RESTATED AND AMENDED
CREDIT AGREEMENT
Dated as of May 27, 1996
Among
RHI HOLDINGS, INC.,
as Borrower
THE FINANCIAL INSTITUTIONS
LISTED ON THE
SIGNATURE PAGES HEREOF,
and
CITICORP NORTH AMERICA, INC.,
as Administrative Agent
TABLE OF CONTENTS
ARTICLE IDEFINITIONS
SECTION 1.01 Certain Defined
Terms.............................2
SECTION 1.02 Computation of Time
Periods......................25
SECTION 1.03 Accounting and Commercial
Terms..................26
SECTION 1.04 Other Definitional
Provisions....................26
ARTICLE IIRESTATEMENT OF 1992 CREDIT
AGREEMENT
SECTION 2.01 Amendment and Restatement of 1992 Credit
Agreement........................................26
ARTICLE IIIAMOUNTS AND TERMS OF LOANS
SECTION 3.01 Intentionally
Omitted............................27
SECTION 3.02 Intentionally
Omitted............................27
SECTION 3.03 Intentionally
Omitted............................27
SECTION 3.04 Intentionally
Omitted............................27
SECTION 3.05 Revolving Credit
Loans...........................27
SECTION 3.06 Intentionally
omitted............................28
SECTION 3.07 Procedure for Revolving Credit
Borrowings........28
SECTION 3.08 Making of Revolving Credit
Loans.................28
SECTION 3.09 Conversion or Continuation of Base Rate Loans
and
Eurodollar Rate
Loans............................29
SECTION 3.10 Authorized Officers and Employees; Telephonic
Notices..........................................29
SECTION 3.11 Endorsement of Payments on
Note..................30
SECTION 3.12 Intentionally
omitted............................31
SECTION 3.13 Foreign Exchange Contracts; Interest Rate
Contracts........................................31
SECTION 3.14 Special Provisions Governing Eurodollar Rate
Loans............................................33
SECTION 3.15 Senior Lenders' Obligations
Several..............38
ARTICLE IVPAYMENTS AND PREPAYMENTS
SECTION 4.01
Prepayments......................................38
SECTION 4.02 Mandatory Prepayments of
Loans...................38
SECTION 4.03 Reductions of
Commitments........................39
SECTION 4.04 Intentionally
omitted............................39
SECTION 4.05 Manner and Time of
Payment.......................39
SECTION 4.06 Apportionment and Application of
Payments........40
SECTION 4.07 Required Additional Cash
Collateral..............42
ARTICLE VTHE LETTER OF CREDIT SUBFACILITY
SECTION 5.01 Obligation to
Issue..............................42
SECTION 5.02
Conditions.......................................43
SECTION 5.03 Issuance of Letters of
Credit....................43
SECTION 5.04 Reimbursement Obligations; Duties of Issuing
Banks............................................45
SECTION 5.05
Participations...................................45
SECTION 5.06 Payment of Reimbursement
Obligations.............48
SECTION 5.07
Exoneration......................................48
SECTION 5.08 Issuing Bank Reporting
Requirements..............49
ARTICLE VIINTEREST AND FEES
SECTION 6.01 Interest
Rate....................................49
SECTION 6.02 Default
Interest.................................50
SECTION 6.03 Computation of
Interest..........................50
SECTION 6.04 Interest
Payments................................50
SECTION 6.05 Administrative Agent's
Fee.......................50
SECTION 6.06 Intentionally
omitted............................50
SECTION 6.07 Non-Use
Fees.....................................51
SECTION 6.08 Letter of Credit Fees; Issuing Bank
Charges......51
SECTION 6.09 Payment of
Fees..................................51
SECTION 6.10 Changes; Legal
Restrictions......................52
SECTION 6.11 Increased
Capital................................53
ARTICLE VIICONDITIONS PRECEDENT
SECTION 7.01 Conditions to
Effectiveness......................54
SECTION 7.02 Conditions Precedent to All Loans and the
Issuance
of Letters of
Credit.............................55
ARTICLE VIIIREPRESENTATIONS AND WARRANTIES
SECTION 8.01 Organization; Corporate
Powers...................56
SECTION 8.02 Authorization;
Enforceability....................57
SECTION 8.03 No
Conflict......................................57
SECTION 8.04 Governmental
Consents............................58
SECTION 8.05 Subsidiaries and Ownership of Capital
Stock......58
SECTION 8.06 Pledge of
Collateral.............................59
SECTION 8.07 Governmental
Regulation..........................59
SECTION 8.08 Litigation; Adverse
Effects......................59
SECTION 8.09 No Material Adverse
Change.......................60
SECTION 8.10 Payment of
Taxes.................................60
SECTION 8.11 Material Adverse
Agreements......................61
SECTION 8.12
Performance......................................61
SECTION 8.13 Securities
Activities............................61
SECTION 8.14 Requirements of
Law..............................61
SECTION 8.15 Patents, Trademarks, Permits,
etc................61
SECTION 8.16 Environmental
Matters............................62
SECTION 8.17 No
Default.......................................63
SECTION 8.18
ERISA............................................63
SECTION 8.19 Tax
Examinations.................................64
SECTION 8.20 Financial
Condition..............................65
SECTION 8.21
Guaranties.......................................65
SECTION 8.22 Senior
Indebtedness..............................65
ARTICLE IXREPORTING COVENANTS
SECTION 9.01 Financial
Statements.............................66
SECTION 9.02 Certificates to Accompany Financial
Statements...67
SECTION 9.03 Intentionally
omitted............................68
SECTION 9.04 Officer's Certificates Regarding Investments
and
Indebtedness.....................................68
SECTION 9.05 Intentionally
omitted............................69
SECTION 9.06 Other Financial
Information......................69
SECTION 9.07 Environmental
Notices............................69
SECTION 9.08 Declaration of Dividends and Other
Distributions.70
SECTION 9.09 Notices Concerning Defaults, Material Adverse
Change and
Litigation............................70
SECTION 9.10 ERISA
Reporting..................................71
SECTION 9.11 Other
Reports....................................72
SECTION 9.12 Independent Certified Public
Accountants.........72
SECTION 9.13 TFC/RHI Consolidated
Liquidity...................73
ARTICLE XAFFIRMATIVE COVENANTS
SECTION 10.01 Corporate Existence,
etc........................73
SECTION 10.02 Compliance with Laws,
etc.......................74
SECTION 10.03 Payment of
Taxes................................74
SECTION 10.04 Maintenance of Properties;
Insurance............74
SECTION 10.05 Inspection of Property; Books and Records;
Discussions.....................................75
SECTION 10.06 Intentionally
omitted...........................75
SECTION 10.07 Use of
Proceeds.................................75
SECTION 10.08 Intentionally
omitte............................75
SECTION 10.09 Receipt of Certain
Funds........................76
SECTION 10.10 Maintenance of Tax Allocation
Agreement.........76
SECTION 10.11 Separate Corporate
Existence....................76
SECTION 10.12 Consolidated Net Worth of the Borrower;
Liquidity.......................................77
SECTION 10.13 Future Liens for the Benefit of the Senior
Lenders.........................................77
ARTICLE XINEGATIVE COVENANTS
SECTION 11.01
Liens...........................................78
SECTION 11.02 Conduct of
Business.............................79
SECTION 11.03 Transactions with Shareholders and
Affiliates...79
SECTION 11.04 Restriction on Fundamental
Changes..............79
SECTION 11.05
ERISA...........................................80
SECTION 11.06 Sales and
Leasebacks............................81
SECTION 11.07 Subordinated
Indebtedness.......................81
SECTION 11.08 Amendment of Charter or By-
laws...............82
SECTION 11.09 Issuance and Disposal of
Stock..................82
SECTION 11.10 Interest Exchange
Agreements....................82
SECTION 11.11 Asset
Transfers.................................82
SECTION 11.12 Consulting
Contracts............................82
SECTION 11.13 Intentionally
omitted...........................82
SECTION 11.14 Consolidated Capital
Expenditures...............83
SECTION 11.15 Intercompany
Indebtedness.......................83
SECTION 11.16
Indebtedness....................................83
SECTION 11.17 Sales of
Assets.................................85
SECTION 11.18
Investments.....................................85
SECTION 11.19 Restricted Junior
Payments......................88
SECTION 11.20 Accommodation
Obligations.......................89
SECTION 11.21 Restriction on Operating
Leases.................89
SECTION 11.22 Sale of
Accounts................................90
ARTICLE XIA INTENTIONALLY OMITTED
ARTICLE XIB INTENTIONALLY OMITTED
ARTICLE XIC INTENTIONALLY OMITTED
ARTICLE XII INTENTIONALLY OMITTED
ARTICLE XIII INTENTIONALLY OMITTED
ARTICLE XIVEVENTS OF DEFAULT; RIGHTS AND REMEDIES
SECTION 14.01 Events of
Default...............................91
SECTION 14.02 Intentionally
omitted...........................95
SECTION 14.03 Rights and
Remedies.............................96
ARTICLE XV THE ADMINISTRATIVE AGENT
SECTION 15.01
Appointment.....................................97
SECTION 15.02 Nature of
Duties................................97
SECTION 15.03 Rights, Exculpation,
etc........................98
SECTION 15.04
Reliance........................................98
SECTION 15.05
Indemnification.................................99
SECTION 15.06 The Administrative Agent
Individually...........99
SECTION 15.07 Successor Administrative
Agents.................99
SECTION 15.08 Collateral
Management..........................100
ARTICLE XVIMISCELLANEOUS
SECTION 16.01 Concerning the Collateral
Documents............100
SECTION 16.02 Assignment of Loans; Participation in the
Facilities.....................................101
SECTION 16.03
Expenses.......................................104
SECTION 16.04
Indemnity......................................105
SECTION 16.05 Change in Accounting
Principles................106
SECTION 16.06 Set-
Off......................................106
SECTION 16.07 Ratable
Sharing................................107
SECTION 16.08 Amendments and
Waivers.........................108
SECTION 16.09 Independence of
Covenants......................109
SECTION 16.10
Notices........................................110
SECTION 16.11 Survival of Warranties and Certain
Agreements..110
SECTION 16.12 Failure or Indulgence Not Waiver; Remedies
Cumulative.....................................110
SECTION 16.13 Marshalling; Payments Set
Aside................110
SECTION 16.14
Severability...................................111
SECTION 16.15 Obligations
Several............................111
SECTION 16.16
Headings.......................................111
SECTION 16.17 Governing
Law..................................111
SECTION 16.18 Limitation of
Liability........................111
SECTION 16.19 Successors and Assigns; Subsequent Holders of
Notes..........................................111
SECTION 16.20 Consent to Jurisdiction and Service of
Process;
Waiver of Jury Trial; Bankruptcy
Venue.........112
SECTION 16.21 Counterparts; Effectiveness;
Inconsistencies...112
SECTION 16.22 Performance of
Obligations.....................113
SECTION 16.23 Intentionally
omitted..........................113
SECTION 16.24 Replacement of Certain Senior
Lenders..........113
SECTION 16.25 No Default Under 1992 Credit
Agreement.........115
SCHEDULES
Schedule 1.01-A-Eurodollar Affiliates
Schedule 1.01-B-Excluded Dispositions
Schedule 1.01-C-Existing Investments
Schedule 1.01-D-Permitted Existing Indebtedness
Schedule 1.01-E-Subsidiary Guarantors
Schedule 8.05-Borrowers and their Subsidiaries; Ownership of
Borrowers' and Their Subsidiaries' Capital Stock
Schedule 8.08-Litigation
Schedule 8.16-Environmental Matters
Schedule 8.18-Post-Employment Employee Welfare Plans
Schedule 8.19-Tax Matters
Schedule 10.04-Insurance Policies
Schedule 11.03-Management Contracts and Service Agreements
with Affiliates
Schedule 11.20-Unsecured Guaranties by Fairchild Germany,
Inc. of Indebtedness of Fairchild Convac GmbH
EXHIBITS
Exhibit A-Form of Assignment Agreement
Exhibit B-Form of Compliance Certificate
Exhibit C-Form of Revolving Credit Note
Exhibit D-Form of Notice of Borrowing
Exhibit E-Form of Notice of Conversion/Continuation
Exhibit F-List of Closing Documents
Exhibit G-Form of Officer's No Default Certificate
Exhibit H-Form of Officer's Certificate Regarding
Investments and Indebtedness
Exhibit I-Form of Officer's Certificate Regarding
TFC/RHI Consolidated Liquidity
RESTATED AND AMENDED CREDIT AGREEMENT
Dated as of May 27, 1996
THIS RESTATED AND AMENDED CREDIT AGREEMENT, dated as of
May 27, 1996, among RHI Holdings, Inc., a Delaware
corporation, the Senior Lenders from time to time a party
hereto, the Issuing Banks from time to time a party hereto,
and the Administrative Agent, sets forth the terms upon
which the Senior Lenders and Issuing Banks will, among other
things, (i) continue certain loans and other extensions of
credit made to the Borrower under the 1992 Credit Agreement
and (ii) make certain additional loans and/or otherwise
extend additional financial accommodations to the Borrower.
