoever
with respect to any Letter of Credit or any application relating thereto or
any LIBOR Rate Loan made by it, or change the basis of taxation of payments
to such Lender in respect thereof (except for taxes covered by Section 2.16
(including any taxes imposed by reason of any failure of such Lender to
comply with its obligations under Section 2.16(b)), or changes in the rate
of tax on the net income, or franchise tax, of such Lender);
36
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender which is not otherwise included in the determination
of the LIBOR Rate hereunder; or
(iii) shall impose on such Lender any other condition (excluding any
tax of any kind whatsoever);
and the result of any of the foregoing is to increase the cost to such Lender of
making or maintaining LIBOR Loans or the Letters of Credit or to reduce any
amount receivable hereunder or under any Note, then, in any such case, the
Borrower shall promptly pay such Lender, within 15 days after its demand, any
additional amounts necessary to compensate such Lender for such additional cost
or reduced amount receivable which such Lender reasonably deems to be material
as determined by such Lender with respect to its LIBOR Rate Loans or Letters of
Credit. A certificate as to any additional amounts payable pursuant to this
subsection submitted by such Lender, through the Administrative Agent,
describing in reasonable detail the nature of such event and a reasonably
detailed explanation of the calculation thereof, to the Borrower shall be
conclusive in the absence of manifest error. Each Lender agrees to use
reasonable efforts (including reasonable efforts to change its Domestic Lending
Office or LIBOR Lending Office, as the case may be) to avoid or to minimize any
amounts which might otherwise be payable pursuant to this paragraph of this
subsection; provided, however, that such efforts shall not cause the imposition
on such Lender of any additional costs or legal or regulatory burdens deemed by
such Lender to be material.
(b) If any Lender shall have reasonably determined that the adoption
of or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof as a consequence of its obligations
hereunder or compliance by such Lender or any corporation controlling such
Lender with any request or directive regarding capital adequacy (whether or not
having the force of law) from any central bank or Governmental Authority made
subsequent to the date hereof as a consequence of its obligations hereunder does
or shall have the effect of reducing the rate of return on such Lender's or such
corporation's capital as a consequence of its obligations hereunder to a level
below that which such Lender or such corporation could have achieved but for
such adoption, change or compliance (taking into consideration such Lender's or
such corporation's policies with respect to capital adequacy) by an amount
reasonably deemed by such Lender to be material, then from time to time, within
15 days after demand by such Lender, the Borrower shall pay to such Lender such
additional amount as shall be certified by such Lender as being required to
compensate it for such reduction. Such a certificate as to any additional
amounts payable under this subsection submitted by a Lender (which certificate
shall include a description in reasonable detail of the basis for the
computation), through the Administrative Agent, to the Borrower shall be
conclusive absent manifest error.
(c) Notwithstanding anything to the contrary contained herein, the
Borrower shall not have any obligation to pay to any Lender amounts owing under
this subsection 2.14 for
37
any period which is more than 90 days prior to the date (but not in any event
prior to the Closing Date) upon which the request for payment therefor is
delivered to the Borrower.
(d) The agreements in this subsection shall survive the termination
of this Agreement and payment of the Notes and all other amounts payable
hereunder.
2.15 INDEMNITY.
---------
The Borrower hereby agrees to indemnify each Lender and to hold such Lender
harmless from any funding loss or expense which such Lender may actually sustain
or incur (other than as a result of such Lender's gross negligence or willful
misconduct) as a consequence of (a) default by the Borrower in payment of the
principal amount of or interest on any LIBOR Rate Loan by such Lender in
accordance with the terms hereof, (b) default by the Borrower in accepting a
LIBOR Rate Loan after the Borrower has given a notice in accordance with the
terms hereof, (c) default by the Borrower in making any prepayment of a LIBOR
Rate Loan after the Borrower has given a notice in accordance with the terms
hereof, and/or (d) the making by the Borrower of a prepayment of a LIBOR Rate
Loan, or the conversion thereof, on a day which is not the last day of the
Interest Period with respect thereto, in each case equal to (i) the amount of
interest which would have accrued on the amount so prepaid, or not so paid,
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to pay, borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure), in each case at the applicable rate of interest for such Loans
provided for herein (excluding the Applicable Interest Rate Percentage included
therein), over (ii) the amount of interest (as reasonably determined by such
Lender) which would have accrued to such Lender on such amount by placing such
amount on deposit for a comparable period with leading banks in the interbank
eurodollar market. A certificate as to any additional amounts payable pursuant
to this subsection submitted by any Lender, through the Administrative Agent, to
the Borrower (which certificate must be delivered to the Administrative Agent
within thirty days following such default, prepayment or conversion) shall be
conclusive in the absence of manifest error. The agreements in this subsection
shall survive termination of this Agreement and payment of the Notes and all
other amounts payable hereunder.
2.16. TAXES.
-----
(a) All payments made by the Borrower hereunder or under any Note
will be, except as provided in Section 2.16(b), 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 Governmental Authority or by any political subdivision
or taxing authority thereof or therein with respect to such payments (but
excluding (i) any tax imposed on or measured by the net income or profits of a
Lender and (ii) any franchise taxes, branch taxes, taxes on doing business or
taxes on the overall capital or net worth of any Lender pursuant to the laws of
the jurisdiction in which it is organized or the jurisdiction in which the
principal office or its applicable lending office is located or any subdivision
thereof or therein) and all interest, penalties or similar liabilities with
respect thereto
38
(all such non-excluded taxes, levies, imposts, duties, fees, assessments or
other charges being referred to collectively as "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 under this Agreement or under any Note, after withholding or deduction for
or on account of any such Taxes, will not be less than the amount provided for
herein or in such Note. The Borrower will furnish to the Administrative Agent as
soon as practicable after the date the payment of any Taxes is due pursuant to
applicable law certified copies (to the extent reasonably available and required
by law) of tax receipts evidencing such payment by the Borrower. Except as
provided in this Section 2.l6, the Borrower agrees to indemnify and hold
harmless each Lender, and reimburse such Lender upon its written request, for
the amount of any Taxes so levied or imposed and paid by such Lender.
(b) Each Lender or Participant 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 Administrative Agent on or prior to the Closing Date, or in
the case of a Lender or Participant that is an assignee or transferee of an
interest under this Agreement pursuant to Section 9.6 (unless the respective
Lender or Participant was already a Lender or Participant hereunder immediately
prior to such assignment or transfer), on the date of such assignment or
transfer to such Lender, (i) if the Lender or Participant is a "bank" within the
meaning of Section 881(c)(3)(A) of the Code, two accurate and complete original
signed copies of Internal Revenue Service Form 4224 or 1001 (or successor forms)
certifying such Lender's or Participant'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, or (ii) if the Lender or Participant is not a
"bank" within the meaning of Section 881(c)(3)(A) of the Code, either Internal
Revenue Service Form 1001 or 4224 as set forth in clause (i) above, or (x) a
certificate substantially in the form of Schedule 2.16 (any such certificate, a
"2.16 Certificate") and (y) two accurate and complete original signed copies of
Internal Revenue Service Form W-8 (or successor form) certifying such Lender's
or Participant's entitlement to an exemption from United States withholding tax
with respect to payments of interest to be made under this Agreement and under
any Note. In addition, each Lender and Participant agrees that it will deliver
upon the Borrower's request (or upon such Lender's or Participant's becoming
aware that any version is no longer accurate) updated versions of the foregoing,
as applicable, whenever the previous certification has become obsolete or
inaccurate in any material respect, together with such other forms as may be
required in order to confirm or establish the entitlement of such Lender or
Participant to a continued exemption from or reduction in United States
withholding tax with respect to payments under this Agreement and any Note.
Notwithstanding anything to the contrary contained in Section 2.16(a), but
subject to the immediately succeeding sentence, (x) the Borrower shall be
entitled, to the extent it is required to do so by law, to deduct or withhold
Taxes imposed by the United States (or any political subdivision or taxing
authority thereof or therein) from interest, fees or other amounts payable
hereunder for the account of any Lender or Participant which is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) for
U.S. Federal income tax purposes to the extent that such Lender or Participant
has not provided to the Borrower U.S. Internal Revenue Service Forms that
establish a complete exemption from such deduction or withholding and (y) the
Borrower shall not be obligated pursuant to Section 2.16(a) hereof to gross-up
payments to be made to a Lender or Participant or
39
otherwise indemnify such Lender or Participant in respect of Taxes imposed by
the United States if (I) such Lender or Participant has not provided to the
Borrower the Internal Revenue Service Forms required to be provided to the
Borrower pursuant to this Section 2.16(b), or if provided, such Forms are
materially inaccurate or (II) in the case of a payment, other than interest, to
a Lender or Participant described in clause (ii) above, to the extent that such
Forms do not establish a complete exemption from withholding of such Taxes.
Notwithstanding anything to the contrary contained in the preceding sentence or
elsewhere in this Section 2.16 but subject in any event to clause (y)(I) in the
immediately preceding sentence, the Borrower agrees to pay additional amounts
and to indemnify each Lender in the manner set forth in Section 2.16(a) (without
regard to the identity of the jurisdiction requiring the deduction or
withholding) in respect of any amounts deducted or withheld by them as described
in the immediately preceding sentence as a result of any changes after the
Closing Date (or, in the case of an assignee or transferee, after the date such
assignee or transferee became a Lender or Participant hereunder) in any
applicable law, treaty, governmental rule, regulation, guideline or order, or in
the interpretation thereof, relating to the deducting or withholding of Taxes.
(c) Each Lender agrees to use reasonable efforts (including
reasonable efforts to change its Domestic Lending Office or LIBOR Lending
Office, as the case may be) to avoid or to minimize any amounts which might
otherwise be payable pursuant to this subsection; provided, however, that such
efforts shall not cause the imposition on such Lender of any additional costs or
legal or regulatory burdens deemed by such Lender to be material unless in the
case of costs the Borrower has agreed to reimburse such Lender for such costs.
(d) If the Borrower pays any additional amount pursuant to this
Section 2.16 with respect to a Lender or Participant, such Lender or Participant
shall use reasonable efforts to obtain a refund of tax or credit against its tax
liabilities on account of such payment; provided that such Lender or Participant
shall have no obligation to use such reasonable efforts if either (i) it is in
an excess foreign tax credit position or (ii) it believes in good faith, in its
sole discretion, that claiming a refund or credit would cause adverse tax
consequences to it. In the event that such Lender or Participant receives such a
refund or credit, such Lender or Participant shall pay to the Borrower an amount
that such Lender reasonably determines is equal to the net tax benefit obtained
by such Lender or Participant as a result of such payment by the Borrower. In
the event that no refund or credit is obtained with respect to the Borrower's
payments to such Lender pursuant to this Section 2.16, then such Lender or
Participant shall upon request provide a certification that such Lender or
Participant has not received a refund or credit for such payments. Nothing
contained in this Section 2.16 shall require a Lender or Participant to disclose
or detail the basis of its calculation of the amount of any tax benefit or any
other amount or the basis of its determination referred to in the proviso to the
first sentence of this Section 2.16 to the Borrower or any other party.
(e) The agreements in this subsection shall survive the termination
of this Agreement and the payment of the Notes and all other amounts payable
hereunder.
2.17 REPLACEMENT OF BANKS.
--------------------
40
If any Lender becomes a Defaulting Lender, if any Lender delivers a notice
pursuant to Section 2.13, 2.14 or 2.16 or if any Lender fails to consent to a
waiver or amendment which requires the consent of each of the Lenders
(hereinafter any such Lender shall be referred to as a "Replaced Lender"), then
in such case, the Borrower may, upon at least two (2) Business Days' notice to
the Administrative Agent and such Replaced Lender, designate a replacement
lender (a "Replacement Lender") acceptable to the Administrative Agent in its
reasonable discretion, to which such Replaced Lender shall, subject to its
receipt (unless a later date for the remittance thereof shall be agreed upon by
the Borrower and the Replaced Lender) of all amounts owed to such Replaced
Lender hereunder, assign all (but not less than all) of its rights and
obligations hereunder. Upon any assignment by any Lender pursuant to this
Section 2.17 becoming effective, the Replacement Lender shall thereupon be
deemed to be a "Lender" for all purposes of this Agreement and such Replaced
Lender shall thereupon cease to be a "Lender" for all purposes of this Agreement
and shall have no further rights or obligations hereunder (other than pursuant
to Sections 2.13, 2.14, 2.16 and 9.5 while such Replaced Lender was a Lender).
2.18 INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES.
--------------------------------------------------
(a) In addition to its other obligations under Section 2.3, the
Borrower hereby agrees to protect, indemnify, pay and save the Issuing Lender
harmless from and against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable attorneys' fees) that
the Issuing Lender may incur or be subject to as a consequence, direct or
indirect, of (i) the issuance of any Letter of Credit or (ii) the failure of the
Issuing Lender to honor a drawing under a Letter of Credit as a result of any
act or omission, whether rightful or wrongful, of any present or future de jure
or de facto government or governmental authority (all such acts or omissions,
herein called "Government Acts").
(b) As between the Borrower and the Issuing Lender, the Borrower
shall assume all risks of the acts, omissions or misuse of any Letter of Credit
by the beneficiary thereof. The Issuing Lender shall not be responsible: (i) for
the form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for and
issuance of any Letter of Credit, even if it should in fact prove to be in any
or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii)
for the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, that may prove to be
invalid or ineffective for any reason; (iii) for failure of the beneficiary of a
Letter of Credit to comply fully with conditions required in order to draw upon
a Letter of Credit; (iv) for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (v) for errors in interpretation of
technical terms; (vi) for any loss or delay in the transmission or otherwise of
any document required in order to make a drawing under a Letter of Credit or of
the proceeds thereof; and (vii) for any consequences arising from causes beyond
the control of the Issuing Lender, including, without limitation, any Government
Acts. None of the above shall affect, impair, or prevent the vesting of the
Issuing Lender's rights or powers hereunder.
