CREDIT AGREEMENT
dated as of September 28, 2000
among
REGAL-BELOIT CORPORATION,
VARIOUS FINANCIAL INSTITUTIONS,
M&I XXXXXXXX & XXXXXX BANK,
as Administrative Agent and Swing Line Bank,
and
BANK OF AMERICA, N.A.,
as Documentation and Syndication Agent
BANC OF AMERICA SECURITIES LLC,
Lead Arranger and Book Manager
TABLE OF CONTENTS
Page
SECTION 1 DEFINITIONS.........................................................1
1.1 Definitions.........................................................1
1.2 Other Interpretive Provisions......................................13
SECTION 2 COMMITMENTS OF THE BANKS; BORROWING AND CONVERSION
PROCEDURES; LETTER OF CREDIT PROCEDURES; SWING LINE LOANS..........14
2.1 Commitments........................................................14
2.1.1 Revolving Loans..........................................14
2.1.2 L/C Commitment...........................................14
2.2 Loan Procedures....................................................14
2.2.1 Various Types of Loans...................................14
2.2.2 Borrowing Procedures...............................................14
2.2.3 Conversion and Continuation Procedures...................15
2.3 Letter of Credit Procedures........................................16
2.3.1 Issuance Procedures......................................16
2.3.2 Participations in Letters of Credit......................17
2.3.3 Reimbursement Obligations................................17
2.3.4 Limitation on Obligations of Issuing Banks...............17
2.3.5 Funding by Banks to Issuing Banks........................18
2.3.6 Repayment of Participations..............................18
2.4 Swing Line Loans...................................................18
2.4.1 Swing Line Loans.........................................18
2.4.2 Swing Line Loan Procedures...............................19
2.4.3 Refunding of, or Funding of Participations in,
Swing Line Loans.........................................19
2.4.4 Repayment of Participations..............................20
2.4.5 Participation Obligations Unconditional..................20
2.5 Commitments Several................................................20
2.6 Certain Conditions.................................................21
SECTION 3 NOTES EVIDENCING LOANS.............................................21
3.1 Notes..............................................................21
3.2 Recordkeeping......................................................21
SECTION 4 INTEREST...........................................................21
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4.1 Interest Rates.....................................................21
4.1.1 Interest Rates for Revolving Loans.......................21
4.1.2 Interest Rates on Swing Line Loans.......................21
4.2 Interest Payment Dates.............................................22
4.3 Setting and Notice of Eurodollar Rates.............................22
4.4 Computation of Interest............................................22
SECTION 5 FEES...............................................................22
5.1 Non-Use Fee........................................................22
5.2 Letter of Credit Fees..............................................23
5.3 Up-Front and Funding Fees..........................................23
5.4 Agents' and Lead Arranger's Fees...................................23
SECTION 6 CHANGES IN COMMITMENT AMOUNT; PREPAYMENTS..........................23
6.1 Changes in Commitment Amount.......................................23
6.1.1 Scheduled Reductions of the Commitment Amount............23
6.1.2 Mandatory Reductions of the Commitment Amount............24
6.1.3 Voluntary Reduction or Termination of the Commitments....24
6.1.4 Optional Increase in Commitment Amount...................24
6.2 Prepayments........................................................25
6.2.1 Mandatory Prepayments....................................25
6.2.2 Voluntary Prepayments....................................25
6.2.3 All Prepayments of Revolving Loans.......................25
SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES....................25
7.1 Making of Payments.................................................25
7.2 Application of Certain Payments....................................25
7.3 Due Date Extension.................................................25
7.4 Failure to Make Payments...........................................26
7.5 Setoff.............................................................26
7.6 Proration of Payments..............................................26
7.7 Taxes..............................................................27
SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR EURODOLLAR LOANS
8.1 Increased Costs....................................................28
8.2 Inability to Determine Rates, etc..................................29
8.3 Changes in Law Rendering Eurodollar Loans Unlawful.................30
8.4 Funding Losses.....................................................30
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8.5 Right of Banks to Fund through Other Offices.......................31
8.6 Discretion of Banks as to Manner of Funding........................31
8.7 Mitigation of Circumstances; Replacement of Affected Bank..........31
8.8 Conclusiveness of Statements; Survival of Provisions...............32
SECTION 9 REPRESENTATIONS AND WARRANTIES......................................32
9.1 Organization, etc..................................................32
9.2 Authorization; No Conflict.........................................32
9.3 Validity and Binding Nature........................................32
9.4 Financial Condition................................................33
9.5 No Material Adverse Change.........................................33
9.6 Litigation and Contingent Liabilities..............................33
9.7 Ownership of Properties; Liens.....................................33
9.8 Subsidiaries.......................................................33
9.9 Pension Plans......................................................33
9.10 Investment Company Act.............................................34
9.11 Public Utility Holding Company Act.................................34
9.12 Regulation U.......................................................34
9.13 Taxes..............................................................34
9.14 Solvency, etc......................................................34
9.15 Environmental Matters..............................................34
9.16 Information........................................................35
9.17 Xxxxxx Electric Acquisition........................................35
SECTION 10 COVENANTS..........................................................36
10.1 Reports, Certificates and Other Information........................36
10.1.1 Audit Report.............................................36
10.1.2 Quarterly Reports........................................36
10.1.3 Certificates.............................................36
10.1.4 Reports to SEC and to Shareholders.......................37
10.1.5 Notice of Default, Litigation and ERISA Matters..........37
10.1.6 Subsidiaries.............................................38
10.1.7 Management Reports.......................................38
10.1.8 Other Information........................................38
10.2 Books, Records and Inspections.....................................38
10.3 Insurance..........................................................38
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10.4 Compliance with Laws; Payment of Taxes.............................38
10.5 Maintenance of Existence, etc......................................39
10.6 Financial Covenants................................................39
10.6.1 Minimum Net Worth........................................39
10.6.2 Funded Debt to EBITDA Ratio..............................39
10.6.3 Interest Coverage Ratio..................................39
10.7 Limitations on Debt................................................39
10.8 Liens..............................................................40
10.9 Mergers, Consolidations, Sales.....................................42
10.10 Use of Proceeds....................................................42
10.11 Further Assurances.................................................43
10.12 Transactions with Affiliates.......................................43
10.13 Employee Benefit Plans.............................................43
10.14 Environmental Laws.................................................43
10.15 Unconditional Purchase Obligations.................................43
10.16 Inconsistent Agreements............................................43
10.17 Business Activities................................................43
10.18 Advances and Other Investments.....................................43
10.19 Margin Stock.......................................................44
10.20 Xxxxxx Acquisition Agreement.......................................44
10.21 Non-Guarantor Subsidiaries.........................................45
SECTION 11 EFFECTIVENESS; CONDITIONS OF LENDING, ETC..........................45
11.1 Effectiveness......................................................45
11.1.1 Notes....................................................45
11.1.2 Resolutions..............................................45
11.1.3 Consents, etc............................................45
11.1.4 Incumbency and Signature Certificates....................45
11.1.5 Guaranty.................................................46
11.1.6 Opinions of Counsel for the Company and the Guarantors...46
11.1.8 Officer's Certificate....................................46
11.1.9 Compliance Certificate...................................46
11.1.10 Other....................................................46
11.2 Conditions to All Credit Extensions of Credit......................46
11.2.1 Compliance with Warranties, No Default, etc..............46
11.3 Confirmatory Certificate...........................................47
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SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT.................................47
12.1 Events of Default..................................................47
12.1.1 Non-Payment of the Loans, etc............................47
12.1.2 Non-Payment of Other Debt................................47
12.1.3 Other Material Obligations...............................48
12.1.4 Bankruptcy, Insolvency, etc..............................48
12.1.5 Non-Compliance with Provisions of this Agreement.........48
12.1.6 Representations and Warranties...........................48
12.1.7 Pension Plans............................................48
12.1.8 Judgments................................................49
12.1.9 Invalidity of Guaranty...................................49
12.1.10 Change in Control........................................49
12.2 Effect of Event of Default.........................................49
SECTION 13 THE AGENT..........................................................50
13.1 Appointment and Authorization......................................50
13.2 Delegation of Duties...............................................51
13.3 Liability of Agents................................................51
13.4 Reliance by Agents.................................................51
13.5 Notice of Default..................................................51
13.6 Credit Decision....................................................52
13.7 Indemnification....................................................52
13.8 Agents in Individual Capacity......................................53
13.9 Resignation or Removal of Agent....................................53
13.10 Withholding Tax....................................................54
SECTION 14 GENERAL............................................................55
14.1 Waiver; Amendments.................................................55
14.2 Counterparts.......................................................56
14.3 Notices............................................................56
14.4 Computations.......................................................56
14.5 Regulation U.......................................................56
14.6 Costs, Expenses and Taxes..........................................57
14.7 Captions...........................................................57
14.8 Successors and Assigns.............................................57
14.9 Assignments; Participations........................................57
14.9.1 Assignments..............................................57
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14.9.2 Participations...........................................58
14.10 Governing Law............................................59
14.11 Indemnification by the Company...........................59
14.12 Forum Selection and Consent to Jurisdiction..............60
14.13 Waiver of Jury Trial.....................................60
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SCHEDULES
SCHEDULE 1.1 Pricing Schedule
SCHEDULE 2.1 Commitments and Percentages
SCHEDULE 2.3.1(a) Existing Letters of Credit
SCHEDULE 9.6 Litigation and Contingent Liabilities
SCHEDULE 9.8 Subsidiaries
SCHEDULE 9.15 Environmental Matters
SCHEDULE 10.7 Existing Debt
SCHEDULE 10.8 Existing Liens
SCHEDULE 14.3 Addresses for Notices
EXHIBITS
EXHIBIT A Form of Note (Section 3.1)
EXHIBIT B Form of Compliance Certificate (Section 10.1.3)
EXHIBIT C Form of Guaranty (Section 1)
EXHIBIT D Form of Assignment Agreement (Section 14.9)
EXHIBIT E Form of Request for Increase in Commitment
Amount (Section 6.1.4)
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CREDIT AGREEMENT
This CREDIT AGREEMENT dated as of September 29, 2000 (this "Agreement")
is entered into among REGAL-BELOIT CORPORATION, a Wisconsin corporation (the
"Company"), various financial institutions (together with their respective
successors and assigns, the "Banks"), BANK OF AMERICA, N.A. (in its individual
capacity, "Bank of America"), as documentation and syndication agent, and M&I
XXXXXXXX & ILSLEY BANK (in its individual capacity, "M&I"), as administrative
agent.
In consideration of the mutual agreements contained herein, the parties
hereto agree as follows:
SECTION 1 DEFINITIONS.
1.1 Definitions. When used herein the following terms shall have the
following meanings:
Acquisition means any transaction or series of related transactions for
the purpose of or resulting, directly or indirectly, in (a) the acquisition of
all or substantially all of the assets of a Person, or of all or substantially
all of any business or division of a Person, (b) the acquisition of in excess of
50% of the capital stock, partnership interests, membership interests or equity
of any Person, or otherwise causing any Person to become a Subsidiary, or (c) a
merger or consolidation or any other combination with another Person (other than
a Person that is a Subsidiary) provided that the Company or the Subsidiary is
the surviving entity.
Administrative Agent means M&I in its capacity as administrative agent
for the Banks hereunder and any successor thereto in such capacity.
Affected Bank means any Bank that has given notice to the Company (which
has not been rescinded) of (i) any obligation by the Company to pay any amount
pursuant to Section 7.7 or 8.1 or (ii) the occurrence of any circumstances of
the nature described in Section 8.2 or 8.3.
Affiliate of any Person means (i) any other Person which, directly or
indirectly, controls or is controlled by or is under common control with such
Person and (ii) any officer or director of such Person.
Agent-Related Persons means the Administrative Agent and any successor
administrative agent arising under Section 13.9, the Documentation and
Syndication Agent, the respective Affiliates of the foregoing, and the officers,
directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.
Agent means each of the Administrative Agent and the Documentation and
Syndication Agent.
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Agreement - see the Preamble.
Asset Sale means the sale, lease, assignment or other transfer for value
by the Company or any Subsidiary to any Person (other than the Company or any
Subsidiary) of any asset or right of the Company or such Subsidiary (including
any sale or other transfer of stock of any Subsidiary, whether by merger,
consolidation or otherwise), excluding sales of inventory in the ordinary course
of business.
Assignee - see Section 14.9.1.
Assignment Agreement - see Section 14.9.1.
Bank - see the Preamble. References to the "Banks" shall include the
Issuing Bank and the Swing Line Bank; for purposes of clarification only, to the
extent that M&I (or any successor Issuing Bank or Swing Line Bank) may have
rights or obligations in addition to those of the other Banks due to its status
as Issuing Bank or Swing Line Bank, its status as such will be specifically
referenced.
Bank of America - see the Preamble.
Base Rate means at any time the greater of (a) the Federal Funds Rate
plus 0.5% and (b) the Prime Rate.
Base Rate Loan means any Loan which bears interest at or by reference to
the Base Rate.
Base Rate Margin - see Schedule 1.1.
Business Day means any day other than a Saturday, Sunday or other day on
which commercial banks are authorized or required to be closed in Milwaukee,
Wisconsin or Chicago, Illinois and, if such day relates to a Eurodollar Loan,
means any such day on which dealings in Dollar deposits are carried on in the
interbank eurodollar market.
Capital Lease means, with respect to any Person, any lease of (or other
agreement conveying the right to use) any real or personal property by such
Person that, in conformity with GAAP, is accounted for as a capital lease on the
balance sheet of such Person.
Cash Equivalent Investment means, at any time, (a) any evidence of Debt,
maturing not more than one year after such time, issued or guaranteed by the
United States Government or any agency thereof, (b) commercial paper, maturing
not more than one year from the date of issue, or corporate demand notes, in
each case (unless issued by a Bank or its holding company) rated at least A-l by
Standard & Poor's Ratings Group or P-l by Xxxxx'x Investors Service, Inc., (c)
any certificate of deposit (or time deposits represented by such certificates of
deposit) or bankers
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acceptance, maturing not more than one year after such time, or overnight
Federal Funds transactions that are issued or sold by a commercial banking
institution that is a member of the Federal Reserve System and has a combined
capital and surplus and undivided profits of not less than $500,000,000, (d) any
repurchase agreement entered into with any Bank (or other commercial banking
institution of the stature referred to in clause (c)) which (i) is secured by a
fully perfected security interest in any obligation of the type described in any
of clauses (a) through (c) and (ii) has a market value at the time such
repurchase agreement is entered into of not less than 100% of the repurchase
obligation of such Bank (or other commercial banking institution) thereunder and
(e) investments in short-term asset management accounts offered by any Bank for
the purpose of investing in loans to any corporation (other than the Company or
an Affiliate of the Company), state or municipality, in each case organized
under the laws of any state of the United States or of the District of Columbia.
Code means the Internal Revenue Code of 1986.
Commitment means, as to any Bank, such Bank's commitment to make
Revolving Loans, to participate in Swing Line Loans and to issue or participate
in Letters of Credit under this Agreement. The amount of the Commitment of each
Bank as in effect on the date of this Agreement is set forth opposite such
Bank's name on Schedule 2.1.
Commitment Amount means $450,000,000, as such amount may be reduced or
increased from time to time pursuant to Section 6 or 12.
Commitment Reduction Date - see Section 6.1.1.
Company - see the Preamble.
Computation Period means each period of four consecutive Fiscal Quarters
ending on the last day of a Fiscal Quarter.
Consolidated Net Income means, with respect to the Company and its
Subsidiaries for any period, the consolidated net income (or loss) of the
Company and its Subsidiaries for such period, excluding any extraordinary gains
during such period.
Controlled Group means all members of a controlled group of corporations
and all members of a controlled group of trades or businesses (whether or not
incorporated) under common control which, together with the Company, are treated
as a single employer under Section 414 of the Code or Section 4001 of ERISA.
Credit Extension means the making of any Loan or the issuance of any
Letter of Credit.
Debt of any Person means, without duplication, (a) all indebtedness of
such Person for borrowed money, whether or not evidenced by bonds, debentures,
notes or similar instruments,
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(b) all obligations of such Person as lessee under Capital Leases which have
been or should be recorded as liabilities on a balance sheet of such Person, (c)
all obligations of such Person to pay the deferred purchase price of property or
services (excluding trade accounts payable in the ordinary course of business),
(d) all indebtedness secured by a Lien on the property of such Person, whether
or not such indebtedness shall have been assumed by such Person (it being
understood that if such Person has not assumed or otherwise become personally
liable for any such indebtedness, the amount of the Debt of such Person in
connection therewith shall be limited to the lesser of the face amount of such
indebtedness or the fair market value of all property of such Person securing
such indebtedness), (e) all obligations, contingent or otherwise, with respect
to the face amount of all letters of credit (whether or not drawn) and banker's
acceptances issued for the account of such Person (including the Letters of
Credit), (f) all Hedging Obligations of such Person, (g) all Suretyship
Liabilities of such Person, (h) all Synthetic Lease Obligations of such Person
and (i) all Debt of any partnership in which such Person is a general partner.
Debt to be Repaid means any Debt so designated on Schedule 10.7.
Designated Proceeds means the remainder of (a) all Net Cash Proceeds
received from all Asset Sales after the Effective Date minus (b) the sum of (i)
$50,000,000 and (ii) the aggregate amount of all Net Cash Proceeds previously
applied to reduce the Commitment Amount pursuant to Section 6.1.2.
Documentation and Syndication Agent means Bank of America, N.A. in its
capacity as documentation and syndication agent hereunder.
Dollar and the sign "$" mean lawful money of the United States of
America.
EBIT means, for any period, Consolidated Net Income for such period
plus, to the extent deducted in determining such Consolidated Net Income,
Interest Expense and income tax expense.
EBITDA means, for any period, Consolidated Net Income for such period
plus, to the extent deducted in determining such Consolidated Net Income,
Interest Expense, income tax expense, depreciation and amortization for such
period.
Effective Date - see Section 11.1.
Environmental Claims means all claims, however asserted, by any
governmental, regulatory or judicial authority or other Person alleging
potential liability or responsibility for violation of any Environmental Law, or
for release of Hazardous Substances or injury to the environment.
Environmental Laws means all federal, state or local laws, statutes,
common law duties,
12
rules, regulations, ordinances and codes, together with all administrative
orders, directed and enforceable duties, licenses, authorizations and permits
of, and agreements with, any governmental authority, in each case relating to
environmental matters.
ERISA means the Employee Retirement Income Security Act of 1974.
Eurocurrency Reserve Percentage means, with respect to any Eurodollar
Loan for any Interest Period, a percentage (expressed as a decimal) equal to the
daily average during such Interest Period of the percentage in effect on each
day of such Interest Period, as prescribed by the FRB, for determining the
aggregate maximum reserve requirements applicable to "Eurocurrency Liabilities"
pursuant to Regulation D or any other then applicable regulation of the FRB
which prescribes reserve requirements applicable to "Eurocurrency Liabilities"
as presently defined in Regulation D.
Eurodollar Loan means any Loan which bears interest at a rate determined
by reference to the Eurodollar Rate (Reserve Adjusted).
Eurodollar Margin - see Schedule 1.1.
Eurodollar Office means with respect to any Bank the office or offices
of such Bank which shall be making or maintaining the Eurodollar Loans of such
Bank hereunder or, if applicable, such other office or offices through which
such Bank determines the Eurodollar Rate. A Eurodollar Office of any Bank may
be, at the option of such Bank, either a domestic or foreign office.