W I T N E S S E T H:
WHEREAS, pursuant to the 1992 Credit Agreement, the
Borrower incurred certain obligations and indebtedness for
loans and other financial accommodations extended to it and
issued certain Notes evidencing such indebtedness;
WHEREAS, the terms and provisions of the 1992 Credit
Agreement as they pertain to (i) all borrower parties
thereto other than the Borrower have been terminated in
their entirety, except for certain indemnities thereunder,
and (ii) all lender parties thereto other than Citicorp
North America, Inc. in its capacity as a Senior Lender to
the Borrower and Citibank, N.A. in its capacity as Issuing
Bank to the Borrower have been terminated in their entirety,
except as beneficiaries of the indemnities referenced in
clause (i) above, in each instance, as set forth in that
certain Mutual Release Agreement Agreement dated as of March
13, 1996, among VSI Corporation, Fairchild Industries, Inc.,
the Borrower, in its capacity as a guarantor of certain
obligations owing under the 1992 Credit Agreement by VSI
Corporation and Fairchild Industries, Inc., certain
Subsidiaries of VSI Corporation, Shared Technologies
Fairchild, Inc., and certain financial institutions parties
thereto;
WHEREAS, the Borrower has requested that Citicorp North
America, Inc., as the sole Senior Lender having any
commitment outstanding to the Borrower under the 1992 Credit
Agreement, and Citibank, N.A., as Issuing Bank under the
1992 Credit Agreement, modify certain of the terms and
provisions of the 1992 Credit Agreement and such Senior
Lender and Issuing Bank are willing to modify certain terms
and provisions of the 1992 Credit Agreement, in each case on
the terms and conditions set forth herein; and
WHEREAS, in view of the foregoing, the Administrative
Agent, Citicorp North America, Inc., as Senior Lender,
Citibank, N.A., as Issuing Bank, and the Borrower have
agreed to enter into this Agreement in order to (i) restate
and amend the terms and provisions of the 1992 Credit
Agreement which relate to the Borrower and (ii) set forth
the terms and conditions under which the Senior Lenders
will, on the date hereof and hereafter, extend loans and
make other financial accommodations to or for the benefit of
the Borrower;
NOW, THEREFORE, in consideration of the premises set
forth above and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged,
the Senior Lender, the Issuing Bank, the Borrower, and the
Administrative Agent hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Certain Defined Terms. The following terms
used in this Agreement shall have the following meanings:
"Accommodation Obligation," as applied to any Person,
shall mean any contractual obligation, contingent or
otherwise, of that Person with respect to any Indebtedness
or other obligation or liability of another Person,
including, without limitation, any such Indebtedness,
obligation or liability directly or indirectly guaranteed,
endorsed (otherwise than for collection or deposit in the
ordinary course of business), co-made or discounted or sold
with recourse by that Person, or in respect of which that
Person is otherwise directly or indirectly liable, including
Contractual Obligations (contingent or otherwise) arising
through any agreement to purchase, repurchase, or otherwise
acquire such Indebtedness, obligation or liability or any
security therefor, or to provide funds for the payment or
discharge thereof (whether in the form of loans, advances,
stock purchases, capital contributions or otherwise), or to
maintain solvency, assets, level of income, or other
financial condition, or to make payment other than for value
received.
"Accounts" shall mean and include, with respect to any
Person, all of such Person's present and future rights to
payment for goods, merchandise or Inventory sold or leased
or for services rendered, including, without limitation,
those which are not evidenced by instruments or chattel
paper, and whether or not they have been earned by
performance; accounts; proceeds of any letters of credit on
which such Person is named as beneficiary; contract rights;
chattel paper; instruments; documents; insurance proceeds;
and all such obligations whatsoever owing to such Person,
together with all instruments and all documents of title
representing any of the foregoing, all rights in any goods,
merchandise or Inventory which any of the same may
represent, all rights in any returned or repossessed goods,
merchandise and Inventory, and all right, title, security
and guaranties with respect to each of the foregoing,
including, without limitation, any right of stoppage in
transit.
"Administrative Agent" shall mean Citicorp, not
individually, but in its capacity as administrative agent
for the Senior Lenders and Issuing Banks hereunder, and any
successor Administrative Agent appointed pursuant to Section
15.07.
"Aerospace" shall mean Banner Aerospace, Inc., a
Delaware corporation.
"Aerospace Credit Agreement" shall mean that certain
Credit Agreement dated as of August 2, 1995 among Aerospace,
Burbank Aircraft Supply, Inc., certain financial
institutions a party thereto as lenders and issuing banks,
and Citicorp USA, Inc., as administrative agent, as the same
may be amended, restated, modified or supplemented from time
to time.
"Aerospace Group" shall mean Aerospace and its
Subsidiaries.
"Affiliate," as applied to any Person, shall mean any
other Person directly or indirectly controlling, controlled
by, or under common control with, that Person. For purposes
of this definition, "control" (including, with correlative
meanings, the terms "controlling," "controlled by" and
"under common control with"), as applied to any Person,
means the possession, directly or indirectly, of the power
to vote ten percent (10%) or more of the Securities having
voting power for the election of directors of such Person or
otherwise to direct or cause the direction of the management
and policies of that Person, whether through the ownership
of voting securities or by contract or otherwise.
"Aggregate Foreign Exchange Exposure" shall mean the
aggregate amount of Foreign Exchange Exposure with respect
to Secured F/X Contracts to which Borrower is a party at
such time.
"Aggregate Interest Rate Exposure" shall mean the
aggregate amount of Interest Rate Exposure with respect to
Secured Interest Rate Contracts to which Borrower is a party
at such time.
"Agreement" shall mean this Restated and Amended Credit
Agreement, dated as of May 27, 1996, as it may be amended,
supplemented, restated or otherwise modified from time to
time.
"Allocation Memorandum" shall mean that certain
Memorandum for Allocating Corporate G&A Expense in FY '97
dated May 8, 1996, prepared by the Borrower and delivered to
the Administrative Agent prior to the Closing Date, as
amended, supplemented, restated or otherwise modified from
time to time for succeeding Fiscal Years.
"Applicable Eurodollar Rate Margin" shall mean one and
one-quarter percent (1.25%) per annum.
"Assignment Agreement" shall mean an Assignment and
Acceptance in substantially the form of Exhibit A hereto
pursuant to which a Senior Lender assigns all or a portion
of its rights under and in connection with this Agreement
and the Notes to another Person and such other Person
assumes all or a portion of such Senior Lender's obligations
under this Agreement, all as permitted pursuant to the
provisions of Section 16.02.
"Bankruptcy Code" shall mean Title 11 of the United
States Code (11 U.S.C 101 et seq.), as amended to the date
hereof and from time to time hereafter, and any successor
statute.
"Base Rate" shall mean, for any period, a fluctuating
interest rate per annum as shall be in effect from time to
time, which rate per annum shall at all times be equal to
the highest of:
(i) the rate of interest announced publicly by
Citibank in New York, New York, from time to time, as
Citibank's base rate;
(ii) the sum (adjusted to the nearest one-quarter of
one percent (1/4 of 1%) or, if there is no nearest one-
quarter of one percent (1/4 of 1%), to the next higher one-
quarter of one percent (1/4 of 1%)) of (A) one-half of one
percent (1/2 of 1%) per annum plus (B) the rate per annum
obtained by dividing (1) the latest three-week moving
average of secondary market morning offering rates in the
United States for three-month certificates of deposit of
major United States money market banks, such three-week
moving average being determined weekly on each Monday (or,
if any such day is not a Business Day, on the next succeed-
ing Business Day) for the three-week period ending on the
previous Friday (or, if such day is not a Business Day, on
the next succeeding Business Day) by Citibank on the basis
of such rates reported by certificate of deposit dealers to,
and published by, the Federal Reserve Bank of New York, or,
if such publication shall be suspended or terminated, on the
basis of quotations for such rates received by Citibank from
three New York certificate of deposit dealers of recognized
standing selected by Citibank by (2) a percentage equal to
one hundred percent (100%) minus the Reserve Percentage for
such three-week period plus (C) the Base Assessment Rate (as
defined below) for such three-week period. The "Reserve
Percentage" for any three-week period is the average of the
daily percentages specified during such three-week period by
the Federal Reserve Board for determining the maximum
reserve requirement (including, but not limited to, any
emergency, supplemental or other marginal reserve
requirement) for Citibank in respect of liabilities which
consist of or which include (among other liabilities) three-
month Dollar nonpersonal time deposits in the United States.
The "Base Assessment Rate" for any three-week period is the
average during such three-week period of the annual assess-
ment rates estimated by Citibank for determining the then
current annual assessment payable by Citibank to the Federal
Deposit Insurance Corporation (or any successor thereto) for
insuring Dollar deposits of Citibank in the United States;
and
(iii) the sum of (A) one half of one percent (1/2 of
1%) per annum plus (B) the Federal Funds Rate in effect from
time to time during such period.
"Base Rate Loans" shall mean those Loans outstanding
which bear interest at a rate based upon the Base Rate as
provided in subsection 6.01(b).
"Benefit Plan" shall mean, with respect to any
Borrower, any employee benefit plan defined in Section 3(3)
of ERISA, other than a Multiemployer Plan, in respect of
which such Borrower or any ERISA Affiliate of such Borrower
is, or within the immediately preceding five (5) years was,
an "employer" as defined in Section 3(5) of ERISA.
"Borrower" shall mean RHI Holdings, Inc., a Delaware
corporation.
"Borrower Pledge Agreement" shall mean the Amended and
Restated Pledge Agreement, dated as of May 27, 1996 executed
by Borrower in favor of the Administrative Agent, for the
benefit of the Senior Secured Creditors, relating to the
pledge of the stock of certain of the Subsidiaries of
Borrower as security for the Obligations, as such Amended
and Restated Pledge Agreement may be amended, supplemented,
restated or otherwise modified from time to time.
"Borrower Security Agreement" shall mean that certain
Amended and Restated Security Agreement, dated as of May 27,
1996, executed by the Borrower in favor of the
Administrative Agent for the benefit of the Senior Secured
Creditors, as the same may be amended, supplemented,
restated or otherwise modified from time to time.
"Borrowing" shall mean a borrowing consisting of Loans
of the same type (except as otherwise provided in subsection
3.14(e)), made on the same day to the Borrower by the Senior
Lenders.
"Business Day" shall mean any day excluding Saturday,
Sunday and any day which is a legal holiday under the law of
the State of New York or Illinois, or is a day on which
banking institutions located in either such state are
required or authorized by law or other governmental action
to close and, with respect to all notices, determinations,
fundings and payments in connection with the Eurodollar Rate
Loans, any day which is also a day for trading by and
between banks in the London interbank Eurodollar market.
"Capital Lease," shall mean, as applied to any Person,
any lease of any property (whether real, personal, or mixed)
by that Person as lessee which, in conformity with GAAP, is
accounted for as a capital lease on the balance sheet of
that Person.
"Cash" shall mean money, currency or a credit balance
in a Deposit Account.
"Cash Collateral Pledge Agreement" shall mean that
certain Pledge and Assignment Agreement, dated as of
September 5, 1995, executed by Borrower in favor of the
Senior Secured Creditors, relating to the pledge and
assignment of certain cash collateral as security for the
Obligations, as such Cash Collateral Pledge Agreement may be
amended, supplemented, restated or otherwise modified from
time to time and as reaffirmed pursuant to that certain
Reaffirmation Agreement and Acknowledgment dated as of May
27, 1996 executed by Borrower.