(c) In furtherance and extension and not in limitation of the
specific
41
provisions hereinabove set forth, any action taken or omitted by the Issuing
Lender, under or in connection with any Letter of Credit or the related
certificates, if taken or omitted in good faith, shall not put such Issuing
Lender under any resulting liability to the Borrower. It is the intention of the
parties that this Agreement shall be construed and applied to protect and
indemnify the Issuing Lender against any and all risks involved in the issuance
of the Letters of Credit, all of which risks are hereby assumed by the Borrower,
including, without limitation, any and all risks of the acts or omissions,
whether rightful or wrongful, of any Governmental Authority. The Issuing Lender
shall not, in any way, be liable for any failure by the Issuing Lender or anyone
else to pay any drawing under any Letter of Credit as a result of any Government
Acts or any other cause beyond the control of the Issuing Lender.
(d) Nothing in this Section 2.18 is intended to limit the
reimbursement obligation of the Borrower contained in Section 2.3(d) hereof. The
obligations of the Borrower under this Section 2.18 shall survive the
termination of this Agreement. No act or omissions of any current or prior
beneficiary of a Letter of Credit shall in any way affect or impair the rights
of the Issuing Lender to enforce any right, power or benefit under this
Agreement.
(e) Notwithstanding anything to the contrary contained in this
Section 2.18, the Borrower shall have no obligation to indemnify any Issuing
Lender in respect of any liability incurred by such Issuing Lender arising out
of the gross negligence or willful misconduct of the Issuing Lender (including
action not taken by an Issuing Lender).
SECTION 3 REPRESENTATIONS AND WARRANTIES
------------------------------
To induce the Lenders to enter into this Agreement and to make the Loans
herein provided for, the Borrower hereby represents and warrants to the
Administrative Agent and to each Lender that:
3.1 FINANCIAL CONDITION.
-------------------
The financial statements provided to the Administrative Agent and the
Lenders, consisting of the audited balance sheet of the Borrower dated as of
December 31, 1997, together with related statements of operations and statements
of cash flows, copies of which have heretofore been provided to each of the
Lenders, are complete and correct in all material respects and present fairly in
accordance with GAAP the financial condition of the entities for the periods
specified, except as noted therein.
3.2 NO CHANGE.
---------
Since December 31, 1997, there has been no development or event which has
had a Material Adverse Effect.
3.3 EXISTENCE; COMPLIANCE WITH LAW.
------------------------------
42
The Borrower and each Subsidiary (a) is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization, (b)
has the limited liability company, corporate or partnership power and authority
and the legal right to own and operate all its material property, to lease the
material property it operates as lessee and to conduct the business in which it
is currently engaged, (c) is duly qualified as a foreign limited liability
company, corporation or partnership and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires such qualification except to the extent that the
failure to so qualify or be in good standing would not, in the aggregate, have a
Material Adverse Effect and (d) is in compliance with all Requirements of Law
except to the extent that the failure to comply therewith would not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
3.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
---------------------------------------------
The Borrower and each Subsidiary have full power and authority and the
legal right to make, deliver and perform the Credit Documents to which it is
party and has taken all necessary company, corporate or partnership action to
authorize the execution, delivery and performance by it of the Credit Documents
to which it is party. No consent or authorization of, filing with, notice to or
other act by or in respect of, any Governmental Authority or any other Person is
required in connection with the borrowings hereunder or with the execution,
delivery or performance of any Credit Document by the Borrower or any Subsidiary
(other than those which have been obtained) or with the validity or
enforceability of any Credit Document against the Borrower or any Subsidiary
(except such filings as are necessary in connection with the perfection of the
Liens created by such Credit Documents). Each Credit Document to which the
Borrower or any Subsidiary is a party has been duly executed and delivered on
behalf of the Borrower or such Subsidiary. Each Credit Document to which it is a
party constitutes a legal, valid and binding obligation of the Borrower or such
Subsidiary enforceable against the Borrower or such Subsidiary in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law).
3.5 NO LEGAL BAR; NO DEFAULT.
------------------------
The execution, delivery and performance of the Credit Documents, the
borrowings thereunder and the use of the proceeds of the Loans will not violate
any Requirement of Law or any Contractual Obligation of the Borrower or any
Subsidiary (except those as to which waivers or consents have been obtained and
except for any such violation which will not have a Material Adverse Effect),
and will not result in, or require, the creation or imposition of any Lien on
any of their respective properties or revenues pursuant to any Requirement of
Law or Contractual Obligation other than the Liens arising under or contemplated
in connection with the Credit Documents. Neither the Borrower nor any Subsidiary
is in default under or with respect to any of its Contractual Obligations in any
respect which would reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
43
3.6 NO MATERIAL LITIGATION.
----------------------
Except as set forth in Schedule 3.6, no litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the best knowledge of the Borrower, threatened by or against the Borrower or
any Subsidiary or against any of its or their respective properties or revenues
(a) with respect to the Credit Documents or any Loan or any of the transactions
contemplated hereby, or (b) which could reasonably be expected to have a
Material Adverse Effect.
3.7 INVESTMENT COMPANY ACT.
----------------------
Neither the Borrower nor any Subsidiary is an "investment company", or a
company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
3.8 FEDERAL REGULATIONS.
-------------------
No part of the proceeds of any Loan hereunder will be used directly or
indirectly for any purpose which violates, or which would be inconsistent with,
the provisions of Regulation G, T, U or X of the Board of Governors of the
Federal Reserve System as now and from time to time hereafter in effect. Neither
the Borrower nor any Subsidiary owns "margin stock" except as identified in the
financial statements referred to in Section 3.1 and the aggregate value of all
"margin stock" owned by the Borrower and the Subsidiaries taken as a group does
not exceed 25% of the value of their assets.
3.9 ERISA.
-----
To the best knowledge of the Borrower, neither a Reportable Event nor an
"accumulated funding deficiency" (within the meaning of Section 412 of the Code
or Section 302 of ERISA) has occurred during the five-year period prior to the
date on which this representation is made or deemed made with respect to any
Plan, and each Plan has complied in all material respects with the applicable
provisions of ERISA and the Code, except to the extent that any such occurrence
or failure to comply would not reasonably be expected to have a Material Adverse
Effect; no termination of a Single Employer Plan has occurred resulting in any
liability that has remained underfunded, and no Lien in favor of the PBGC or a
Plan has arisen, during such five-year period which would reasonably be expected
to have a Material Adverse Effect; the present value of all accrued benefits
under each Single Employer Plan (based on those assumptions used to fund such
Plans) did not, as of the last annual valuation date prior to the date on which
this representation is made or deemed made, exceed the value of the assets of
such Plan allocable to such accrued benefits by an amount which, as determined
in accordance with GAAP, would reasonably be expected to have a Material Adverse
Effect; and neither the Borrower, any Subsidiary nor any Commonly Controlled
Entity is currently subject to any liability for a complete or partial
withdrawal from a Multiemployer Plan which would reasonably be expected to have
a Material Adverse Effect.
44
3.10 ENVIRONMENTAL MATTERS.
---------------------
Except to the extent that all of the following, in the aggregate, would not
reasonably be expected to have a Material Adverse Effect:
(a) To the best knowledge of the Borrower, the facilities and
properties owned, leased or operated by the Borrower and its Subsidiaries
(the "Properties") do not use, store, generate, dispose of or handle any
Materials of Environmental Concern in amounts or concentrations which
constitute a violation of any Environmental Law.
(b) To the best knowledge of the Borrower, the Properties and all
operations of the Borrower and its subsidiaries at the Properties are in
compliance, and have in the last five years been in compliance, in all
material respects with all applicable Environmental Laws, and to the best
knowledge of the Borrower, there has been no violation of any Environmental
Law with respect to the Properties or the business operated by the Borrower
(the "Business").
(iv) Neither the Borrower nor any Subsidiary has received any notice
of violation, alleged violation, non-compliance, liability or potential
liability regarding environmental matters or compliance with Environmental
Laws with regard to any of the Properties or the Business, nor does the
Borrower have knowledge that any such notice is being threatened except as
set forth is Schedule 3.6 hereof.
(v) To the best knowledge of the Borrower, all Materials of
Environmental Concern have been generated, treated, stored or disposed of
at, on or under any of the Properties in accordance with applicable
Environmental Law.
(vi) No judicial proceeding or governmental or administrative action
is pending or, to the best of the knowledge of the Borrower, threatened,
under any Environmental Law to which the Borrower or any Subsidiary is or
will be named as a party with respect to the Properties or the Business or
to the best knowledge of the Borrower, any facility that has received
materials of environmental concern generated by the Borrower, nor are there
any consent decrees or other decrees, consent orders, administrative orders
or other orders, or other administrative or judicial requirements
outstanding under any Environmental Law with respect to the Properties or
the Business.
(vii) To the best knowledge of the Borrower, there has been no
release or threat of release of Materials of Environmental Concern at or
from the Properties arising from or related to the operations of the
Borrower or any Subsidiary in connection with the Properties or otherwise
in connection with the Business, in violation of or in amounts or in a
manner that could give rise to liability under Environmental Laws.
3.11 PURPOSE OF LOAN.
---------------
The proceeds of the Loans will be used to finance the acquisition of the
Acquired Assets
45
and closing costs incurred in connection therewith, to repay existing
Indebtedness, to pay closing costs incurred in connection herewith and to
provide general working capital.
3.12 SUBSIDIARIES.
------------
Set forth on Schedule 3.12 is a complete and accurate list of all
Subsidiaries of the Borrower as of the Closing Date. As of the Closing Date,
information on the attached Schedule includes state of organization; the number
of shares of each class of capital stock or partnership or other equity
interests (identified by type) outstanding; the number and percentage of
outstanding shares of each class of stock or percentage of ownership interest;
and the number and effect, if exercised, of all outstanding options, warrants,
rights of conversion or purchase and similar rights. The outstanding capital
stock and partnership and other equity interests of all such Subsidiaries are
validly issued, fully paid and non-assessable and are owned, free and clear of
all Liens (other than those arising under or contemplated in connection with the
Credit Documents). As of the Closing Date, except as set forth on Schedule 3.12,
there are no outstanding options or other rights pertaining to the partnership
or other equity interests of the Borrower, and no voting trusts, shareholders'
or partners' agreements (other than the partnership agreements relating to the
formation, organization, operation and governance of the partnerships, copies of
which have been provided to the Administrative Agent and the Lenders) or similar
agreement affecting either ownership of or the right to vote such partnership
interests.
3.13 INTELLECTUAL PROPERTY RIGHTS.
----------------------------
The Borrower and its Subsidiaries own or have the right to use, subject to
any of its obligations under any valid and binding license agreement, the
Intellectual Property (as defined below) disclosed in Schedule 3.13 hereto,
which represents all Intellectual Property individually or in the aggregate
material to the conduct of the businesses of the Borrower and its Subsidiaries
taken as a whole on the date hereof. Except as disclosed in Schedule 3.13
hereto or where the failure shall not have a Material Adverse Effect, (i) the
Borrower or a Subsidiary has the right to use the Intellectual Property
disclosed in Schedule 3.13 hereto in perpetuity and without payment of
royalties, (ii) all registrations with and applications to Governmental or
Regulatory Authorities in respect of such Intellectual Property are valid and in
full force and effect and are not subject to the payment of any taxes or
maintenance fees or the taking of any other actions by the Borrower or a
Subsidiary to maintain their validity or effectiveness, and (iii) there are no
restrictions on the direct or indirect transfer of any Contractual Obligation,
or any interest therein, held by the Borrower or any Subsidiary in respect of
such Intellectual Property. Neither the Borrower nor any Subsidiary of the
Borrower is in default (or with the giving of notice or lapse of time or both,
would be in default) under any license to use such Intellectual Property the
loss of which would reasonably be expected to have a Material Adverse Effect, to
the best of the Borrower and its Subsidiaries' knowledge such Intellectual
Property is not being infringed by any third party the loss of which may have a
Material Adverse Effect, and to the best of the Borrower and its Subsidiaries'
knowledge neither the Borrower nor any Subsidiary of the Borrower is infringing
any Intellectual Property of any third party the infringement of which would
reasonably be expected to have a Material Adverse Effect. For purposes of this
Section 3.13, (A) "Intellectual Property" means patents and patent rights,
trademarks and trademark rights, trade names and
46
trade name rights, service marks and service xxxx rights, copyrights and
copyright rights, including the right to xxx for past infringement, licenses,
proprietary information, designs, processes, inventions, software and related
intellectual property rights and all pending applications for and registrations
of any of the foregoing and (B) the foregoing representations with respect to
Intellectual Property licensed by the Borrower or any of its Subsidiaries shall
be to the best of the Borrower's knowledge.
3.14 NO BURDENSOME RESTRICTIONS.
--------------------------
No Requirement of Law or Contractual Obligation of the Borrower could
reasonably be expected to have a Material Adverse Effect.
3.15 TAXES.
-----
Except as set forth in Schedule 3.15, the Borrower and the Subsidiaries
have filed, or caused to be filed, all material tax returns (Federal, state,
local and foreign) required to be filed and paid all taxes shown thereon to be
due (including interest and penalties) and has paid all other taxes, fees,
assessments and other governmental charges (including mortgage recording taxes,
documentary stamp taxes and intangibles taxes) owing (or necessary to preserve
any Liens in favor of the Lenders) by them, except for such taxes (i) which are
not yet delinquent or (ii) as are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with GAAP. The Borrower is not aware of any proposed material tax
assessments against it or any of its Subsidiaries.