Eurodollar Rate means, with respect to any Eurodollar Loan for any
Interest Period, (a) the BBAM Libor rate per annum for a period equal or
comparable to such Interest Period appearing on Bloomberg as of 10:00 A.M.
Chicago time, two Business Days prior to the beginning of such Interest Period
(it being understood that if two or more such rates appear on Bloomberg, the
rate shall be the arithmetic mean of such rates, rounded upward, if necessary,
to an integral multiple of 1/10,000th of 1%); or (b) if the rate described in
clause (a) is not available, the rate per annum at which Dollar deposits in
immediately available funds are offered to the Eurodollar Office of M&I two
Business Days prior to the beginning of such Interest Period by major banks in
the interbank eurodollar market as at or about 10:00 A.M., Chicago time, for
delivery on the first day of such Interest Period, for a period equal or
comparable to such Interest Period and in an amount equal or comparable to the
amount of the Eurodollar Loan of M&I for such Interest Period.
Eurodollar Rate (Reserve Adjusted) means, with respect to any Eurodollar
Loan for any Interest Period, a rate per annum (rounded upwards, if necessary,
to the nearest 1/10,000 of 1%) determined pursuant to the following formula:
Eurodollar Rate = Eurodollar Rate
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(Reserve Adjusted) 1-Eurocurrency
Reserve Percentage
Event of Default means any of the events described in Section 12.1.
Executive Officer means the chief financial officer, the president or
the executive vice president of the Company.
Exemption Representation - see Section 7.7.
Existing Letter of Credit means each Letter of Credit listed on Schedule
2.3.1(a).
Federal Funds Rate means, for any day, the rate set forth in the weekly
statistical release designated as H.15(519), or any successor publication,
published by the Federal Reserve Bank of New York (including any such successor
publication, "H.15(519)") on the preceding Business Day opposite the caption
"Federal Funds (Effective)"; or, if for any relevant day such rate is not so
published on any such preceding Business Day, the rate for such day will be the
arithmetic mean as determined by the Administrative Agent of the rates for the
last transaction in overnight Federal funds arranged prior to 9:00 a.m. (New
York City time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by the Administrative Agent.
Fiscal Quarter means a fiscal quarter of a Fiscal Year.
Fiscal Year means the fiscal year of the Company and its Subsidiaries,
which period shall be the 12-month period ending on December 31 of each year.
References to a Fiscal Year with a number corresponding to any calendar year
(e.g., "Fiscal Year 1999") refer to the Fiscal Year ending on December 31 of
such calendar year.
Foreign Subsidiary means each Subsidiary of the Company which is
organized under the laws of any jurisdiction other than, and which is conducting
the majority of its business outside of, the United States or any state thereof.
FRB means the Board of Governors of the Federal Reserve System or any
successor thereto.
Funded Debt means all Debt of the Company and its Subsidiaries,
excluding (i) contingent obligations in respect of undrawn letters of credit and
Suretyship Liabilities (except, in each case, to the extent constituting
Suretyship Liabilities in respect of Debt of a Person other than the Company or
any Subsidiary), (ii) Hedging Obligations and (iii) Debt of the Company to
Subsidiaries and Debt of Subsidiaries to the Company or to other Subsidiaries.
Funded Debt to EBITDA Ratio means, for any Computation Period, the ratio
of (i)
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Funded Debt as of the last day of such Computation Period to (ii) EBITDA for
such Computation Period.
GAAP means generally accepted accounting principles set forth from time
to time in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.
Group - see Section 2.2.1.
Guarantor means, at any time, Xxxxxx Electric, Hub City, Inc., Marathon
Electric Manufacturing Corporation and each other Subsidiary that has executed a
counterpart of the Guaranty at or prior to such time (or is required to execute
a counterpart of the Guaranty at such time), excluding any such Person which has
been released from its obligations under the Guaranty in accordance with the
terms hereof.
Guaranty means the guaranty substantially in the form of Exhibit C
issued by the Guarantors.
Hazardous Substances means any hazardous waste, as defined by 42 U.S.C.
ss.6903(5), any hazardous substance as defined by 42 U.S.C. ss.9601(14), any
pollutant or contaminant as defined by 42 U.S.C. ss.9601(33) or any toxic
substance, oil or hazardous material or other chemical or substance regulated by
any Environmental Law, excluding household hazardous waste.
Hedging Obligations means, with respect to any Person, all liabilities
of such Person under interest rate, currency and commodity swap agreements, cap
agreements and collar agreements, and all other agreements or arrangements
designed to protect such Person against fluctuations in interest rates, currency
exchange rates or commodity prices.
Immaterial Law means any provision of any Environmental Law the
violation of which will not (a) violate any judgment, decree or order which is
binding upon the Company or any Subsidiary, (b) result in or threaten any injury
to public health or the environment or any material damage to the property of
any Person or (c) result in any liability or expense (other than any de minimis
liability or expense) for the Company or any Subsidiary; provided that no
provision of any Environmental Law shall be an Immaterial Law if the
Administrative Agent has notified the Company that the Required Banks have
determined in good faith that such provision is material.
Interest Coverage Ratio means, for any Computation Period, the ratio of
(a) EBIT for such Computation Period to (b) Interest Expense for such
Computation Period.
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Interest Expense means, for any Computation Period, the consolidated
interest expense of the Company and its Subsidiaries for such Computation Period
(including all imputed interest on Capital Leases and Synthetic Leases).
Interest Period means, as to any Eurodollar Loan, the period commencing
on the date such Loan is borrowed or continued as, or converted into, a
Eurodollar Loan and ending on the date one, two, three or six months thereafter
(or, during the first thirty days following the Effective Date, seven days
thereafter), as selected by the Company pursuant to Section 2.2.2 or 2.2.3;
provided that:
(i) if any Interest Period would otherwise end on a day that is
not a Business Day, such Interest Period shall be extended to the
following Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month, in which event
such Interest Period shall end on the preceding Business Day;
(ii) any Interest Period (other than a seven-day Interest Period)
that begins on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period shall end on
the last Business Day of the calendar month at the end of such Interest
Period; and
(iii) the Company may not select any Interest Period if, after
giving effect to such selection, the aggregate principal amount of all
Eurodollar Loans having Interest Periods ending after any Commitment
Reduction Date, plus the aggregate amount of all Letters of Credit
scheduled to be outstanding as of such Commitment Reduction Date (taking
account of any scheduled increases or decreases in the amount available
under any such Letter of Credit), would exceed the Commitment Amount
scheduled to be in effect after giving effect to the reduction thereof
on such Commitment Reduction Date; and
(iv) the Company may not select any Interest Period which would
extend beyond the scheduled Termination Date.
Investment means, relative to any Person, (a) any loan or advance made
by such Person to any other Person, (b) any Suretyship Liability of such Person
and (c) any ownership or similar interest held by such Person in any other
Person.
Issuing Bank means M&I in its capacity as an issuer of Letters of Credit
hereunder and any other Bank which, with the written consent of the Company and
the Agents, is the issuer of one or more Letters of Credit.
L/C Application means, with respect to any request for the issuance of a
Letter of Credit, a letter of credit application in the form being used by the
applicable Issuing Bank at the time of such request for the type of letter of
credit requested; provided that to the extent any such letter of credit
application is inconsistent with any provision of this Agreement, the applicable
16
provision of this Agreement shall control.
LC Fee Rate - see Schedule 1.1.
Lead Arranger means Banc of America Securities LLC in its capacity as
the sole and exclusive arranger of, and book manager for, the facilities
hereunder.
Leeson Electric means Xxxxxx Electric Corporation, a Wisconsin
corporation.
Leeson Acquisition means the acquisition by the Company of all of the
outstanding stock of Leeson Electric pursuant to the Xxxxxx Acquisition
Agreement.
Leeson Acquisition Agreement means the Stock Purchase Agreement dated as
of August 7, 2000 among the Company, LEC Acquisition Corporation, Xxxxxx
Electric and the shareholders of Xxxxxx Electric.
Letter of Credit means any Existing Letter of Credit and any standby
Letter of Credit issued by an Issuing Bank pursuant to Section 2.1.2 and 2.3.
Lien means, with respect to any Person, any interest granted by such
Person in any real or personal property, asset or other right owned or being
purchased or acquired by such Person which secures payment or performance of any
obligation and shall include any mortgage, lien, encumbrance, charge or other
security interest of any kind, whether arising by contract, as a matter of law,
by judicial process or otherwise.
Loan means a Revolving Loan or a Swing Line Loan.
Loan Documents means this Agreement, the Notes, the Guaranty and the L/C
Applications.
M&I - see the Preamble.
Margin Stock means any "margin stock" as defined in Regulation U of the
FRB.
Material Adverse Effect means (a) a material adverse change in, or a
material adverse effect upon, the business, assets, liabilities (actual or
contingent), operations or condition (financial or otherwise) of the Company and
its Subsidiaries taken as a whole or (b) a material adverse effect upon the
legality, validity, binding effect or enforceability against the Company or any
Guarantor of any Loan Document.
Multiemployer Pension Plan means a multiemployer plan, as such term is
defined in Section 4001(a)(3) of ERISA, and to which the Company or any member
of the Controlled Group may have any liability.
17
Net Cash Proceeds means:
(a) with respect to any Asset Sale, the aggregate cash proceeds
(including cash proceeds received by way of deferred payment of
principal pursuant to a note, installment receivable or
otherwise, but only as and when received) received by the
Company or any Subsidiary pursuant to such Asset Sale, net of
(i) the direct costs relating to such Asset Sale (including
sales commissions and legal, accounting and investment banking
fees), (ii) taxes paid or reasonably estimated by the Company to
be payable as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing
arrangements), (iii) amounts required to be applied to the
repayment of any Debt secured by a Lien on the asset subject to
such Asset Sale, (iv) any portion of such cash proceeds which
the Company specifies in writing to the Agents will be used
within 180 days to purchase assets which will replace the assets
sold in such Asset Sale or to complete a Permitted Acquisition
(it being understood that any such cash proceeds not so used
within such 180-day period shall become Net Cash Proceeds on the
last day of such period) and (v) any portion of such cash
proceeds which are used by the Company or a Subsidiary to retire
Debt (including Loans) incurred to consummate a Permitted
Acquisition during the 90 days preceding receipt of such Net
Cash Proceeds; and
(b) with respect to any issuance of equity securities, the aggregate
cash proceeds received by the Company or any Subsidiary pursuant
to such issuance, net of the direct costs relating to such
issuance (including sales and underwriter's discounts and
commissions and legal, accounting and investment banking fees).
Net Worth means the Company's consolidated stockholders' equity.
Non-Use Fee Rate - see Schedule 1.1.
Note - see Section 3.1.
PBGC means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
Pension Plan means a "pension plan", as such term is defined in Section
3(2) of ERISA, which is subject to Title IV of ERISA (other than a Multiemployer
Pension Plan), and to which the Company or any member of the Controlled Group
may have any liability, including any liability by reason of having been a
substantial employer within the meaning of Section 4063 of ERISA at any time
during the preceding five years, or by reason of being deemed to be a
contributing sponsor under Section 4069 of ERISA.
18
Percentage means, as to any Bank, the percentage which (a) the
Commitment of such Bank (or, after termination of the Commitments, the principal
amount of such Bank's Revolving Loans plus the participation interest of such
Bank in the outstanding Swing Line Loans and in the Stated Amount of all Letters
of Credit) is of (b) the aggregate amount of the Commitments (or after
termination of the Commitments, the aggregate principal amount of all Revolving
Loans and Swing Line Loans and the Stated Amount of all Letters of Credit);
provided that, if and so long as any Bank fails to fund its participation in any
Letter of Credit or Swing Line Loan when required by Section 2.3.5 or 2.4.3,
such Bank's Percentage shall be deemed for purposes of this definition to be
reduced to the extent of the defaulted amount and the Percentage of the
applicable Issuing Bank or the Swing Line Bank, as applicable, shall be deemed
for purposes of this definition to be increased to such extent. The Percentage
of each Bank as in effect on the date of this Agreement is set forth opposite
such Bank's name on Schedule 2.1.
Permitted Acquisition means any Acquisition by the Company or a
Subsidiary which satisfies each of the following requirements: (i) no Event of
Default or Unmatured Event of Default has occurred and is continuing at the time
of, or will result from, such Acquisition; (ii) the Person to be acquired is in,
or the assets to be acquired are for use in, the same or a similar line of
business as the Company and its Subsidiaries or a reasonable extension thereof;
(iii) if the aggregate consideration to be paid by the Company and its
Subsidiaries in connection with such Acquisition (including Debt assumed, but
excluding capital stock of the Company) exceeds $25,000,000, the Company shall
have delivered to the Agents a certificate demonstrating that, after giving
effect to such Acquisition, the Company will be in pro forma compliance with the
covenants in Section 10.6; (iv) in the case of the Acquisition of a Person, the
Board of Directors (or equivalent governing body) of the Person being acquired
shall have approved such Acquisition; and (v) after giving effect to such
Acquisition, the Commitment Amount shall exceed the Total Outstandings by not
less than $10,000,000.
Person means any natural person, corporation, partnership, trust,
limited liability company, association, governmental authority or unit, or other
entity, whether acting in an individual, fiduciary or other capacity.
Prime Rate means, for any day, the rate of interest in effect for such
day as publicly announced from time to time by M&I as its "prime rate". (The
"prime rate" is a rate set by M&I based upon various factors, including M&I's
costs and desired return, general economic conditions and other factors, and is
used as a reference point for pricing some loans, which may be priced at, above
or below such announced rate.) Any change in the "prime rate" announced by M&I
shall take effect at the opening of business on the day specified in the public
announcement of such change.
Required Banks means Banks having combined Percentages of more than 50%.
Revolving Loan - see Section 2.1.1.
19
SEC means the Securities and Exchange Commission.
Significant Subsidiary means, at any time, any Subsidiary having (a)
assets with a value not less than 5% of the total value of the consolidated
assets of the Company and its Subsidiaries, taken as a whole, or (b) revenues
not less than 7.5% of the consolidated revenues of the Company and its
Subsidiaries, taken as a whole, for the most recently completed period of four
consecutive Fiscal Quarters.
Stated Amount means, with respect to any Letter of Credit at any date of
determination, the maximum aggregate amount available for drawing thereunder at
any time during the then ensuing term of such Letter of Credit under any and all
circumstances, plus the aggregate amount of all unreimbursed payments and
disbursements under such Letter of Credit.
Subordinated Debt means any Debt of the Company which has maturities and
other terms, and which is subordinated to the obligations of the Company and its
Subsidiaries hereunder and under the other Loan Documents in a manner, approved
in writing by the Required Banks.
Subsidiary means, with respect to any Person, a corporation,
partnership, limited liability company or other entity of which such Person
and/or its other Subsidiaries own, directly or indirectly, such number of
outstanding shares or other ownership interests as have more than 50% of the
ordinary voting power for the election of directors or other managers of such
entity. Unless the context otherwise requires, each reference to Subsidiaries
herein shall be a reference to Subsidiaries of the Company.
Suretyship Liability means any agreement, undertaking or arrangement by
which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to or otherwise to invest in a
debtor, or otherwise to assure a creditor against loss) any indebtedness,
obligation or other liability of any other Person (other than by endorsements of
instruments in the course of collection), or guarantees the payment of dividends
or other distributions upon the shares of any other Person. The amount of any
Person's obligation in respect of any Suretyship Liability shall (subject to any
limitation set forth therein) be deemed to be the principal amount of the debt,
obligation or other liability supported thereby.
Swing Line Bank means M&I in its capacity as swing line lender
hereunder, together with any replacement swing line lender arising under Section
13.9.
Swing Line Loan - see Section 2.4.1.
Synthetic Lease means a lease transaction under which the parties intend
that (i) the lease will be treated as an "operating lease" by the lessee
pursuant to Statement of Financial Accounting Standards No. 13 and (ii) the
lessee will be entitled to various tax and other benefits
20
ordinarily available to owners (as opposed to lessees) of like property.
Synthetic Lease Obligations means, with respect to any Person, the sum
of (a) all remaining rental obligations of such Person as lessee under Synthetic
Leases which are attributable to principal and, without duplication, (b) all
obligations of such Person to pay the purchase price for property leased under
Synthetic Leases assuming such Person exercises the option to purchase such
property at the end of the lease term.
Termination Date means the earlier to occur of (a) December 30, 2005 or
(b) such other date on which the Commitments terminate pursuant to Section 6 or
12.
Total Outstandings means, at any time, the aggregate outstanding
principal amount of all Revolving Loans and Swing Line Loans plus the aggregate
Stated Amount of all Letters of Credit.
Type of Loan or Borrowing - see Section 2.2.1. The types of Loans or
borrowings under this Agreement are as follows: Base Rate Loans or borrowings
and Eurodollar Loans or borrowings.
Unmatured Event of Default means any event that, if it continues
uncured, will, with lapse of time or notice or both, constitute an Event of
Default.
1.2 Other Interpretive Provisions. (a) The meanings of defined terms are
equally applicable to the singular and plural forms of the defined terms.
(b) Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(c) (i) The term "including" is not limiting and means
"including without limitation."
(ii) In the computation of periods of time from a
specified date to a later specified date, the word "from" means
"from and including"; the words "to" and "until" each mean "to
but excluding", and the word "through" means "to and including."
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments
shall be deemed to include all subsequent amendments and other
modifications thereto, but only to the extent such amendments and other
modifications are not prohibited by the terms of any Loan Document, and
(ii) references to any statute or regulation are to be construed as
including all statutory and regulatory provisions consolidating,
amending, replacing, supplementing or interpreting such statute or
regulation.
21
(e) This Agreement and the other Loan Documents may use several
different limitations, tests or measurements to regulate the same or
similar matters. All such limitations, tests and measurements are
independent and each shall be performed in accordance with its terms.
(f) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Agents, the
Company, the Banks and the other parties thereto and are the products of
all parties. Accordingly, they shall not be construed against the Agents
or the Banks merely because of the Agents' or the Banks' involvement in
their preparation.
SECTION 2 COMMITMENTS OF THE BANKS; BORROWING AND
CONVERSION PROCEDURES; LETTER OF CREDIT PROCEDURES;
SWING LINE LOANS.
2.1 Commitments. On and subject to the terms and conditions of this
Agreement, each of the Banks, severally and for itself alone, agrees to make
loans to, and to issue or participate in the issuance of letters of credit for
the account of, the Company as follows:
2.1.1 Revolving Loans. Each Bank will make loans on a revolving basis
("Revolving Loans") from time to time before the Termination Date in such Bank's
Percentage of such aggregate amounts as the Company may from time to time
request from all Banks; provided that the Total Outstandings shall not at any
time exceed the Commitment Amount. Amounts borrowed under this Section 2.1.1 may
be borrowed, repaid and reborrowed until the Termination Date.
2.1.2 L/C Commitment. (a) The Issuing Banks will issue Letters of Credit
from time to time before the Termination Date, in each case containing such
terms and conditions as are permitted by this Agreement and are reasonably
satisfactory to the applicable Issuing Bank and the Company, at the request of
and for the account of the Company (or jointly for the account of the Company
and any Subsidiary) from time to time before the date which is 30 days prior to
the scheduled Termination Date; and (b) as more fully set forth in Section
2.3.2, each Bank agrees to purchase a participation in each such Letter of
Credit; provided that (i) the aggregate Stated Amount of all Letters of Credit
shall not at any time exceed $15,000,000; and (ii) after giving effect to the
issuance of each Letter of Credit, the Total Outstandings shall not at any time
exceed the Commitment Amount.