"Cash Equivalents" shall mean (i) marketable direct
obligations issued or unconditionally guaranteed by the
United States Government or issued by an agency thereof and
backed by the full faith and credit of the United States, in
each case maturing within ninety (90) days after the date of
acquisition thereof; (ii) marketable direct obligations
issued by any state of the United States of America or any
political subdivision of any such state or any public
instrumentality thereof maturing within ninety (90) days
after the date of acquisition thereof and, at the time of
acquisition, having the highest rating obtainable from
either Standard & Poor's Ratings Group, a division of
McGraw-Hill, Inc., or Moody's Investors Services, Inc. (or,
if at any time neither Standard & Poor's Ratings Group, a
division of McGraw-Hill, Inc., nor Moody's Investors
Services, Inc. shall be rating such obligations, then from
such other nationally recognized rating services as are
reasonably acceptable to the Agents); (iii) commercial paper
maturing no more than ninety (90) days after the date of
creation thereof and, at the time of acquisition, having the
highest rating from either Standard & Poor's Ratings Group,
a division of McGraw-Hill, Inc., or Moody's Investors
Services, Inc. (or, if at any time neither Standard & Poor's
Ratings Group, a division of McGraw-Hill, Inc., nor Moody's
Investors Services, Inc. shall be rating such obligations,
then the highest rating from such other nationally
recognized rating services as are reasonably acceptable to
the Agents); (iv) domestic and Eurodollar certificates of
deposit or bankers' acceptances maturing within ninety (90)
days after the date of acquisition thereof (A) issued by any
Senior Lender or (B) issued by any commercial bank organized
under the laws of the United States of America or any state
thereof or the District of Columbia having the highest
deposit rating category as published by Keefe, Bruyette &
Woods (or any successor thereto)(or, if such commercial bank
is not rated by Keefe, Bruyette & Woods or a successor
thereto, having either Standard & Poor's Ratings Group, a
division of McGraw-Hill, Inc.'s, or Moody's Investors
Services, Inc.'s highest rating); and (v) any agreement
involving U.S. Government securities, certificates of
deposit or "eligible" bankers' acceptances which provides
for the transfer of such securities against payment in funds
and which contains an agreement by the seller to repurchase
the securities at a specified date not more than one (1)
year after the date of such agreement.
"Citibank" shall mean Citibank, N.A., a national
banking association.
"Citicorp" shall mean Citicorp North America, Inc., a
Delaware corporation.
"Closing Date" shall mean May 27, 1996.
"Collateral" shall mean all property and interests in
property now owned or hereafter acquired by any Person in or
upon which a security interest, lien or mortgage is granted
under the Collateral Documents.
"Collateral Account" shall mean an account maintained
by the Administrative Agent at Citibank.
"Collateral Documents" shall mean, collectively, the
Borrower Security Agreement, the Borrower Pledge Agreement,
the Foreign Subsidiary Pledge Agreements, Cash Collateral
Pledge Agreement, and any other agreement, instrument or
document pursuant to which a security interest or lien is
granted by the Borrower (or any of its predecessors in
interest) or any Subsidiary Guarantor to the Administrative
Agent (or any of its predecessors in interest) to secure the
payment and performance of any of the Obligations.
"Commercial Letter of Credit" shall mean any documen-
tary Letter of Credit which is drawable upon presentation of
documents evidencing the sale, storage, or shipment of goods
purchased by Borrower or any of its Subsidiaries for
Inventory or Equipment in the ordinary course of its
business.
"Commission" shall mean the Securities and Exchange
Commission or any Governmental Authority succeeding to its
functions.
"Commitment" shall mean, with respect to each Senior
Lender the amount set forth below such Senior Lender's name
under the heading "Commitment" on the signature pages of
this Agreement, or, as the case may be, on the signature
page of the Assignment Agreement pursuant to which such
Senior Lender became a Senior Lender hereunder in accordance
with the provisions of Section 16.02, as such amount may be
reduced or increased (whether temporarily or permanently)
from time to time pursuant to the terms of this Agreement,
including any reduction resulting from the assignment of all
or a portion of such Senior Lender's Commitment in
accordance with Section 16.02, and "Commitments" shall mean,
collectively, the aggregate amount of the Commitments, which
aggregate amount shall not exceed at any time the lesser of
(a) $4,250,000 and (b) the amount of cash collateral then on
deposit with the Administrative Agent.
"Commitment Period" shall mean the period during which
the Senior Lenders have committed hereunder to make, subject
to the terms and conditions contained herein, Loans and the
other extensions of credit provided for herein to the
Borrower, which period shall each commence on the Closing
Date and end on May 26, 1998.
"Compliance Certificate" shall mean a certificate
substantially in the form attached hereto as Exhibit B
delivered to the Senior Lenders by Borrower pursuant to
subsection 9.02(a).
"Consolidated Capital Expenditures" shall mean, for any
period, the aggregate of all expenditures (whether paid in
cash or accrued as liabilities during that period and
including that portion of Capital Leases which is
capitalized on the balance sheet of the Borrower by the
Borrower and its Subsidiaries) during such period that, in
conformity with GAAP, are required to be included in the
property, plant or equipment or similar fixed asset accounts
reflected in the consolidated balance sheet of the Borrower
and its Subsidiaries, but excluding expenditures made in
connection with the replacement or restoration of assets, to
the extent financed from insurance proceeds paid or other
recoveries or court awards received on account of the loss
of or damage to the assets being replaced or restored, or
from awards of compensation arising from the taking by
condemnation or eminent domain of such assets being
replaced.
"Consolidated Net Income" shall mean, for any period,
the net income (or loss) of the Borrower and its
Subsidiaries on a consolidated basis for such period taken
as a single accounting period determined in conformity with
GAAP.
"Consolidated Net Worth" shall mean, as at any date of
determination, the amount by which total assets of the
Borrower and its Subsidiaries exceed total liabilities of
the Borrower and its Subsidiaries (all as determined on a
consolidated basis in conformity with GAAP), after deducting
therefrom nonrecurring gains and adding thereto nonrecurring
losses in respect of asset sales, in each case on a
cumulative basis.
"Consolidated Rental Payments" shall mean, for any
period, the aggregate amount of all rents paid or, as used
in Section 11.21, accrued during such period under all
Operating Leases of the Borrower and its Subsidiaries as
lessee (net of sublease income) (all as determined on a
consolidated basis in conformity with GAAP).
"Contractual Obligation," shall mean, as applied to any
Person, any provision of any Securities issued by that
Person or any indenture, mortgage, deed of trust, contract,
undertaking, agreement, instrument or other document to
which that Person is a party or by which it or any of its
properties is bound or to which it or any of its properties
is subject (including, without limitation, any restrictive
covenant affecting any of the properties of such Person).
"Customary Permitted Liens" shall mean
(i) Liens (other than Environmental Liens) for taxes,
assessments or governmental charges or claims not yet due or
which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves or
other appropriate provisions are being maintained in
accordance with the provisions of GAAP;
(ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed
by law created in the ordinary course of business for
amounts not yet due or which are being contested in good
faith by appropriate proceedings and with respect to which
adequate reserves or other appropriate provisions are being
maintained in accordance with the provisions of GAAP;
(iii) Liens (other than any Lien imposed by ERISA)
incurred or deposits made in the ordinary course of business
(including, without limitation, surety bonds and appeal
bonds) in connection with workers' compensation,
unemployment insurance and other types of social security
benefits or to secure the performance of tenders, bids,
leases, contracts (other than for the repayment of borrowed
money), statutory obligations and other similar obligations
or arising as a result of progress payments under government
contracts; and
(iv) easements, rights-of-way, restrictions, municipal
and zoning ordinances and other similar charges or
encumbrances not interfering with the ordinary conduct of
the business of the Borrower or its Subsidiaries.
"Defined Benefit Plan" shall mean any employee benefit
plan defined in Section 3(3) of ERISA, other than a
Multiemployer Plan, which is subject to the provisions of
Title IV of ERISA and in respect of which the Borrower or an
ERISA Affiliate of the Borrower is, or within the
immediately preceding five (5) years was, an "employer" as
defined in Section 3(5) of ERISA.
"Deposit Account" shall mean a demand, time, savings,
passbook or like account with a bank, savings and loan
association, credit union or like organization, other than
an account evidenced by a negotiable certificate of deposit.
"Determination Date" shall have the meaning ascribed to
it in subsection 6.01(d).
"Dollars" and "$" shall mean the lawful money of the
United States of America.
"Domestic Subsidiary" of a Person shall mean a Sub-
sidiary of such Person organized under the laws of the
United States of America, any state thereof, Puerto Rico or
the District of Columbia.
"ECRA" means the Environmental Cleanup and Respon-
sibility Act, as the same may be amended from time to time,
and any successor statute.
"Environmental Liabilities and Costs" shall mean all
liabilities, obligations, responsibilities, losses, damages,
punitive damages, consequential damages, treble damages,
costs and expenses (including, without limitation, attorney,
expert and consulting fees and costs of investigation and
feasibility studies), fines, penalties and monetary
sanctions, interest, direct or indirect, known or unknown,
absolute or contingent, past, present or future, in each
case arising from or relating to a breach or alleged breach
of environmental laws or regulations.
"Environmental Lien" shall mean a Lien in favor of any
governmental entity for (i) any liability under federal or
state environmental laws or regulations, or (ii) damages
arising from or costs incurred by such governmental entity
in response to a release of a hazardous or toxic waste,
substance or constituent, or other substance into the
environment.
"Equipment" shall mean, with respect to any Person, all
of such Person's goods, except Inventory, including, without
limitation, all machinery, manufacturing equipment, office
equipment, data processing equipment, vehicles, vessels,
aircraft, furniture, furnishings, appliances, fixtures, and
tools and all other equipment of every type and description,
together with any and all accessions, parts and
appurtenances thereto and replacements thereof.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended to the date hereof and from
time to time hereafter, and any successor statute.
"ERISA Affiliate" shall mean (i) any corporation which
is a member of the same controlled group of corporations
(within the meaning of Section 414(b) of the Internal
Revenue Code) as the Borrower; (ii) a trade or business
(whether or not incorporated) which is under common control
(within the meaning of Section 414(c) of the Internal
Revenue Code) with the Borrower; and (iii) a member of the
same affiliated service group (within the meaning of Section
414(m) of the Internal Revenue Code) as the Borrower, any
corporation described in clause (i) above or any trade or
business described in clause (ii) above.
"Eurodollar Affiliate" shall mean, with respect to any
Senior Lender, the Senior Lender Affiliate set forth below
such Senior Lender's name on Schedule 1.01-A or on the
signature page of the Assignment Agreement pursuant to which
such Senior Lender became a Senior Lender hereunder in
accordance with the provisions of Section 16.02.
"Eurodollar Rate" shall mean, with respect to any
Interest Period applicable to a Borrowing, continuation or
conversion of Eurodollar Rate Loans, an interest rate per
annum obtained by dividing (i) the rate of interest
determined by the Administrative Agent to be the average
(rounded upward to the nearest whole multiple of
one-sixteenth of one percent (1/16 of 1%) per annum if such
average is not such a multiple) of the rate per annum
determined by Citibank to be the rate per annum at which
deposits in Dollars are offered by Citibank to major banks
in the London interbank Eurodollar market at 11:00 A.M.
(London time) on the Interest Rate Determination Date for
such Interest Period for a period equal to such Interest
Period and in an amount substantially equal to the amount of
the Eurodollar Rate Loan to be outstanding during such
Interest Period from Citicorp, by (ii) a percentage equal to
100% minus the Eurodollar Reserve Percentage in effect on
the relevant Interest Rate Determination Date.
"Eurodollar Rate Loans" shall mean those Loans out-
standing which bear interest at a rate based upon the
Eurodollar Rate as provided in Section 6.01.
"Eurodollar Reserve Percentage" shall mean for any date
that percentage (expressed as a decimal) which is in effect
on such date, as prescribed by the Federal Reserve Board for
determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other
marginal reserve requirement) for a member bank of the
Federal Reserve System in New York City with deposits
exceeding five billion Dollars in respect of "Eurocurrency
liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which
the interest rate on Eurodollar loans is determined or any
category of extensions of credit or other assets which
includes loans by a non-United States office of any bank to
United States residents). The Eurodollar Rate shall be
adjusted automatically on and as of the effective date of
any change in the Eurodollar Reserve Percentage.
"Event of Default" shall mean any of the occurrences
set forth in Section 14.01, after the expiration of any
applicable grace period expressly provided therein.
"Excluded Dispositions" shall mean the sale, transfer
or other disposition by Borrower or a Subsidiary of the
Borrower of all or any part of the assets and properties
listed on Schedule 1.01-B.
"Excluded ERISA Affiliates" shall mean TFC and any
Subsidiary of TFC other than the Borrower or a Subsidiary of
the Borrower.
"Existing Investments" shall mean, with respect to the
Borrower or TFC, those Investments of the Borrower reflected
on Schedule 1.01-C.