3.16 INTEREST IN REAL ESTATE.
-----------------------
Schedule 3.16 sets forth the interests of the Borrower and its Subsidiaries
in real property. Except as set forth in Schedule 3.16, neither the Borrower nor
any of its Subsidiaries has any interest in real property.
SECTION 4. CONDITIONS PRECEDENT
4.1 CONDITIONS TO CLOSING DATE.
--------------------------
This Agreement shall become effective upon the satisfaction of the
following conditions precedent:
(a) Execution of Agreement. The Administrative Agent shall have
----------------------
received (i) multiple counterparts of this Agreement for each Lender,
executed by a duly authorized officer of each party hereto, (ii) for the
account of each Lender a Revolving Note and Term Note, as appropriate, and
(iii) multiple counterparts of the Security Agreement to be executed by the
Borrower and its Subsidiaries in existence as of the Closing Date, the
Pledge Agreement and other Security Documents for each Lender and UCC
financing statements relating thereto executed by a duly authorized officer
of each
47
party thereto, in each case conforming to the requirements of this Agreement and
the Security Documents and executed by a duly authorized officer of the
Borrower, the Guarantors and the parties to the Pledge Agreement, as applicable.
(b) Liability and Casualty Insurance. The Administrative Agent shall
--------------------------------
have received copies of insurance policies or certificates of insurance
evidencing liability and casualty insurance meeting the requirements set
forth herein or in the Security Agreement to be executed by the Borrower
and its Subsidiaries in existence as of the Closing Date.
(c) Corporate Documents. The Administrative Agent shall have received
--------- ---------
the following:
(i) Articles of Incorporation. Copies of the certificate of
-------------------------
formation, articles of organization, articles of incorporation or
charter documents of the Borrower and the Guarantors certified to be
true and complete as of a recent date by the appropriate governmental
authority of the state of its organization or incorporation with
respect to the Borrower and the Acquired Company and by the applicable
secretary or assistant secretary with respect to each other Guarantor.
(ii) Resolutions. Copies of the resolutions taken by the
-----------
directors of the Borrower and the Guarantors approving and adopting
the Credit Documents, the transactions contemplated therein and
authorizing execution and delivery thereof, certified by a secretary
or assistant secretary as of the Closing Date to be true and correct
and in full force and effect as of such date.
(iii) Bylaws. A copy of the bylaws of the Borrower and the
------
Guarantors certified by a secretary or assistant secretary as of the
Closing Date to be true and correct and in full force and effect as of
such date.
(iv) Good Standing. Copies of (A) certificates of good standing,
-------------
existence or its equivalent with respect to the Borrower and the
Guarantors certified as of a recent date by the appropriate
governmental authorities of the state of incorporation and each other
state in which the failure to so qualify and be in good standing would
have a material adverse effect on the business or operations of the
Borrower or the Guarantors in such state and (B) a certificate
indicating payment of all corporate franchise taxes certified as of a
recent date by the appropriate governmental taxing authorities.
(d) Officer's Certificate. The Administrative Agent shall have
---------------------
received a certificate of a duly authorized secretary or assistant
secretary of each of the Borrower and the Guarantors dated the Closing
Date, substantially in the form of Schedule 4.1(d) with appropriate
insertions and attachments.
(e) Legal Opinion of Counsel. The Administrative Agent shall have
------------------------
received, with a copy for each Lender, opinions of various counsel for the
Borrower and the
48
Guarantors, dated the Closing Date and addressed to the Administrative
Agent and the Lenders, in form and substance satisfactory to Administrative
Agent and the Lenders.
(f) Compliance and Solvency Certificates. The Administrative Agent
------------------------------------
shall have received from an Authorized Signatory (i) a certificate
regarding the accuracy of representations and warranties and the absence of
Defaults, in form reasonably acceptable to the Administrative Agent, and
(ii) a solvency certificate substantially in the form of Schedule
4.1(f)(ii), demonstrating the solvency of the Borrower and each of the
Guarantors.
(g) Fees. The Administrative Agent shall have received all fees owing
----
to it pursuant to the Fee Letter.
(h) Acquisition. The Acquisition shall have been consummated in
-----------
accordance with the terms of the Purchase Agreement and in compliance with
applicable law and regulatory approvals. The Purchase Agreement shall not
have been altered, amended or otherwise changed or supplemented or any
condition therein waived, without the prior written consent of the
Administrative Agent.
(i) Litigation. There shall not exist any pending or threatened
----------
action, suit, investigation or proceeding against the Borrower or any
Guarantor that would have or would reasonably be expected to have a
Material Adverse Effect.
(j) Minnesota IRB. The Administrative Agent shall have received
-------------
evidence satisfactory to it that the industrial revenue bonds with respect
to the Owatonna, Minnesota facility shall have been repaid in full and all
collateral securing such industrial revenue bonds shall have been released.
(k) Section 4.2 Conditions. The conditions specified in Sections 4.2
----------------------
(a) and (b) shall be satisfied on the Closing Date as if Loans were to be
made on such date.
(l) Notice of Account Designation. The Borrower shall have executed
-----------------------------
and delivered to the Administrative Agent a Notice of Account Designation.
(m) Additional Matters. All other documents and legal matters in
------------------
connection with the transactions contemplated by this Agreement shall be
reasonably satisfactory in form and substance to the Administrative Agent
and its counsel.
4.2 CONDITIONS TO ALL LOANS.
-----------------------
The obligation of each Lender to make any Loan hereunder (including the
initial Loans to be made hereunder) or the issuance of a Letter of Credit is
subject to the satisfaction of the following conditions precedent on the date of
making such Loan or the issuance of such Letter of Credit:
49
(a) Representations and Warranties. The representations and
------------------------------
warranties made by the Borrower and the Subsidiaries herein, in the
Security Agreements or which are contained in any certificate furnished at
any time under or in connection herewith shall be true and correct in all
material respects on and as of the date of such Loan or Letter of Credit as
if made on and as of such date (except to the extent such representations
and warranties expressly relate to an earlier date).
(b) No Default or Event of Default. No Default or Event of Default
------------------------------
shall have occurred and be continuing on such date or after giving effect
to the Loan to be made on such date or the Letter of Credit to be issued on
such date unless such Default or Event of Default shall have been waived in
accordance with this Agreement.
Each request for a Loan or Letter of Credit and each acceptance by the
Borrower of a Loan or Letter of Credit shall be deemed to constitute a
representation and warranty by the Borrower as of the date of such Loan or
Letter of Credit that the applicable conditions in paragraphs (a) and (b) have
been satisfied.
SECTION 5. AFFIRMATIVE COVENANTS
The Borrower hereby covenants and agrees that on the Closing Date, and
thereafter for so long as this Agreement is in effect and until the Commitments
have terminated, no Note remains outstanding and unpaid, no Letter of Credit
remains outstanding and the Loans and LOC Obligations, together with interest,
fees and all other amounts owing to the Administrative Agent or any Lender
hereunder, are paid in full, the Borrower shall, and in the case of Sections
5.3, 5.4, 5.5, 5.6, 5.7 and 5.8 shall cause each of its Subsidiaries, to:
5.1 FINANCIAL STATEMENTS.
--------------------
Furnish to the Administrative Agent and each of the Lenders:
(a) Annual Financial Statements. As soon as available, but in any
---------------------------
event within 105 days after the end of each fiscal year of the Borrower, a
copy of (i) the consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income and retained earnings and of cash flows
of the Borrower and its consolidated Subsidiaries for such year, audited by
Xxxxxx Xxxxxxxx or any other firm of independent certified public
accountants of nationally recognized standing reasonably acceptable to the
Majority Lenders, setting forth in each case in comparative form the
figures for the previous year, reported on without a "going concern" or
like qualification or exception, or qualification indicating that the scope
of the audit was inadequate to permit such independent certified public
accountants to certify such financial statements without such qualification
and (ii) the company-prepared consolidating statements of income of the
Borrower and its consolidated subsidiaries for such year, setting forth in
each case in comparative form the figures for the previous year;
50
(b) Quarterly Financial Statements. As soon as available and in any
------------------------------
event within 45 days after the end of each of the first three fiscal
quarters of the Borrower, a company-prepared consolidated balance sheet of
the Borrower and its consolidated Subsidiaries as at the end of such period
and related company-prepared statements of income and retained earnings and
of cash flows for the Borrower and its consolidated Subsidiaries for such
quarterly period and for the portion of the fiscal year ending with such
period, in each case setting forth in comparative form consolidated figures
for the corresponding period or periods of the preceding fiscal year;
(c) Annual Budget Plan. As soon as available, but in any event no
------------------
more than 60 days after the end of fiscal year 1998 and each fiscal year
thereafter, a copy of the detailed annual budget or plan for the next
fiscal year set out by fiscal quarter, in form and detail reasonably
acceptable to the Administrative Agent and the Majority Lenders, together
with a summary of the material assumptions made in the preparation of the
budget or plan;
all such financial statements fairly present in all material respects the
financial condition and results from operations of the entities and for the
periods specified (subject, in the case of interim statements, to normal
recurring year-end audit adjustments) and to be prepared in reasonable detail
and, in the case of the annual and quarterly financial statements provided in
accordance with subsections (a) and (b) above, in accordance with GAAP applied
consistently throughout the periods reflected therein (except as approved by
such accountants or Authorized Signatory, as the case may be, and disclosed
therein).
5.2 CERTIFICATES; OTHER INFORMATION.
-------------------------------
Furnish to the Administrative Agent and each of the Lenders:
(a) Accountant's Compliance Letter. Concurrently with the delivery
------------------------------
of the financial statements referred to in Section 5.1(a) above,
a compliance letter of the independent certified public
accountants reporting on such financial statements stating that
in making the examination necessary therefor no knowledge was
obtained of any Default or Event of Default, except as specified
in such compliance letter;
(b) Compliance Certificate. Concurrently with the delivery of the
----------------------
financial statements referred to in Sections 5.1(a) and 5.1(b) above, a
certificate of an Authorized Signatory stating that, to the best of such
Authorized Signatory's knowledge, the Borrower and the Subsidiaries during
such period observed or performed in all material respects all of their
covenants and other agreements, and satisfied in all material respects
every material condition, contained in this Agreement to be observed,
performed or satisfied by them, and that such Authorized Signatory has
obtained no knowledge of any Default or Event of Default except as
specified in such certificate and such certificate shall include the
calculations in reasonable detail required to indicate compliance with
Section 5.9 and information as to Restricted Payments made in the
applicable period in accordance with Section 6.11;
51
(c) Other Information. Promptly, such additional financial and other
-----------------
information as the Administrative Agent, on behalf of any Lender, may from
time to time reasonably request.
5.3 PAYMENT OF OBLIGATIONS.
----------------------
Pay, discharge or otherwise satisfy at or before maturity or before they
become delinquent, as the case may be, in accordance with industry practice
(subject, where applicable, to specified grace periods) all obligations of
whatever nature and any additional costs that are imposed as a result of any
failure to so pay, discharge or otherwise satisfy such obligations, except when
the amount or validity of such obligations and costs is currently being
contested in good faith by appropriate proceedings and reserves, if applicable,
in conformity with GAAP with respect thereto have been provided on the books of
the Borrower or its Subsidiaries, as the case may be.
5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE.
------------------------------------------------
Preserve, renew and keep in full force and effect the Borrower's and each
Subsidiary's (other than any Non-Material Subsidiary which is not a Designated
Non-Material Subsidiary) company, corporate or partnership existence and take
all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business; comply with all
Contractual Obligations and Requirements of Law applicable to it except to the
extent that failure to comply therewith would not, in the aggregate, have a
Material Adverse Effect.
5.5 MAINTENANCE OF PROPERTY; INSURANCE.
----------------------------------
Keep all material property useful and necessary in its business in
reasonably good working order and condition (ordinary wear and tear excepted);
maintain with financially sound and reputable insurance companies insurance on
all its material property in at least such amounts and against at least such
risks as are usually insured against in the same general area by companies
engaged in the same or a similar business; and furnish to the Administrative
Agent, upon written request, full information as to the insurance carried.
5.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS.
------------------------------------------------------
Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its businesses and activities; and
permit, during regular business hours and upon reasonable notice by the
Administrative Agent or any Lender, the Administrative Agent's (at the
Borrower's expense after the occurrence of a Default or Event of Default) or any
Lender (at such Lender's expense) to visit and inspect any of its properties and
examine and make abstracts from any of its books and records (other than
materials protected by the attorney-client privilege and materials which the
Borrower may not disclose without violation of a confidentiality obligation
binding upon it) at any reasonable time and as often as may reasonably be
desired, and to discuss the business, operations, properties and financial and
other condition of
52
the Borrower and its Subsidiaries with officers and employees of the Borrower
and its Subsidiaries and with its independent certified public accountants.
5.7 NOTICES.
-------
Give notice to the Administrative Agent (which shall promptly transmit such
notice to each Lender) of:
(a) within five Business Days after the Borrower knows of the
occurrence of any material Default or Event of Default;
(b) promptly, any default or event of default under any Contractual
Obligation of the Borrower or any Subsidiary which would reasonably be
expected to have a Material Adverse Effect;
(c) promptly, any litigation, or any investigation or proceeding
known to the Borrower, affecting the Borrower or any Subsidiary which, if
adversely determined, would reasonably be expected to have a Material
Adverse Effect;
(d) as soon as possible and in any event within 30 days after the
Borrower knows: (i) the occurrence of any Reportable Event with respect to
any Plan, a failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC or a Plan or any withdrawal from,
or the termination, Reorganization or Insolvency of, any Multiemployer Plan
or (ii) the institution of proceedings or the taking of any other action by
the PBGC or the Borrower, any Subsidiary or any Commonly Controlled Entity
or any Multiemployer Plan with respect to the withdrawal from, or the
terminating, Reorganization or Insolvency of, any Plan, provided that in
each case in clause (i) and (ii) above, such event or condition could have
a Material Adverse Effect; and
(e) promptly, any other development or event which would reasonably
be expected to have a Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of
an Authorized Signatory setting forth details of the occurrence referred to
therein and stating what action the Borrower proposes to take with respect
thereto.