2.2 Loan Procedures.
2.2.1 Various Types of Loans. Each Revolving Loan shall be either a Base
Rate Loan or a Eurodollar Loan (each a "type" of Loan), as the Company shall
specify in the related notice of borrowing or conversion pursuant to Section
2.2.2 or 2.2.3. Eurodollar Loans having the same
22
Interest Period are sometimes called a "Group" or collectively "Groups". Base
Rate Loans and Eurodollar Loans may be outstanding at the same time, provided
that (i) not more than eight different Groups of Eurodollar Loans shall be
outstanding at any one time and (ii) the aggregate principal amount of each
Group of Eurodollar Loans shall at all times be at least $3,000,000 and an
integral multiple of $1,000,000. All borrowings, conversions and repayments of
Loans shall be effected so that each Bank will have a pro rata share (according
to its Percentage) of all types and Groups of Loans.
2.2.2 Borrowing Procedures. The Company shall give written notice or
telephonic notice (followed promptly by written confirmation thereof) to the
Administrative Agent of each proposed borrowing not later than (a) in the case
of a Base Rate borrowing, 11:00 A.M., Chicago time, on the proposed date of such
borrowing, and (b) in the case of a Eurodollar borrowing, 10:00 A.M., Chicago
time, at least three Business Days prior to the proposed date of such borrowing.
Each such notice shall be effective upon receipt by the Administrative Agent,
shall be irrevocable, and shall specify the date, amount and type of borrowing
and, in the case of a Eurodollar borrowing, the initial Interest Period
therefor. Promptly upon receipt of such notice, the Administrative Agent shall
advise each Bank thereof. Not later than 1:00 p.m., Chicago time, on the date of
a proposed borrowing, each Bank shall provide the Administrative Agent at the
office specified by the Administrative Agent with immediately available funds
covering such Bank's Percentage of such borrowing and, so long as the
Administrative Agent has not received written notice that the conditions
precedent set forth in Section 11 with respect to such borrowing have not been
satisfied, the Administrative Agent shall pay over the requested amount to the
Company on the requested borrowing date. Each borrowing shall be on a Business
Day. Each borrowing shall be in an aggregate amount of at least $3,000,000 and
an integral multiple of $1,000,000.
2.2.3 Conversion and Continuation Procedures. (a) Subject to the
provisions of Section 2.2.1, the Company may, upon irrevocable written notice to
the Administrative Agent in accordance with clause (b) below:
(i) elect, as of any Business Day, to convert any
outstanding Revolving Loan into a Revolving Loan of a different
type; or
(ii) elect, as of the last day of the applicable
Interest Period, to continue any Group of Eurodollar Loans
having an Interest Period expiring on such day (or any part
thereof in an aggregate amount not less than $3,000,000 or a
higher integral multiple of $1,000,000) for a new Interest
Period.
(b) The Company shall give written or telephonic notice
(followed promptly by written confirmation thereof) to the
Administrative Agent of each proposed conversion or continuation not
later than (i) in the case of conversion into Base Rate Loans, 11:00
a.m., Chicago time, on the proposed date of such conversion; and (ii) in
the case of a conversion into or continuation of Eurodollar Loans, 10:00
a.m., Chicago time,
23
at least three Business Days prior to the proposed date of such
conversion or continuation, specifying in each case:
(1) the proposed date of conversion or continuation;
(2) the aggregate amount of Loans to be converted or
continued;
(3) the type of Loans resulting from the proposed
conversion or continuation; and
(4) in the case of conversion into, or continuation of,
Eurodollar Loans, the duration of the requested Interest Period
therefor.
(c) If upon expiration of any Interest Period applicable to any
Eurodollar Loan, the Company has failed to select timely a new Interest
Period to be applicable to such Eurodollar Loan, the Company shall be
deemed to have elected to convert such Eurodollar Loan into a Base Rate
Loan effective on the last day of such Interest Period.
(d) The Administrative Agent will promptly notify each Bank of
its receipt of a notice of conversion or continuation pursuant to this
Section 2.2 or, if no timely notice is provided by the Company, of the
details of any automatic conversion.
(e) Unless the Required Banks otherwise consent, during the
existence of any Event of Default or Unmatured Event of Default, the
Company may not elect to have a Loan converted into or continued as a
Eurodollar Loan.
2.3 Letter of Credit Procedures.
2.3.1 Issuance Procedures (a) On the Effective Date, each Existing
Letter of Credit shall be deemed to have been issued hereunder and shall be a
"Letter of Credit" for all purposes hereof.
(b) The Company shall give notice to the Administrative Agent and
the applicable Issuing Bank of the proposed issuance of each Letter of
Credit on a Business Day which is at least three Business Days (or such
lesser number of days as the Administrative Agent and such Issuing Bank
shall agree in any particular instance) prior to the proposed date of
issuance of such Letter of Credit. Each such notice shall be accompanied
by an L/C Application, duly executed by the Company (together with any
Subsidiary for the account of which the related Letter of Credit is to
be issued) and in all respects satisfactory to the Administrative Agent
and the applicable Issuing Bank, together with such other documentation
as the Administrative Agent or such Issuing Bank may reasonably request
in support thereof, it being understood that each L/C Application shall
specify, among other things, the date on which the proposed Letter of
24
Credit is to be issued, the amount of such Letter of Credit, whether
such Letter of Credit is to be transferable and the expiration date of
such Letter of Credit (which shall not be later than seven days prior to
the Termination Date). The Company may not request, and no Issuing Bank
shall issue, any Letter of Credit if, after giving effect to such
issuance, the aggregate amount of all Letters of Credit scheduled to be
outstanding as of any Commitment Reduction Date (taking account of any
scheduled increases or decreases in the amount available under any such
Letter of Credit), plus the aggregate amount of all Eurodollar Loans
having Interest Periods ending after such Commitment Reduction Date,
would exceed the Commitment Amount scheduled to be in effect after
giving effect to the reduction thereof on such Commitment Reduction
Date. So long as the applicable Issuing Bank has not received written
notice that the conditions precedent to the issuance of a Letter of
Credit have not been satisfied, such Issuing Bank shall issue such
Letter of Credit on the requested issuance date. Each Issuing Bank shall
promptly advise the Administrative Agent of the issuance of each Letter
of Credit by such Issuing Bank and of any amendment thereto, extension
thereof or event or circumstance changing the amount available for
drawing thereunder (it being understood that no Issuing Bank shall
increase the amount of, or extend the term of, any Letter of Credit
unless a replacement Letter of Credit having substantially the same
terms as such increased or extended Letter of Credit could be issued at
the time of such increase or extension).
2.3.2 Participations in Letters of Credit. Concurrently with the
issuance of each Letter of Credit (or, in the case of the Existing Letters of
Credit, on the Effective Date), the applicable Issuing Bank shall be deemed to
have sold and transferred to each other Bank, and each other Bank shall be
deemed irrevocably and unconditionally to have purchased and received from such
Issuing Bank, without recourse or warranty, an undivided interest and
participation, to the extent of such other Bank's Percentage, in such Letter of
Credit (or, if applicable, all Existing Letters of Credit) and the Company's
reimbursement obligations with respect thereto. For the purposes of this
Agreement, the unparticipated portion of each Letter of Credit shall be deemed
to be the applicable Issuing Bank's "participation" therein. Each Issuing Bank
hereby agrees, upon request of the Administrative Agent or any Bank, to deliver
to such Bank a list of all outstanding Letters of Credit issued by such Issuing
Bank, together with such information related thereto as such Bank may reasonably
request.
2.3.3 Reimbursement Obligations. The Company hereby unconditionally and
irrevocably agrees to reimburse the applicable Issuing Bank for each payment or
disbursement made by such Issuing Bank under any Letter of Credit honoring any
demand for payment made by the beneficiary thereunder, in each case on the date
that such payment or disbursement is made. Any amount not reimbursed on the date
of such payment or disbursement shall bear interest from the date of such
payment or disbursement to the date that such Issuing Bank is reimbursed by the
Company therefor, payable on demand, at a rate per annum equal to the Base Rate
from time to time in effect plus the Base Rate Margin from time to time in
effect plus, beginning on the third Business Day after receipt of notice from
the Issuing Bank of such payment or disbursement, 2%. The applicable Issuing
Bank shall notify the Company and the
25
Administrative Agent whenever any demand for payment is made under any Letter of
Credit by the beneficiary thereunder; provided that the failure of such Issuing
Bank to so notify the Company shall not affect the rights of such Issuing Bank
or the Banks in any manner whatsoever.
2.3.4 Limitation on Obligations of Issuing Banks. In determining whether
to pay under any Letter of Credit, no Issuing Bank shall have any obligation to
the Company or any Bank other than to confirm that any documents required to be
delivered under such Letter of Credit appear to have been delivered and appear
to comply on their face with the requirements of such Letter of Credit. Any
action taken or omitted to be taken by an Issuing Bank under or in connection
with any Letter of Credit, if taken or omitted in the absence of gross
negligence and willful misconduct, shall not impose upon such Issuing Bank any
liability to the Company or any Bank and shall not reduce or impair the
Company's reimbursement obligations set forth in Section 2.3.3 or the
obligations of the Banks pursuant to Section 2.3.5.
2.3.5 Funding by Banks to Issuing Banks. If an Issuing Bank makes any
payment or disbursement under any Letter of Credit and the Company has not
reimbursed such Issuing Bank in full for such payment or disbursement by 11:00
A.M., Chicago time, on the date of such payment or disbursement, or if any
reimbursement received by such Issuing Bank from the Company is or must be
returned or rescinded upon or during any bankruptcy or reorganization of the
Company or otherwise, each other Bank shall be obligated to pay to the
Administrative Agent for the account of such Issuing Bank, in full or partial
payment of the purchase price of its participation in such Letter of Credit, its
pro rata share (according to its Percentage) of such payment or disbursement
(but no such payment shall diminish the obligations of the Company under Section
2.3.3), and upon notice from the applicable Issuing Bank, the Administrative
Agent shall promptly notify each other Bank thereof. Each other Bank irrevocably
and unconditionally agrees to so pay to the Administrative Agent in immediately
available funds for the applicable Issuing Bank's account the amount of such
other Bank's Percentage of such payment or disbursement. If and to the extent
any Bank shall not have made such amount available to the Administrative Agent
by 2:00 P.M., Chicago time, on the Business Day on which such Bank receives
notice from the Administrative Agent of such payment or disbursement (it being
understood that any such notice received after noon, Chicago time, on any
Business Day shall be deemed to have been received on the next following
Business Day), such Bank agrees to pay interest on such amount to the
Administrative Agent for the applicable Issuing Bank's account forthwith on
demand for each day from the date such amount was to have been delivered to the
Administrative Agent to the date such amount is paid, at a rate per annum equal
to (a) for the first three days after demand, the Federal Funds Rate from time
to time in effect and (b) thereafter, the Base Rate from time to time in effect.
Any Bank's failure to make available to the Administrative Agent its Percentage
of any such payment or disbursement shall not relieve any other Bank of its
obligation hereunder to make available to the Administrative Agent such other
Bank's Percentage of such payment, but no Bank shall be responsible for the
failure of any other Bank to make available to the Administrative Agent such
other Bank's Percentage of any such payment or disbursement.
26
2.3.6 Repayment of Participations. Upon (and only upon) receipt by the
Administrative Agent for the account of the applicable Issuing Bank of
immediately available funds from or on behalf of the Company (a) in
reimbursement of any payment or disbursement under a Letter of Credit with
respect to which a Bank has paid the Administrative Agent for the account of
such Issuing Bank the amount of such Bank's participation therein or (b) in
payment of any interest thereon, the Administrative Agent will pay to such Bank
its pro rata share (according to its Percentage) thereof (and such Issuing Bank
shall receive the amount otherwise payable to any Bank which did not so pay the
Administrative Agent the amount of such Bank's participation in such payment or
disbursement).
2.4 Swing Line Loans.
2.4.1 Swing Line Loans. Subject to the terms and conditions of this
Agreement, the Swing Line Bank may from time to time, in its discretion, make
loans to the Company (collectively the "Swing Line Loans" and individually each
a "Swing Line Loan") in accordance with this Section 2.4 in an aggregate amount
not at any time exceeding $15,000,000; provided that, after giving effect to the
making of each Swing Line Loan, the Total Outstandings shall not exceed the
Commitment Amount. Amounts borrowed under this Section 2.4 may be borrowed,
repaid and (subject to the agreement of the Swing Line Bank) reborrowed until
the Termination Date.
2.4.2 Swing Line Loan Procedures. The Company shall give written or
telephonic notice to the Administrative Agent (which shall promptly inform the
Swing Line Bank) of each proposed Swing Line Loan not later than 1:00 p.m.,
Chicago time, on the proposed date of such Swing Line Loan. Each such notice
shall be effective upon receipt by the Administrative Agent and shall specify
the date and amount of such Swing Line Loan, which shall be $100,000 or a higher
integral multiple thereof. So long as the Swing Line Bank has not received
written notice that the conditions precedent set forth in Section 11 with
respect to the making of such Swing Line Loan have not been satisfied, the Swing
Line Bank may make the requested Swing Line Loan. If the Swing Line Bank agrees
to make the requested Swing Line Loan, the Swing Line Bank shall pay over the
requested amount to the Company on the requested borrowing date. Concurrently
with the making of any Swing Line Loan, the Swing Line Bank shall be deemed to
have sold and transferred, and each other Bank shall be deemed to have purchased
and received from the Swing Line Bank, an undivided interest and participation
to the extent of such other Bank's Percentage in such Swing Line Loan (but such
participation shall remain unfunded until required to be funded pursuant to
Section 2.4.3).
2.4.3 Refunding of, or Funding of Participations in, Swing Line Loans.
The Swing Line Bank may at any time, in its sole discretion, upon at least three
Business Days' notice (or same day notice if an Event of Default exists) to the
Company and the Agent (it being understood that any notice delivered after 9:00
A.M. (or, if an Event of Default exists, 11:00 A.M.), Chicago time, shall be
deemed received on the next Business Day), on behalf of the
27
Company (which hereby irrevocably authorizes the Swing Line Bank to act on its
behalf) deliver a notice to the Administrative Agent (which shall promptly
notify each Bank of its receipt thereof) requesting that each Bank (including
the Swing Line Bank in its individual capacity) make a Revolving Loan (which
shall be a Base Rate Loan unless the Company makes a timely request for a
borrowing of Eurodollar Loans) on the date specified in such notice in such
Bank's Percentage of the aggregate amount of Swing Line Loans outstanding on
such date for the purpose of repaying all Swing Line Loans (and, upon receipt of
the proceeds of such Revolving Loans, the Administrative Agent shall apply such
proceeds to repay Swing Line Loans); provided that if the conditions precedent
to a borrowing of Revolving Loans are not then satisfied or for any other reason
the Banks may not then make Revolving Loans, then instead of making Revolving
Loans each Bank (other than the Swing Line Bank) shall become immediately
obligated to fund its participation in all outstanding Swing Line Loans and
shall pay to the Administrative Agent for the account of the Swing Line Bank an
amount equal to such Bank's Percentage of such Swing Line Loans. If and to the
extent any Bank shall not have made such amount available to the Administrative
Agent by 2:00 P.M., Chicago time, on the Business Day on which such Bank
receives notice from the Administrative Agent of its obligation to fund its
participation in Swing Line Loans (it being understood that any such notice
received after 12:00 noon, Chicago time, on any Business Day shall be deemed to
have been received on the next following Business Day), such Bank agrees to pay
interest on such amount to the Administrative Agent for the Swing Line Bank's
account forthwith on demand for each day from the date such amount was to have
been delivered to the Administrative Agent to the date such amount is paid, at a
rate per annum equal to (a) for the first three days after demand, the Federal
Funds Rate from time to time in effect and (b) thereafter, the Base Rate from
time to time in effect. Any Bank's failure to make available to the
Administrative Agent its Percentage of the amount of all outstanding Swing Line
Loans shall not relieve any other Bank of its obligation hereunder to make
available to the Administrative Agent such other Bank's Percentage of such
amount, but no Bank shall be responsible for the failure of any other Bank to
make available to the Administrative Agent such other Bank's Percentage of any
such amount.
2.4.4 Repayment of Participations. Upon (and only upon) receipt by the
Administrative Agent for the account of the Swing Line Bank of immediately
available funds from or on behalf of the Company (a) in reimbursement of any
Swing Line Loan with respect to which a Bank has paid the Administrative Agent
for the account of the Swing Line Bank the amount of such Bank's participation
therein or (b) in payment of any interest on a Swing Line Loan, the
Administrative Agent will pay to such Bank its pro rata share (according to its
Percentage) thereof (and the Swing Line Bank shall receive the amount otherwise
payable to any Bank which did not so pay the Administrative Agent the amount of
such Bank's participation in such Swing Line Loan).
2.4.5 Participation Obligations Unconditional. (a) Each Bank's
obligation to make available to the Administrative Agent for the account of the
Swing Line Bank the amount of its participation interest in all Swing Line Loans
as provided in Section 2.4.3 shall be absolute and unconditional and shall not
be affected by any circumstance, including (i) any set-off,
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counterclaim, recoupment, defense or other right which such Bank may have
against the Swing Line Bank or any other Person, (ii) the occurrence or
continuance of an Event of Default or Unmatured Event of Default, (iii) any
adverse change in the condition (financial or otherwise) of the Company or any
Subsidiary thereof, (iv) any termination of the Commitments or (v) any other
circumstance, happening or event whatsoever.
(b) Notwithstanding the provisions of clause (a) above, no Bank shall be
required to purchase a participation interest in any Swing Line Loan if, prior
to the making by the Swing Line Bank of such Swing Line Loan, the Swing Line
Bank received written notice specifying that one or more of the conditions
precedent to the making of such Swing Line Loan were not satisfied and, in fact,
such conditions precedent were not satisfied at the time of the making of such
Swing Line Loan.
2.5 Commitments Several. The failure of any Bank to make a requested
Loan on any date shall not relieve any other Bank of its obligation (if any) to
make a Loan on such date, but no Bank shall be responsible for the failure of
any other Bank to make any Loan to be made by such other Bank.
2.6 Certain Conditions. Notwithstanding any other provision of this
Agreement, no Bank shall have an obligation to make any Loan, and no Issuing
Bank shall have any obligation to issue any Letter of Credit, if an Event of
Default or Unmatured Event of Default exists.
SECTION 3 NOTES EVIDENCING LOANS.
3.1 Notes. The Loans of each Bank shall be evidenced by a promissory
note substantially in the form set forth in Exhibit A, with appropriate
insertions, payable to the order of such Bank in the principal amount of all of
such Bank's Loans hereunder.
3.2 Recordkeeping. Each Bank shall record in its records, or at its
option on the schedule attached to its Note, the date and amount of each Loan
made by such Bank, each repayment or conversion thereof and, in the case of each
Eurodollar Loan, the dates on which each Interest Period for such Loan shall
begin and end. The aggregate unpaid principal amount so recorded shall be
rebuttable presumptive evidence of the principal amount owing and unpaid on such
Note. The failure to so record any such amount or any error in so recording any
such amount shall not, however, limit or otherwise affect the obligations of the
Company hereunder or under any Note to repay the principal amount of the Loans
evidenced by such Note together with all interest accruing thereon.