"Facility Availability" shall mean, at any time, an
amount equal to the excess, if any, of the then effective
Commitments over the Facility Outstandings at such time.
"Facility Outstandings" shall mean, at any time, an
amount equal to (i) the aggregate principal amount of all
Loans outstanding at such time, plus (ii) the Letter of
Credit Obligations at such time, plus (iii) the sum of the
Borrower's Aggregate Foreign Exchange Exposure and Aggregate
Interest Rate Exposure at such time, plus (iv) the aggregate
face amount of all Letters of Credit which the Borrower has
requested Issuing Banks to issue but which have not on such
date been issued and which will become Letters of Credit
when issued pursuant to the terms of Section 5.03, plus (v)
the aggregate amount of Foreign Exchange Exposure
corresponding to proposed Foreign Exchange Contracts which,
on such date, have not yet been entered into between a
Senior Lender and the Borrower but will become Secured F/X
Contracts when entered into pursuant to the terms of
subsection 3.13(a), plus (vi) the aggregate amount of
Interest Rate Exposure corresponding to proposed Interest
Rate Contracts which, on such date, have not yet been
entered into between a Senior Lender and the Borrower but
will become Secured Interest Rate Contracts when entered
into pursuant to the terms of subsection 3.13(b).
"Facility Termination Date" shall mean the last day of
the Commitment Period.
"Federal Funds Rate" shall mean, for any period, a
fluctuating interest rate per annum equal for each day
during such period to the weighted average of the rates on
overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average
of the quotations for such day on such transactions received
by the Administrative Agent from three (3) Federal funds
brokers of recognized standing selected by the
Administrative Agent.
"Federal Reserve Board" shall mean the Board of
Governors of the Federal Reserve System or any Governmental
Authority succeeding to its functions.
"FHC" shall mean Fairchild Holding Corp., a Delaware
corporation and wholly-owned Subsidiary of the Borrower.
"FHC Credit Agreement" shall mean that certain Credit
Agreement dated as of March 13, 1996 among FHC, certain
financial institutions as lenders, Citibank, as issuing
bank, and Citicorp USA, Inc., as administrative agent, as
the same may be amended, restated, or supplemented from time
to time.
"Fiscal Year" shall mean the fiscal year of the
Borrower, which shall be the twelve (12) month period ending
on June 30, or such other period as the Borrower may
designate and the Requisite Senior Lenders may approve in
writing.
"Fixed Assets" shall mean, with respect to any Person,
such Person's property plant and equipment under GAAP.
"Foreign Exchange Contract" shall mean any contract
between any Senior Lender or Senior Lender Affiliate and the
Borrower or any of its Subsidiaries that requires payment
in, or the delivery of, a currency other than the currency
being tendered.
"Foreign Exchange Exposure" shall mean, with respect to
any Foreign Exchange Contract, an amount equal to the
product of the amount of the foreign currency obligation
under such Foreign Exchange Contract multiplied by a
percentage determined by the contracting Senior Lender or
Senior Lender Affiliate, which percentage shall be
comparable to the percentages determined by such Senior
Lender or Senior Lender Affiliate to apply to foreign
exchange contracts of like kind and term entered into by
such Senior Lender or Senior Lender Affiliate.
"Foreign Subsidiary" of a Person shall mean a Sub-
sidiary of that Person which is not a Domestic Subsidiary.
"Foreign Subsidiary Pledge Agreements" shall mean those
several pledge agreements, in each case, executed by the
Borrower before, on, or after the Closing Date, relating to
the pledge of certain of the stock of certain of Borrower's
Foreign Subsidiaries, as such pledge agreements may be
amended, supplemented, restated or otherwise modified from
time to time.
"Funding Date" shall mean the date requested by the
Borrower to be the date on which a Loan is funded.
"GAAP" shall mean generally accepted accounting prin-
ciples set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board
or in such other statements by such other entity as may be
approved by significant segments of the accounting
profession, which are applicable to the circumstances as of
the date of determination, except as otherwise provided in
Section 16.05 hereof.
"Governmental Authority" shall mean any nation or
government, any state or other political subdivision thereof
and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to
government.
"Hartz-Rex Associates" shall mean Hartz-Rex Associates,
a general partnership formed under the laws of the State of
New Jersey.
"Hasbrouck Heights Lease" shall mean that certain Lease
dated as of December 27, 1995 between Hartz-Rex Associates,
as landlord, and Flaghouse, Inc., as tenant.
"Hasbrouck Heights Real Property" shall mean that
certain real property which is the subject of the Hasbrouck
Heights Lease.
"Indebtedness" shall mean, as applied to any Person,
any obligation for the payment of money created by contract
(other than trade payables and normal accruals), and shall
include, without limitation but without duplication, (i) all
indebtedness of that Person for borrowed money or for deben-
tures, bonds and other debt Securities issued; (ii) that
portion of obligations with respect to Capital Leases which
is properly classified as a liability on the balance sheet
of that Person in conformity with GAAP; (iii) notes payable
and drafts accepted representing extensions of credit to
that Person whether or not representing obligations for
borrowed money; (iv) obligations owed by that Person for all
or any part of the deferred purchase price of property or
services; (v) all indebtedness secured by any Lien on any
property or asset owned or held by that Person regardless of
whether the indebtedness secured thereby shall have been
assumed by or is a personal liability of that Person;
(vi) the undrawn amount of all outstanding Letters of Credit
issued for the account of such Person; and (vii) all
Accommodation Obligations in respect of Indebtedness,
obligations or liability of others of the types described in
clauses (i) through (vi) above.
"Interest Payment Date" shall mean, with respect to any
Eurodollar Rate Loan, the last day of each Interest Period
applicable to such Loan and, in the case of an Interest
Period in excess of three (3) months, each day which occurs
every three (3) months after the initial date of such
Interest Period.
"Interest Period" shall have the meaning ascribed to it
in subsection 3.14(b).
"Interest Rate Contracts" shall mean interest rate cap
agreements, interest rate swap agreements, interest rate
collar agreements, options on any of the foregoing, or any
other agreements or arrangements designed to provide
protection against fluctuations in interest rates.
"Interest Rate Determination Date" shall mean the date
on which the Administrative Agent determines the Eurodollar
Rate applicable to a Borrowing, continuation or conversion
of Eurodollar Rate Loans. The Interest Rate Determination
Date shall be the second Business Day (or such later day as
the Senior Lenders may permit) prior to the first day of the
Interest Period applicable to such Borrowing, continuation
or conversion.
"Interest Rate Exposure" shall mean, with respect to
any Interest Rate Contract between the Borrower and a Senior
Lender or Senior Lender Affiliate, an amount equal to the
product of the maximum obligation of the Borrower under such
Interest Rate Contract multiplied by a percentage determined
by the contracting Senior Lender or Senior Lender Affiliate,
which percentage shall be comparable to the percentages
determined by such Senior Lender or Senior Lender Affiliate
to apply to contracts of like kind and term entered into by
such Senior Lender or Senior Lender Affiliate.
"Internal Revenue Code" shall mean the Internal Revenue
Code of 1986, as amended to the date hereof and from time to
time hereafter, and any successor statute.
"Inventory" shall mean and include, with respect to any
Person, all of such Person's now owned and hereafter
acquired inventory, goods, materials, supplies, merchandise
and other personal property furnished under any contract of
service or intended for sale or lease, including, without
limitation, all raw materials, work in process, finished
goods and materials, parts and supplies of any kind, nature
or description which are used or consumed in such Person's
business or are or might be used in connection with the
manufacture, packing, shipping, advertising, selling or
finishing of such goods, merchandise and other personal
property, or are used in connection with the provision of
services in such Person's business, all returned or
repossessed goods now, or at any time or times hereafter, in
the possession or under the control of such Person, the
Administrative Agent or any Senior Lender, and all documents
of title or documents representing the same.
"Investment" shall mean, as applied to any Person, any
direct or indirect purchase or other acquisition by that
Person of stock or other Securities, or of a beneficial
interest in stock or other Securities, of any other Person,
and any direct or indirect loan, advance (other than
deposits with financial institutions available for
withdrawal on demand, prepaid expenses and similar items
made or incurred in the ordinary course of business), or
capital contribution by that Person to, or note receivable
from, any other Person, including all Indebtedness and
Accounts owed by that other Person which are not current
assets or did not arise from sales of goods or services to
that Person in the ordinary course of business. The amount
of any Investment shall be determined in conformity with
GAAP.
"Issuing Banks" shall mean (i) Citibank and (ii) any
Senior Lender or Senior Lender Affiliate that agrees, in its
sole discretion at the request of the Borrower, and on terms
and conditions mutually acceptable to the Administrative
Agent, such Senior Lender or Senior Lender Affiliate and the
Borrower, to become an Issuing Bank for the purpose of
issuing Letters of Credit pursuant to Article V. When a
Senior Lender is referred to as an Issuing Bank hereunder,
such reference to such Senior Lender as an Issuing Bank
shall be interpreted to refer to such Senior Lender solely
in its capacity as an Issuing Bank.
"L/C Subfacility" shall mean $4,250,000 of Letter of
Credit Obligations of the Borrower which is permitted to be
outstanding under the terms of this Agreement.
"Letter(s) of Credit" shall mean, in the singular form,
any Commercial Letter of Credit or any Standby Letter of
Credit, in either case issued by an Issuing Bank for the
account of the Borrower pursuant to Article V and, in the
plural form, all such Commercial Letters of Credit and
Standby Letters of Credit issued by an Issuing Bank for the
account of the Borrower.
"Letter of Credit Obligations" shall mean, at any
particular time, the sum of (i) the Borrower's Reimbursement
Obligations plus (ii) the aggregate undrawn face amount of
all outstanding Letters of Credit issued for the account of
the Borrower, in each case as determined by the Administra-
tive Agent.
"Letter of Credit Reimbursement Agreement" shall mean,
with respect to a Letter of Credit, such form of application
therefor and form of reimbursement agreement therefor
(whether in a single or several documents, taken together)
as the Issuing Bank from which such Letter of Credit is
requested may employ in the ordinary course of business for
its own account, whether or not providing for collateral
security, with such modifications thereto as may be agreed
upon by the Issuing Bank and the account party and as are
not materially adverse to the interests of the Senior
Lenders; provided, that in the event of any conflict between
the terms of any Letter of Credit Reimbursement Agreement
and this Agreement, the terms of this Agreement shall
control; and further, provided, that any grant or purported
grant of a security interest in favor of the Issuing Bank
contained in any Letter of Credit Reimbursement Agreement
shall be void.
"Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, security
interest, encumbrance (including, but not limited to,
easements, rights of way, zoning restrictions and the like),
lien (statutory or other), preference, priority or other
security agreement or preferential arrangement of any kind
or nature whatsoever, including, without limitation, any
conditional sale or other title retention agreement, the
interest of a lessor under a Capital Lease, any financing
lease having substantially the same economic effect as any
of the foregoing and the filing of any financing statement
(other than a financing statement filed by a "true" lessor
pursuant to 9-408 of the Uniform Commercial Code) naming the
owner of the asset to which such Lien relates as debtor,
under the Uniform Commercial Code or other comparable law of
any jurisdiction.
"Loan" shall mean (i) an advance which was made by the
Senior Lenders to the Borrower under the 1992 Credit
Agreement and which remains outstanding on the Closing Date
and (ii) an advance made to the Borrower by a Lender
pursuant to the terms of Section 3.05; and "Loans" shall
mean all of the advances described in the preceding clauses
(i) and (ii).
"Loan Documents" shall mean this Agreement, the Notes,
the Collateral Documents, the Letters of Credit (and
accompanying applications and reimbursement agreements), the
Secured F/X Contracts, the Secured Interest Rate Contracts,
and all other security agreements, mortgages, deeds of
trust, financing statements, patent and trademark security
agreements, lease assignments, assumption agreements,
guaranties and other agreements, instruments and written
indicia of Contractual Obligations between the Borrower, TFC
or any guarantor of all or any part of the Obligations and
any Senior Lender, any Issuing Bank, or the Administrative
Agent delivered to such Senior Lender, such Issuing Bank, or
the Administrative Agent by or on behalf of the Borrower,
TFC or such guarantor pursuant to or in connection with the
transactions contemplated hereby.
"Margin Stock" shall have the meaning assigned to that
term in Regulation U and Regulation G.