5.8 ENVIRONMENTAL LAWS.
------------------
(a) Comply in all material respects with, and take reasonable
actions to ensure compliance in all material respects by all tenants and
subtenants, if any, with, all applicable Environmental Laws and obtain and
comply in all material respects with and maintain, and take reasonable
actions to ensure that all tenants and subtenants obtain and comply in all
material respects with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable
Environmental Laws except to the extent that failure to do so would not
reasonably be expected to have a Material
53
Adverse Effect;
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all
lawful orders and directives of all Governmental Authorities regarding
Environmental Laws except to the extent that the same are being contested
in good faith by appropriate proceedings and the failure to do or the
pendency of such proceedings would not reasonably be expected to have a
Material Adverse Effect; and
(c) Defend, indemnify and hold harmless the Administrative Agent and
the Lenders, and their respective employees, agents, officers and
directors, from and against any and all claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature known or unknown, contingent or otherwise, arising out of, or in any
way relating to the violation of, noncompliance with or liability under,
any Environmental Law applicable to the operations of the Borrower, its
Subsidiaries or the Properties, or any orders, requirements or demands of
Governmental Authorities related thereto, including, without limitation,
reasonable attorney's and consultant's fees, investigation and laboratory
fees, response costs, court costs and litigation expenses, except to the
extent that any of the foregoing arise out of the gross negligence or
willful misconduct of the party seeking indemnification therefor. The
agreements in this paragraph shall survive repayment of the Notes and all
other amounts payable hereunder.
5.9 FINANCIAL COVENANTS.
--------------------
(a) Leverage Ratio. The Borrower will maintain, as of the end of
each fiscal quarter to occur during the periods shown, a Leverage Ratio of
not greater than:
Period Ratio
------ -----
Closing Date through June 30, 1998 3.75:1.0
July 1, 1998 through September 30, 1998 3.50:1.0
October 1, 1998 through December 31, 1998 3.50:1.0
January 1, 1999 through March 31, 1999 3.25:1.0
April 1, 1999 through June 30, 1999 3.25:1.0
July 1, 1999 through September 30, 1999 3.25:1.0
October 1, 1999 through December 31, 1999 3.25:1.0
January 1, 2000 and thereafter 2.75:1.0
(b) Interest Coverage Ratio. The Borrower will maintain, as of the
-----------------------
end of each fiscal quarter to occur during the periods shown, an Interest
Coverage Ratio of at least:
54
Period Ratio
------ -----
Closing Date through June 30, 1998 2.75:1.0
July 1, 1998 through September 30, 1998 2.75:1.0
October 1, 1998 through December 31, 1998 2.75:1.0
January 1, 1999 through March 31, 1999 3.00:1.0
April 1, 1999 through June 30, 1999 3.00:1.0
July 1, 1999 through September 30, 1999 3:00:1.0
October 1, 1999 through December 31, 1999 3.00:1.0
January 1, 2000 and thereafter 3.25:1.0
(c) Ratio of Total Funded Debt to Consolidated Capitalization. The
---------------------------------------------------------
Borrower will maintain at all times during the following periods a ratio of
Total Funded Debt to Consolidated Capitalization of not greater than:
Period Ratio
------ -----
Closing Date through June 30, 1998 0.65:1.0
July 1, 1998 through September 30, 1998 0.65:1.0
October 1, 1998 through December 31, 1998 0.65:1.0
January 1, 1999 through March 31, 1999 0.65:1.0
April 1, 1999 through June 30, 1999 0.60:1.0
July 1, 1999 through September 30, 1999 0.60:1.0
October 1, 1999 through December 31, 1999 0.60:1.0
January 1, 2000 and thereafter 0.55:1.0
(d) Capital Expenditures. The Borrower and its Subsidiaries shall not
--------------------
make Capital Expenditures in excess of $8,000,000 in the aggregate in any
fiscal year (on a non-cumulative basis).
5.10 COVENANTS REGARDING PATENTS, TRADEMARKS AND COPYRIGHTS.
------------------------------------------------------
(a) The Borrower shall notify the Administrative Agent promptly if
it knows or has reason to know that any application, letters patent or
registration relating to any Patent or Trademark which is material to the
business of the Borrower and its Subsidiaries taken as a whole may become
abandoned, or of any adverse determination or development (including,
without limitation, the institution of, or any such determination or
development in, any proceeding in the United States Patent and Trademark
Office or any court) regarding the Borrower's or such other Subsidiary's
ownership of any Patent or Trademark which is material to the business of
the Borrower and its Subsidiaries taken as a whole, its right to patent or
register the same, or to enforce, keep and maintain the same.
(b) The Borrower shall notify the Administrative Agent promptly
after it
55
knows or has reason to know of any adverse determination or development
(including, without limitation, the institution of, or any such
determination or development in, any proceeding in any court) regarding any
Copyright which is material to the business of the Borrower and its
Subsidiaries taken as a whole, whether (i) such Copyright may become
invalid or unenforceable prior to its expiration or termination, or (ii)
the Borrower's or such other Subsidiary ownership of such Copyright, its
right to register the same or to enforce, keep and maintain the same may
become affected.
(c) (i) The Borrower shall promptly notify the Administrative Agent
of any filing by the Borrower or any other Subsidiary, either itself or
through any agent, employee, licensee or designee (but in no event later
than the fifteenth day following such filing), of any application for the
registration of any Copyright, Trademark or Patent which is material to the
business of the Borrower and its Subsidiaries taken as a whole with the
United States Copyright Office or United States Patent and Trademark Office
or any similar office or agency in any other country or any political
subdivision thereof.
(ii) Concurrently with the delivery of annual financial
statements of the Borrower pursuant to Section 5.1 hereof, the
Borrower shall provide the Administrative Agent and its counsel a
complete and correct list of all Copyrights, Patents and Trademarks
owned by the Borrower or any of its Subsidiaries which are material to
the business of the Borrower and its Subsidiaries taken as a whole
that have not been set forth as annexes of such documents and
instruments showing all filings and recordings for the protection of
the security interest of the Administration Agent therein pursuant to
the agreements of the United States Patent and Trademark Office or the
United States Copyright Office.
(iii) Upon request of the Administrative Agent, the Borrower
shall execute and deliver any and all agreements, instruments,
documents, and papers as the Administrative Agent may reasonably
request to evidence the Administrative Agent's security interest in
the Copyrights, Patents, Trademarks and the General Intangibles
referred to in clauses (i) and (ii), including, without limitation,
the goodwill of the Borrower or such other Subsidiary, relating
thereto or represented thereby (or such other Copyrights, Trademarks,
Patents or the General Intangibles relating thereto or represented
thereby as the Administrative Agent may reasonably request).
(d) The Borrower will take all necessary actions, including, without
limitation, in any proceeding before the United States Patent and Trademark
Office or the United States Copyright Office, to maintain each letters
patent for the Patents or registration of the Trademarks and Copyrights
which are material to the business of the Borrower and its Subsidiaries
taken as a whole, including, without limitation, payment of maintenance
fees, filing of applications for renewal, affidavits of use, affidavits of
incontestability and opposition, interference and cancellation proceedings.
56
(e) In the event that any Trademark, Copyright or Patent is
infringed, misappropriated or diluted by a third party, the Borrower shall
notify the Administrative Agent promptly after it learns thereof and shall,
unless the Borrower or the relevant Subsidiary, as the case may be, shall
reasonably determine that such Trademark, Copyright or Patent is not
material to the business of the Borrower and its Subsidiaries taken as a
whole, promptly xxx for infringement, misappropriation or dilution and to
recover any and all damages for such infringement, misappropriation or
dilution, and take such other actions as the Borrower or such Subsidiary,
as the case may be, shall reasonably deem appropriate under the
circumstances to protect such Trademark, Copyright or Patent.
5.11 FEES, ETC.
---------
Pay to the Administrative Agent the fees and comply with the other
agreements provided for in the Fee Letter and the Commitment Letter.
5.12 SUBSIDIARIES.
------------
(a) Material Subsidiaries; Designated Non-Material Subsidiaries. In
-----------------------------------------------------------
the event the Borrower on or after the Closing Date, shall form, acquire or
otherwise obtain any Material Subsidiary or designate any Non-Material
Subsidiary as a Designated Non-Material Subsidiary, the Borrower shall
promptly notify the Administrative Agent of the existence of such Material
Subsidiary or designation of such Designated Non-Material Subsidiary, shall
provide the Administrative Agent with the information required by Section
3.12 with respect thereto and shall enter into and shall cause such
Material Subsidiary or Designated Non-Material Subsidiary to enter into and
deliver to the Administrative Agent on behalf of the Lenders (i) a Joinder
Agreement in the form of Schedule 5.12 attached hereto and (ii) an
amendment to the Pledge Agreement pledging the stock of such Material
Subsidiary or Designated Non-Material Subsidiary. In connection therewith,
the Borrower shall cause such Material Subsidiary or Designated Non-
Material Subsidiary to deliver to the Administrative Agent on behalf of the
Lenders certified organizational documents, evidences of authority and
opinion letters and to take such other action in connection therewith,
including without limitation the filing of appropriate financing
statements, as the Administrative Agent may reasonably require.
(b) Non-Material Subsidiaries. In the event the Borrower on or after
-------------------------
the Closing Date, shall form, acquire or otherwise obtain any Non-Material
Subsidiary (other than a Designated Non-Material Subsidiary), the Borrower
shall promptly notify the Administrative Agent of the existence of such
Non-Material Subsidiary, shall provide the Administrative Agent with the
information required by Section 3.12 with respect thereto and shall enter
into and shall cause such Non-Material Subsidiary to enter into and deliver
to the Administrative Agent on behalf of the Lenders a Joinder Agreement in
the form of Schedule 5.12 attached hereto. In connection therewith, the
Borrower shall cause such Non-Material Subsidiary to deliver to the
Administrative Agent on behalf of the Lenders certified organizational
documents, evidences of authority and opinion letters and to take
57
such other action in connection therewith, including without limitation the
filing of appropriate financing statements, as the Administrative Agent may
reasonably require.
5.13 MORTGAGES ON REAL PROPERTY.
--------------------------
Upon the reasonable request of the Majority Lenders, the Borrower and its
Subsidiaries shall enter into and deliver to the Administrative Agent on behalf
of the Lenders deeds of trust and mortgages, together with evidences of
authority and opinion letters (except with respect to the Medway Facility), in
form and substance reasonably acceptable to the Administrative Agent pursuant to
which the Borrower and its Subsidiaries grant deeds of trust and mortgages to
the Administrative Agent (or its trustee) on behalf of the Lenders on all real
property interests owned or leased by the Borrower and its Subsidiaries free and
clear of all Liens other than Permitted Liens. In connection therewith, the
Borrower and its Subsidiaries shall deliver to the Administrative Agent such
surveys, environmental reports and title insurance policies (except with respect
to the Medway Facility and take such other action in connection therewith,
including without limitation the filing of appropriate fixture filings, as shall
be reasonably required by the Administrative Agent.
5.14 YEAR 2000 COMPATIBILITY.
-----------------------
The Borrower will take as soon as reasonably practicable all actions
reasonably necessary to assure that the Credit Parties' computer based systems
are able to operate with respect to and effectively process data which includes
dates on and after January 1, 2000. At the request of the Administrative Agent,
the Credit Parties shall provide reasonable assurances satisfactory to the
Administrative Agent of the Credit Parties' Year 2000 compatibility.
5.15 FURTHER ASSURANCES.
------------------
Promptly upon request by the Agent, or any Lender through the Agent,
the Borrower shall correct any material defect or error that may be discovered
in any credit document or in the execution, acknowledgment, filing or
recordation hereof, and
(a) Promptly upon request by the Agent or any Lender through the
Agent, the Borrower shall duly, execute, acknowledge, deliver, record,
rerecord, file, refile, register and reregister any and all such further
acts, deeds, conveyances, pledge agreements, mortgages, deeds of trust,
trust deeds, assignments, financing statements and continuations thereof,
termination statements, notices of assignment, transfers, certificates,
assurances and other instruments as the Agent, or any Lender through the
Agent, may reasonably require from time to time in order to (i) carryout
more effectively the purposes of this Agreement, the Notes or any other
Credit Document (ii) to the fullest extent permitted by applicable law,
subject any Credit Party's properties, assets, rights or interest to the
Liens now or hereafter intended to be covered by any of the Security
Documents, (iii) perfect and maintain the validity, effectiveness priority
of any of the Security Documents and any of the Liens intended to be
created thereunder and (iv) assure, convey, grant, assign, transfer,
preserve, protect and confirm more effectively
58
unto the Agent and the Lenders the rights granted or now or hereafter
granted to the Agent and the Lender under any Credit Document or under any
other instrument executed in connection with any Credit Document to which
any Credit Party is or is to be a party.