SECTION 4 INTEREST.
4.1 Interest Rates.
4.1.1 Interest Rates for Revolving Loans. The Company promises to pay
interest on the
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unpaid principal amount of each Revolving Loan for the period commencing on the
date such Revolving Loan is made until such Revolving Loan is paid in full as
follows:
(a) at all times such Revolving Loan is a Base Rate Loan, at a
rate per annum equal to the sum of the Base Rate from time to time in
effect plus the applicable Base Rate Margin from time to time in effect;
and
(b) at all times such Revolving Loan is a Eurodollar Loan, at a
rate per annum equal to the sum of the Eurodollar Rate (Reserve
Adjusted) applicable to each Interest Period for such Loan plus the
Eurodollar Margin from time to time in effect;
provided that, unless the Required Banks otherwise agree in writing, at any time
an Event of Default exists the interest rate applicable to each Revolving Loan
shall be increased by 2%.
4.1.2 Interest Rates on Swing Line Loans. The Company promises to pay
interest on the unpaid principal amount of each Swing Line Loan for the period
commencing on the date such Swing Line Loan is made until the date such Swing
Line Loan is paid in full at a rate per annum agreed to from time to time
between the Company and the Swing Line Bank; provided that if at any time the
Banks become obligated to fund their participations in any Swing Line Loan
pursuant to Section 2.4.3, such Swing Line Loan shall thereafter bear interest
at the rate applicable from time to time for Base Rate Loans pursuant to Section
4.1.1.
4.2 Interest Payment Dates. Accrued interest on each Base Rate Loan
shall be payable in arrears on the last Business Day of each calendar quarter
and at maturity. Accrued interest on each Eurodollar Loan shall be payable on
the last day of each Interest Period relating to such Loan (and, in the case of
a Eurodollar Loan with a six-month Interest Period, on the three-month
anniversary of the first day of such Interest Period) and at maturity. Accrued
interest on each Swing Line Loan shall be paid on the dates agreed to from time
to time by the Company and the Swing Line Bank; provided that if at any time the
Banks become obligated to fund their participations in any Swing Line Loan
pursuant to Section 2.4.3, interest on such Swing Line Loan shall be payable on
the last day of each calendar quarter and at maturity. After maturity, accrued
interest on all Loans shall be payable on demand.
4.3 Setting and Notice of Eurodollar Rates. The applicable Eurodollar
Rate for each Interest Period shall be determined by the Administrative Agent,
which shall give notice thereof to the Company and each Bank. Each determination
of the applicable Eurodollar Rate by the Administrative Agent shall be
conclusive and binding upon the parties hereto, in the absence of demonstrable
error. The Administrative Agent shall, upon written request of the Company or
any Bank, deliver to the Company or such Bank a statement showing the
computations used by the Administrative Agent in determining any applicable
Eurodollar Rate hereunder.
4.4 Computation of Interest. All determinations of interest for Base
Rate Loans (including any Swing Line Loan bearing interest at or by reference to
the Base Rate) when the
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Base Rate is determined by the Prime Rate shall be made on the basis of a year
of 365 or 366 days, as the case may be, and the actual number of days elapsed.
All other computations of interest shall be computed for the actual number of
days elapsed on the basis of a year of 360 days. The applicable interest rate
for each Base Rate Loan shall change simultaneously with each change in the Base
Rate.
SECTION 5 FEES.
5.1 Non-Use Fee. The Company agrees to pay to the Administrative Agent
for the account of each Bank a non-use fee, for the period from the Effective
Date to the Termination Date, at a rate per annum equal to the Non-Use Fee Rate
in effect from time to time of the daily average of such Bank's Percentage of
the unused portion of the Commitment Amount. For purposes of calculating usage
under this Section, the Commitment Amount shall be deemed used to the extent of
the sum of the aggregate outstanding principal amount of all Revolving Loans
(but not Swing Line Loans) and the Stated Amount of all Letters of Credit. Such
non-use fee shall be payable in arrears on the last Business Day of each
calendar quarter and on the Termination Date for any period then ending for
which such non-use fee shall not have theretofore been paid. The non-use fee
shall be computed for the actual number of days elapsed on the basis of a year
of 360 days.
5.2 Letter of Credit Fees. (a) The Company agrees to pay to the
Administrative Agent for the account of the Banks pro rata according to their
respective Percentages a letter of credit fee for each Letter of Credit in an
amount equal to the applicable LC Fee Rate per annum in effect from time to time
of the undrawn amount of such Letter of Credit (computed for the actual number
of days elapsed on the basis of a year of 360 days); provided that, unless the
Required Banks otherwise agree in writing, the rate applicable to each Letter of
Credit shall be increased by 2% at any time that an Event of Default exists.
Such letter of credit fee shall be payable in arrears on the last Business Day
of each calendar quarter and on the Termination Date (and, if any Letter of
Credit remains outstanding on the Termination Date, thereafter on demand) for
the period from the date of the issuance of each Letter of Credit to the date
such payment is due or, if earlier, the date on which such Letter of Credit
expired or was terminated.
(b) The Company agrees to pay each Issuing Bank a fronting fee for each
Letter of Credit issued by such Issuing Bank in the amount separately agreed to
between the Company and such Issuing Bank.
(c) In addition, with respect to each Letter of Credit, the Company
agrees to pay to the applicable Issuing Bank, for its own account, such fees and
expenses as such Issuing Bank customarily requires in connection with the
issuance, negotiation, processing and/or administration of letters of credit in
similar situations.
5.3 Up-Front and Funding Fees. The Company agrees to pay to the
Administrative Agent for the account of the Banks pro rata according to their
respective percentages such
31
up- front and funding fees as are mutually agreed to by the Company and the
Banks.
5.4 Agents' and Lead Arranger's Fees. The Company agrees to pay to the
Agents and the Lead Arranger such fees as are mutually agreed to from time to
time by the Company, the Agents and the Lead Arranger.
SECTION 6 CHANGES IN COMMITMENT AMOUNT; PREPAYMENTS.
6.1 Changes in Commitment Amount.
6.1.1 Scheduled Reductions of the Commitment Amount. The Commitment
Amount shall be reduced on each of the following dates (each a "Commitment
Reduction Date") by the amount set forth opposite such date:
Commitment Reduction Date Amount of Reduction
January 1, 2002 $25,000,000
January 1, 2003 $25,000,000
January 1, 2004 $30,000,000
January 1, 2005 $35,000,000.
6.1.2 Mandatory Reductions of the Commitment Amount. If, on any date on
which the Company or any Subsidiary receives proceeds from any Asset Sale, the
amount of Designated Proceeds exceeds $1,000,000, the Commitment Amount shall be
immediately reduced by the amount of Designated Proceeds (rounded down, if
necessary, to an integral multiple of $1,000,000).
6.1.3 Voluntary Reduction or Termination of the Commitments. The Company
may from time to time on at least five Business Days' prior written notice
received by the Administrative Agent (which shall promptly advise each Bank
thereof) permanently reduce the Commitment Amount to an amount not less than the
Total Outstandings. Any such reduction shall be in an amount not less than
$10,000,000 or a higher integral multiple of $1,000,000. The Company may at any
time on like notice terminate the Commitments upon payment in full of all
Revolving Loans and Swing Line Loans and all other obligations of the Company
hereunder in respect of such Loans and cash collateralization in full, pursuant
to documentation in form and substance reasonably satisfactory to the applicable
Issuing Banks, of all obligations arising with respect to the Letters of Credit.
All reductions of the Commitment Amount shall reduce the Commitments pro rata
among the Banks according to their respective Percentages.
6.1.4 Optional Increase in Commitment Amount. So long as no Event of
Default or Unmatured Event of Default exists or would result therefrom, the
Company may, by means of a letter to the Agents substantially in the form of
Exhibit E, request that the Commitment Amount be increased by (a) increasing the
Commitment of one or more Banks which have agreed to such increase (it being
understood that no Bank shall have any obligation to increase its Commitment
32
pursuant to this Section 6.1.4) and/or (b) adding one or more commercial banks
or other Persons as a party hereto with a Commitment in an amount agreed to by
any such commercial bank or other Person; provided that (i) no commercial bank
or other Person shall be added as a party hereto without the written consent of
the Administrative Agent (which shall not be unreasonably withheld); (ii) in no
event shall the Commitment Amount be increased by more than $50,000,000 during
the term of this Agreement without the written consent of all Banks; and (iii)
the Company may not request any increase pursuant to this Section 6.1.4, and no
such increase may take place, after December 30, 2003. Any increase in the
Commitment Amount pursuant to this Section 6.1.4 shall be effective three
Business Days (or such other period of time as may be agreed upon by the
Company, the Administrative Agent and the Banks or other Persons participating
in such increase) after the date on which the Administrative Agent has received
and accepted the applicable increase letter in the form of Annex 1 to Exhibit E
(in the case of an increase in the Commitment of an existing Bank) or assumption
letter in the form of Annex 2 to Exhibit E (in the case of the addition of a
commercial bank or other Person as a new Bank). The Administrative Agent shall
promptly notify the Company and the Banks of any increase in the Commitment
Amount pursuant to this Section 6.1.4 and of the Commitment and Percentage of
each Bank after giving effect thereto. The Company acknowledges that, in order
to maintain Loans in accordance with each Bank's Percentage, a reallocation of
the Commitments as a result of a non-pro-rata increase in the Commitment Amount
may require prepayment of all or portions of certain Loans on the date of such
increase (and any such prepayment shall be subject to the provisions of Section
8.4).
6.2 Prepayments.
6.2.1 Mandatory Prepayments. On each date on which the Commitment Amount
is reduced pursuant to Section 6.1.1 or Section 6.1.2, the Company shall make a
prepayment of Loans (or, to the extent required after all Loans have been
prepaid, provide cash collateral for outstanding Letters of Credit) in an amount
equal to the excess, if any, of the Total Outstandings over the Commitment
Amount as so reduced.
6.2.2 Voluntary Prepayments. The Company may from time to time prepay
Loans in whole or in part, without premium or penalty, provided that the Company
shall give the Administrative Agent (which shall promptly advise each Bank)
notice thereof not later than (a) 10:00 A.M. (or, in the case of prepayment of
Swing Line Loans, 12:00 noon), Chicago time, on the date of such prepayment
(which shall be a Business Day), in the case of Base Rate Loans and Swing Line
Loans, and (b) three Business Days prior to the date of such prepayment, in the
case of Eurodollar Loans, in each case specifying the Loans to be prepaid and
the date and amount of prepayment. Subject to Section 2.2.1, each partial
prepayment of Revolving Loans shall be in a principal amount of $3,000,000 or a
higher integral multiple of $1,000,000.
6.2.3 All Prepayments of Revolving Loans. Prepayments of Revolving Loans
shall be applied pro rata to the applicable Revolving Loans of all Banks in
accordance with their Percentages. Any prepayment of a Eurodollar Loan on a day
other than the last day of an Interest Period therefor shall include interest on
the principal amount being repaid and shall be subject to
33
Section 8.4.
SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.
7.1 Making of Payments. All payments of principal of or interest on the
Loans, and of all non-use fees and Letter of Credit fees, shall be made by the
Company to the Administrative Agent at its principal office in Milwaukee in
immediately available funds not later than noon, Chicago time, on the date due;
and funds received after that hour shall be deemed to have been received by the
Administrative Agent on the next following Business Day. The Administrative
Agent shall promptly remit to each Bank its share (if any) of all such payments
received in collected funds by the Administrative Agent. All payments under
Section 8.1 shall be made by the Company directly to the Bank entitled thereto.
7.2 Application of Certain Payments. Each payment of principal shall be
applied to such Loans as the Company shall direct by notice to be received by
the Administrative Agent on or before the date of such payment or, in the
absence of such notice, as the Administrative Agent shall determine in its
discretion. Concurrently with each remittance to any Bank of its share of any
such payment, the Administrative Agent shall advise such Bank as to the
application of such payment.
7.3 Due Date Extension. If any payment of principal or interest with
respect to any of the Loans, or of any fees, falls due on a day which is not a
Business Day, then such due date shall be extended to the immediately following
Business Day (unless, in the case of a payment of interest on a Eurodollar Loan,
the result of such extension would be to extend the due date for such payment
into another calendar month, in which case such due date shall be the
immediately preceding Business Day) and any extension of time shall be reflected
in computing interest and fees.
7.4 Failure to Make Payments. Unless the Company or a Bank has notified
the Administrative Agent, prior to the date any payment to be made by it is due,
that it does not intend to remit such payment, the Administrative Agent may, in
its sole and absolute discretion, assume that the Company or such Bank, as the
case may be, has timely remitted such payment and may, in its sole and absolute
discretion and in reliance thereon, make available such payment to the Person
entitled thereto. If such payment was not in fact remitted to the Administrative
Agent in immediately available funds, then:
(i) if the Company failed to make such payment, each Bank shall
forthwith on demand repay to the Administrative Agent the amount of such
assumed payment made available to such Bank, together with interest
thereon in respect of each day from the date such amount was made
available by the Administrative Agent to such Bank to the date such
amount is repaid to the Administrative Agent at a rate per annum equal
to (a) for the first three days after demand, the Federal Funds Rate
from time to time in effect and (b) thereafter, the Base Rate from time
to time in effect; and
34
(ii) if a Bank failed to make such payment, the Administrative
Agent shall promptly notify the Company, and the Company shall pay such
corresponding amount to the Administrative Agent, together with interest
thereon in respect of each day from the date such amount was made
available by the Administrative Agent to the Company at a rate per annum
equal to the interest rate applicable to the applicable borrowing.
Nothing in this clause (ii) shall be deemed to relieve any Bank from its
obligation to fulfill its Commitment or to prejudice any rights which
the Administrative Agent or the Company may have against any Bank as a
result of any default by such Bank hereunder.
7.5 Setoff. The Company agrees that each Agent and each Bank have all
rights of set-off and bankers' lien provided by applicable law, and in addition
thereto, the Company agrees that at any time any Event of Default exists, each
Agent and each Bank may apply to the payment of any obligations of the Company
hereunder, whether or not then due, any and all balances, credits, deposits,
accounts or moneys of the Company then or thereafter with such Agent or such
Bank.
7.6 Proration of Payments. If any Bank shall obtain any payment or other
recovery (whether voluntary, involuntary, by application of offset or otherwise,
but excluding any payment pursuant to Section 8.7 or in connection with an
assignment or participation pursuant to Section 14.9 or any payment to the Swing
Line Bank in respect of a Swing Line Loan) on account of principal of or
interest on any Loan (or on account of its participation in any Letter of Credit
or Swing Line Loan) in excess of its pro rata share of payments and other
recoveries obtained by all Banks on account of principal of and interest on
Loans (or such participations) then held by them, such Bank shall purchase from
the other Banks such participation in the Loans (or sub-participations in
Letters of Credit or Swing Line Loans) held by them as shall be necessary to
cause such purchasing Bank to share the excess payment or other recovery ratably
with each of them; provided that if all or any portion of the excess payment or
other recovery is thereafter recovered from such purchasing Bank, the purchase
shall be rescinded and the purchase price restored to the extent of such
recovery.
7.7 Taxes. (a) All payments of principal of, and interest on, the Loans
and all other amounts payable hereunder shall be made free and clear of and
without deduction for any present or future income, excise, stamp or franchise
taxes and other taxes, fees, duties, withholdings or other charges of any nature
whatsoever imposed by any taxing authority, but excluding franchise taxes and
taxes imposed on or measured by any Bank's net income or receipts (all
non-excluded items being called "Taxes"). If any withholding or deduction from
any payment to be made by the Company hereunder is required in respect of any
Taxes pursuant to any applicable law, rule or regulation, then the Company will:
(i) pay directly to the relevant authority the full amount
required to be so withheld or deducted;
35
(ii) promptly forward to the Administrative Agent an official
receipt or other documentation satisfactory to the Administrative Agent
evidencing such payment to such authority; and
(iii) (except to the extent such withholding or deduction would
not be required if such Bank's Exemption Representation were true) pay
to the Administrative Agent for the account of the Banks such additional
amount or amounts as is necessary to ensure that the net amount actually
received by each Bank will equal the full amount such Bank would have
received had no such withholding or deduction been required.
Moreover, if any Taxes are directly asserted against the Administrative Agent or
any Bank with respect to any payment received by the Administrative Agent or
such Bank hereunder, the Administrative Agent or such Bank may pay such Taxes
and the Company will (except to the extent such Taxes are payable by a Bank and
would not have been payable if such Bank's Exemption Representation were true)
promptly pay such additional amounts (including any penalty, interest and
expense) as is necessary in order that the net amount received by such Person
after the payment of such Taxes (including any Taxes on such additional amount)
shall equal the amount such Person would have received had such Taxes not been
asserted.
(b) If the Company fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Administrative Agent, for the account
of the respective Banks, the required receipts or other required documentary
evidence, the Company shall indemnify the Banks for any incremental Taxes,
interest or penalties that may become payable by any Bank as a result of any
such failure. For purposes of this Section 7.7, a distribution hereunder by the
Administrative Agent or any Bank to or for the account of any Bank shall be
deemed a payment by the Company.
(c) Each Bank represents and warrants (such Bank's "Exemption
Representation") to the Company and the Administrative Agent that, as of the
date of this Agreement (or, in the case of an Assignee, the date it becomes a
party hereto), it is entitled to receive payments hereunder without any
deduction or withholding for or on account of any Taxes imposed by the United
States of America or any political subdivision or taxing authority thereof.
(d) Upon the request from time to time of the Company or the
Administrative Agent, each Bank that is organized under the laws of a
jurisdiction other than the United States of America shall execute and deliver
to the Company and the Administrative Agent one or more (as the Company or the
Administrative Agent may reasonably request) United States Internal Revenue
Service Forms W-8ECI or Forms W-8BEN or such other forms or documents,
appropriately completed, as may be applicable to establish the extent, if any,
to which a payment to such Bank is exempt from withholding or deduction of
Taxes.
(e) If, and to the extent that, any Bank shall obtain a credit or other
tax benefit with respect to any Taxes indemnified or paid by the Company
pursuant to this Section 7.7, such
36
Bank agrees to promptly notify the Company thereof and thereupon to use
reasonable efforts to provide the Company the benefit of such credit or other
tax benefit.
SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR EURODOLLAR
LOANS.
8.1 Increased Costs. (a) If, after the date hereof, the adoption of any
applicable law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or any Eurodollar Office of such Bank) with
any request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency
(A) shall subject any Bank (or any Eurodollar Office of such
Bank) to any tax, duty or other charge with respect to its Eurodollar
Loans, its Note or its obligation to make Eurodollar Loans, or shall
change the basis of taxation of payments to any Bank of the principal of
or interest on its Eurodollar Loans or any other amounts due under this
Agreement in respect of its Eurodollar Loans or its obligation to make
Eurodollar Loans (except for changes in the rate of tax on the overall
net income of such Bank or its Eurodollar Office imposed by the
jurisdiction in which such Bank's principal executive office or
Eurodollar Office is located); or
(B) shall impose, modify or deem applicable any reserve
(including any reserve imposed by the FRB, but excluding any reserve
included in the determination of interest rates pursuant to Section 4),
special deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended by any Bank (or any Eurodollar
Office of such Bank); or
(C) shall impose on any Bank (or its Eurodollar Office) any other
condition affecting its Eurodollar Loans, its Note or its obligation to
make Eurodollar Loans;
and the result of any of the foregoing is to increase the cost to (or in the
case of Regulation D of the FRB, to impose a cost on) such Bank (or any
Eurodollar Office of such Bank) of making or maintaining any Eurodollar Loan, or
to reduce the amount of any sum received or receivable by such Bank (or its
Eurodollar Office) under this Agreement or under its Note with respect thereto,
then within 10 Business Days after demand by such Bank (which demand shall be
accompanied by a statement setting forth the basis for such demand and a
calculation of the amount thereof in reasonable detail, a copy of which shall be
furnished to the Administrative Agent), the Company shall pay directly to such
Bank such additional amount as will compensate such Bank for such increased cost
or such reduction.