"Marketable Securities" shall mean any Securities which
are freely deliverable (including by book-entry transfer)
and readily traded on any nationally recognized United
States securities exchange or the London Stock Exchange or
traded overthe-counter as reported by the National
Association of Securities Dealers Automated Quotations
system or traded on the Paris Bourse.
"Multiemployer Plan" shall mean a "multiemployer plan"
as defined in Section 4001(a)(3) of ERISA which is, or
within the immediately preceding five (5) years was,
contributed to by the Borrower or any ERISA Affiliate of the
Borrower.
"Net Cash Proceeds of Sale" shall mean Net Proceeds of
Sale received by the Borrower or any of its Domestic
Subsidiaries in Cash or Cash Equivalents, including, without
limitation, the principal and interest paid under any note
which constitutes Net Proceeds of Sale, but only when such
principal and interest are received.
"Net Proceeds of Sale" shall mean proceeds (including
any notes, Securities, warrants and other noncash items and
money paid into escrow accounts, together with (or reduced
by) all interest paid thereon and capital gains (or capital
losses) realized in connection with the investment thereof)
received as consideration by the Borrower or any of its
Domestic Subsidiaries (in the case of a Domestic Subsidiary,
to the extent of such Borrower's ownership interest in such
Subsidiary) from the sale, lease, assignment or other
disposition outside of the ordinary course of business to
any Person (other than the Borrower or a Subsidiary of the
Borrower) of any assets or property of the Borrower having
an aggregate fair market value in excess of $500,000, in
each Fiscal Year during the period commencing on the Closing
Date through the date on which this Agreement shall
terminate pursuant to the terms hereof, in each case net of
(A) the cost of sale, lease, assignment or other
disposition, taxes paid or payable as a result thereof, and
reasonable reserves associated therewith, (B) amounts
applied to the repayment of Indebtedness (other than the
Obligations) or any other liability assumed, indemnified or
retained by the Borrower or secured by a Lien on the asset
disposed of, and (C) amounts used to purchase or lease a
replacement asset. For this purpose, all proceeds of
insurance paid or other recoveries or awards received on
account of the loss of or damage to any such asset or
property, or group of assets or properties, and awards of
compensation for any such asset or property, or group of
assets or properties, taken by condemnation or eminent
domain shall be deemed proceeds of the disposition of that
asset or property.
"1992 Credit Agreement" shall mean that certain
Restated and Amended Credit Agreement, dated as of July 27,
1992, among Borrower, the other borrowers party thereto, the
financial institutions from time to time party thereto as
senior lenders, Citicorp, The Bank of Nova Scotia and
NationsBank, N.A. as agents for such lenders, and Citicorp,
as administrative agent, as amended prior to the Closing
Date.
"Non-Facility Letter of Credit" shall mean any letter
of credit which is not a Letter of Credit.
"Non-Facility Letter of Credit Obligations" shall mean,
at any time, the sum of (i) the Borrower's aggregate
reimbursement obligations with respect to drawings made
under Non-Facility Letters of Credit issued for the account
of the Borrower and (ii) the aggregate undrawn face amount
of all outstanding Non-Facility Letters of Credit issued for
the account of the Borrower.
"Non-Use Fee" shall have the meaning ascribed to it in
Section 6.07.
"Non-Use Fee Base" shall mean, at any time, the amount,
if any, by which the aggregate amount of the then effective
Commitments exceeds the sum of (i) the then aggregate
outstanding principal amount of the Loans and (ii) the
Letter of Credit Obligations at such time.
"Note" shall mean a promissory note substantially in
the form of Exhibit C attached hereto, issued by the
Borrower and payable to a Senior Lenders evidencing Loans
made to the Borrower pursuant to the terms hereof and all
promissory notes issued in substitution for or replacement
thereof, in each case, as the same may be modified in
writing from time to time; and "Notes" shall mean all such
Notes, collectively.
"Notice of Borrowing" shall mean a notice,
substantially in the form of Exhibit D, signed by a duly
authorized officer or employee of the Borrower.
"Notice of Conversion/Continuation" shall mean a
notice, substantially in the form of Exhibit E, signed by a
duly authorized officer or employee of the Borrower.
"Obligations" shall mean, collectively, all present and
future Indebtedness and other loans, advances, debts,
liabilities, obligations, covenants and duties owing by the
Borrower or any of its Subsidiaries to any of the Senior
Lenders, Issuing Banks, the Administrative Agent, any
Senior Lender Affiliate or any other Person entitled to
indemnification pursuant to Section 16.04, of every type and
description, present or future, whether or not evidenced by
any note, guaranty or other instrument, arising under or in
connection with this Agreement, any of the other Loan
Documents, or the transactions contemplated hereby or
thereby, whether or not for the payment of money, whether
arising by reason of any extension of credit, opening or
amendment of a Letter of Credit or payment or acceptance of
a draft drawn thereunder, loan, guaranty, indemnification,
foreign exchange or interest rate swap transactions or in
any other manner, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due
or to become due, now existing or hereafter acquired, and
shall include, without limitation, (i) all liability of the
Borrower for principal of and interest on Loans or under the
Notes, (ii) all liability of the Borrower or any of its
Subsidiaries to any Senior Lender or Senior Lender Affiliate
under any Secured F/X Contract between the Borrower or any
such Subsidiary and such Senior Lender or such Senior Lender
Affiliate (to the extent of the Foreign Exchange Exposure
with respect to such Secured F/X Contract), (iii) all
liability of the Borrower or any of its Subsidiaries to any
Senior Lender or Senior Lender Affiliate under any Secured
Interest Rate Contract between the Borrower or any such
Subsidiary and such Senior Lender or such Senior Lender
Affiliate (to the extent of the Interest Rate Exposure with
respect to such Secured Interest Rate Contract), (iv) all
Reimbursement Obligations of the Borrower to any Senior
Lender in its capacity as an Issuing Bank, and (v) all
liability of the Borrower for fees payable under this
Agreement to the Administrative Agent, any of the Issuing
Banks or any of the Senior Lenders, expense reimbursements
(including, without limitation, reasonable attorneys' fees
and disbursements), indemnifications, charges and other
amounts due or to become due to any of the Senior Lenders,
or the Administrative Agent under or in connection with this
Agreement, any Letter of Credit Reimbursement Agreement or
any other Loan Document.
"Officer's Certificate" shall mean, as to a corpora-
tion, a certificate executed on behalf of such corporation
by its chairman or vice-chairman of the board (if an
officer) or its president, vice-president, chief financial
officer, controller, treasurer or assistant treasurer.
"Operating Lease" shall mean, as applied to any Person,
any lease of any property (whether real, personal or mixed)
by that Person as lessee which is not a Capital Lease.
"PBGC" shall mean the Pension Benefit Guaranty Corpora-
tion, and any Person succeeding to the functions thereof.
"Permitted Existing Indebtedness" shall mean the
Indebtedness of the Borrower and its Subsidiaries reflected
on Schedule 1.01-D.
"Person" shall mean any natural person, corporation,
limited partnership, general partnership, joint stock
company, joint venture, association, company, trust, bank,
trust company, land trust, business trust or other
organization, whether or not a legal entity, and any
Governmental Authority.
"Potential Event of Default" shall mean an occurrence
which, after the giving of notice or the lapse of time, or
both, would constitute an Event of Default.
"Prohibited Investments" shall mean any Securities
issued by, or direct or indirect loans, advances or capital
contributions to, any Person which is a general partnership
or which has, as one of its primary activities, (i) the
manufacture, transportation or sale of weapons or (ii) the
ownership or management of gaming operations.
"Pro Rata Share" shall mean, as of any date of
determination, for each Senior Lender, the percentage
obtained by dividing such Senior Lender's Commitment by all
Commitments (or, following the termination of the
Commitments pursuant to the terms of this Agreement, the
percentage obtained by dividing the then outstanding
principal amount under the Note held by such Senior Lender
by the then outstanding principal amount under the Notes
held by all Senior Lenders).
"Purchase Money Indebtedness" shall mean Indebtedness,
the proceeds of which are used by the Borrower or one of its
Subsidiaries to make Consolidated Capital Expenditures
permitted by Section 11.11 and which is either unsecured or
secured solely by purchase money Liens of the type permitted
by clause (h) of Section 11.04; provided, that the amount of
such Indebtedness incurred in connection with any
Consolidated Capital Expenditure of the Borrower or any of
its Subsidiaries shall not exceed eighty percent (80%) of
the purchase price of such Consolidated Capital Expenditure.
"Regulation A" shall mean Regulation A of the Federal
Reserve Board as in effect from time to time.
"Regulation D" shall mean Regulation D of the Federal
Reserve Board as in effect from time to time.
"Regulation G" shall mean Regulation G of the Federal
Reserve Board as in effect from time to time.
"Regulation T" shall mean Regulation T of the Federal
Reserve Board as in effect from time to time.
"Regulation U" shall mean Regulation U of the Federal
Reserve Board as in effect from time to time.
"Regulation X" shall mean Regulation X of the Federal
Reserve Board as in effect from time to time.
"Reimbursement Obligations" shall mean the Borrower's
reimbursement or repayment obligations to the Issuing Banks
pursuant to this Agreement or Letter of Credit Reimbursement
Agreements with respect to drawings made under Letters of
Credit issued for the account of the Borrower.
"Requirements of Law" shall mean, as to any Person, the
charter and by-laws or other organizational or governing
documents of such Person, and any law, rule or regulation,
or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or
binding upon such Person or any of its property or to which
such Person or any of its property is subject, including,
without limitation, the Securities Act, the Securities
Exchange Act, Regulations G, T, U and X, and any certificate
of occupancy, zoning ordinance, building, environmental or
land use requirement or permit or occupational safety or
health law, rule or regulation.
"Requisite Knowledge" shall occur, with respect to any
Person and any event or fact, on the date on which a
Responsible Officer of such Person knew or reasonably should
have known of such event or fact.
"Requisite Senior Lenders" shall mean those Senior
Lenders whose aggregate Commitments are equal to fifty
percent (50%) or more of the total Commitments or, following
the termination of the Commitments pursuant to the terms of
this Agreement, Senior Lenders who hold fifty percent (50%)
or more of the aggregate principal amount outstanding under
the Notes.
"Responsible Officer" shall mean, with respect to any
Person, the Chairman of the Board, the President, any Vice
President, the Treasurer, any Assistant Treasurer, the
Controller, or any other officer of similar or higher rank
of such Person.
"Restricted Junior Payment" shall mean (i) any dividend
or other distribution, direct or indirect, on account of any
shares of any class of stock of the Borrower or any of its
Subsidiaries now or hereafter outstanding, except (A) a
dividend payable solely in shares of stock to the holders of
that class or (B) a dividend or other distribution payable
to the Borrower or to any Subsidiary of the Borrower, (ii)
any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect,
of any shares of any class of stock of the Borrower or any
of its Subsidiaries now or hereafter outstanding, (iii) any
payment or prepayment of principal of, premium, if any, or
interest on, redemption, purchase, retirement, defeasance,
sinking fund or similar payment with respect to, any
Subordinated Indebtedness, (iv) any payment made to retire,
or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any class of
stock of the Borrower or any of its Subsidiaries now or
hereafter outstanding, and (v) any payment of a claim, not
reduced to final judgment after exhaustion of all available
appellate remedies, for the rescission of the purchase or
sale of, or for material damages arising from the purchase
or sale of, any Subordinated Indebtedness or any shares of
the capital stock of the Borrower or of a claim for
reimbursement, indemnification or contribution arising out
of or related to any such claim for damages or rescission.
"Secured F/X Contract" shall mean a Foreign Exchange
Contract with respect to which the Foreign Exchange Exposure
constitutes an Obligation secured by the Collateral.
"Secured Interest Rate Contract" shall mean an Interest
Rate Contract between any Senior Lender or Senior Lender
Affiliate and the Borrower or any of its Subsidiaries with
respect to which the Interest Contract Exposure constitutes
an Obligation secured by the Collateral.
"Securities" shall mean any stock, shares, voting trust
certificates, limited partnership certificates, debentures,
notes or other evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise, or in
general any instruments commonly known as "securities,"
including, without limitation, any "security" as such term
is defined in Section 8-102 of the Uniform Commercial Code
as in effect in the State of New York, or any certificates
of interest, shares, or participations in temporary or
interim certificates for the purchase or acquisition of, or
any right to subscribe to, purchase or acquire any of the
foregoing, but shall not include the Notes, or any other
evidence of the Obligations.
"Securities Act" shall mean the Securities Act of 1933,
as amended to the date hereof and from time to time
hereafter, and any successor statute.
"Securities Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended to the date hereof and from
time to time hereafter, and any successor statute.