5.16 DESIGNATED NON-MATERIAL SUBSIDIARIES.
------------------------------------
If the assets owned by the Non-Material Subsidiaries exceed 20% of
consolidated assets of the Borrower and its Subsidiaries or if the revenues
generated by the Non-Material Subsidiaries exceed 20% of the consolidated
revenues of the Borrowers and its Subsidiaries during any consecutive 12-month
period, then the Borrower shall designate certain Non-Material Subsidiaries as
"Designated Non-Material Subsidiaries" so that immediately after such
designation the Non-Material Subsidiaries not designated as "Designated Non-
Material Subsidiaries" own in the aggregate less than 20% of the consolidated
assets of the Borrower and its Subsidiaries and generate less than 20% of the
consolidated revenues of the Borrowers and its Subsidiaries during any
applicable 12-month period.
5.17 IRB LETTER OF CREDIT
--------------------
The Borrower shall use its reasonable commercial best efforts to effect the
substitution or replacement of the IRB Letter of Credit with a substitute or
replacement Letter of Credit issued by the Issuing Lender on or before December
31, 1999; provided, that the Borrower shall not be required to pay costs and
expenses in connection with such substitution or replacement in excess of
$25,000. Upon the consummation of the aforesaid substitution or replacement of
the IRB Letter of Credit, the Revolving Committed Amount shall be increased to
THIRTY MILLION DOLLARS ($30,000,000). The Revolving Commitment of each Lender
shall be increased on a pro rata basis to reflect such increase in the Revolving
Committed Amount.
SECTION 6 NEGATIVE COVENANTS
The Borrower hereby covenants and agrees that on the Closing Date, and
thereafter for so long as this Agreement is in effect and until the Commitments
have terminated, no Note remains outstanding and unpaid and the Loans, together
with interest, Commitment Fees and all other amounts owing to the Administrative
Agent or any Lender hereunder, are paid in full.
6.1 INDEBTEDNESS.
------------
The Borrower will not, nor will it permit any Subsidiary to, contract,
create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising or existing under this Agreement and the
other Credit Documents;
(b) Indebtedness existing as of the Closing Date as set forth in
Schedule 6.1(b)) and renewals, refinancings or extensions thereof in a
principal amount not in
59
excess of that outstanding as of the date of such renewal, refinancing or
extension;
(c) unsecured intercompany Indebtedness among the Borrower and the
Guarantors;
(d) Capital Leases and purchase money indebtedness for the
financing of equipment which, in the aggregate principal amount at any
time, do not exceed $5,000,000;
(e) Indebtedness under the Seller Senior Note and the Seller
Subordinated Note;
(f) Indebtedness of the Borrower and its Subsidiaries in respect of
the sale to any third party by the Borrower or any of its Subsidiaries of
receivables due under equipment leases or security agreements or financing
agreements in the nature a financing lease or installment sales contract,
of the Borrower or any such Subsidiary, and the chattel paper and equipment
related thereto; provided, the portion of such Indebtedness (i) which is
recourse to the Borrower or any such Subsidiary or (ii) in respect of which
the Borrower or any such Subsidiary has issued any guarantee or otherwise
has any contingent obligation, does not exceed $12,000,000 in the aggregate
at any one time;
(g) Indebtedness of the Borrower and its Subsidiaries in respect of
any equipment leases either funded or financed by third party sources
(other than Subsidiaries of the Borrower) in an aggregate maximum amount of
$6,000,000 at any one time; and
(h) other Indebtedness which does not exceed $7,000,000 in the
aggregate at any time outstanding.
6.2 LIENS.
-----
The Borrower will not, nor will it permit any Subsidiary to, contract,
create, incur, assume or permit to exist any Lien with respect to any of their
respective property or assets of any kind (whether real or personal, tangible or
intangible), whether now owned or hereafter acquired, except for Permitted
Liens.
6.3 GUARANTY OBLIGATIONS.
--------------------
The Borrower will not, nor will it permit any Subsidiary to, enter into or
otherwise become or be liable in respect of any Guaranty Obligations (excluding
specifically therefrom endorsements in the ordinary course of business of
negotiable instruments for deposit or collection) other than (i) those in favor
of the Lenders in connection herewith, (ii) Guaranty Obligations by the Borrower
or its Subsidiaries of other Indebtedness permitted under Section 6.1 (except,
as regards Indebtedness under subsection (b) thereof, only if and to the extent
such Indebtedness was guaranteed on the Closing Date), and (iii) other Guaranty
Obligations of the Borrowers and its Subsidiaries to the extent permitted by
Section 6.1(f) hereof.
60
6.4 LINES OF BUSINESS.
-----------------
The Borrower will not, nor will it permit any of its Subsidiaries to, alter
its line or lines of business activity if as a result thereof the Borrower and
its Subsidiaries would not be predominantly engaged in the retail or commercial
business of the design, marketing, manufacture and sale of exercise and health
related equipment and similar or related businesses.
6.5 CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS, ETC.
------------------------------------------------------
The Borrower will not, nor will it permit any Subsidiary to,
(a) dissolve, liquidate or wind up its affairs, sell, transfer,
lease or otherwise dispose of all or any part of its property or assets or
agree to do so at a future time except the following, without duplication,
shall be expressly permitted:
(i) Specified Sales;
(ii) the sale, transfer, lease or other disposition of property
or assets not in the ordinary course of business (other than Specified
Sales), where and to the extent that they are the result of a Recovery
Event or otherwise and the net proceeds therefrom are used to repair
or replace damaged property or to purchase or otherwise acquire new
assets or property provided that such purchase or acquisition is
committed to within 90 days of receipt of the net proceeds and such
purchase or acquisition is consummated within 180 days of such
receipt;
(iii) the dissolution of any Non-Material Subsidiary which is
not a Designated Non-Material Subsidiary or the sale, transfer, lease
or other disposition of property or assets to the Borrower or any
Guarantor; and
(iv) any other sale of any property or asset provided such
property or asset does not have a value in excess of $250,000.
Provided no Default or Event of Default then exists, the Administrative Agent
shall, without obtaining the consent of any Lender, release its lien on any
collateral sold or otherwise transferred in accordance with this Section upon
the consummation of such sale or transfer and upon the performance by the
Borrower of all of its Obligations hereunder on account of such sale or
transfer.
(b) purchase, lease or otherwise acquire (in a single transaction
or a series of related transactions) all or any substantial part of the
property or assets of any Person (other than purchases or other
acquisitions of inventory, leases, materials, property and equipment in the
ordinary course of business, except as otherwise limited or prohibited
herein), or enter into any merger or consolidation, except for (i)
investments or acquisitions permitted pursuant to Section 6.6, (ii) the
acquisition of the Acquired Assets, (iii) acquisitions of types of
businesses permitted to be engaged in by the
61
Borrower and its Subsidiaries pursuant to Section 6.4 (the "Permitted
Acquisitions") so long as with respect to the acquisition of each such
business, (A) no Default or Event of Default then exists or would exist
after giving effect thereto, (B) the Borrower demonstrates to the
reasonable satisfaction of the Administrative Agent that the Borrower will
be in pro forma compliance with all of the terms and provisions of this
Agreement after giving effect thereto, and (C) the aggregate consideration
for all Permitted Acquisitions (including any assumption of debt) shall not
exceed $2,000,000, (iv) the merger or consolidation of any Subsidiary into
the Borrower or any Subsidiary, or a sale, transfer or lease of all or a
substantial part of the properties of any Subsidiary (at fair value) to the
Borrower or any Subsidiary and (v) the merger of any Person into the
Borrower or any Subsidiary, provided that the Borrower or any Subsidiary
shall be the surviving corporation, and in any such case no Default or
Event of Default would exist after giving effect thereto.
6.6 ADVANCES, INVESTMENTS AND LOANS.
-------------------------------
The Borrower will not, nor will it permit any Subsidiary to, lend money or
extend 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 for Permitted Investments.
6.7 TRANSACTIONS WITH AFFILIATES.
----------------------------
Except (a) as permitted in subsection (iv) of the definition of Permitted
Investments, (b) for the payments and issuances permitted by Section 6.8 and (c)
for the payments permitted by Section 6.11, the Borrower will not, nor will it
permit any Subsidiary to, enter into any transaction or series of transactions,
whether or not in the ordinary course of business, with any officer, director,
shareholder or Affiliate other than on terms and conditions substantially as
favorable as would be obtainable in a comparable arm's-length transaction with a
Person other than an officer, director, shareholder or Affiliate.
6.8 OWNERSHIP OF SUBSIDIARIES.
-------------------------
The Borrower will not, nor will it permit any Subsidiary to, create, form
or acquire a Subsidiary other than any Subsidiary acquired or formed to acquire
assets in connection with any Permitted Acquisition, provided such Subsidiary
guarantees all of the Obligations of the Borrower hereunder, pledges
substantially all of its assets to secure such guarantee and has its stock or
other equity interests pledged to the Administrative Agent, all on terms
reasonably satisfactory to the Administrative Agent.
6.9 FISCAL YEAR.
-----------
The Borrower will not, nor will it permit any Subsidiary to, change its
fiscal year if as a result thereof the Lenders do not receive audited financial
statements for the Borrower and its Subsidiaries for a period in excess of 12
months.
62
6.10 PREPAYMENTS OF INDEBTEDNESS, ETC.
--------------------------------
Neither the Borrower nor any of its Subsidiaries will (a) after the
issuance thereof, amend or modify (or permit the amendment or modification of),
if reasonably and materially adverse to the interests of the Lenders (including,
without limitation, any acceleration or shortening of amortization of principal
thereof, or modification of the terms of subordination relating thereto), any of
the terms of any Consolidated Total Funded Debt (other than any Indebtedness
permitted by Section 6.1(d) or any Indebtedness hereunder), or (b) make (or give
any notice with respect thereto) any voluntary or optional payment or prepayment
or redemption or acquisition for value of (including without limitation, by way
of depositing money or securities with the trustee with respect thereto before
due for the purpose of paying when due) or exchange of any Consolidated Total
Funded Debt (other than any Indebtedness permitted by Section 6.1(d) or any
Indebtedness hereunder).
6.11 RESTRICTED PAYMENTS.
-------------------
The Borrower will not, nor will it permit any of its Subsidiaries to, make
any Restricted Payment; provided, however, (i) any Subsidiary of the Borrower
may make Restricted Payments to the Borrower, (ii) the Borrower may make
Restricted Payments to any Subsidiary which is a Guarantor and (iii) the
Borrower may make Restricted Payments to its shareholders provided the aggregate
amount of such Restricted Payments made after the Closing Date shall not exceed
50% of cumulative consolidated net income since July 1, 1997.
6.12 PARTNERSHIP AND CORPORATE DOCUMENTS; PURCHASE AGREEMENT.
-------------------------------------------------------
The Borrower will not, nor will it permit any of its Subsidiaries to, amend
or otherwise modify their articles of limited partnership, limited liability
limited partnership, incorporation, limited liability company or other similar
organizational or charter document, or their limited partnership agreement,
limited liability limited partnership agreement, limited liability company
agreement, bylaws, operating agreement or other similar governing document or
the Purchase Agreement in a manner which is adverse to the interest of the
Lenders, without the prior written consent of the Administrative Agent and the
Majority Lenders, which consent will not be unreasonably withheld.
6.13 LEASE RECEIVABLES.
-----------------
The Borrower and it Subsidiaries, on a consolidated basis, will not have
assets on their balance sheet comprised of receivables due under leases in
excess of $10,000,000 in the aggregate at any one time.