(b) If any Bank shall reasonably determine that the adoption or phase-in
of any applicable law, rule or regulation regarding capital adequacy, or any
37
change therein, or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank or any
Person controlling such Bank with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on such Bank's or such controlling Person's capital as a consequence of
such Bank's obligations hereunder or under any Letter of Credit to a level below
that which such Bank or such controlling Person could have achieved but for such
adoption, change or compliance (taking into consideration such Bank's or such
controlling Person's policies with respect to capital adequacy) by an amount
deemed by such Bank or such controlling Person to be material, then from time to
time, within 10 Business Days after demand by such Bank (which demand shall be
accompanied by a statement setting forth the basis for such demand and a
calculation of the amount thereof in reasonable detail, a copy of which shall be
furnished to the Administrative Agent), the Company shall pay to such Bank such
additional amount or amounts as will compensate such Bank or such controlling
Person for such reduction.
8.2 Inability to Determine Rates, etc. If with respect to any Interest
Period:
(a) the Administrative Agent determines (which determination
shall be binding and conclusive on the Company) that by reason of
circumstances affecting the interbank eurodollar market adequate and
reasonable means do not exist for ascertaining the applicable Eurodollar
Rate; or
(b) Banks having an aggregate Percentage of 40% or more advise
the Administrative Agent that the Eurodollar Rate (Reserve Adjusted)
will not adequately and fairly reflect the cost to such Banks of
maintaining or funding such Eurodollar Loans for such Interest Period
(taking into account any amount to which such Banks may be entitled
under Section 8.1) or that the making or funding of Eurodollar Loans has
become impracticable as a result of an event occurring after the date of
this Agreement which in the opinion of such Banks materially affects
such Loans;
then the Administrative Agent shall promptly notify the other parties thereof
and, so long as such circumstances shall continue, (i) no Bank shall be under
any obligation to make or convert into Eurodollar Loans and (ii) on the last day
of the current Interest Period for each Eurodollar Loan, such Loan shall, unless
then repaid in full, automatically convert to a Base Rate Loan.
8.3 Changes in Law Rendering Eurodollar Loans Unlawful. In the event
that any change in (including the adoption of any new) applicable laws or
regulations, or any change in the interpretation of applicable laws or
regulations by any governmental or other regulatory body charged with the
administration thereof, should make it (or in the good faith judgment of any
Bank cause a substantial question as to whether it is) unlawful for any Bank to
make, maintain or fund Eurodollar Loans, then such Bank shall promptly notify
each of the other parties hereto and, so long as such circumstances shall
continue, (a) such Bank shall have no obligation to make or
38
convert into Eurodollar Loans (but shall make Base Rate Loans concurrently with
the making of or conversion into Eurodollar Loans by the Banks which are not so
affected, in each case in an amount equal to such Bank's pro rata share of all
Eurodollar Loans which would be made or converted into at such time in the
absence of such circumstances) and (b) on the last day of the current Interest
Period for each Eurodollar Loan of such Bank (or, in any event, on such earlier
date as may be required by the relevant law, regulation or interpretation), such
Eurodollar Loan shall, unless then repaid in full, automatically convert to a
Base Rate Loan. Each Base Rate Loan made by a Bank which, but for the
circumstances described in the foregoing sentence, would be a Eurodollar Loan
(an "Affected Loan") shall remain outstanding for the same period as the Group
of Eurodollar Loans of which such Affected Loan would be a part absent such
circumstances.
8.4 Funding Losses. The Company hereby agrees that upon demand by any
Bank (which demand shall be accompanied by a statement setting forth the basis
for the amount being claimed, a copy of which shall be furnished to the
Administrative Agent), the Company will indemnify such Bank against any net loss
or expense which such Bank may sustain or incur (including any net loss or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Bank to fund or maintain any Eurodollar Loan), as
reasonably determined by such Bank, as a result of (a) any payment, prepayment
or conversion of any Eurodollar Loan of such Bank on a date other than the last
day of an Interest Period for such Loan (including any conversion pursuant to
Section 8.3) or (b) any failure of the Company to borrow, prepay or continue, or
to convert any Loan into, a Eurodollar Loan on a date specified therefor in a
notice of borrowing, prepayment, continuation or conversion pursuant to this
Agreement. For this purpose, all notices to the Administrative Agent pursuant to
this Agreement shall be deemed to be irrevocable.
8.5 Right of Banks to Fund through Other Offices. Each Bank may, if it
so elects, fulfill its commitment as to any Eurodollar Loan by causing a foreign
branch or affiliate of such Bank to make such Loan, provided that in such event
for the purposes of this Agreement such Loan shall be deemed to have been made
by such Bank and the obligation of the Company to repay such Loan shall
nevertheless be to such Bank and shall be deemed held by it, to the extent of
such Loan, for the account of such branch or affiliate.
8.6 Discretion of Banks as to Manner of Funding. Notwithstanding any
provision of this Agreement to the contrary, each Bank shall be entitled to fund
and maintain its funding of all or any part of its Loans in any manner it sees
fit, it being understood, however, that for the purposes of this Agreement all
determinations hereunder shall be made as if such Bank had actually funded and
maintained each Eurodollar Loan during each Interest Period for such Loan
through the purchase of deposits having a maturity corresponding to such
Interest Period and bearing an interest rate equal to the Eurodollar Rate for
such Interest Period.
8.7 Mitigation of Circumstances; Replacement of Affected Bank. (a) Each
Bank shall promptly notify the Company and the Administrative Agent of any event
of which it has
39
knowledge which will result in, and will use reasonable commercial efforts
available to it (and not, in such Bank's good faith judgment, otherwise
disadvantageous to such Bank) to mitigate or avoid, (i) any obligation by the
Company to pay any amount pursuant to Section 7.7 or 8.1 or (ii) the occurrence
of any circumstance of the nature described in Section 8.2 or 8.3 (and, if any
Bank has given notice of any such event described in clause (i) or (ii) above
and thereafter such event ceases to exist, such Bank shall promptly so notify
the Company and the Administrative Agent). Without limiting the foregoing, (x)
each Bank will designate a different funding office if such designation will
avoid (or reduce the cost to the Company of) any event described in clause (i)
or (ii) of the preceding sentence and such designation will not, in such Bank's
good faith judgment, be otherwise disadvantageous to such Bank; and (y) if any
Bank fails to notify the Company of any event or circumstance which will entitle
such Bank to compensation pursuant to Section 7.7 or 8.1 within 90 days after
such Bank obtains knowledge of such event or circumstance, then such Bank shall
not be entitled to compensation from the Company for any amount arising prior to
the date which is 90 days before the date on which such Bank notifies the
Company of such event or circumstance.
(b) At any time any Bank is an Affected Bank, the Company may replace
such Affected Bank as a party to this Agreement with one or more other bank(s)
or financial institution(s) reasonably satisfactory to the Administrative Agent
(and upon notice from the Company such Affected Bank shall assign pursuant to an
Assignment Agreement, and without recourse or warranty, its Commitment, its
Loans, its Note, its participation in Letters of Credit and Swing Line Loans,
and all of its other rights and obligations hereunder to such replacement
bank(s) or other financial institution(s) for a purchase price equal to the sum
of the principal amount of the Loans so assigned, all accrued and unpaid
interest thereon, its ratable share of all accrued and unpaid non-use fees and
Letter of Credit fees, and any amounts payable under Section 8.4 as a result of
such Bank receiving payment of any Eurodollar Loan prior to the end of an
Interest Period therefor and all other obligations owed to such Affected Bank
hereunder).
8.8 Conclusiveness of Statements; Survival of Provisions. Determinations
and statements of any Bank pursuant to Section 8.1, 8.2, 8.3 or 8.4 shall be
conclusive absent demonstrable error. Banks may use reasonable averaging and
attribution methods in determining compensation under Sections 8.1 and 8.4, and
the provisions of such Sections shall survive repayment of the Loans,
cancellation of the Notes, cancellation or expiration of the Letters of Credit
and any termination of this Agreement.
SECTION 9 REPRESENTATIONS AND WARRANTIES.
To induce the Agents and the Banks to enter into this Agreement and to
induce the Banks to make Loans and issue or participate in Letters of Credit
hereunder, the Company represents and warrants to the Agents and the Banks that:
9.1 Organization, etc. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Wisconsin;
each Subsidiary is duly organized, validly existing and in good standing under
the laws of the state of its organization;
40
and the Company and each Subsidiary is duly qualified to do business in each
jurisdiction where the nature of its business makes such qualification necessary
(except in those instances in which the failure to be qualified or in good
standing does not have a Material Adverse Effect) and has full power and
authority to own its property and conduct its business as presently conducted by
it.
9.2 Authorization; No Conflict. The execution and delivery by the
Company of this Agreement and each other Loan Document to which it is a party,
the borrowings hereunder, the execution and delivery by each Guarantor of the
Guaranty and the performance by each of the Company and each Guarantor of its
obligations under each Loan Document to which it is a party are within the
organizational powers of the Company and each Guarantor, have been duly
authorized by all necessary organizational action on the part of the Company and
each Guarantor (including any necessary shareholder, partner or member action),
have received all necessary governmental approval (if any shall be required),
and do not and will not (a) violate any provision of law or any order, decree or
judgment of any court or other government agency which is binding on the Company
or any Guarantor, (b) contravene or conflict with, or result in a breach of, any
provision of the certificate of incorporation, partnership agreement, by-laws or
other organizational documents of the Company or any Guarantor or of any
agreement, indenture, instrument or other document which is binding on the
Company, any Guarantor or any other Subsidiary or (c) result in, or require, the
creation or imposition of any Lien on any property of the Company, any Guarantor
or any other Subsidiary.
9.3 Validity and Binding Nature. Each of this Agreement and each other
Loan Document to which the Company is a party is the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, subject to bankruptcy, insolvency and similar laws affecting the
enforceability of creditors' rights generally and to general principles of
equity; and the Guaranty is the legal, valid and binding obligation of each
Guarantor, enforceable against such Guarantor in accordance with its terms,
subject to bankruptcy, insolvency and similar laws affecting the enforceability
of creditors' rights generally and to general principles of equity.
9.4 Financial Condition. The audited consolidated financial statements
of the Company and its Subsidiaries dated December 31, 1999 and the unaudited
consolidated financial statements of the Company and its Subsidiaries dated June
30, 2000, copies of each of which have been delivered to each Bank, were
prepared in accordance with GAAP (subject, in the case of such unaudited
statements, to the absence of footnotes and to normal year-end adjustments) and
present fairly the consolidated financial condition of the Company and its
Subsidiaries as at such dates and the results of their operations for the
periods then ended.
9.5 No Material Adverse Change. Since December 31, 1999, there has been
no material adverse change in the financial condition, operations, assets,
business or properties of the Company and its Subsidiaries taken as a whole.
41
9.6 Litigation and Contingent Liabilities. No litigation (including
derivative actions), arbitration proceeding, labor controversy or governmental
investigation or proceeding is pending or, to the Company's knowledge,
threatened against the Company or any Subsidiary which might reasonably be
expected to have a Material Adverse Effect, except as set forth in Schedule 9.6.
Other than any liability incident to such litigation or proceedings, neither the
Company nor any Subsidiary has any material contingent liabilities not listed in
such Schedule 9.6.
9.7 Ownership of Properties; Liens. Each of the Company and each
Subsidiary owns good and, in the case of real property, indefeasible title to
all of its properties and assets, real and personal, tangible and intangible, of
any nature whatsoever (including patents, trademarks, trade names, service marks
and copyrights), free and clear of all Liens, charges and material claims
(including material infringement claims with respect to patents, trademarks,
copyrights and the like) except as permitted pursuant to Section 10.8.
9.8 Subsidiaries. The Company has no Subsidiaries except those listed in
Schedule 9.8.
9.9 Pension Plans. (a) During the twelve-consecutive-month period prior
to the date of the execution and delivery of this Agreement or the making of any
Loan hereunder, (i) no steps have been taken to terminate any Pension Plan other
than a "standard termination" in accordance with Section 4041(b) of ERISA and
(ii) no contribution failure has occurred with respect to any Pension Plan
sufficient to give rise to a lien under Section 302(f) of ERISA. No condition
exists or event or transaction has occurred with respect to any Pension Plan
which could result in the incurrence by the Company of any material liability,
fine or penalty.
(b) All contributions (if any) have been made to any Multiemployer
Pension Plan that are required to be made by the Company or any other member of
the Controlled Group under the terms of the plan or of any collective bargaining
agreement or by applicable law; neither the Company nor any member of the
Controlled Group has withdrawn or partially withdrawn from any Multiemployer
Pension Plan, incurred any withdrawal liability with respect to any such plan,
received notice of any claim or demand for withdrawal liability or partial
withdrawal liability from any such plan, and no condition has occurred which, if
continued, might result in a withdrawal or partial withdrawal from any such
plan; and neither the Company nor any member of the Controlled Group has
received any notice that any Multiemployer Pension Plan is in reorganization,
that increased contributions may be required to avoid a reduction in plan
benefits or the imposition of any excise tax, that any such plan is or has been
funded at a rate less than that required under Section 412 of the Code, that any
such plan is or may be terminated, or that any such plan is or may become
insolvent.
9.10 Investment Company Act. Neither the Company 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.
42
9.11 Public Utility Holding Company Act. Neither the Company nor any
Subsidiary is a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935.
9.12 Regulation U. The Company is not engaged principally, or as one of
its important activities, in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
9.13 Taxes. Each of the Company and each Subsidiary has filed all
Federal tax returns and other material tax returns and reports required by law
to have been filed by it and has paid all taxes and governmental charges thereby
shown to be owing, except any such taxes or charges which are being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its books.
9.14 Solvency, etc. On the Effective Date (or, in the case of any Person
which becomes a Guarantor after the Effective Date, on the date such Person
becomes a Guarantor), and immediately prior to and after giving effect to the
issuance of each Letter of Credit and each borrowing hereunder and the use of
the proceeds thereof (and after giving effect to any right of contribution and
subrogation), (a) each of the Company's and each Guarantor's assets will exceed
its liabilities and (b) each of the Company and each Guarantor will be solvent,
will be able to pay its debts as they mature, will own property with fair
saleable value greater than the amount required to pay its debts and will have
capital sufficient to carry on its business as then constituted.
9.15 Environmental Matters. The Company conducts, in the ordinary course
of business, a review of the effect of existing Environmental Laws (excluding
health, safety and land use matters) and existing Environmental Claims
(excluding health, safety and land use matters) on its business, operation and
properties, and as a result thereof, the Company has reasonably concluded that
such Environmental Laws and Environmental Claims, including those specifically
disclosed in Schedule 9.15, could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
9.16 Information. All information heretofore or contemporaneously
herewith furnished in writing by the Company or any Subsidiary to either Agent
or any Bank for purposes of or in connection with this Agreement and the
transactions contemplated hereby is, and all written information hereafter
furnished by or on behalf of the Company or any Subsidiary to any Bank pursuant
hereto or in connection herewith will be, true and accurate in every material
respect on the date as of which such information is dated or certified, and none
of such information is or will be incomplete by omitting to state any material
fact necessary to make such information not misleading in light of the
circumstances under which made (it being recognized by the Agents and the Banks
that (a) any projections and forecasts provided by the Company are based on good
faith estimates and assumptions believed by the Company to be
43
reasonable as of the date of the applicable projections or assumptions and that
actual results during the period or periods covered by any such projections and
forecasts will likely differ from projected or forecasted results and (b) any
information provided by the Company or any Subsidiary with respect to any Person
or assets acquired or to be acquired by the Company or any Subsidiary shall, for
all periods prior to the date of such Acquisition, be limited to the knowledge
of the Company or the acquiring Subsidiary after reasonable inquiry).
9.17 Xxxxxx Electric Acquisition.
(a) The representations and warranties made by the Company and
LEC Acquisition Corp., and (to the best of the Company's knowledge) the
representations and warranties made by all other parties, in the Xxxxxx
Acquisition Agreement (i) are true and correct in all material respects on the
date hereof and (ii) will be true and correct in all material respects as of the
Effective Date (except to the extent such representations and warranties relate
solely to an earlier date, in which case they were true and correct in all
material respects as of such earlier date).
(b) To the best of the Company's knowledge, the Xxxxxx
Acquisition complies in all material respects with all applicable legal
requirements, and all necessary governmental, regulatory, shareholder and other
consents and approvals required for the consummation of the Xxxxxx Acquisition
have been, or prior to the consummation thereof will be, duly obtained and in
full force and effect.
(c) The execution and delivery by the Company and LEC
Acquisition Corp., and (to the best of the Company's knowledge) by Xxxxxx
Electric, of the Xxxxxx Acquisition Agreement, and the consummation of the
Xxxxxx Acquisition, will not (a) violate any provision of law or any order,
decree or judgment of any court or other government agency which is binding on
the Company or any Subsidiary (including any entity which will be a Subsidiary
after giving effect to the Xxxxxx Acquisition) or (b) contravene or conflict
with, or result in a breach of or default under, any provision of the
certificate of incorporation, partnership agreement, by- laws or other
organizational documents of the Company or any Subsidiary (including any entity
which will be a Subsidiary after giving effect to the Xxxxxx Acquisition) or of
any material agreement, indenture, instrument or other document which is binding
on the Company or any Subsidiary (including any entity which will be a
Subsidiary after giving effect to the Xxxxxx Acquisition).
SECTION 10 COVENANTS.
Until the expiration or termination of the Commitments and thereafter
until all obligations of the Company hereunder and under the other Loan
Documents are paid in full and all Letters of Credit have been terminated, the
Company agrees that, unless at any time the Required Banks shall otherwise
expressly consent in writing, it will:
10.1 Reports, Certificates and Other Information. Furnish to each Bank:
44
10.1.1 Audit Report. Promptly when available and in any event within 90
days after the close of each Fiscal Year, a copy of the annual audit report of
the Company and its Subsidiaries for such Fiscal Year, including therein
consolidated balance sheets of the Company and its Subsidiaries as of the end of
such Fiscal Year and consolidated statements of earnings and cash flow of the
Company and its Subsidiaries for such Fiscal Year certified without
qualification by Xxxxxx Xxxxxxxx LLP or other independent auditors of recognized
standing selected by the Company and reasonably acceptable to the Required
Banks, together with a written statement from such accountants to the effect
that in making the examination necessary for the signing of such annual audit
report by such accountants, they have not become aware of any Event of Default
or Unmatured Event of Default that has occurred and is continuing or, if they
have become aware of any such event, describing it in reasonable detail.