"Selling Price of Fixed Assets" shall mean, for any
period, the aggregate gross cash proceeds received by the
Borrower and its Subsidiaries during such period from the
disposal of Fixed Assets.
"Senior Lender" shall mean any Person which is a holder
of a Note but shall not include any Person to which a
participation is sold pursuant to Section 16.02 unless such
Person is also the holder of a Note.
"Senior Lender Affiliate" shall mean any Affiliate of a
Senior Lender.
"Senior Secured Creditors" shall mean the
Administrative Agent, the Senior Lenders, the Issuing Banks,
and any Senior Lender Affiliate or Indemnitee to which any
Obligations are owed.
"Senior Subordinated Debenture Indenture" shall mean
the Indenture between Rexnord Acquisition Corp. and Irving
Trust Company, as trustee, dated as of March 2, 1987,
pursuant to which Senior Subordinated Debentures in the
aggregate original principal amount of $126,000,000 were
issued, as supplemented by the First Supplemental Indenture
dated as of July 1, 1987 between Rexnord and Irving Trust
Company, as trustee, and the Second Supplemental Indenture
dated as of August 16, 1988, between Borrower and Irving
Trust Company, as trustee, as the same may be further
amended, supplemented, restated or modified from time to
time.
"Senior Subordinated Debentures" shall mean Borrower's
(as successor by merger to Rexnord, Inc., which was, in
turn, successor by merger to Rexnord Acquisition Corp.)
11-7/8% Senior Subordinated Debentures due 1999 issued
pursuant to the Senior Subordinated Debenture Indenture.
"Solvent" shall mean, when used with respect to any
Person, that at the time of determination:
(i) the fair value of its assets (both at fair
valuation and present fair saleable value) is in excess of
the total amount of its liabilities, including, without
limitation, contingent liabilities;
(ii) it is then able and expects to be able to pay its
debts as they mature;
(iii) it owns property having a value (both at fair
valuation and present fair saleable value) in excess of the
total amount required to pay its debts; and
(iv) it has capital sufficient to carry on its
business as conducted and as proposed to be conducted.
"Standby Letter of Credit" shall mean any "clean" or
standby Letter of Credit issued to support obligations
(contingent or otherwise) of the Borrower or any of its
Subsidiaries.
"Subordinated Indebtedness" shall mean, (i) the
Indebtedness of the Borrower evidenced by the Senior
Subordinated Debentures, (ii) any additional Indebtedness
hereafter incurred by the Borrower which is subordinated in
right of payment and is payable on terms and conditions no
less favorable to the Senior Lenders than those set forth in
the Senior Subordinated Debenture Indenture, and (iii) any
refinancing of the Senior Subordinated Debentures, or any
such additional Indebtedness of the Borrower which is
subordinated in right of payment and is payable on terms and
conditions no less favorable to the Senior Lenders than
those set forth in the Senior Subordinated Debenture
Indenture.
"Subsidiary" of a Person shall mean any corporation,
association, partnership or other business entity of which
more than fifty percent (50%) of the total voting power of
shares of stock (or equivalent ownership or controlling
interest) entitled to vote in the election of directors,
managers, or trustees (or the equivalent governing body)
thereof is at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other
Subsidiaries of such Person or any combination thereof;
provided, that (i) none of FHC or any of its Subsidiaries
shall be considered Subsidiaries of the Borrower, (ii) no
member of the Aerospace Group shall be considered a
Subsidiary of the Borrower, and (iii) solely for purposes of
determining the Borrower's compliance with Article XI, any
Person constituting an Existing Investment (but not a
Subsidiary as of the Closing Date) of the Borrower which
becomes a Subsidiary of the Borrower pursuant to an
acquisition permitted hereunder shall not be considered a
Subsidiary of the Borrower.
"Subsidiary Guarantor" shall mean each Subsidiary of
the Borrower listed on Schedule 1.01-E.
"Subsidiary Guaranty" shall mean (i) the Amended and
Restated Subsidiary Guaranties dated as of May 27, 1996,
executed by a Subsidiary Guarantor in favor of the Senior
Secured Creditors, guaranteeing payment and performance of
the Obligations, and (ii) any other guaranty of all or a
portion of the Obligations executed after the Closing Date,
in each case as such Subsidiary Guaranty may be amended,
supplemented, restated or otherwise modified from time to
time.
"Tax Allocation Agreement" shall mean the Eighth
Amended and Restated Tax Allocation Agreement, dated as of
March 13, 1996, among TFC, Borrower and certain Affiliates
thereof, as the same may be amended from time to time with
the consent of the Requisite Senior Lenders.
"Termination Event" shall mean (i) with respect to any
Benefit Plan, a Reportable Event described in Section 4043
of ERISA and the regulations issued thereunder, or (ii) the
withdrawal of the Borrower or any ERISA Affiliate from a
Defined Benefit Plan during a plan year in which it is a
"substantial employer" as defined in Section 4001(a)(2) of
ERISA, or (iii) the filing under Section 4041 of ERISA of a
notice of intent to terminate a Defined Benefit Plan or the
treatment of a Defined Benefit Plan amendment as a
termination under Section 4041 of ERISA, or (iv) the
institution of proceedings to terminate a Defined Benefit
Plan by the PBGC or (v) any other event or condition which
might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to
administer, any Defined Benefit Plan.
"TFC" shall mean The Fairchild Corporation, a Delaware
corporation.
"Unused L/C Subfacility" shall mean, at any time, the
amount, if any, by which the L/C Subfacility exceeds the
amount of (i) all Letter of Credit Obligations at such time,
plus (ii) the aggregate face amount of all Letters of Credit
which the Borrower has requested prior to such time but
which have not yet been issued.
"Virginia Real Property" shall mean the leasehold
estate, together with the building and improvements located
at 300 West Service Road, Chantilly, Virginia.
SECTION 1.02 Computation of Time Periods. In this
Agreement, in the computation of periods of time from a
specified date to a later specified date, the word "from"
means "from and including" and the words "to" and "until"
each means "to but excluding." Periods of days referred to
in this Agreement shall be counted in calendar days unless
Business Days are expressly prescribed.
SECTION 1.03 Accounting and Commercial Terms. For
purposes of this Agreement, all accounting terms not
otherwise defined herein shall have the meanings assigned to
them in conformity with GAAP. Terms not otherwise defined
herein which are defined in, or used in, Article 9 of the
Uniform Commercial Code as in effect in the State of New
York shall herein have the respective meanings given to them
in Article 9 of the Uniform Commercial code as in effect in
the State of New York.
SECTION 1.04 Other Definitional Provisions.
References to "Sections," "subsections" "Schedules" and
"Exhibits" shall be to Sections, subsections, Schedules and
Exhibits, respectively, of this Agreement unless otherwise
specifically provided. Any of the terms defined in Section
1.01 may, unless the context otherwise requires, be used in
the singular or the plural depending on the reference.
ARTICLE II
RESTATEMENT OF 1992 CREDIT AGREEMENT
SECTION 2.01 Amendment and Restatement of 1992 Credit
Agreement. The Borrower, the Senior Lender and the Issuing
Bank agree that, upon (i) the execution and delivery of this
Agreement by the Borrower, the Administrative Agent, and the
Senior Lender and the Issuing Bank as of the Closing Date,
and (ii) satisfaction (or waiver) of the conditions
precedent set forth in Section 7.01, the terms and
provisions of the 1992 Credit Agreement as they pertain to
loans and extensions of credit and other financial
accommodations made to or for the benefit of the Borrower by
the Administrative Agent and/or the Senior Lenders and
Issuing Bank shall be and hereby are amended, superseded and
restated in their entirety by the terms and provisions of
this Agreement. This Agreement shall not constitute a
novation. All Loans made to the Borrower under the 1992
Credit Agreement which remain outstanding on the Closing
Date shall continue as Loans under (and shall be governed by
the terms of) this Agreement. All Letters of Credit issued
for the account of the Borrower, or entered into with the
Borrower, under the 1992 Credit Agreement which remain
outstanding on the Closing Date shall continue as Letters of
Credit under (and shall be governed by the terms of) this
Agreement. Upon and after the Closing Date, all interest,
fees, charges and other amounts accruing and payable by the
Borrower to the Senior Lenders, the Issuing Banks, or the
Administrative Agent under the terms of the 1992 Credit
Agreement shall be payable in accordance with the terms and
provisions of this Agreement.
ARTICLE III
AMOUNTS AND TERMS OF LOANS
SECTION 3.01 Intentionally Omitted.
SECTION 3.02 Intentionally Omitted
SECTION 3.03 Intentionally Omitted.
SECTION 3.04 Intentionally Omitted.
SECTION 3.05 Revolving Credit Loans. (a) Subject to
the terms and conditions of this Agreement and in reliance
upon the representations and warranties of the Borrower
herein set forth, each Senior Lender hereby severally agrees
that such Senior Lender shall, from time to time during the
Facility Commitment Period, upon the Borrower's request
therefor, make advances of Loans in an amount which (i) with
respect to each such Loan considered individually, does not
exceed such Senior Lender's Pro Rata Share of the Facility
Availability on the date such Loan is made and (ii) when
combined with such Senior Lender's Pro Rata Share of the
Facility Outstandings on the date such Loan is made, does
not exceed such Senior Lender's Commitment; provided, that
in no event shall the sum of (i) the Loan proposed to be
made on any date pursuant to this Section 3.05, (ii) the
principal amount outstanding on such date of all Loans made
hereunder, (iii) Borrower's Aggregate Foreign Exchange
Exposure on such date, (iv) the aggregate amount of Foreign
Exchange Exposure corresponding to proposed Foreign Exchange
contracts which, on such date, have not yet been entered
into between a Senior Lender and the Borrower hereunder but
will become Secured F/X Contracts when entered into pursuant
to the terms of subsection 3.13(a), (v) the Borrower's
Aggregate Interest Rate Exposure on such date and (vi) the
aggregate amount of Interest Rate Exposure corresponding to
proposed Interest Rate Contracts which, on such date, have
not yet been entered into between a Senior Lender and the
Borrower hereunder but will become Secured Interest Rate
Contracts when entered into pursuant to the terms of
subsection 3.13(b), exceed $4,250,000.
(b) Loans may, on the date made and from time to time
thereafter, consist of Base Rate Loans or Eurodollar Rate
Loans or a combination thereof, as elected by the Borrower
pursuant to Section 3.09. Within the limits of the Facility
Availability, at any time and from time to time during the
Facility Commitment Period, Borrower may borrow, repay,
prepay and reborrow Loans, all in accordance with the terms
and conditions hereof.
SECTION 3.06 Intentionally omitted
SECTION 3.07 Procedure for Revolving Credit
Borrowings. Whenever Borrower desires to make a Borrowing,
Borrower shall deliver to the Administrative Agent a Notice
of Borrowing (a) in the case of such a Borrowing of Base
Rate Loans, no later than 10:00 A.M. (Chicago time) on the
Funding Date and (b) in the case of such a Borrowing of
Eurodollar Rate Loans, no later than 11:00 A.M. (Chicago
time) at least two (2) Business Days in advance of the
Funding Date. Each Notice of Borrowing under this Section
3.07 shall specify (i) the Funding Date (which shall be a
Business Day), (ii) the amount of the proposed Borrowing,
(iii) whether the proposed Borrowing will be of Base Rate
Loans or Eurodollar Rate Loans, and (iv) in the case of
Eurodollar Rate Loans, the requested Interest Period.
SECTION 3.08 Making of Revolving Credit Loans. (a)
Promptly after receipt of a Notice of Borrowing given by a
Borrower pursuant to Section 3.07 (or telephonic notice in
lieu thereof), including, without limitation, any Notice of
Borrowing relating to Loans requested to be made on the
Closing Date, the Administrative Agent shall notify each
Senior Lender by telecopy, telephone or other similar form
of transmission, of the amount and Funding Date of the
requested Loans. Except as otherwise provided in subsection
3.08(b), no later than 12:00 noon (Chicago time) on the
Funding Date for the requested Loans, each Senior Lender
shall transfer to such account of the Administrative Agent
as the Administrative Agent may designate, same day funds in
an amount equal to such Senior Lender's Pro Rata Share of
such Loans. After the Administrative Agent's receipt from
the Senior Lenders of the proceeds of such Loans and, upon
satisfaction of the applicable conditions precedent set
forth in Article VII, the Administrative Agent shall make
such proceeds available to the Borrower.
(b) Intentionally omitted.