SECTION 7 EVENTS OF DEFAULT
Upon the occurrence of any of the following events:
(a) (i) The Borrower shall fail to pay any principal on any Note or
63
reimburse any LOC Obligations when due in accordance with the terms thereof
or hereof and such failure shall continue unremedied for five (5) Business
Days; or (ii) the Borrower shall fail to pay any interest on any Note or
any fee or other amount payable hereunder when due in accordance with the
terms thereof or hereof and such failure shall continue unremedied for five
(5) Business Days; or
(b) Any representation or warranty made or deemed made by the
Borrower or any Subsidiary herein, in any Security Agreement or in any of
the other Credit Documents or which is contained in any certificate,
document or financial or other statement prepared and furnished by the
Borrower or any of its Subsidiaries at any time under or in connection with
this Agreement shall prove to have been incorrect, false or misleading in
any material respect on or as of the date made or deemed made; or
(c) The Borrower shall
(i) default in the due performance or observance of Sections
5.7(a) or Section 5.9, or
(ii) default in any material respect in the observance or
performance of any other term, covenant or agreement contained in this
Agreement (other than as described in Sections 7(a) or 7(c)(i) above)
or any of the other Credit Documents, and such default shall continue
unremedied for a period of 30 days or more after the earlier of the
chief financial officer of the Borrower becoming aware of such default
or the receipt by the Borrower of written notice from the
Administrative Agent thereof; or
(d) The Borrower or any of its Subsidiaries shall (i) default in any
payment of principal of or interest on any Indebtedness (other than the
Notes) in a principal amount outstanding of at least $5,000,000 in the
aggregate for the Borrower and its Subsidiaries or in the payment of any
matured Guarantee Obligation in a principal amount outstanding of at least
$5,000,000 in the aggregate for the Borrower and its Subsidiaries beyond
the period of grace (not to exceed 30 days), if any, provided in the
instrument or agreement under which such Indebtedness or Guarantee
Obligation was created; or (ii) default in the observance or performance of
any other agreement or condition relating to any such Indebtedness in a
principal amount outstanding of at least $5,000,000 in the aggregate for
the Borrower and its Subsidiaries or Guarantee Obligation in a principal
amount outstanding of at least $5,000,000 in the aggregate for the Borrower
and its Subsidiaries or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is
to cause, or to permit the holder or holders of such Indebtedness or
beneficiary or beneficiaries of such Guarantee Obligation (or a trustee or
agent on behalf of such holder or holders or beneficiary or beneficiaries)
to cause, with the giving of notice if required, such Indebtedness to
become due prior to its stated maturity or such Guarantee Obligation to
become payable; or
64
(e) The Borrower or any of its Subsidiaries shall commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or
its debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any substantial
part of its assets, or the Borrower or any of its Subsidiaries shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against the Borrower or any of its Subsidiaries any case,
proceeding or other action of a nature referred to in clause (i) above
which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced against
the Borrower or any of its Subsidiaries any case, proceeding or other
action seeking issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its assets which
results in the entry of an order for any such relief which shall not have
been vacated, discharged, or stayed or bonded pending appeal within 60 days
from the entry thereof; or (iv) the Borrower or any of its Subsidiaries
shall take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause (i),
(ii), or (iii) above; or (v) the Borrower or any of its Subsidiaries shall
generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; or
(f) One or more judgments or decrees shall be entered against the
Borrower or any of its Subsidiaries involving in the aggregate a liability
(to the extent not paid when due or covered by insurance) of $10,000,000 or
more and all such judgments or decrees shall not have been paid and
satisfied, vacated, discharged, stayed or bonded pending appeal within 45
days from the entry thereof; or
(g) (i) The Borrower, any Subsidiary or any Commonly Controlled
Entity shall engage in any "prohibited transaction" (as defined in Section
406 of ERISA or Section 4975 of the Code) involving any Plan, other than a
transaction for which a statutory exemption is available or an
administrative exemption has been obtained, (ii) any "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not waived,
shall exist with respect to any Single-Employer Plan or any Lien in favor
of the PBGC or a Single-Employer Plan shall arise on the assets of the
Borrower, any Subsidiary or any Commonly Controlled Entity, (iii) a
Reportable Event shall occur with respect to, or proceedings shall commence
to have a trustee appointed, or a trustee shall be appointed, to administer
or to terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a Trustee is, in the
reasonable opinion of the Majority Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any Single
Employer Plan shall terminate for purposes of Title IV of ERISA, or (v) the
Borrower, any Subsidiary or any Commonly Controlled Entity shall, or in the
reasonable opinion of the Majority Lenders is likely to, incur any
liability in connection with a withdrawal from, or the Insolvency or
65
Reorganization of, any Multiemployer Plan; and in each case in clauses (i)
through (v) above, such event or condition, together with all other such
events or conditions, if any, could have a Material Adverse Effect; or
(h) The occurrence of a Change of Control; or
(i) Any other Credit Document shall fail to be in full force and
effect or to give the Administrative Agent and/or the Lenders the security
interests, liens, rights, powers and privileges purported to be created
thereby and such failure shall have a material adverse effect on the rights
and remedies of the Administrative Agent or the Lenders thereunder (except
to the extent any such failure is caused by the Administrative Agent and
except as such documents may be terminated or no longer in force and effect
in accordance with the terms thereof, other than those indemnities and
provisions which by their terms shall survive);
then, and in any such event, (A) if such event is an Event of Default specified
in paragraph (e) above, automatically the Commitments shall immediately
terminate and the Loans (with accrued interest thereon), and all other amounts
under the Credit Documents shall immediately become due and payable (including
without limitation the maximum amount of all contingent liabilities under
Letters of Credit), and (B) if such event is any other Event of Default, either
or both of the following actions may be taken: (i) with the written consent of
the Majority Lenders, the Administrative Agent may, or upon the written request
of the Majority Lenders, the Administrative Agent shall, by notice to the
Borrower declare the Commitments to be terminated forthwith, whereupon the
Commitments shall immediately terminate; and (ii) with the written consent of
the Majority Lenders, the Administrative Agent may, or upon the written request
of the Majority Lenders, the Administrative Agent shall, by notice of default to
the Borrower, declare the Loans (with accrued interest thereon) and all other
amounts owing under this Agreement and the Notes to be due and payable forthwith
and direct the Borrower to pay to the Agent cash collateral as security for the
LOC Obligations for subsequent drawings under then outstanding Letters of Credit
an amount equal to the maximum amount of which may be drawn under Letters of
Credit then outstanding, whereupon the same shall immediately become due and
payable. Except as expressly provided above in this Section 7, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
SECTION 8 THE ADMINISTRATIVE AGENT
8.1 APPOINTMENT.
-----------
Each Lender hereby irrevocably designates and appoints First Union National
Bank as the Administrative Agent of such Lender under this Agreement, and each
such Lender irrevocably authorizes First Union National Bank, as the
Administrative Agent for such Lender, to take such action on its behalf under
the provisions of this Agreement and to exercise such powers and perform such
duties as are expressly delegated to the Administrative Agent by the terms of
this Agreement, together with such other powers as are reasonably incidental
thereto.
66
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein and 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 Administrative Agent.
8.2 DELEGATION OF DUTIES.
--------------------
The Administrative Agent may execute any of its duties under this Agreement
by or through agents or attorneys-in-fact and shall be entitled to rely on
advice of counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with reasonable care. Without
limiting the foregoing, the Administrative Agent may appoint an affiliate as its
agent to perform the functions of the Administrative 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 Administrative Agent
hereunder as are reasonably incidental to such functions. No such appointment
shall relieve the Administrative Agent of its responsibilities hereunder.
8.3 EXCULPATORY PROVISIONS.
----------------------
Neither the Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (a) 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 (b) responsible in any manner to any of the
Lenders for any recitals, statements, representations or warranties made by the
Borrower or any officer thereof contained in this Agreement or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, this
Agreement or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of any of the Credit Documents or for any failure of the Borrower
to perform its Obligations hereunder or thereunder. The Administrative Agent
shall not be under any obligation to any Lender to ascertain or to inquire as to
the observance or performance by the Borrower of any of the agreements contained
in, or conditions of, this Agreement, or to inspect the properties, books or
records of the Borrower.
8.4 RELIANCE BY ADMINISTRATIVE AGENT.
--------------------------------
The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any Note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation reasonably believed
by it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless (a) a written notice of assignment, negotiation
or transfer thereof shall have been filed with the Administrative Agent and (b)
the Administrative
67
Agent shall have received the written agreement of such assignee to be bound
hereby as fully and to the same extent as if such assignee were an original
Lender party hereto, in each case in form satisfactory to the Administrative
Agent. The Administrative Agent shall be fully justified in failing or refusing
to take any action under this Agreement unless it shall first receive such
advice or concurrence of the Majority 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 it by reason of taking or
continuing to take any such action. The Administrative Agent shall in all cases
be fully protected in acting, or in refraining from acting, under any of the
Credit Documents in accordance with a request of the Majority Lenders, and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Lenders and all future holders of the Notes.
8.5 NOTICE OF DEFAULT.
-----------------
The Administrative Agent shall not be deemed to have knowledge or notice of
the occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received notice from a Lender or the Borrower referring
to this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default". In the event that the Administrative
Agent receives such a notice, the Administrative Agent shall give prompt notice
thereof to each of the Lenders. The Administrative Agent shall take such action
with respect to such Default or Event of Default as shall be directed by the
Majority Lenders, including, without limitation, exercise of remedies and
initiation of litigation; provided, however, that unless and until the
Administrative Agent shall have received such directions, the Administrative
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.
8.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS.
------------------------------------------------------
Each Lender expressly acknowledges that neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representation or warranty to it and that no act by the
Administrative Agent hereinafter taken, including any review of the affairs of
the Borrower, shall be deemed to constitute any representation or warranty by
the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower and made its own decision to make
its Loans hereunder and enter into this Agreement. Each Lender also represents
that it will, independently and without reliance upon the Administrative 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, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished to
68
the Lenders by the Administrative Agent hereunder, the Administrative Agent
shall not have any duty or responsibility to provide any Lender with any credit
or other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of the Borrower which
may come into the possession of the Administrative Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates.
8.7 INDEMNIFICATION.
---------------
The Lenders agree to indemnify the Administrative Agent in its capacity
hereunder (to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to their respective
Commitment Percentages in effect on the date on which indemnification is sought
under this subsection, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Notes) be imposed on,
incurred by or asserted against the Administrative Agent in any way relating to
or arising out of any Credit Document or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by the Administrative Agent under or in
connection with any of the foregoing; provided, however, that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
to the extent resulting from the Administrative Agent's gross negligence or
willful misconduct. The agreements in this subsection shall survive the
termination of this Agreement and payment of the Notes and all other amounts
payable hereunder.
8.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.
-----------------------------------------------
The Administrative Agent and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Borrower as
though the Administrative Agent were not the Administrative Agent hereunder.
With respect to its Loans made or renewed by it and any Note issued to it, the
Administrative 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 Administrative
Agent, and the terms "Lender" and "Lenders" shall include the Administrative
Agent in its individual capacity.
8.9 SUCCESSOR ADMINISTRATIVE AGENT.
------------------------------
The Administrative Agent may resign or be removed as Administrative Agent
upon 30 days' prior written notice to the Borrower and the Lenders. The
Administrative Agent may be removed by the written consent of the Majority
Lenders. If the Administrative Agent shall resign or be removed as
Administrative Agent under this Agreement and the Notes, then the Majority
Lenders shall appoint from among the Lenders a successor agent for the Lenders,
which successor agent shall be approved by the Borrower, or if the Majority
Lenders cannot agree on a successor within 30 days from the notice of
resignation by the Administrative Agent, the Administrative Agent, with the
approval of the Borrower, may appoint a bank or trust company
69
with capital and surplus of at least $500,000,000 as successor Administrative
Agent within 30 days thereafter, whereupon such successor agent shall succeed to
the rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Notes. After any retiring
Administrative Agent's resignation or renewal as Administrative Agent, the
provisions of this subsection shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Administrative Agent under this
Agreement. Resignation by the Administrative Agent shall become effective upon
appointment of, and acceptance by, a successor Administrative Agent, or the
passage of the applicable periods without appointment of a successor.
SECTION 9 MISCELLANEOUS
9.1 AMENDMENTS, WAIVERS AND RELEASE OF COLLATERAL.
---------------------------------------------
Neither this Agreement, nor any of the Notes, nor any of the other Credit
Documents, nor any terms hereof or thereof may be amended, supplemented, waived
or modified except in accordance with the provisions of this subsection nor may
Collateral be released except as specifically provided herein or in the Security
Agreements or in accordance with the provisions of this subsection. The
Majority Lenders affected thereby may, or, with the written consent of the
Majority Lenders affected thereby, the Administrative Agent may, from time to
time, (a) enter into with the Borrower written amendments, supplements or
modifications hereto and to the other Credit Documents for the purpose of adding
any provisions to this Agreement or the other Credit Documents or (b) waive, on
such terms and conditions as the Majority Lenders may specify in such
instrument, any of the requirements of this Agreement or the other Credit
Documents or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, waiver, supplement,
modification or release shall (i) reduce the amount or extend the scheduled
final date of maturity of any Loan or Note or any installment thereon, or reduce
the stated rate of any interest or fee payable hereunder or extend the scheduled
date of any payment thereof or increase the amount or extend the expiration date
of any Lender's Commitment, in each case without the written consent of each
Lender directly affected thereby, or (ii) amend, modify or waive any provision
of this subsection or reduce the percentage specified in the definition of
Majority Lenders, or consent to the assignment or transfer by the Borrower of
any of its rights and obligations under this Agreement, in each case without the
written consent of all the Lenders, or (iii) amend, modify or waive any
provision of Section 8 without the written consent of the then Administrative
Agent, or (iv) release or subordinate all or substantially of the collateral
without the written consent of all of the Lenders except to the extent such
releases are provided for in this Agreement or the other Credit Documents. Any
such waiver, any such amendment, supplement or modification and any such release
shall apply equally to each of the Lenders and shall be binding upon the
Borrower, the Lenders, the Administrative Agent and all future holders of the
Notes. In the case of any waiver, the Borrower, the Lenders and the
Administrative Agent shall be restored to their former position and rights
hereunder and under the outstanding Loans and Notes and other Credit Documents,
70
and any Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.
9.2 NOTICES.
-------
Except as otherwise provided in Section 2, all notices, requests and
demands to or upon the respective parties hereto to be effective shall be in
writing (including by telecopy), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made (a) when delivered by
hand, (b) when transmitted via telecopy (or other facsimile device) on a
Business Day between the hours of 10:00 A.M. and 7:00 P.M. (EST or EDT, as
appropriate) (or on the following Business Day if sent after 7:00 P.M.) to the
number set out herein, (c) the day following the day on which the same has been
delivered prepaid to a reputable national overnight air courier service, or (d)
the third Business Day following the day on which the same is sent by certified
or registered mail, postage prepaid, in each case, addressed as follows in the
case of the Borrower and the Administrative Agent, and as set forth on Schedule
2.1(a) in the case of the Lenders, or to such other address as may be hereafter
notified by the respective parties hereto and any future holders of the Notes:
The Borrower: Cybex International, Inc.
00 Xxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx, VP and CFO
Telecopier: (000) 000-0000
Telephone: (000) 000-0000 x000
with a copy to:
Xxxxxx & Xxxxxxx
Xxx Xxxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxx Xxxxxx 00000
Attn. Xxxxx Xxxxx, Esq.
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
The Administrative Agent: First Union National Bank
Xxx Xxxxx Xxxxx Xxxxxx, XX00
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Syndication Agency Services
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
First Union Capital Markets
71
One First Xxxxx Xxxxxx, XX-0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attn: Xxxxxx Xxxxx
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
9.3 NO WAIVER; CUMULATIVE REMEDIES.
------------------------------
No failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
------------------------------------------
All representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the Notes and the
making of the Loans, provided that all such representations and warranties shall
terminate on the date upon which the Commitments have been terminated and all
amounts owing hereunder and under any Notes have been paid in full.