10.1.2 Quarterly Reports. Promptly when available and in any event
within 45 days after the end of each Fiscal Quarter (except the last Fiscal
Quarter) of each Fiscal Year, consolidated balance sheets of the Company and its
Subsidiaries as of the end of such Fiscal Quarter, together with consolidated
statements of earnings and cash flows for such Fiscal Quarter and for the period
beginning with the first day of such Fiscal Year and ending on the last day of
such Fiscal Quarter, certified by an Executive Officer.
10.1.3 Certificates. (a) Contemporaneously with the furnishing of a copy
of each annual audit report pursuant to Section 10.1.1 and of each set of
quarterly statements pursuant to Section 10.1.2, (i) a duly completed compliance
certificate in the form of Exhibit B, with appropriate insertions, dated the
date of such annual report or such quarterly statements and signed by an
Executive Officer, containing a computation of each of the financial ratios and
restrictions set forth in Section 10.6 and to the effect that such officer has
not become aware of any Event of Default or Unmatured Event of Default that has
occurred and is continuing or, if there is any such event, describing it and the
steps, if any, being taken to cure it; and (ii) an updated organizational chart
listing all Subsidiaries.
10.1.4 Reports to SEC and to Shareholders. Within 15 days after the
filing or sending thereof, copies of all regular, periodic or special reports of
the Company or any Subsidiary filed with the SEC (excluding exhibits thereto,
provided that the Company shall promptly deliver any such exhibit to either
Agent or any Bank upon request therefor); copies of all registration statements
of the Company or any Subsidiary filed with the SEC (other than on Form S-8);
and copies of all proxy statements or other communications made to shareholders
generally concerning material developments in the business of the Company or any
Subsidiary.
10.1.5 Notice of Default, Litigation and ERISA Matters. Promptly upon
becoming aware of any of the following, written notice describing the same and
the steps being taken by the Company or the Subsidiary affected thereby with
respect thereto:
(a) the occurrence of an Event of Default or an Unmatured Event
of Default;
45
(b) any litigation, arbitration or governmental investigation or
proceeding not previously disclosed by the Company to the Banks which
has been instituted or, to the knowledge of the Company, is threatened
against the Company or any Subsidiary or to which any of the properties
of any thereof is subject which, if adversely determined, might
reasonably be expected to have a Material Adverse Effect;
(c) the institution of any steps by any member of the Controlled
Group or any other Person to terminate any Pension Plan other than a
"standard termination" in accordance with Section 4041(b) of ERISA, or
the failure of any member of the Controlled Group to make a required
contribution to any Pension Plan (if such failure is sufficient to give
rise to a lien under Section 302(f) of ERISA) or to any Multiemployer
Pension Plan, or the taking of any action with respect to a Pension Plan
which could result in the requirement that the Company furnish a bond or
other security to the PBGC or such Pension Plan, or the occurrence of
any event with respect to any Pension Plan or Multiemployer Pension Plan
which could result in the incurrence by any member of the Controlled
Group of any material liability, fine or penalty (including any claim or
demand for withdrawal liability or partial withdrawal from any
Multiemployer Pension Plan), or any notice that any Multiemployer
Pension Plan is in reorganization, that increased contributions may be
required to avoid a reduction in plan benefits or the imposition of an
excise tax, that any such plan is or has been funded at a rate less than
that required under Section 412 of the Code, that any such plan is or
may be terminated, or that any such plan is or may become insolvent;
(d) any cancellation (without replacement) or material change in
any material insurance maintained by the Company or any Subsidiary; or
(e) any other event (including any violation of any Environmental
Law or the assertion of any Environmental Claim) which might reasonably
be expected to have a Material Adverse Effect.
10.1.6 Subsidiaries. Promptly upon any change in the list of its
Subsidiaries from that set forth on Schedule 9.8 (or in the most recent notice
pursuant to this Section), notification of such change.
10.1.7 Management Reports. Promptly upon the request of either Agent or
any Bank through the Administrative Agent, copies of all detailed financial and
management reports submitted to the Company by independent auditors in
connection with each annual or interim audit made by such auditors of the books
of the Company.
10.1.8 Other Information. From time to time such other information
concerning the Company and its Subsidiaries as either Agent or any Bank through
the Administrative Agent may reasonably request.
46
10.2 Books, Records and Inspections. Keep, and cause each Subsidiary to
keep, its books and records in accordance with sound business practices
sufficient to allow the preparation of financial statements in accordance with
GAAP; permit, and cause each Subsidiary to permit, either Agent (which may be
accompanied by any Bank) or any representative thereof upon reasonable prior
notice to inspect the properties and operations of the Company and of such
Subsidiary; and permit, and cause each Subsidiary to permit, at any reasonable
time during normal business hours and with reasonable notice (or at any time
without notice if an Event of Default exists), either Agent (which may be
accompanied by any Bank) or any representative thereof to visit any or all of
its offices, to discuss its financial matters with its officers and its
independent auditors (and the Company hereby authorizes such independent
auditors to discuss such financial matters with either Agent (which may be
accompanied by any Bank) or any representative thereof, provided that the
Company shall have the right to be present at any such discussions so long as no
Event of Default exists), to examine (and photocopy extracts from) any of its
books or other financial or operating records and, at any time an Event of
Default or Unmatured Event of Default exists, to conduct field examinations of
the accounts receivable, inventory and equipment of the Company and its
Subsidiaries.
10.3 Insurance. Maintain, and cause each Subsidiary to maintain, with
responsible insurance companies, such insurance as may be required by any law or
governmental regulation or court decree or order applicable to it and such other
insurance, to such extent and against such hazards and liabilities, as is
customarily maintained by companies similarly situated; and, upon request of
either Agent or any Bank through the Administrative Agent, furnish to such Agent
or to the Administrative Agent for delivery to such Bank a certificate setting
forth in reasonable detail the nature and extent of all insurance maintained by
the Company and its Subsidiaries.
10.4 Compliance with Laws; Payment of Taxes. (a) Comply, and cause each
Subsidiary to comply, in all material respects with all material applicable laws
(including Environmental Laws and ERISA), rules, regulations, decrees, orders,
judgments, licenses and permits; and (b) pay, and cause each Subsidiary to pay,
prior to delinquency, all Federal taxes and all other material taxes and
governmental charges against it or any of its property and all other lawful
claims which, if unpaid, would by law become a Lien on its property; provided
that the foregoing shall not require the Company or any Subsidiary to pay any
such tax, charge or claim so long as it shall contest the validity thereof in
good faith by appropriate proceedings and shall set aside on its books adequate
reserves with respect thereto.
10.5 Maintenance of Existence, etc. Maintain and preserve, and (subject
to Section 10.9) cause each Significant Subsidiary to maintain and preserve, (a)
its existence and good standing in the jurisdiction of its incorporation and (b)
its qualification and good standing as a foreign corporation in each
jurisdiction where the nature of its business makes such qualification necessary
(except in those instances in which the failure to be qualified or in good
standing does not have a Material Adverse Effect).
47
10.6 Financial Covenants.
10.6.1 Minimum Net Worth. Not permit Net Worth to be less than the sum
of (i) $220,000,000 plus (ii) 50% of Consolidated Net Income for each Fiscal
Quarter ending after October 1, 2000 (excluding any Fiscal Quarter in which
there is a loss) plus (iii) 75% of the Net Cash Proceeds of all issuances of
equity securities by the Company or any Subsidiary (other than issuances to the
Company or another Subsidiary) after the Effective Date.
10.6.2 Funded Debt to EBITDA Ratio. Not permit the Funded Debt to EBITDA
Ratio as of the last day of any Computation Period to exceed the applicable
ratio set forth below:
Computation Funded Debt to
Period Ending: EBITDA Ratio
------------- ------------
Effective Date through March 31, 2001 3.75 to 1.0
June 30, 2001 and September 30, 2001 3.50 to 1.0
December 31, 2001 through September 30, 2002 3.25 to 1.0
December 31, 2002 and thereafter 3.00 to 1.0.
10.6.3 Interest Coverage Ratio. Not permit the Interest Coverage Ratio
as of the last day of any Computation Period to be less than the applicable
ratio set forth below:
Computation Interest
Period Ending: Coverage Ratio
------------- --------------
Effective Date through September 30, 2001 2.25 to 1.0
December 31, 2001 through September 30, 2002 2.75 to 1.0
December 31, 2002 through September 30, 2003 3.25 to 1.0
December 31, 2003 and thereafter 3.75 to 1.0.
10.7 Limitations on Debt. Not, and not permit any Subsidiary to, create,
incur, assume or suffer to exist any Debt, except:
(a) obligations in respect of the Loans, the L/C Applications
and the Letters of Credit (including obligations under the Guaranty);
(b) Debt arising under Capital Leases; provided that the
aggregate amount of Debt arising under all Capital Leases (other than
Capital Leases listed on Schedule 10.7 and refinancings thereof
permitted by clause (j)) shall not at any time exceed $15,000,000;
(c) Debt secured by Liens permitted by subsections 10.8(f), (g)
and (j); provided that the aggregate amount of all such Debt shall not
at any time exceed
48
$15,000,000;
(d) Debt outstanding on the date hereof and listed in Schedule
10.7 (excluding Debt to be Repaid);
(e) Debt of Subsidiaries owed to the Company;
(f) Hedging Obligations of the Company or any Subsidiary to any
Bank or any Affiliate of a Bank incurred in the ordinary course of
business for bona fide hedging purposes and not for speculation;
(g) unsecured Debt of the Company to Subsidiaries;
(h) Debt to be Repaid; provided that all Debt to be Repaid shall
be repaid on the Effective Date;
(i) Subordinated Debt;
(j) refinancings of any Debt permitted under subsections (c) and
(d) above so long as the terms applicable to such refinanced Debt are no
less favorable to the Company or the applicable Subsidiary than the
terms in effect immediately prior to such refinancing;
(k) unsecured Debt of the Company or a Subsidiary denominated in
Canadian dollars and obtained from one or more lenders located in
Canada; provided that the aggregate amount of all such Debt shall not at
any time exceed an amount equivalent to $7,500,000; and
(l) other unsecured Debt of the Company; provided that the
aggregate amount of all such Debt shall not at any time exceed
$25,000,000.
10.8 Liens. Not, and not permit any Subsidiary to, create or permit to
exist any Lien on any of its real or personal properties, assets or rights of
whatsoever nature (whether now owned or hereafter acquired), except:
(a) Liens for taxes or other governmental charges not at the time
delinquent or thereafter payable without penalty or being contested in
good faith by appropriate proceedings and, in each case, for which it
maintains adequate reserves, provided that no notice of lien has been
filed or recorded under the Code;
(b) Liens arising in the ordinary course of business (such as (i)
Liens of carriers, warehousemen, mechanics and materialmen and other
similar Liens imposed by law and (ii) Liens incurred in connection with
worker's compensation, unemployment compensation and other types of
social security (excluding Liens arising under ERISA) or
49
in connection with surety bonds, bids, performance bonds and similar
obligations) for sums not overdue or being contested in good faith by
appropriate proceedings and not involving any deposits or advances or
borrowed money or the deferred purchase price of property or services,
and, in each case, for which it maintains adequate reserves;
(c) Liens identified in Schedule 10.8;
(d) attachments, appeal bonds, judgments and other similar Liens,
for sums not in the aggregate exceeding $10,000,000, arising in
connection with court proceedings, provided the execution or other
enforcement of such Liens is effectively stayed and the claims secured
thereby are being actively contested in good faith and by appropriate
proceedings;
(e) easements, rights of way, restrictions, minor defects or
irregularities in title and other similar Liens not interfering in any
material respect with the ordinary conduct of the business of the
Company or any Subsidiary;
(f) subject to subsection 10.7(c), Liens on assets of any Person
which becomes a Subsidiary after the date of this Agreement, provided
that such Liens existed at the time such Person became a Subsidiary and
were not created in anticipation thereof;
(g) subject to subsection 10.7(c), purchase money security
interests on any property acquired or held by the Company or any
Subsidiary in the ordinary course of business, securing Debt (other than
Debt under Capital Leases) incurred or assumed for the purpose of
financing all or any part of the cost of acquiring such property;
provided that (i) any such Lien attaches to such property concurrently
with or within 20 days after the acquisition thereof, (ii) such Lien
attaches solely to the property so acquired in such transaction, and
(iii) the principal amount of the Debt secured thereby does not exceed
100% of the cost of such property;
(h) Liens securing obligations in respect of Capital Leases
attaching solely to the assets subject to such Capital Leases; provided
that such Capital Leases are otherwise permitted hereunder;
(i) Liens arising solely by virtue of any statutory or common law
provision relating to banker's liens, rights of set-off or similar
rights and remedies as to deposit accounts or other funds maintained
with a creditor depository institution; provided that (i) such deposit
account is not a dedicated cash collateral account and is not subject to
restrictions against access by the Company or the applicable Subsidiary
in excess of those set forth by regulations promulgated by the FRB and
(ii) such deposit account is not intended by the Company or any
Subsidiary to provide a collateral to the depository institution; and
50
(j) other Liens securing obligations not at any time exceeding
$2,500,000.
10.9 Mergers, Consolidations, Sales. Not, and not permit any Subsidiary
to, be a party to any merger or consolidation, make any Acquisition, purchase or
otherwise acquire any partnership or joint venture interest in any other Person,
or sell, transfer, convey or lease all or any substantial part of its assets, or
sell or assign with or without recourse any receivables, except for:
(a) any such merger or consolidation, sale, transfer,
conveyance, lease or assignment of or by any wholly-owned Subsidiary
into the Company or into, with or to any other wholly-owned Subsidiary;
(b) any such purchase or other acquisition by the Company or any
wholly- owned Subsidiary of the assets or stock of any wholly-owned
Subsidiary;
(c) Permitted Acquisitions;
(d) the Xxxxxx Acquisition;
(e) sales and dispositions of assets (including the stock of
Subsidiaries) made for fair market value so long as (i) no Event of
Default or Unmatured Event of Default exists or would result therefrom;
(ii) the purchase price therefor shall be paid in cash or by a
promissory note in form and substance satisfactory to the Required Banks
(and the aggregate outstanding principal amount of all such notes shall
not at any time exceed $15,000,000), and (iii) the Net Cash Proceeds of
such sales and dispositions are applied, to the extent applicable, to
reduce the Commitment Amount pursuant to Section 6.1.2 and, if
applicable, to make prepayments of Loans pursuant to Section 6.2.1.
10.10 Use of Proceeds. Use the proceeds of the Loans solely (i) to fund
the cash portion of the purchase price for the Xxxxxx Acquisition, (ii) to
refinance existing Debt, (iii) to pay fees and expenses incurred in connection
with the Xxxxxx Acquisition, (iv) to finance repurchases of shares of the
Company's common stock, (v) to finance Permitted Acquisitions and (vi) for
capital expenditures, working capital and other general corporate purposes.
10.11 Further Assurances. Cause each Significant Subsidiary (other than
any Foreign Subsidiary, but including any Significant Subsidiary created or
acquired, and any Subsidiary which becomes a Significant Subsidiary, after the
date hereof) to execute and deliver a counterpart of the Guaranty, and deliver,
or cause the applicable Guarantor to deliver, to the Administrative Agent such
documents as either Agent (or the Required Banks acting through the
Administrative Agent) may reasonably request (including opinions of counsel) to
confirm that the Guaranty is the legal, valid and binding obligation of each
Guarantor.
10.12 Transactions with Affiliates. Not, and not permit any Subsidiary
to, enter into, or
51
cause, suffer or permit to exist any transaction, arrangement or contract with
any of its other Affiliates (other than the Company and its Subsidiaries) which
is on terms which are less favorable than are obtainable from any Person which
is not one of its Affiliates.
10.13 Employee Benefit Plans. Maintain, and cause each Subsidiary to
maintain, each Pension Plan in substantial compliance with all applicable
requirements of law and regulations.
10.14 Environmental Laws. Conduct, and cause each Subsidiary to conduct,
its operations and keep and maintain its property in material compliance with
all Environmental Laws (other than Immaterial Laws).
10.15 Unconditional Purchase Obligations. Not, and not permit any
Subsidiary to, enter into or be a party to any material contract for the
purchase of materials, supplies or other property or services, if such contract
requires that payment be made by it regardless of whether or not delivery is
ever made of such materials, supplies or other property or services; provided
that the foregoing shall not prohibit the Company or any Subsidiary from
entering into options for the purchase of particular assets or businesses.
10.16 Inconsistent Agreements. Not, and not permit any Subsidiary to,
enter into any agreement containing any provision which (a) would be violated or
breached by any borrowing, or the obtaining of any Letter of Credit, by the
Company hereunder or by the performance by the Company or any Subsidiary of any
of its obligations hereunder or under any other Loan Document or (b) would
prohibit the Company or any Subsidiary from granting to the Administrative
Agent, for the benefit of the Banks, a Lien on any of its assets.
10.17 Business Activities. Not, and not permit any Subsidiary to, engage
in any line of business other than the same or similar lines of business engaged
in by the Company and its Subsidiaries as of the date hereof and reasonable
extensions thereof.
10.18 Advances and Other Investments. Not, and not permit any Subsidiary
to, make, incur, assume or suffer to exist any Investment in any other Person,
except (without duplication) the following:
(a) bank deposits in the ordinary course of business;
(b) extensions of credit in the nature of accounts receivable or
notes receivable arising from the sale of goods or services in the
ordinary course of business;
(c) equity Investments existing on the Effective Date in
wholly-owned Subsidiaries;
(d) in the ordinary course of business, contributions by the
Company to the capital of any Subsidiary, or by any Subsidiary to the
capital of any of its Subsidiaries;
52
(e) in the ordinary course of business, Investments by the
Company in any Subsidiary or by any Subsidiary in the Company, by way of
intercompany loans, advances or guaranties, all to the extent permitted
by Section 10.7;
(f) Suretyship Liabilities to the extent permitted by Section
10.7;
(g) Permitted Acquisitions (and good faith deposits made in
connection with prospective Permitted Acquisitions);
(h) travel and similar advances made to officers and employees
in the ordinary course of business not at any time exceeding $1,000,000
in the aggregate;
(i) loans to officers and employees (in addition to advances
described in clause (h) above) not at any time exceeding (i) $1,000,000
in the aggregate to any single individual or (ii) $3,000,000 in the
aggregate for all such individuals;
(j) Cash Equivalent Investments;
(k) the Guaranty; and
(l) other Investments not at any time exceeding in the aggregate
$25,000,000 (without taking account of any writedown in the value of any
Investment);
provided that no Investment otherwise permitted by clause (d), (f), (g) or (i)
shall be permitted to be made if, immediately before or after giving effect
thereto, any Event of Default or Unmatured Event of Default shall have occurred
and be continuing.
10.19 Margin Stock. Not permit the amount of all Margin Stock owned by
the Company and its Subsidiaries to exceed 15% of the total consolidated assets
of the Company and its Subsidiaries.
10.20 Xxxxxx Acquisition Agreement. Not amend or otherwise modify the
Xxxxxx Acquisition Agreement in any material respect.
10.21 Non-Guarantor Subsidiaries. Not permit Subsidiaries which are not
Guarantors to have, in the aggregate, (a) assets with a value of more than 15%
of the total value of the consolidated assets of the Company and its
Subsidiaries, taken as a whole, or (b) revenues in any Fiscal Quarter which
constitute more than 15% of the consolidated revenues of the Company and its
Subsidiaries, taken as a whole, for such Fiscal Quarter.
SECTION 11 EFFECTIVENESS; CONDITIONS OF LENDING, ETC.