(c) Unless the Administrative Agent shall have been
notified by any Senior Lender prior to the Funding Date for
a Loan (or, in the case of a Base Rate Loan, prior to the
funding thereof as contemplated in subsection 3.08(b)) that
such Senior Lender does not intend to make available to the
Administrative Agent such Senior Lender's Pro Rata Share of
such Borrowing, the Administrative Agent may assume that
each Senior Lender has made its Pro Rata Share of each
requested Borrowing available to the Administrative Agent on
such Funding Date as provided herein and the Administrative
Agent, in its sole discretion, may, but shall not be
obligated to, make available to the Borrower a corresponding
amount on such Funding Date. If such corresponding amount
is not in fact made available to the Administrative Agent by
any Senior Lender, then such Senior Lender and the Borrower
severally agree to repay to the Administrative Agent
forthwith on demand such corresponding amount, together with
interest thereon, for each day from the date such amount was
made available by the Administrative Agent to the Borrower
until the date such amount is repaid to the Administrative
Agent at an interest rate per annum equal to (i) in the case
of the Borrower, the interest rate applicable to the
Borrowing required to be repaid and (ii) in the case of a
Senior Lender, the Federal Funds Rate; provided, that the
Administrative Agent shall demand repayment from the Senior
Lender prior to seeking repayment from the Borrower. If the
Senior Lender repays the Administrative Agent the amount
owed pursuant to this subsection 3.08(c), such amount so
repaid shall constitute such Senior Lender's Loan; if both
the Senior Lender and the Borrower repay such amount, the
Administrative Agent shall promptly return to the Borrower
such amount in same day funds. Nothing in this subsection
3.08(c) shall be deemed to relieve any Senior Lender of its
obligation hereunder, if any, to make Loans on any Funding
Date.
SECTION 3.09 Conversion or Continuation of Base Rate
Loans and Eurodollar Rate Loans. (a) Subject to the
provisions of Section 3.14, Borrower shall have the option
(i) at any time, to convert all or any part of its
outstanding Base Rate Loans to Eurodollar Rate Loans and
(ii) on the expiration date of the Interest Period therefor,
to convert all or any part of its outstanding Eurodollar
Rate Loans to Base Rate Loans or to continue all or any
portion of its outstanding Eurodollar Rate Loans as
Eurodollar Rate Loans, in which case, the succeeding
Interest Period(s) of such converted or continued Eurodollar
Rate Loans shall commence on such expiration date.
Notwithstanding the foregoing, (A) no such conversion or
continuation shall be permitted with respect to Loans in an
aggregate principal amount of less than $1,000,000 and (B)
no outstanding Loan may be continued past the expiration
date of the Interest Period therefor as, or converted into,
a Eurodollar Rate Loan when any Event of Default or
Potential Event of Default exists.
(b) Whenever Borrower desires to convert or continue a
Loan pursuant to the provisions of this Section 3.09,
Borrower shall deliver to the Administrative Agent a Notice
of Conversion/Continuation (i) in the case of a conversion
to a Base Rate Loan, no later than 10:00 A.M. (Chicago time)
on the proposed conversion date and (ii) in the case of a
conversion to, or continuation of, a Eurodollar Rate Loan,
no later than 10:00 A.M. (Chicago time) at least two (2)
Business Days in advance of the proposed conversion or
continuation date, as the case may be. A Notice of
Conversion/Continuation shall specify (i) the proposed
conversion or continuation date (which date shall be a
Business Day), (ii) the amount of the Loans to be converted
or continued, (iii) the nature of the proposed conversion or
continuation, and (iv) in the case of a conversion to, or
continuation of, a Eurodollar Rate Loan, the requested
Interest Period.
SECTION 3.10 Authorized Officers and Employees;
Telephonic Notices. (a) Borrower shall notify the
Administrative Agent in writing of the names of officers and
employees authorized to deliver a Notice of Borrowing or a
Notice of Conversion/Continuation to the Administrative
Agent on behalf of the Borrower and shall provide the
Administrative Agent with a specimen signature of each such
officer or employee. The Administrative Agent shall be
entitled to rely conclusively on such officer's or
employee's authority to deliver such Notices until the
Administrative Agent receives written notice to the
contrary. The Administrative Agent shall have no duty to
verify the authenticity of the signature appearing on any
such Notice.
(b) In lieu of delivering a Notice of Borrowing or a
Notice of Conversion/Continuation, Borrower may give the
Administrative Agent telephonic notice of the proposed
Borrowing or continuation or conversion of Loans by the time
required for such notice pursuant to Section 3.07 and
subsection 3.09(b), respectively, provided that such
telephonic notice shall be confirmed in writing by promptly
(but in no event later than the Funding Date of the
requested Borrowing or the proposed continuation or
conversion date, as the case may be) delivering to the
Administrative Agent a Notice of Borrowing or a Notice of
Conversion/Continuation, as applicable, containing the
original signature of an authorized officer or employee of
the Borrower. The Administrative Agent shall have no duty
to verify the identity of any person representing himself or
herself as one of the officers or employees authorized to
make such request on behalf of the Borrower. Neither the
Administrative Agent nor any Senior Lender shall incur any
liability to the Borrower in acting upon any telephonic
notice which the Administrative Agent believes in good faith
to have been given by an officer or employee authorized to
give such notice on behalf of such Borrower or for otherwise
acting in good faith under this Section 3.10, and upon the
funding of a Loan by any Senior Lender, or upon the
conversion or continuation of a Loan by any Senior Lender,
in each case pursuant to any such telephonic notice and in
accordance with the terms of this Agreement, the Borrower
shall have effected a Borrowing or a continuation or
conversion of a Loan, as the case may be, hereunder.
(c) Any Notice of Borrowing or Notice of Conver-
sion/Continuation (including a telephonic notice given in
lieu thereof) delivered to the Administrative Agent shall be
irrevocable and the Borrower shall be bound to make a
Borrowing or to convert or continue a Loan, as the case may
be, in accordance therewith.
SECTION 3.11 Endorsement of Payments on Note. Each
Senior Lender is hereby authorized to, and prior to any
transfer of any Note held by it a Senior Lender shall,
endorse the date and amount of each payment or prepayment of
principal of the Loans evidenced thereby on a schedule
annexed to and constituting a part of such Note, which
endorsement shall constitute prima facie evidence, absent
demonstrated error, of the accuracy of the information so
endorsed, provided that failure by any such Senior Lender to
make such endorsement, or any error with respect thereto,
shall not affect the obligations of the Borrower under such
Note. In lieu of endorsing such schedule as hereinabove
provided, prior to any transfer of a Note, a Senior Lender
is hereby authorized, at its option, to record such payments
or prepayments in its books and records, such books and
records constituting prima facie evidence, absent
demonstrated error, of the accuracy of the information
contained therein.
SECTION 3.12 Intentionally omitted.
SECTION 3.13 Foreign Exchange Contracts; Interest Rate
Contracts. (a) At any time, and from time to time, each
Senior Lender may, but shall have no obligation to, enter
into Foreign Exchange Contracts with the Borrower; provided,
that a Foreign Exchange Contract shall be a Secured F/X
Contract only if the Senior Lender complies with the
following terms and conditions and all other applicable
provisions of this Agreement.
(i) At least two (2) Business Days prior to entering
into any Foreign Exchange Contract with the Borrower which a
Senior Lender desires to be a Secured F/X Contract, such
Senior Lender shall give the Administrative Agent written
notice thereof, no later than 10:00 A.M. (Chicago time).
Such written notice shall include a summary of all material
provisions of the proposed Foreign Exchange Contract, the
Foreign Exchange Exposure with respect to such Foreign
Exchange Contract and the date on which such Senior Lender
expects to enter into such Foreign Exchange Contract. The
Administrative Agent shall determine whether, as of the
close of business on the date of the Administrative Agent's
receipt of written notice of the proposed Foreign Exchange
Contract, the amount of Foreign Exchange Exposure related to
the proposed Foreign Exchange Contract is less than or equal
to the Facility Availability. On the date the Senior Lender
and the Borrower enter into the proposed Foreign Exchange
Contract, such Foreign Exchange Contract shall become a
Secured F/X Contract unless on or before the second Business
Day prior to such date, such Senior Lender shall have
received written notice from the Administrative Agent that
there is insufficient Facility Availability to cover the
Foreign Exchange Exposure related to such Foreign Exchange
Contract.
(ii) Promptly after either entering into any Foreign
Exchange Contract with the Borrower or deciding not to enter
into a proposed Foreign Exchange Contract, the applicable
Senior Lender shall give the Administrative Agent written
notice thereof (which may be by telecopy) or telephonic
notice promptly confirmed in writing. No Senior Lender
other than the Senior Lender which is a party to such
Foreign Exchange Contract shall be entitled to any fees
and/or profits in connection with such Foreign Exchange
Contract or shall have any responsibility or obligations
with respect thereto, and the Foreign Exchange Exposure with
respect to each Secured F/X Contract shall not constitute
utilization of the Commitments for the purposes of
calculating the Non-Use Fees payable by the Borrower
pursuant to Section 6.07.
(iii) Each Senior Lender which is a party to one or
more Secured F/X Contracts with the Borrower shall advise
the Administrative Agent on the last Business Day of each
calendar month of the aggregate amount of Foreign Exchange
Exposure with respect to its Secured F/X Contracts with the
Borrower and shall advise the Administrative Agent promptly
of any increase, since the date of the last such report, in
excess of $500,000 in the aggregate amount of such Foreign
Exchange Exposure.
(iv) Any Senior Lender Affiliate may, upon compliance
with the terms and conditions of this subsection 3.13(a),
and all other applicable provisions of this Agreement, enter
into Secured F/X Contracts.
(b) At any time, and from time to time, each Senior
Lender may, but shall have no obligation to, enter into
Interest Rate Contracts with the Borrower; provided, that an
Interest Rate Contract shall be a Secured Interest Rate
Contract only if the Senior Lender complies with the
following terms and conditions and all other applicable
provisions of this Agreement:
(i) At least two (2) Business Days prior to entering
into any Interest Rate Contract with the Borrower which a
Senior Lender desires to be a Secured Interest Rate
Contract, such Senior Lender shall give the Administrative
Agent written notice thereof, no later than 10:00 A.M.
(Chicago time). Such written notice shall include a summary
of all material provisions of the proposed Interest Rate
Contract, the Interest Rate Exposure with respect to such
Interest Rate Contract and the date on which such Senior
Lender expects to enter into such Interest Rate Contract.
The Administrative Agent shall determine whether, as of the
close of business on the date of the Administrative Agent's
receipt of written notice of the proposed Interest Rate
Contract, the amount of Interest Rate Exposure related to
the proposed Interest Rate Contract is less than or equal to
the Facility Availability. On the date the Senior Lender
and the Borrower enter into the proposed Interest Rate Con-
tract, such Interest Rate Contract shall become a Secured
Interest Rate Contract unless on or before the second
Business Day prior to such date, such Senior Lender shall
have received written notice from the Administrative Agent
that there is insufficient Facility Availability to cover
the Interest Rate Exposure related to such Interest Rate
Contract.
(ii) Promptly after either entering into any Interest
Rate Contract with the Borrower or deciding not to enter
into a proposed Interest Rate Contract, the applicable
Senior Lender shall give the Administrative Agent written
notice thereof (which may be by telecopy) or telephonic
notice promptly confirmed in writing. No Senior Lender
other than the Senior Lender which is a party to such
Interest Rate Contract shall be entitled to any fees and/or
profits in connection with such Interest Rate Contract or
shall have any responsibility or obligations with respect
thereto, and the Interest Rate Exposure with respect to each
Secured Interest Rate Contract shall not constitute
utilization of the Commitments for the purposes of
calculating the Non-Use Fees payable by the Borrower
pursuant to Section 6.07.
(iii) Each Senior Lender which is a party to one or
more Secured Interest Rate Contracts with the Borrower shall
advise the Administrative Agent on the last Business Day of
each calendar month of the aggregate amount of Interest Rate
Exposure with respect to its Secured Interest Rate Contracts
with the Borrower and shall advise the Administrative Agent
promptly of any increase, since the date of the last such
report, in excess of $500,000 in the aggregate amount of
such Interest Rate Exposure.
(iv) Any Senior Lender Affiliate may, upon compliance
with the terms and conditions of this subsection 3.13(b) and
all other applicable provisions of this Agreement, enter
into Secured Interest Rate Contracts.