9.5 PAYMENT OF EXPENSES AND TAXES.
-----------------------------
The Borrower agrees (a) to pay or reimburse the Administrative Agent for
all its reasonable out-of-pocket costs and expenses incurred in connection with
the preparation and execution of, and any amendment, supplement or modification
to, the Credit Documents and any other documents prepared in connection herewith
or therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, together with the reasonable fees and
disbursements of counsel to the Administrative Agent in amount not to exceed
$40,000, (b) to pay or reimburse each Lender and the Administrative Agent for
all its costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the Notes and any such other
documents, including, without limitation, the reasonable fees and disbursements
of counsel to the Administrative Agent and to the Lenders (including reasonable
allocated costs of in house legal counsel) and (c) on demand, to pay, indemnify,
and hold each Lender and the Administrative Agent harmless from, any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other similar taxes, if
any, which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, the Credit Documents and any
such other documents, and (d) to pay, indemnify, and hold each Lender and the
Administrative Agent and their affiliates harmless from and against, any and all
other liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever with
respect
72
to the execution, delivery, enforcement, performance and administration
of the Credit Documents and any such other Documents and the use, or proposed
use, of proceeds of the Loans (all the foregoing, collectively, the "indemnified
liabilities"); provided, however, that the Borrower shall not have any
obligation hereunder to the Administrative Agent or any Lender with respect to
indemnified liabilities arising from (i) the gross negligence or willful
misconduct of the Administrative Agent or any such Lender, (ii) legal
proceedings commenced against the Administrative Agent or any such Lender by any
security holder or creditor thereof arising out of and based upon rights
afforded such security holder or creditor solely in its capacity as such, (iii)
legal proceedings commenced against the Administrative Agent or any Lender by
any other Lender or the Administrative Agent or its participants or (iv) a
breach of any of the Credit Documents by the Lenders. The agreements in this
subsection shall survive repayment of the Loans, Notes and all other amounts
payable hereunder.
9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING LENDERS.
----------------------------------------------------------
(a) This Agreement shall be binding upon and inure to the benefit of
the Borrower, the Lenders, the Administrative Agent, all future holders of
the Notes and their respective successors and assigns, except that the
Borrower may not assign or transfer any of its rights or obligations under
this Agreement or the other Credit Documents without the prior written
consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time sell to one or
more banks or other entities ("Participants") participating interests in
------------
any Loan owing to such Lender, any Note held by such Lender, any Commitment
of such Lender, or any other interest of such Lender hereunder. In the
event of any such sale by a Lender of participating interests to a
Participant, such Lender's obligations under this Agreement to the other
parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain
the holder of any such Note for all purposes under this Agreement, and the
Borrower and the Administrative Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. No Lender shall transfer or grant 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) extend the final
maturity of any Loan or Note in which such Participant is participating, or
reduce the stated rate or extend the time of payment of interest or Fees
thereon (except in connection with a waiver of interest at the increased
post-default rate) or reduce the principal amount thereof, or increase the
amount of the Participant's participation over the amount thereof then in
effect (it being understood that a waiver of any Default or Event of
Default shall not constitute a change in the terms of such participation,
and that an increase in any Commitment or Loan shall be permitted without
consent of any Participant if the Participant's participation is not
increased as a result thereof), (ii) except as otherwise expressly provided
in a Credit Document, release all or substantially all of the collateral,
or (iii) consent to the assignment or transfer by the Borrower of any of
its rights and obligations under this Agreement. In the case of any
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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, provided
that each Participant shall be entitled to the benefits of Sections 2.14,
2.15, 2.16 and 9.5 with respect to its participation in the Commitments and
the Loans outstanding from time to time; provided, that no Participant
shall be entitled to receive any greater amount pursuant to such
subsections than the transferor Lender would have been entitled to receive
in respect of the amount of the participation transferred by such
transferor Lender to such Participant had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time sell or assign
to any Lender or any affiliate thereof and, with the consent of the
Administrative Agent, and, so long as no Event of Default has occurred and
is continuing, with the consent of the Borrower (in each case, which
consent shall not be unreasonably withheld), to one or more additional
banks or financial institutions ("Purchasing Lenders"), all or any part of
------------------
its rights and obligations under this Agreement and the Notes in minimum
amounts of $5,000,000 (or, if less, the entire amount of such Lender's
obligations) if the Purchasing Lender is not a Lender hereunder, or with no
minimum amount if the Purchasing Lender is a Lender hereunder, pursuant to
a Commitment Transfer Supplement, executed by such Purchasing Lender, such
transferor Lender (and, in the case of a Purchasing Lender that is not then
a Lender or an affiliate thereof, by the Administrative Agent and, so long
as no Event of Default has occurred and is continuing, by the Borrower),
and delivered to the Administrative Agent for its acceptance and recording
in the Register. Each such assignment must be of a constant, not varying,
percentage of all of such Lender's rights and obligations hereunder. Upon
such execution, delivery, acceptance and recording, from and after the
Transfer Effective Date specified in such Commitment Transfer Supplement,
(x) the Purchasing Lender thereunder shall be a party hereto and, to the
extent provided in such Commitment Transfer Supplement, have the rights and
obligations of a Lender hereunder with a Commitment as set forth therein,
and (y) the transferor Lender thereunder shall, to the extent provided in
such Commitment Transfer Supplement, be released from its obligations under
this Agreement (and, in the case of a Commitment Transfer Supplement
covering all or the remaining portion of a transferor Lender's rights and
obligations under this Agreement, such transferor Lender shall cease to be
a party hereto). Such Commitment Transfer Supplement shall be deemed to
amend this Agreement to the extent, and only to the extent, necessary to
reflect the addition of such Purchasing Lender and the resulting adjustment
of Commitment Percentages arising from the purchase by such Purchasing
Lender of all or a portion of the rights and obligations of such transferor
Lender under this Agreement and the Notes. On or prior to the Transfer
Effective Date specified in such Commitment Transfer Supplement, the
Borrower shall execute and deliver to the Administrative Agent in exchange
for the Note delivered to the Administrative Agent pursuant to such
Commitment Transfer Supplement a new Note to the order of such Purchasing
Lender in an amount equal to the
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Commitment assumed by it pursuant to such Commitment Transfer Supplement
and, unless the transferor Lender has not retained a Commitment hereunder,
a new Note to the order of the transferor Lender in an amount equal to the
Commitment retained by it hereunder. Such new Note shall be dated the
Closing Date and shall otherwise be in the form of the Note replaced
thereby. The Note surrendered by the transferor Lender shall be returned by
the Administrative Agent to the Borrower marked "canceled".
(d) The Administrative Agent shall maintain at its address referred
to in Section 9.2 a copy of each Commitment Transfer Supplement delivered
to it and a register (the "Register") for the recordation of the names and
addresses of the Lenders and the Commitment of, and principal amount of the
Loans owing to, each Lender from time to time. The entries in the Register
shall be conclusive, in the absence of manifest error, and the Borrower,
the Administrative Agent and the Lenders may treat each Person whose name
is recorded in the Register as the owner of the Loan recorded therein for
all purposes of this Agreement. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and from
time to time upon reasonable prior notice.
(e) Upon its receipt of a Commitment Transfer Supplement executed by
a transferor Lender and a Purchasing Lender (and, in the case of a
Purchasing Lender that is not then a Lender or an affiliate thereof, by the
Administrative Agent and, so long as no Event of Default has occurred and
is continuing, by the Borrower) together with payment to the Administrative
Agent (by the transferor Lender or the Purchasing Lender, as agreed between
them) of a registration and processing fee of $3,000 for each Purchasing
Lender listed in such Commitment Transfer Supplement, and the Notes subject
to such Commitment Transfer Supplement, the Administrative Agent shall (i)
accept such Commitment Transfer Supplement, (ii) record the information
contained therein in the Register and (iii) give prompt notice of such
acceptance and recordation to the Lenders and the Borrower.
(f) The Borrower authorizes each Lender to disclose to any
Participant or Purchasing Lender (each, a "Transferee") and any prospective
Transferee any and all financial information in such Lender's possession
concerning the Borrower and its Affiliates which has been delivered to such
Lender by or on behalf of the Borrower pursuant to this Agreement or which
has been delivered to such Lender by or on behalf of the Borrower in
connection with such Lender's credit evaluation of the Borrower and its
Affiliates prior to becoming a party to this Agreement; in each case
subject to Section 9.15.
(g) At the time of each assignment pursuant to this Section 9.6 to a
Person which is not already a Lender hereunder and which is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code)
for Federal income tax purposes, the respective assignee Lender shall
provide to the Borrower and the Administrative Agent the appropriate
Internal Revenue Service Forms (and, if applicable, a 2.16 Certificate)
described in Section 2.16.
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(h) Nothing herein shall prohibit any Lender from pledging or
assigning any of its rights under this Agreement (including, without
limitation, any right to payment of principal and interest under any Note)
to any Federal Reserve Bank in accordance with applicable laws.
9.7 ADJUSTMENTS; SET-OFF.
--------------------
(a) Each Lender agrees that if any Lender (a "benefitted Lender")
shall at any time receive any payment of all or part of its Loans, or
interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings
of the nature referred to in clause (e) of Section 7, or otherwise) in a
greater proportion than any such payment to or collateral received by any
other Lender, if any, in respect of such other Lender's Loans, or interest
thereon, such benefitted Lender shall purchase for cash from the other
Lenders a participating interest in such portion of each such other
Lender's Loan, or shall provide such other Lenders with the benefits of any
such collateral, or the proceeds thereof, as shall be necessary to cause
such benefitted Lender to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders; provided, however,
that if all or any portion of such excess payment or benefits is thereafter
recovered from such benefitted Lender, such purchase shall be rescinded,
and the purchase price and benefits returned, to the extent of such
recovery, but without interest. The Borrower agrees that each Lender so
purchasing a portion of another Lender's Loans may exercise all rights of
payment (including, without limitation, rights of set-off) with respect to
such portion as fully as if such Lender were the direct holder of such
portion.
(b) In addition to any rights and remedies of the Lenders provided by
law (including, without limitation, other rights of set-off), each Lender
shall have the right, without prior notice to the Borrower, any such notice
being expressly waived by the Borrower to the extent permitted by
applicable law and without regard to the adequacy of other collateral, upon
the occurrence of any Event of Default, to setoff and appropriate and apply
any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in
any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Lender
or any branch or agency thereof to or for the credit or the account of the
Borrower, or any part thereof in such amounts as such Lender may elect,
against and on account of the obligations and liabilities of the Borrower
to such Lender hereunder and claims of every nature and description of such
Lender against the Borrower, in any currency, whether arising hereunder,
under the Notes or under any documents contemplated by or referred to
herein or therein, as such Lender may elect, whether or not such Lender has
made any demand for payment and although such obligations, liabilities and
claims may be contingent or unmatured. The aforesaid right of set-off may
be exercised by such Lender against the Borrower or against any trustee in
bankruptcy, debtor in possession, assignee for the benefit of creditors,
receiver or execution, judgment or attachment creditor of the Borrower, or
against anyone else claiming through or against the Borrower or any such
trustee in bankruptcy, debtor in
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possession, assignee for the benefit of creditors, receiver, or execution,
judgment or attachment creditor, notwithstanding the fact that such right
of set-off shall not have been exercised by such Lender prior to the
occurrence of any Event of Default. Each Lender agrees promptly to notify
the Borrower and the Administrative Agent after any such set-off and
application made by such Lender; provided, however, that the failure to
give such notice shall not affect the validity of such set-off and
application.
9.8 TABLE OF CONTENTS AND SECTION HEADINGS.
--------------------------------------
The table of contents and the Section and subsection headings herein are
intended for convenience only and shall be ignored in construing this Agreement.
9.9 COUNTERPARTS.
------------
This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. A set
of the copies of this Agreement signed by all the parties shall be lodged with
the Borrower and the Administrative Agent.
9.10 SEVERABILITY.
------------
Any provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
9.11 INTEGRATION.
-----------
This Agreement, the Notes and the other Credit Documents represent the
agreement of the Borrower, the Administrative Agent and the Lenders with respect
to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Administrative Agent, the Borrower or any
Lender relative to the subject matter hereof not expressly set forth or referred
to herein or in the Notes.
9.12 GOVERNING LAW.
-------------
This Agreement and the Notes and the rights and obligations of the parties
under this Agreement and the Notes shall be governed by, and construed and
interpreted in accordance with, the law of the State of New Jersey.
9.13 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
----------------------------------------------
All judicial proceedings brought against the Borrower and/or any other
Credit Party with respect to this Agreement, any Note or any of the other Credit
Documents may be brought in any
77
state or federal court of competent jurisdiction in the State of North Carolina,
and, by execution and delivery of this Agreement, each of the Borrower and the
other Credit Parties accepts, for itself and in connection with its properties,
generally and unconditionally, the non-exclusive jurisdiction of the aforesaid
courts and irrevocably agrees to be bound by any final judgment rendered thereby
in connection with this Agreement from which no appeal has been taken or is
available. Each of the Borrower and the other Credit Parties irrevocably agrees
that all service of process in any such proceedings in any such court may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to it at its address set
forth in Section 9.2 or at such other address of which the Agent shall have been
notified pursuant thereto, such service being hereby acknowledged by the each of
the Borrower and the other Credit Parties to be effective and binding service in
every respect. Each of the Borrower, the other Credit Parties, the Agent and the
Lenders irrevocably waives any objection, including, without limitation, any
objection to the laying of venue or based on the grounds of forum non conveniens
which it may now or hereafter have to the bringing of any such action or
proceeding in any such jurisdiction. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right of
any Lender or the Agent to bring proceedings against the Borrower or the other
Credit Parties in the court of any other jurisdiction.