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11.1 Effectiveness. This Agreement shall become effective on the date
(the "Effective Date"), which date shall not occur later than September 30,
2000, on which (a) each of the conditions precedent specified in Section 11.2
shall have been satisfied and (b) the Administrative Agent shall have received
(i) all amounts which are then due and payable pursuant to Section 5 and (to the
extent billed) Section 14.6; (ii) evidence satisfactory to the Agents that all
Debt to be Repaid has been (or concurrently with the initial Credit Extension
will be) paid in full and all Liens securing Debt to be Repaid have been (or
concurrently with the initial Credit Extension will be) terminated; (iii)
evidence satisfactory to the Agents that the Xxxxxx Acquisition has been (or
concurrently with the initial Credit Extension will be) completed in accordance
with the terms and provisions of the Xxxxxx Acquisition Agreement, that the
purchase price to complete the Xxxxxx Acquisition will not exceed $275,000,000
and that, after giving effect to the Xxxxxx Acquisition, the payment of all Debt
to be Repaid and the other transactions contemplated on the Effective Date, the
Commitment Amount will be at least $40,000,000 greater than the Total
Outstandings; and (iv) all of the following, each duly executed and dated the
Effective Date (or such earlier date as shall be satisfactory to the Agents),
each in form and substance satisfactory to the Agents, and each (except for the
Notes, of which only the originals shall be signed) in sufficient number of
signed counterparts to provide one for each Bank:
11.1.1 Notes. The Notes.
11.1.2 Resolutions. Certified copies of resolutions of the Board of
Directors of the Company authorizing or ratifying the execution, delivery and
performance by the Company of this Agreement, the Notes and the L/C
Applications; and certified copies of resolutions of the Board of Directors of
each Guarantor authorizing or ratifying the execution, delivery and performance
by such Guarantor of the Guaranty.
11.1.3 Consents, etc. Certified copies of all documents evidencing any
necessary corporate action, consents and governmental approvals (if any)
required for the execution, delivery and performance by the Company and each
Guarantor of the documents referred to in this Section 11 or for the
consummation of the Xxxxxx Acquisition.
11.1.4 Incumbency and Signature Certificates. A certificate of the
Secretary or an Assistant Secretary of the Company and each Guarantor as of the
Effective Date certifying the names of the officer or officers of such entity
authorized to sign the Loan Documents to which such entity is a party, together
with a sample of the true signature of each such officer (it being understood
that the Agents and each Bank may conclusively rely on each such certificate
until formally advised by a like certificate of any changes therein).
11.1.5 Guaranty. The Guaranty executed by each Significant Subsidiary
which is to be a Guarantor as of the Effective Date.
11.1.6 Opinions of Counsel for the Company and the Guarantors. The
opinion of Xxxxx
54
& Lardner, counsel to the Company and the Guarantors.
11.1.7 Acquisition Opinions. Copies of all opinions delivered in
connection with the Xxxxxx Acquisition (which opinions shall state, or be
accompanied by letters which state, that the Agents and the Banks may rely
thereon).
11.1.8 Officer's Certificate. A certificate of an Executive Officer
attaching a true and correct copy of the Xxxxxx Acquisition Agreement.
11.1.9 Compliance Certificate. A compliance certificate showing pro
forma compliance with the financial covenants set forth in Section 10.6 after
giving effect to the Acquisition.
11.1.10 Other. Such other documents as the either Agent or any Bank may
reasonably request.
11.2 Conditions to All Credit Extensions of Credit. The
obligation of each Bank to make each Loan and of each Issuing Bank to issue each
Letter of Credit is subject to the condition that the Effective Date shall have
occurred and to the following further conditions precedent:
11.2.1 Compliance with Warranties, No Default, etc. Both before
and after giving effect to such Credit Extension:
(a) the representations and warranties of the Company set
forth in this Agreement (excluding Sections 9.6, 9.8 and 9.17) shall be
true and correct in all material respects with the same effect as if
then made (except to the extent stated to relate to an earlier date, in
which case such representations and warranties shall be true and correct
in all material respects as of such earlier date);
(b) except as disclosed by the Company pursuant to
Section 9.6,
(i) no litigation (including derivative
actions), arbitration proceeding, labor controversy or
governmental investigation or proceeding shall be
pending or, to the knowledge of the Company, threatened
against the Company or any of its Subsidiaries which
might reasonably be expected to have a Material Adverse
Effect or which purports to affect the legality,
validity or enforceability of this Agreement or any
other Loan Document; and
(ii) no development shall have occurred in any
litigation (including derivative actions), arbitration
proceeding, labor controversy or governmental
investigation or proceeding disclosed pursuant to Section
9.6 which might reasonably be expected to have a Material
Adverse Effect; and
55
(c) no Event of Default or Unmatured Event of Default
shall have then occurred and be continuing, and neither the
Company nor any of its Subsidiaries shall be in violation of any
law or governmental regulation or court order or decree where
such violation or violations singly or in the aggregate might
reasonably be expected to have a Material Adverse Effect.
11.3 Confirmatory Certificate. If requested by either Agent or any Bank
(acting through the Administrative Agent), the Administrative Agent shall have
received (in sufficient counterparts to provide one to each Bank) a certificate
dated the date of such requested Credit Extension and signed by a duly
authorized representative of the Company as to the matters set forth in Section
11.2.1 (it being understood that each request by the Company for a Credit
Extension shall be deemed to constitute a warranty by the Company that the
conditions precedent set forth in Section 11.2.1 will be satisfied at the time
of the making of such Credit Extension), together with such other documents as
either Agent or any Bank (acting through the Administrative Agent) may
reasonably request in support thereof.
SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT.
12.1 Events of Default. Each of the following shall constitute an Event
of Default under this Agreement:
12.1.1 Non-Payment of the Loans, etc. Default in the payment when due of
the principal of any Loan or any reimbursement obligation with respect to any
Letter of Credit; or default, and continuance thereof for five days, in the
payment when due of any interest, fee or other amount payable by the Company
hereunder or under any other Loan Document.
12.1.2 Non-Payment of Other Debt. Any default shall occur under the
terms applicable to any Debt of the Company or any Subsidiary (other than Debt
hereunder) in an aggregate principal amount (for all such Debt so affected)
exceeding $10,000,000 and such default shall (a) consist of the failure to pay
such Debt when due (subject to any applicable grace period), whether by
acceleration or otherwise, or (b) accelerate the maturity of such Debt or permit
the holder or holders thereof, or any trustee or agent for such holder or
holders, to cause such Debt to become due and payable prior to its expressed
maturity.
12.1.3 Other Material Obligations. Default in the payment when due, or
in the performance or observance of, any material obligation of, or condition
agreed to by, the Company or any Subsidiary with respect to any material
purchase or lease of goods or services where such default, singly or in the
aggregate with other such defaults, would reasonably be expected to have a
Material Adverse Effect (except only to the extent that the existence of any
such default is being contested by the Company or such Subsidiary in good faith
and by appropriate proceedings and appropriate reserves have been made in
respect of such default).
12.1.4 Bankruptcy, Insolvency, etc. The Company or any Significant
Subsidiary
56
becomes insolvent or generally fails to pay, or admits in writing its general
inability or refusal to pay, debts as they become due; or the Company or any
Significant Subsidiary applies for, consents to, or acquiesces in the
appointment of a trustee, receiver or other custodian for the Company or such
Significant Subsidiary or any substantial part of the property thereof, or makes
a general assignment for the benefit of creditors; or, in the absence of such
application, consent or acquiescence, a trustee, receiver or other custodian is
appointed for the Company or any Significant Subsidiary or for any substantial
part of the property thereof and is not discharged within 60 days; or any
bankruptcy, reorganization, debt arrangement, or other case or proceeding under
any bankruptcy or insolvency law, or any dissolution or liquidation proceeding
(except the voluntary dissolution, not under any bankruptcy or insolvency law,
of a Significant Subsidiary), is commenced in respect of the Company or any
Significant Subsidiary, and if such case or proceeding is not commenced by the
Company or such Significant Subsidiary, an order for relief is entered therein,
or such case or proceeding is consented to or acquiesced in by the Company or
such Significant Subsidiary or remains for 60 days undismissed; or the Company
or any Significant Subsidiary takes any corporate action to authorize, or in
furtherance of, any of the foregoing.
12.1.5 Non-Compliance with Provisions of this Agreement. (a) Failure by
the Company to comply with or to perform any covenant set forth in Sections
10.1.5(a), 10.5 through 10.9, 10.12 or 10.19; (b) failure by the Company to
comply with or to perform any covenant set forth in Sections 10.10, 10.11 or
10.18 and continuance of such failure for ten days after an Executive Officer
obtains actual knowledge; or (c) failure by the Company to comply with or to
perform any other provision of this Agreement (and not constituting an Event of
Default under any of the other provisions of this Section 12) and continuance of
such failure for 30 days after notice thereof to the Company from either Agent
or any Bank (acting through the Administrative Agent).
12.1.6 Representations and Warranties. Any representation or warranty
made by the Company herein is breached or is false or misleading in any material
respect, or any schedule, certificate, financial statement, report, notice or
other writing furnished by the Company to either Agent or any Bank in connection
herewith is false or misleading in any material respect on the date as of which
the facts therein set forth are stated or certified.
12.1.7 Pension Plans. (i) Institution of any steps by the Company or any
other Person to terminate a Pension Plan if as a result of such termination the
Company could be required to make a contribution to such Pension Plan, or could
incur a liability or obligation to such Pension Plan, in excess of $1,000,000;
(ii) a contribution failure occurs with respect to any Pension Plan sufficient
to give rise to a Lien under section 302(f) of ERISA; or (iii) there shall occur
any withdrawal or partial withdrawal from a Multiemployer Pension Plan and the
withdrawal liability (without unaccrued interest) to Multiemployer Pension Plans
as a result of such withdrawal (including any outstanding withdrawal liability
that the Company and the Controlled Group have incurred on the date of such
withdrawal) exceeds $1,000,000.
57
12.1.8 Judgments. Final judgments which exceed an aggregate of
$10,000,000 shall be rendered against the Company, or any Subsidiary and shall
not have been paid, discharged or vacated or had execution thereof stayed
pending appeal within 30 days after entry or filing of such judgments.
12.1.9 Invalidity of Guaranty. The Guaranty shall cease to be in full
force and effect, any Guarantor shall fail (subject to any applicable grace
period) to comply with or to perform any applicable provision of the Guaranty,
or the Company or any Guarantor (or any Person by, through or on behalf of the
Company or any Guarantor) shall contest in any manner the validity, binding
nature or enforceability of the Guaranty with respect to any Guarantor.
12.1.10 Change in Control. (a) Any Person or group of Persons (within
the meaning of Section 13 or 14 of the Securities Exchange Act of 1934) shall
acquire beneficial ownership (within the meaning of Rule 13d-3 promulgated under
such Act) of 20% or more of the outstanding shares of common stock of the
Company; or (b) during any 12-month period, individuals who at the beginning of
such period constituted the Company's Board of Directors (together with any new
directors whose election by the Company's Board of Directors or whose nomination
for election by the Company's shareholders was approved by a vote of at least
two- thirds of the directors who either were directors at beginning of such
period or whose election or nomination was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of the Company.
12.2 Effect of Event of Default. If any Event of Default described in
Section 12.1.4 shall occur, the Commitments (if they have not theretofore
terminated) shall immediately terminate and the Loans and all other obligations
hereunder shall become immediately due and payable and the Company shall become
immediately obligated to deliver to the Administrative Agent cash collateral in
an amount equal to the outstanding face amount of all Letters of Credit, all
without presentment, demand, protest or notice of any kind; and, if any other
Event of Default shall occur and be continuing, the Administrative Agent (upon
written request of the Required Banks) shall declare the Commitments (if they
have not theretofore terminated) to be terminated and/or declare all Loans and
all other obligations hereunder to be due and payable and/or demand that the
Company immediately deliver to the Administrative Agent cash collateral in
amount equal to the outstanding face amount of all Letters of Credit, whereupon
the Commitments (if they have not theretofore terminated) shall immediately
terminate and/or all Loans and all other obligations hereunder shall become
immediately due and payable and/or the Company shall immediately become
obligated to deliver to the Administrative Agent cash collateral in an amount
equal to the face amount of all Letters of Credit, all without presentment,
demand, protest or notice of any kind. The Administrative Agent shall promptly
advise the Company of any such declaration, but failure to do so shall not
impair the effect of such declaration. Notwithstanding the foregoing, the effect
as an Event of Default of any event described in Section 12.1.1 or Section
12.1.4 may be waived by the written concurrence of all of the Banks, and the
effect as an Event of Default of any other event described in this Section 12
may be waived by the written concurrence of the Required Banks. Any cash
collateral delivered
58
hereunder shall be held by the Administrative Agent and applied to obligations
arising in connection with any drawing under a Letter of Credit. After the
expiration or termination of all Letters of Credit, such cash collateral shall
be applied by the Administrative Agent to any remaining obligations hereunder
and any excess shall be delivered to the Company or as a court of competent
jurisdiction may direct.
SECTION 13 THE AGENTS.
13.1 Appointment and Authorization. (a) Each Bank hereby irrevocably
(subject to Section 13.9) appoints, designates and authorizes each Agent to take
such action on its behalf under the provisions of this Agreement and each other
Loan Document and to exercise such powers and perform such duties as are
expressly delegated to such Agent by the terms of this Agreement or any other
Loan Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, neither Agent shall have any duties or
responsibilities except those expressly set forth herein, nor shall either Agent
have or be deemed to have any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against either Agent.
(b) Each Issuing Bank shall act on behalf of the Banks with respect to
any Letters of Credit issued by it and the documents associated therewith. Each
Issuing Bank shall have all of the benefits and immunities (i) provided to the
Agents in this Section 13 with respect to any acts taken or omissions suffered
by such Issuing Bank in connection with Letters of Credit issued by it or
proposed to be issued by it and the L/C Applications pertaining to such Letters
of Credit as fully as if the term "Agent", as used in this Section 13, included
such Issuing Bank with respect to such acts or omissions and (ii) as
additionally provided in this Agreement with respect to the Issuing Banks.
(c) The Swing Line Bank shall have all of the benefits and immunities
(i) provided to the Agents in this Section 13 with respect to any acts taken or
omissions suffered by the Swing Line Bank in connection with Swing Line Loans
made or proposed to be made by it as fully as if the term "Agent", as used in
this Section 13, included the Swing Line Bank with respect to such acts or
omissions and (ii) as additionally provided in this Agreement with respect to
the Swing Line Bank.
13.2 Delegation of Duties. Either Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Neither Agent shall be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
13.3 Liability of Agents. None of the Agent-Related Persons shall (i) be
liable for any
59
action taken or omitted to be taken by any of them under or in connection with
this Agreement or any other Loan Document or the transactions contemplated
hereby (except for its own gross negligence or willful misconduct), or (ii) be
responsible in any manner to any of the Banks for any recital, statement,
representation or warranty made by the Company or any Subsidiary or Affiliate of
the Company, or any officer thereof, contained in this Agreement or in any other
Loan Document, or in any certificate, report, statement or other document
referred to or provided for in, or received by either Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of the Company or any other party to
any Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Bank to ascertain or
to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of the Company or any of the Company's
Subsidiaries or Affiliates.
13.4 Reliance by Agents. Each Agent shall be entitled to rely, and shall
be fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to the
Company), independent accountants and other experts selected by such Agent. Each
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Loan Document unless it shall first receive such
advice or concurrence of the Required Banks as it deems appropriate and, if it
so requests, confirmation from the Banks of their obligation to indemnify such
Agent against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. Each Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a request or consent of
the Required Banks and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Banks.
13.5 Notice of Default. Neither Agent shall be deemed to have knowledge
or notice of the occurrence of any Event of Default or Unmatured Event of
Default (except, in the case of the Administrative Agent, with respect to
defaults in the payment of principal, interest and fees required to be paid to
the Administrative Agent for the account of the Banks), unless such Agent shall
have received written notice from a Bank, the other Agent or the Company
referring to this Agreement, describing such Event of Default or Unmatured Event
of Default and stating that such notice is a "notice of default". The
Administrative Agent will notify the Banks of its receipt of any such notice.
The Administrative Agent shall take such action with respect to such Event of
Default or Unmatured Event of Default as may be requested by the Required Banks
in accordance with Section 12; provided that unless and until the Administrative
Agent has received any such request, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Event of Default or Unmatured Event of Default as it shall deem
advisable or in the best interest of the Banks.
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13.6 Credit Decision. Each Bank acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by any Agent-Related Person hereafter taken, including any review of the
affairs of the Company and its Subsidiaries, shall be deemed to constitute a
representation or warranty by any Agent-Related Person to any Bank. Each Bank
represents to the Agents and the Lead Arranger that it has, independently and
without reliance upon any Agent-Related Person and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of the Company and its Subsidiaries, and
all applicable bank regulatory laws relating to the transactions contemplated
hereby, and made its own decision to enter into this Agreement and to extend
credit to the Company hereunder. Each Bank also represents that it will,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Company. Except for notices, reports and other documents
expressly herein required to be furnished to the Banks by the Administrative
Agent, neither Agent shall have any duty or responsibility to provide any Bank
with any credit or other information concerning the business, prospects,
operations, property, financial or other condition or creditworthiness of the
Company which may come into the possession of any Agent-Related Person.
13.7 Indemnification. Whether or not the transactions contemplated
hereby are consummated, the Banks shall indemnify upon demand the Agent-Related
Persons (to the extent not reimbursed by or on behalf of the Company and without
limiting the obligation of the Company to do so), pro rata, from and against any
and all Indemnified Liabilities; provided that no Bank shall be liable for any
payment to any Agent-Related Person of any portion of the Indemnified
Liabilities resulting from such Person's gross negligence or willful misconduct.
Without limitation of the foregoing, each Bank shall reimburse each Agent upon
demand for its ratable share of any costs or out-of-pocket expenses (including
reasonable fees of attorneys for such Agent (including the allocable costs of
internal legal services and all disbursements of internal counsel)) incurred by
such Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or referred to herein, to the extent that such
Agent is not reimbursed for such expenses by or on behalf of the Company. The
undertaking in this Section shall survive repayment of the Loans, cancellation
of the Notes, cancellation or expiration of the Letters of Credit, any
termination of this Agreement and the resignation or replacement of either
Agent.
13.8 Agents in Individual Capacity. Bank of America, M&I and their
respective Affiliates may make loans to, issue letters of credit for the account
of, accept deposits from,
61
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Company and its
Subsidiaries and Affiliates as though Bank of America were not the Documentation
and Syndication Agent hereunder and M&I were not the Administrative Agent, the
Issuing Bank or the Swing Line Bank hereunder, and without notice to or consent
of the Banks. The Banks acknowledge that, pursuant to such activities, Bank of
America or M&I or their respective Affiliates may receive information regarding
the Company or its Subsidiaries (including information that may be subject to
confidentiality obligations in favor of the Company or such Subsidiary) and
acknowledge that neither Agent shall be under any obligation to provide such
information to them. With respect to their Loans, Bank of America, M&I and their
respective Affiliates shall have the same rights and powers under this Agreement
as any other Bank and may exercise the same as though they were not Agents (and
M&I were not the Issuing Bank and the Swing Line Bank), and the terms "Bank" and
"Banks" include Bank of America and M&I and, to the extent applicable, their
respective Affiliates in their individual capacities.
13.9 Resignation or Removal of Agent. Either Agent may, and at the
request of the Required Banks shall, resign as an Agent upon 30 days' notice to
the Banks. If the Administrative Agent resigns, the Required Banks shall, with
(so long as no Event of Default exists) the consent of the Company (which shall
not be unreasonably withheld or delayed), appoint from among the Banks a
successor administrative agent for the Banks. If no successor administrative
agent is appointed prior to the effective date of the resignation of the
Administrative Agent, the Administrative Agent may appoint, after consulting
with the Banks and the Company, a successor administrative agent from among the
Banks. Upon the acceptance of its appointment as successor administrative agent
hereunder, such successor administrative agent shall succeed to all the rights,
powers and duties of the resigning Administrative Agent and the term
"Administrative Agent" shall mean such successor administrative agent, and the
resigning Administrative Agent's appointment, powers and duties as
Administrative Agent shall be terminated. After any Agent's resignation
hereunder as an Agent, the provisions of this Section 13 and Sections 14.6 and
14.11 shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was an Agent under this Agreement. If the Administrative Agent
resigns or is removed and no successor administrative agent has accepted
appointment as Administrative Agent by the date which is 30 days following the
resigning Administrative Agent's notice of resignation, the resigning
Administrative Agent's resignation shall nevertheless thereupon become effective
and the Banks shall perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Banks appoint a successor
administrative agent as provided for above. Notwithstanding the foregoing, M&I
may not be required to resign as the Administrative Agent at the request of the
Required Banks unless M&I shall also simultaneously be replaced as an "Issuing
Bank" and the "Swing Line Bank" hereunder pursuant to documentation in form and
substance reasonably satisfactory to M&I.
13.10 Withholding Tax.
(a) If any Bank is a "foreign corporation, partnership or trust"
within the meaning of the Code and such Bank claims exemption from, or a
reduction of, U.S.
62
withholding tax under Sections 1441 or 1442 of the Code, such Bank
agrees to deliver to the Administrative Agent:
(i) if such Bank claims an exemption from, or a reduction
of, withholding tax under a United States tax treaty, properly
completed Internal Revenue Service ("IRS") Form W-8BEN before the
payment of any interest in the first calendar year and before the
payment of any interest in each third succeeding calendar year
during which interest may be paid under this Agreement;
(ii) if such Bank claims that interest paid under this
Agreement is exempt from United States withholding tax because it
is effectively connected with a United States trade or business
of such Bank, two properly completed and executed copies of IRS
Form W-8ECI before the payment of any interest is due in the
first taxable year of such Bank and in each succeeding taxable
year of such Bank during which interest may be paid under this
Agreement, and IRS Form W-9; and
(iii) such other form or forms as may be required under
the Code or other laws of the United States as a condition to
exemption from, or reduction of, United States withholding tax.
Such Bank agrees to promptly notify the Administrative Agent of any
change in circumstances which would modify or render invalid any claimed
exemption or reduction.
(b) If any Bank claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form
W-8BEN and such Bank sells, assigns, grants a participation in, or
otherwise transfers all or part of the obligations of the Company to
such Bank, such Bank agrees to notify the Administrative Agent of the
percentage amount in which it is no longer the beneficial owner of such
obligations of the Company hereunder. To the extent of such percentage
amount, the Administrative Agent will treat such Bank's IRS Form W-8BEN
as no longer valid.
(c) If any Bank claiming exemption from United States withholding
tax by filing IRS Form W-8EIC with the Administrative Agent sells,
assigns, grants a participation in, or otherwise transfers all or part
of the obligations of the Company to such Bank hereunder, such Bank
agrees to undertake sole responsibility for complying with the
withholding tax requirements imposed by Sections 1441 and 1442 of the
Code.
(d) If any Bank is entitled to a reduction in the applicable
withholding
63
tax, the Administrative Agent may withhold from any interest payment to
such Bank an amount equivalent to the applicable withholding tax after
taking into account such reduction. If the forms or other documentation
required by subsection (a) of this Section are not delivered to the
Administrative Agent, then the Administrative Agent may withhold from
any interest payment to such Bank not providing such forms or other
documentation an amount equivalent to the applicable withholding tax.
(e) If the IRS or any other governmental authority of the United
States or any other jurisdiction asserts a claim that the Administrative
Agent did not properly withhold tax from amounts paid to or for the
account of any Bank (because the appropriate form was not delivered or
was not properly executed, or because such Bank failed to notify the
Administrative Agent of a change in circumstances which rendered the
exemption from, or reduction of, withholding tax ineffective, or for any
other reason) such Bank shall indemnify the Administrative Agent fully
for all amounts paid, directly or indirectly, by the Administrative
Agent as tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the amounts payable
to the Administrative Agent under this Section, together with all costs
and expenses (including reasonable fees of attorneys for the
Administrative Agent (including the allocable costs of internal legal
services and all disbursements of internal counsel)). The obligation of
the Banks under this subsection shall survive the repayment of the
Loans, cancellation of the Notes, cancellation or expiration of the
Letters of Credit, any termination of this Agreement and the resignation
or replacement of the Administrative Agent.
SECTION 14 GENERAL.
14.1 Waiver; Amendments. No delay on the part of either Agent or any
Bank in the exercise of any right, power or remedy shall operate as a waiver
thereof, nor shall any single or partial exercise by any of them of any right,
power or remedy preclude other or further exercise thereof, or the exercise of
any other right, power or remedy. No amendment, modification or waiver of, or
consent with respect to, any provision of this Agreement or the Notes shall be
effective unless the same shall be in writing and signed and delivered by the
Required Banks, and then any such amendment, modification, waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given. No amendment, modification, waiver or consent shall (i)
increase the Commitment of any Bank, (ii) extend any scheduled date for payment
of any principal of or interest on any Loan or any fees payable hereunder or
(iii) reduce the principal amount of any Loan, the rate of interest thereon or
any fees payable hereunder, without, in each case, the consent of each Bank
directly affected thereby; and no amendment, modification, waiver or consent
shall (x) release all or substantially all of the Subsidiaries party thereto
from the Guaranty or (y) reduce the aggregate Percentage required to
64
effect an amendment, modification, waiver or consent without, in each case, the
consent of all Banks. No provisions of Section 13 or other provision of this
Agreement affecting an Agent in its capacity as such shall be amended, modified
or waived without the consent of such Agent. No provision of this Agreement
relating to the rights or duties of an Issuing Bank in its capacity as such
shall be amended, modified or waived without the consent of such Issuing Bank.
No provision of this Agreement affecting the Swing Line Bank in its capacity as
such shall be amended, modified or waived without the written consent of the
Swing Line Bank.
14.2 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts and
each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Agreement.
14.3 Notices. Except as otherwise provided in Sections 2.2 and 2.3, all
notices hereunder shall be in writing (including facsimile transmission) and
shall be sent to the applicable party at its address shown on Schedule 14.3 or
at such other address as such party may, by written notice received by the other
parties, have designated as its address for such purpose. Notices sent by
facsimile transmission shall be deemed to have been given when sent and receipt
of such facsimile is confirmed; notices sent by mail shall be deemed to have
been given three Business Days after the date when sent by registered or
certified mail, postage prepaid; and notices sent by hand delivery or overnight
courier service shall be deemed to have been given when received. For purposes
of Sections 2.2 and 2.3, the Administrative Agent and the Swing Line Bank shall
be entitled to rely on telephonic instructions from any person that the
Administrative Agent or the Swing Line Bank in good faith believes is an
authorized officer or employee of the Company, and the Company shall hold the
Administrative Agent, the Swing Line Bank and each other Bank harmless from any
loss, cost or expense resulting from any such reliance.
14.4 Computations. Where the character or amount of any asset or
liability or item of income or expense is required to be determined, or any
consolidation or other accounting computation is required to be made, for the
purpose of this Agreement, such determination or calculation shall, to the
extent applicable and except as otherwise specified in this Agreement, be made
in accordance with GAAP, consistently applied; provided that if the Company
notifies the Administrative Agent that the Company wishes to amend any covenant
in Section 10 to eliminate or to take into account the effect of any change in
GAAP on the operation of such covenant (or if the Administrative Agent notifies
the Company that the Required Banks wish to amend Section 10 for such purpose),
then the Company'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 Company and the Required Banks.
14.5 Regulation U. Each Bank represents that it in good faith is not
relying, either directly or indirectly, upon any Margin Stock as collateral
security for the extension or
65
maintenance by it of any credit provided for in this Agreement.
14.6 Costs, Expenses and Taxes. The Company agrees to pay on demand all
reasonable out-of-pocket costs and expenses of the Agents and the Lead Arranger
(including the reasonable fees and charges of counsel for the Agents and the
Lead Arranger and of local counsel, if any, who may be retained by said counsel)
in connection with the preparation, execution, delivery and administration of
this Agreement, the other Loan Documents and all other documents provided for
herein or delivered or to be delivered hereunder or in connection herewith
(including any amendments, supplements or waivers to any Loan Documents), and
all reasonable out-of-pocket costs and expenses (including reasonable attorneys'
fees, court costs and other legal expenses and allocated costs of staff counsel)
incurred by either Agent and each Bank in connection with the enforcement of
this Agreement, the other Loan Documents or any such other documents. In
addition, the Company agrees to pay, and to save the Agents, the Lead Arranger
and the Banks harmless from all liability for, (a) any stamp or other taxes
(excluding income taxes and franchise taxes based on net income) which may be
payable in connection with the execution and delivery of this Agreement, the
borrowings hereunder, the issuance of the Notes or the execution and delivery of
any other Loan Document or any other document provided for herein or delivered
or to be delivered hereunder or in connection herewith and (b) any fees of the
Company's auditors and, if an Event of Default or Unmatured Event of Default
exists, any costs and expenses of either Agent or any Bank in connection with
any reasonable exercise by either Agent or any Bank of its rights pursuant to
Section 10.2. All obligations provided for in this Section 14.6 shall survive
repayment of the Loans, cancellation of the Notes, cancellation or expiration of
the Letters of Credit and any termination of this Agreement.
14.7 Captions. Section captions used in this Agreement are for
convenience only and shall not affect the construction of this Agreement.
14.8 Successors and Assigns. This Agreement shall be binding upon the
Company, the Agents and the Banks and their respective successors and assigns,
and shall inure to the benefit of the Company, the Agents and the Banks and the
successors and assigns of the Agents and the Banks.
14.9 Assignments; Participations.
14.9.1 Assignments. Any Bank may, with the prior written consent of the
Agents and, so long as no Unmatured Event of Default or Event of Default has
occurred and is continuing, the Company (which consents shall not be
unreasonably delayed or withheld), at any time assign and delegate to one or
more commercial banks or other Persons (any Person to whom such an assignment
and delegation is to be made being herein called an "Assignee"), all or any
fraction of such Bank's Loans and Commitment (which assignment and delegation
shall be of a constant, and not a varying, percentage of all the assigning
Bank's Loans and Commitment) in a minimum aggregate amount equal to the lesser
of (i) the amount of the assigning Bank's remaining Commitment and (ii)
$5,000,000; provided that (a) no assignment and delegation may be made
66
to any Person if, at the time of such assignment and delegation, the Company
would be obligated to pay any greater amount under Section 7.7 or Section 8 to
the Assignee than the Company is then obligated to pay to the assigning Bank
under such Sections (and if any assignment is made in violation of the
foregoing, the Company will not be required to pay the incremental amounts) and
(b) the Company and the Agents shall be entitled to continue to deal solely and
directly with such Bank in connection with the interests so assigned and
delegated to an Assignee until the date when all of the following conditions
shall have been met:
(x) five Business Days (or such lesser period of time as the
Agents and the assigning Bank shall agree) shall have passed after
written notice of such assignment and delegation, together with payment
instructions, addresses and related information with respect to such
Assignee, shall have been given to the Company and the Agents by such
assigning Bank and the Assignee,
(y) the assigning Bank and the Assignee shall have executed and
delivered to the Company and the Agents an assignment agreement
substantially in the form of Exhibit D (an "Assignment Agreement"),
together with any documents required to be delivered hereunder, which
Assignment Agreement shall have been accepted by the Agents, and
(z) the assigning Bank or the Assignee shall have paid the
Administrative Agent a processing fee of $3,500.
From and after the date on which the conditions described above have been met,
(x) such Assignee shall be deemed automatically to have become a party hereto
and, to the extent that rights and obligations hereunder have been assigned and
delegated to such Assignee pursuant to such Assignment Agreement, shall have the
rights and obligations of a Bank hereunder, and (y) the assigning Bank, to the
extent that rights and obligations hereunder have been assigned and delegated by
it pursuant to such Assignment Agreement, shall be released from its obligations
hereunder. Within five Business Days after the effectiveness of any assignment
and delegation to a Person that is not currently a Bank hereunder, the Company
shall execute and deliver to the Administrative Agent (for delivery to the
Assignee) a new Note dated the effective date of such assignment. Any attempted
assignment and delegation not made in accordance with this Section 14.9.1 shall
be null and void.
Notwithstanding the foregoing provisions of this Section 14.9.1 or any
other provision of this Agreement, any Bank may at any time assign all or any
portion of its Loans and its Note to a Federal Reserve Bank (but no such
assignment shall release any Bank from any of its obligations hereunder).
14.9.2 Participations. Any Bank may at any time sell to one or more
commercial banks or other Persons participating interests in any Loan owing to
such Bank, the Note held by such Bank, the Commitment of such Bank, the direct
or participation interest of such Bank in any Letter of Credit or Swing Line
Loan or any other interest of such Bank hereunder (any Person
67
purchasing any such participating interest being herein called a "Participant").
In the event of a sale by a Bank of a participating interest to a Participant,
(x) such Bank shall remain the holder of its Note for all purposes of this
Agreement, (y) the Company and the Administrative Agent shall continue to deal
solely and directly with such Bank in connection with such Bank's rights and
obligations hereunder and (z) all amounts payable by the Company shall be
determined as if such Bank had not sold such participation and shall be paid
directly to such Bank. No Participant shall have any direct or indirect voting
rights hereunder except with respect to any of the events described in the third
sentence of Section 14.1. Each Bank agrees to incorporate the requirements of
the preceding sentence into each participation agreement which such Bank enters
into with any Participant. The Company agrees that if amounts outstanding under
this Agreement and the Notes are due and payable (as a result of acceleration or
otherwise), each Participant shall be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Bank under this Agreement or such Note; provided that such
right of setoff shall be subject to the obligation of each Participant to share
with the Banks, and the Banks agree to share with each Participant, as provided
in Section 7.6. The Company also agrees that each Participant shall be entitled
to the benefits of Section 7.7 and Section 8 as if it were a Bank (provided that
no Participant shall receive any greater compensation pursuant to Section 7.7 or
Section 8 than would have been paid to the participating Bank if no
participation had been sold).
14.10 Governing Law. This Agreement and each Note shall be a contract
made under and governed by and construed and interpreted in accordance with, the
laws of the State of Illinois applicable to contracts made and to be performed
entirely within such State. Whenever possible each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement. All obligations of the
Company and rights of the Agents and the Banks expressed herein or in any other
Loan Document shall be in addition to and not in limitation of those provided by
applicable law.
14.11 Indemnification by the Company. In consideration of the execution
and delivery of this Agreement by the Agents and the Banks and the agreement to
extend the Commitments provided hereunder, the Company hereby agrees to
indemnify, exonerate and hold the Agents, the Lead Arranger, each Bank and each
of their respective officers, directors, employees, Affiliates and agents (each
a "Bank Party") free and harmless from and against any and all actions, causes
of action, suits, losses, liabilities, damages and expenses, including
reasonable attorneys' fees and charges, settlement costs and, without
duplication, allocated costs of staff counsel (collectively, the "Indemnified
Liabilities"), incurred by the Bank Parties or any of them as a result of, or
arising out of, or relating to (i) any tender offer, merger, purchase of stock,
purchase of assets or other similar transaction financed or proposed to be
financed in whole or in part, directly or indirectly, with the proceeds of any
of the Loans, (ii) the use, handling, release,
68
emission, discharge, transportation, storage, treatment or disposal of any
Hazardous Substance at any property owned or leased by the Company or any
Subsidiary, (iii) any violation of any Environmental Laws with respect to
conditions at any property owned or leased by the Company or any Subsidiary or
the operations conducted thereon, (iv) the investigation, cleanup or remediation
of offsite locations at which the Company or any Subsidiary or their respective
predecessors are alleged to have directly or indirectly disposed of hazardous
substances or (v) the execution, delivery, performance or enforcement of this
Agreement or any other Loan Document by any of the Bank Parties, except for any
such Indemnified Liabilities arising on account of any such Bank Party's gross
negligence or willful misconduct. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, the Company hereby agrees to
make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law. Nothing set
forth above shall be construed to relieve any Bank Party from any obligation it
may have under this Agreement. All obligations provided for in this Section
14.11 shall survive repayment of the Loans, cancellation of the Notes,
cancellation or expiration of the Letters of Credit and any termination of this
Agreement.
14.12 Forum Selection and Consent to Jurisdiction. ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS
OF THE STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO
THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS AND OF THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH ABOVE. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID TO SUCH ADDRESS AS
DETERMINED PURSUANT TO SECTION 14.3, BY PERSONAL SERVICE WITHIN OR WITHOUT THE
STATE OF ILLINOIS. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
14.13 Waiver of Jury Trial. EACH OF THE COMPANY, EACH AGENT AND EACH
BANK HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY NOTE, ANY OTHER LOAN
DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH
MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING
FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING,
AND AGREES THAT ANY SUCH
69
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
70
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
REGAL-BELOIT CORPORATION
By
Title
M&I XXXXXXXX & XXXXXX BANK, as
Administrative Agent, Issuing Bank,
Swing Line Bank and as a Bank
By
Title
BANK OF AMERICA, N.A., as Documentation
and Syndication Agent and as a Bank
By
Title
BANK ONE, NA (Main Office Chicago),
as Managing Agent and as a Bank
By
Title
FIRSTAR BANK, N.A., as Managing Agent
and as a Bank
By
Title
71
THE FUJI BANK, LIMITED, as Managing Agent
and as a Bank
By
Title
FLEET NATIONAL BANK, as Co-Agent
and as a Bank
By
Title
XXXXXX TRUST AND SAVINGS BANK,
as Co-Agent and as a Bank
By
Title
U.S. BANK NATIONAL ASSOCIATION,
as a Bank
By
Title
THE BANK OF TOKYO-MITSUBISHI, LTD.,
Chicago Branch, as a Bank
By
Title
72
LASALLE BANK NATIONAL ASSOCIATION,
as a Bank
By
Title
NORTHERN TRUST COMPANY, as a Bank
By
Title
WACHOVIA BANK, N.A., as a Bank
By
Title
THE GOVERNOR AND COMPANY OF THE
BANK OF IRELAND, as a Bank
By
Title
BANCA NAZIONALE DEL LAVORO, S.P.A., -
New York Branch, as a Bank
By
Title
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
as a Bank
By
Title
73
MICHIGAN NATIONAL BANK, as a Bank
By
Title
THE SAKURA BANK, LIMITED, as a Bank
By
Title
BANK HAPOALIM B.M., as a Bank
By
Title
NATIONAL CITY BANK OF MICHIGAN/
ILLINOIS, as a Bank
By
Title
ST. XXXXXXX BANK, F.S.B., as a Bank
By
Title
74