9.14 ARBITRATION.
-----------
(a) Notwithstanding the provisions of Section 9.13 to the contrary,
upon demand of any party hereto, whether made before or after institution
of any judicial proceeding, any dispute, claim or controversy arising out
of, connected with or relating to this Agreement and other Credit Documents
("Disputes") between or among parties to this Agreement shall be resolved
--------
by binding arbitration as provided herein. Institution of a judicial
proceeding by a party does not waive the right of that party to demand
arbitration hereunder. Disputes may include, without limitation, tort
claims, counterclaims, disputes as to whether a matter is subject to
arbitration, claims brought as class actions, claims arising from Credit
Documents executed in the future, or claims arising out of or connected
with the transaction reflected by this Agreement.
(b) Arbitration shall be conducted under and governed by the
Commercial Financial Disputes Arbitration Rules (the "Arbitration Rules")
of the American Arbitration Association (the "AAA") and Title 9 of the U.S.
Code. All arbitration hearings shall be conducted in Charlotte, North
Carolina. A hearing shall begin within 90 days of demand for arbitration
and all hearings shall be concluded within 120 days of demand for
arbitration. These time limitations may not be extended unless a party
shows cause for extension and then no more than a total extension of 60
days. The expedited procedures set forth in Rule 51 et seq. of the
Arbitration Rules shall be applicable to claims of less than $1,000,000.
All applicable statutes of limitation shall apply to any Dispute. A
judgment upon the award may be entered in any court having jurisdiction.
The panel from which all arbitrators are selected shall be comprised of
licensed attorneys selected from the Commercial Financial Dispute
Arbitration Panel of the AAA. The single arbitrator selected for expedited
procedure shall be a retired judge from the highest court of general
jurisdiction, state or federal, of the state where the hearing will be
78
conducted or if such person is not available to serve, the single
arbitrator may be a licensed attorney. The parties hereto do not waive
applicable Federal or state substantive law except as provided herein.
Notwithstanding the foregoing, this arbitration provision does not apply to
disputes under or related to Interest Rate Protection Agreements.
(c) Notwithstanding the preceding binding arbitration provisions, the
Agent, the Lenders, the Borrower and the other Credit Parties agree to
preserve, without diminution, certain remedies that the Agent on behalf of
the Lenders may employ or exercise freely, independently or in connection
with an arbitration proceeding or after an arbitration action is brought.
The Agent on behalf of the Lenders shall have the right to proceed in any
court of proper jurisdiction or by self-help to exercise or prosecute the
following remedies, as applicable (i) all rights to foreclose against any
real or personal property or other security by exercising a power of sale
granted under Credit Documents or under applicable law or by judicial
foreclosure and sale, including a proceeding to confirm the sale; (ii) all
rights of self-help including peaceful occupation of real property and
collection of rents, set-off, and peaceful possession of personal property;
and (iii) obtaining provisional or ancillary remedies including injunctive
relief, sequestration, garnishment, attachment, appointment of receiver and
filing an involuntary bankruptcy proceeding. Preservation of these
remedies does not limit the power of an arbitrator to grant similar
remedies that may be requested by a party in a Dispute.
(d) The parties hereto agree that they shall not have a remedy of
punitive or exemplary damages against the other in any Dispute and hereby
waive any right or claim to punitive or exemplary damages they have now or
which may arise in the future in connection with any Dispute whether the
Dispute is resolved by arbitration or judicially.
(e) By execution and delivery of this Agreement, each of the parties
hereto accepts, for itself and in connection with its properties, generally
and unconditionally, the non-exclusive jurisdiction relating to any
arbitration proceedings conducted under the Arbitration Rules in Charlotte,
North Carolina and irrevocably agrees to be bound by any final judgment
rendered thereby in connection with this Agreement from which no appeal has
been taken or is available.
9.15 CONFIDENTIALITY.
---------------
The Administrative Agent and each of the Lenders agrees that it will use
reasonable and customary efforts not to disclose without the prior consent of
the Borrower (other than to its employees, Subsidiaries, Affiliates, auditors or
counsel or to another Lender) any information with respect to the Borrower and
its Subsidiaries which is furnished pursuant to this Agreement, any other Credit
Document or any documents contemplated by or referred to herein or therein and
which is designated by the Borrower to the Lenders in writing as confidential or
as to which it is otherwise reasonably clear such information is not public,
except that any Lender may disclose any such information (a) as has become
generally available to the public other than by a breach of this Section 9.15,
(b) as may be required or appropriate in any report, statement or testimony
submitted to any municipal, state or federal regulatory body having or claiming
to
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have jurisdiction over such Lender or to the Federal Reserve Board or the
Federal Deposit Insurance Corporation or the OCC or similar organizations
(whether in the United States or elsewhere) or their successors or the National
Association of Insurance Commissioners, (c) as may be required or appropriate in
response to any summons or subpoena or any law, order, regulation or ruling
applicable to such Lender, or (d) to any prospective Participant or assignee in
connection with any contemplated transfer pursuant to Section 9.6, provided that
such prospective transferee shall have been made aware of this Section 9.15 and
shall have agreed to be bound by its provisions as if it were a party to this
Agreement.
9.16 ACKNOWLEDGMENTS.
---------------
The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of each Credit Document;
(b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to the Borrower arising out of or in connection
with this Agreement and the relationship between Administrative Agent and
Lenders, on one hand, and the Borrower, on the other hand, in connection
herewith is solely that of debtor and creditor; and
(c) no joint venture exists among the Lenders or among the Borrower
and the Lenders.
SECTION 10 GUARANTY
10.1 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 the
Guarantors from the Loans and Letters of Credit hereunder, each of the
Guarantors hereby agrees with the Administrative Agent and the Lenders as
follows: each Guarantor hereby unconditionally and irrevocably jointly and
severally 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 Administrative Agent and the
Lenders and all other Obligations of the Borrower and the other Credit Parties
hereunder. If any or all of the indebtedness of the Borrower to the
Administrative Agent and the Lenders becomes due and payable hereunder, each
Guarantor unconditionally promises to pay such indebtedness to the
Administrative Agent and the Lenders, or order, on demand, together with any and
all reasonable expenses which may be incurred by the Administrative Agent or the
Lenders in collecting any of the indebtedness. The word "indebtedness" is used
in this Section 10 in its most comprehensive sense and includes any and all
advances, debts, obligations and liabilities of the Borrower arising in
connection with this Agreement, in each case, heretofore, now, or hereafter
made, incurred or created, whether
80
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 barred by any
statute of limitations, and whether or not such indebtedness may be or hereafter
become otherwise unenforceable.
Notwithstanding any provision to the contrary contained herein or in any
other of the Credit Documents, to the extent the obligations of a Guarantor
shall be adjudicated to be invalid or unenforceable for any reason (including,
without limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers) then the obligations of each such Guarantor
hereunder shall be limited to the maximum amount that is permissible under
applicable law (whether federal or state and including, without limitation, the
Bankruptcy Code).
10.2 BANKRUPTCY.
----------
Additionally, each of the Guarantors unconditionally and irrevocably
guarantees jointly and severally 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 of any of the events specified in Section 7(a), and unconditionally
promises to pay such indebtedness to the Administrative Agent for the account of
the Lenders, or order, on demand, in lawful money of the United States. Each of
the Guarantors further agrees that to the extent that the Borrower or a
Guarantor shall make a payment or a transfer of an interest in any property to
the Administrative Agent or any Lender, which payment or transfer or any part
thereof is subsequently invalidated, declared to be fraudulent or preferential,
or otherwise is avoided, and/or required to be repaid to the Borrower or a
Guarantor, the estate of the Borrower or a Guarantor, a trustee, receiver or any
other party under any bankruptcy law, state or federal law, common law or
equitable cause, then to the extent of such avoidance or repayment, the
obligation or part thereof intended to be satisfied shall be revived and
continued in full force and effect as if said payment had not been made.
10.3 NATURE OF LIABILITY.
-------------------
The liability of each Guarantor hereunder is exclusive and independent of
any security for or other guaranty of the indebtedness of the Borrower whether
executed by any such Guarantor, any other guarantor or by any other party, and
no Guarantor's liability hereunder shall 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 Administrative Agent or the Lenders on
the indebtedness which the Administrative Agent or such Lenders repay the
Borrower pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding, and each of the Guarantors waives
any right to the deferral or modification of its obligations hereunder by reason
of any such proceeding.
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10.4 INDEPENDENT OBLIGATION.
----------------------
The obligations of each Guarantor 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 each Guarantor whether or not
action is brought against any other guarantor or the Borrower and whether or not
any other Guarantor or the Borrower is joined in any such action or actions.
10.5 AUTHORIZATION.
-------------
Each of the Guarantors authorizes the Administrative Agent and each Lender
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
Administrative 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.
10.6 RELIANCE.
--------
It is not necessary for the Administrative Agent or the Lenders to inquire
into the capacity or powers of the Borrower or the officers, directors, partners
or Administrative 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.
10.7 WAIVER.
------
(a) Each of the Guarantors waives any right (except as shall be
required by applicable statute and cannot be waived) to require the
Administrative Agent or any Lender to (i) proceed against the Borrower, any
other guarantor or any other 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 Administrative Agent's or any Lender's
power whatsoever. Each of the Guarantors 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. Without limiting the generality of
the provisions of this Section 10, each of the Guarantors hereby
specifically waives the benefits of N.C. Gen. Stat. (S) 26-7 through 26-9,
inclusive. The Administrative Agent or any of the Lenders may, at their
election,
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foreclose on any security held by the Administrative Agent or a Lender 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
Administrative Agent and any Lender may have against the Borrower or any
other party, or any security, without affecting or impairing in any way the
liability of any Guarantor hereunder except to the extent the indebtedness
has been paid. Each of the Guarantors waives any defense arising out of any
such election by the Administrative Agent and each of the Lenders, even
though such election operates to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of the Guarantors
against the Borrower or any other party or any security.
(b) Each of the Guarantors 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. Each Guarantor 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 such Guarantor assumes and incurs hereunder, and agrees
that neither the Administrative Agent nor any Lender shall have any duty to
advise such Guarantor of information known to it regarding such
circumstances or risks.
(c) Each of the Guarantors hereby agrees it will not exercise any
rights of subrogation which it may at any time otherwise have as a result
of this Guaranty (whether contractual, under Section 509 of the U.S.
Bankruptcy Code, or otherwise) to the claims of the Lenders against the
Borrower or any other guarantor of the indebtedness of the Borrower owing
to the Lenders (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 until such time as the Loans hereunder shall have been paid
and the Commitments have been terminated. Each of the Guarantors hereby
further agrees not to exercise any right to enforce any other remedy which
the Administrative Agent and 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 until
such time as the Loans hereunder shall have been paid and the Commitments
have been terminated.
10.8 LIMITATION ON ENFORCEMENT.
-------------------------
The Lenders agree that this Guaranty may be enforced only by the action of
the Administrative Agent acting upon the instructions of the Majority Lenders
and that no Lender shall have any right individually to seek to enforce or to
enforce this Guaranty, it being understood and agreed that such rights and
remedies may be exercised by the Administrative Agent for the benefit of the
Lenders upon the terms of this Agreement. The Lenders further
83
agree that this Guaranty may not be enforced against any director, officer,
employee or stockholder of the Guarantors.
10.9 CONFIRMATION OF PAYMENT.
-----------------------
The Administrative Agent and the Lenders will, upon request after payment
of the indebtedness and obligations which are the subject of this Guaranty and
termination of the commitments relating thereto, confirm to the Borrower, the
Guarantors or any other Person that the such indebtedness and obligations have
been paid and the commitments relating thereto terminated, subject to the
provisions of Section 10.2.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by its proper and duly authorized officers as of the
day and year first above written.
BORROWER: CYBEX INTERNATIONAL, INC.
By: /S/ X.X. XXXXXX
---------------
Name: X.X. Xxxxxx
Title: VP CFO
GUARANTORS: CYBEX FINANCIAL CORP.
By: /S/ X.X. XXXXXX
---------------
Name: X.X. Xxxxxx
Title: VP
EAGLE PERFORMANCE SYSTEMS, INC.
By: /S/ X.X. XXXXXX
---------------
Name: X.X. Xxxxxx
Title: VP
GENERAL MEDICAL EQUIPMENT, LTD.
By: /S/ X.X. XXXXXX
---------------
Name: X.X. Xxxxxx
Title: VP
LUMEX BED SYSTEMS, INC.
By: /S/ X.X. XXXXXX
---------------
Name: X.X. Xxxxxx
Title: XX
XXXXXXX, INC.
By: /S/ X.X. XXXXXX
---------------
Name: X.X. Xxxxxx
Title: XX
XXXXXXX HOLDING COMPANY
By: /S/ X.X. XXXXXX
---------------
Name: X.X. Xxxxxx
Title: VP
CYBEX FITNESS GERATE VERTRIEBS
GmbH
By: /S/ X.X. XXXXXX
---------------
Name: X.X. Xxxxxx
Title: VP
TECTRIX FITNESS EQUIPMENT, INC.
By: /S/ X.X. XXXXXX
---------------
Name: X.X. Xxxxxx
Title: VP
2
AGENTS AND LENDERS: FIRST UNION NATIONAL BANK,
as Administrative Agent and as a Lender
By: /S/ XXXXX X. XXXXXXX
--------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
3
FLEET NATIONAL BANK,
as a Lender
By: /S/ M.T. X'XXXXX
----------------
Name: M. T. X'Xxxxx
Title: Vice President
4
SUMMIT BANK,
as a Lender
By: /S/ XXXX X. XXXXXX
------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
5