SECTION 3.14 Special Provisions Governing Eurodollar
Rate Loans. Notwithstanding other provisions of this
Agreement, the following provisions shall govern with
respect to Eurodollar Rate Loans as to the matters covered:
(a) Amount of Eurodollar Rate Loans. Each Eurodollar
Rate Loan shall be in a minimum amount of $1,000,000.
(b) Determination of Interest Period. By giving
notice as set forth in Section 3.07 (with respect to a
Borrowing of Eurodollar Rate Loans) or Section 3.09 (with
respect to a conversion into, or continuation of, Eurodollar
Rate Loans), the Borrower shall have the option, subject to
the other provisions of this Section 3.14, to specify an
interest period (each, an "Interest Period") to apply to the
Borrowing, conversion or continuation of Eurodollar Rate
Loans described in such notice, which Interest Period shall
be either a one-, two-, three-, four- or six-month period
(or such intermediate periods to which the applicable Senior
Lenders may agree in their sole discretion, provided that,
for purposes of computing the interest due in accordance
with Section 6.03, such period shall be rounded up to the
nearest period of full months, for example, a 14 day period
shall be rounded to a one-month period, a 45 day period
shall be rounded to a two-month period, etc.). The
determination of Interest Periods shall be subject to the
following provisions:
(i) In the case of immediately successive Interest
Periods, each successive Interest Period shall commence on
the day on which the next preceding Interest Period expires.
(ii) If any Interest Period would otherwise expire on
a day which is not a Business Day, such Interest Period
shall be extended to expire on the next succeeding Business
Day unless, with respect to an Interest Period applicable to
a Borrowing, conversion into, or continuation of Eurodollar
Rate Loans, such next succeeding Business Day is not in the
same month, in which case such Interest Period shall expire
on the immediately preceding Business Day.
(iii) Borrower may not elect an Interest Period for
any Borrowing, conversion or continuation which terminates
later than the last day of the Facility Termination Date.
(iv) Borrower may not elect an Interest Period with
respect to any portion of principal of a Eurodollar Rate
Loan which extends beyond a date on which the Borrower is
required to make a scheduled payment of that portion of
principal, it being understood and agreed that any
Eurodollar Rate Loan the Interest Period of which ends less
than one (1) month prior to such date shall be deemed
converted to a Base Rate Loan as of the last day of such
Interest Period for purposes of determining whether any
portion of principal of any Eurodollar Rate Loan is required
in order to make a mandatory payment of principal.
(v) There shall be no more than six (6) Interest
Periods in effect at any one time with respect to all
Eurodollar Rate Loans.
(c) Determination of Interest Rate. As soon as prac-
ticable after 10:00 A.M. (Chicago time) on the Interest Rate
Determination Date, the Administrative Agent shall determine
with Citibank (which determination shall, absent
demonstrated error, be presumptively correct) the interest
rate which shall apply for the applicable Interest Period to
the Eurodollar Rate Loans for which an interest rate is then
being determined and shall promptly give notice thereof (in
writing or by telephone confirmed in writing) to the
Borrower and to each Senior Lender.
(d) Interest Rate Unascertainable, Inadequate or
Unfair. If with respect to any Interest Period pertaining
to a Eurodollar Rate Loan:
(i) the Administrative Agent is advised by Citibank
that deposits in Dollars (in the applicable amounts) are not
being offered by Citibank in the relevant market for such
Interest Period; or
(ii) Senior Lenders holding at least fifty percent
(50%) of the then aggregate unpaid principal amount of the
Notes advise the Administrative Agent at that the Eurodollar
Rate as determined by the Administrative Agent is at least
fifteen (15) basis points less than the cost to such Senior
Lenders of obtaining funds in the London interbank
Eurodollar market in the amount substantially equal to such
Senior Lenders' Eurodollar Rate Loans and for a period equal
to such Interest Period;
then, the Administrative Agent shall forthwith give notice
thereof to the Borrower, whereupon until the Administrative
Agent notifies the Borrower that the circumstances giving
rise to such suspension no longer exist, the right of the
Borrower to elect to have Loans bear interest based upon the
Eurodollar Rate shall be suspended, and each outstanding
Eurodollar Rate Loan owing by the Borrower shall be
converted into a Base Rate Loan on the last day of the then
current Interest Period therefor, notwithstanding any prior
election by the Borrower to the contrary. Nothing in this
subsection 3.14(d) shall limit the right of the Borrower
under Article VI to elect to have Loans bear interest based
upon the Eurodollar Rate for any Interest Period not
affected by the circumstances giving rise to a notice under
this subsection 3.14(d).
(e) Illegality. (i) In the event that on any date
any Senior Lender shall have determined in good faith (which
determination shall, absent demonstrated error, be final and
conclusive and binding upon all parties) that as a result of
such Senior Lender's compliance with any law, governmental
rule, regulation or order (whether or not having the force
of law and whether or not failure to comply therewith would
be unlawful) the making or continuation of any Eurodollar
Rate Loan has become unlawful, then, and in any such event,
that Senior Lender shall promptly give notice of such
determination (by telephone confirmed in writing) to the
Borrower and the Administrative Agent (which notice the
Administrative Agent shall promptly transmit to each other
applicable Senior Lender).
(ii) Upon the giving of the notice referred to in
subsection 3.14(e)(i), (A) the Borrower's rights to request,
and such Senior Lender's obligation to make, convert into or
continue, Eurodollar Rate Loans shall be immediately
suspended, and such Senior Lender shall make, continue or
convert a Loan as part of the requested Borrowing or
continuation of, or conversion into, Eurodollar Rate Loans
as a Base Rate Loan, which Base Rate Loan shall, for all
purposes, be considered a part of such Borrowing, conversion
or continuation, and (B) if the affected Eurodollar Rate
Loan or Loans is/are then outstanding, the Borrower shall
immediately, or if permitted by applicable law, no later
than the date permitted thereby, upon at least one (1)
Business Day's written notice to the Administrative Agent
and the affected Senior Lender, convert each such Loan into
a Base Rate Loan.
(iii) In the event that such Senior Lender determines
at any time following its giving of the notice referred to
in subsection 3.14(e)(i) that such Senior Lender may
lawfully make, continue or convert into Eurodollar Rate
Loans, such Senior Lender shall promptly give notice of that
determination (by telephone confirmed in writing) to the
Borrower and the Administrative Agent (which notice the
Administrative Agent shall promptly transmit to each other
Senior Lender), whereupon the Borrower's right to request,
and such Senior Lender's obligation to make, continue or
convert into, Eurodollar Rate Loans shall be restored.
(f) Compensation. Except for any such loss, expense
or liability incurred solely as a result of the willful
misconduct or gross negligence of the Administrative Agent
or any of the Senior Lenders, in addition to such amounts as
are required to be paid by the Borrower pursuant to Article
VI, the Borrower shall compensate each Senior Lender which
has made Eurodollar Rate Loans to the Borrower, upon written
request by such Senior Lender (which request shall set forth
in reasonable detail the basis for requesting such amounts),
for all losses, expenses and liabilities, including, without
limitation, any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds
acquired by such Senior Lender to fund or maintain such
Senior Lender's Eurodollar Rate Loans to the Borrower,
(i) if for any reason a Borrowing, conversion or
continuation of Eurodollar Rate Loans does not occur on a
date specified therefor in a Notice of Borrowing or a Notice
of Conversion/Continuation or in a telephonic request for
Borrowing or conversion/continuation or a successive
Interest Period does not commence after notice therefor is
given pursuant to Section 3.07 or 3.09, (ii) if any
prepayment of any Eurodollar Rate Loan (including, without
limitation, any mandatory prepayments required hereunder)
occurs for any reason on a date which is not the last day of
the applicable Interest Period, (iii) as a consequence of
any required conversion of a Eurodollar Rate Loan to a Base
Rate Loan as a result of any of the events indicated in
subsection 3.14(e), or (iv) as a consequence of any other
default by the Borrower in the repayment of Eurodollar Rate
Loans when required by the terms of this Agreement.
(g) Quotation of Eurodollar Rate. If on any Interest
Rate Determination Date Citibank shall have failed to
provide offered quotations to the Administrative Agent in
accordance with the definition of "Eurodollar Rate", the
Administrative Agent shall give the Borrower and each Senior
Lender prompt notice thereof and the Loans requested by the
Borrower shall be made or continued as, or converted into,
Base Rate Loans.
(h) Eurodollar Rate Taxes. The Borrower agrees that:
(i) it will pay, prior to the date on which penalties
attach thereto, all present and future income, stamp and
other taxes, levies, or costs and charges whatsoever, im-
posed, assessed, levied or collected on or in respect of a
Loan solely as a result of the interest rate being
determined by reference to the Eurodollar Rate and/or the
provisions of this Agreement relating to the Eurodollar Rate
and/or the recording, registration, notarization or other
formalization of any the foregoing and/or any payments of
principal, interest or other amounts made on or in respect
of a Loan when the interest rate is determined by reference
to the Eurodollar Rate (all such taxes, levies, costs and
charges being herein collectively called "Eurodollar Rate
Taxes"); provided that Eurodollar Rate Taxes shall not
include: taxes imposed on or measured by the overall net
income of a Senior Lender or any foreign branch or
Subsidiary of that Senior Lender by the United States of
America or any taxing authority of any jurisdiction in which
such Senior Lender or any such foreign branch or Subsidiary
conducts business. The Borrower shall also pay such
additional amounts equal to increases in taxes payable by a
Senior Lender described in the foregoing proviso, which
increases are attributable to payments made by the Borrower
described in this sentence and in the immediately preceding
sentence of this paragraph. Promptly after the date on
which payment of any such Eurodollar Rate Tax is due
pursuant to applicable law, the Borrower will, at the
reasonable request of a Senior Lender, furnish to that
Senior Lender evidence, in form and substance reasonably
satisfactory to that Senior Lender, that the Borrower has
met its obligation under this subsection 3.14(h)(i); and
(ii) it will indemnify each Senior Lender against, and
reimburse each on demand for, any Eurodollar Rate Taxes paid
by such Senior Lender, as determined by that Senior Lender
in its reasonable discretion. A Senior Lender requesting
reimbursement under this subsection 3.14(h)(ii) shall
provide the Borrower with appropriate receipts for any
payments or reimbursements made by the Borrower pursuant to
this subsection 3.14(h)(ii), together with such information
as may reasonably be required to indicate the basis for such
Eurodollar Rate Taxes; provided that if a Senior Lender
subsequently recovers, or receives a permanent net tax
benefit with respect to, any amount of Eurodollar Rate Taxes
previously paid by the Borrower pursuant to this subsection
3.14(h), such Senior Lender shall, within thirty (30) days
after receipt of such refund, and to the extent permitted by
applicable law, pay to the Borrower the amount of any such
recovery or permanent net tax benefit.
(i) Booking of Eurodollar Rate Loans. Any Senior
Lender may make, carry or transfer Eurodollar Rate Loans at,
to, or for the account of, any of its branch offices or the
office of a Senior Lender Affiliate; provided, that no such
Senior Lender shall be entitled to receive any greater
amount under subsection 3.14(f) or 3.14(h) as a result of
the transfer of any such Loan than such Senior Lender would
be entitled to immediately prior thereto unless (A) such
transfer occurred at a time when circumstances giving rise
to the claim for such greater amount did not exist and (B)
such claim would have arisen even if such transfer had not
occurred.
(j) Affiliates Not Obligated. No Eurodollar Affiliate
or other Senior Lender Affiliate shall be deemed a party to
this Agreement or shall have any liability or obligation
under or in connection with this Agreement.
SECTION 3.15 Senior Lenders' Obligations Several.
All Loans made under this Agreement shall be made by the
applicable Senior Lenders, simultaneously and propor-
tionately in accordance with their respective Pro Rata
Shares thereof, it being understood that (a) no Senior
Lender shall be responsible for any failure by any other
Senior Lender to perform its obligation to make any Loan
hereunder nor shall the commitment of any Senior Lender to
make a Loan hereunder be increased or decreased as a result
of the failure by any other Senior Lender to perform its
obligation to make a Loan hereunder and (b) no failure by
any Senior Lender to perform its obligation to make a Loan
to a Borrower hereunder shall excuse any other Senior Lender
from its obligation to make a Loan.
ARTICLE IV
PAYMENTS AND PREPAYMENTS
SECTION 4.01 Prepayments. The Borrower shall have the
right, upon notice to the Administrative Agent not later
than 10:00 A.M. (Chicago time) on the date of any such
intended prepayment, to prepay any Loans made as Base Rate
Loans in whole or in part, provided that any partial payment
shall be in an aggregate minimum amount of $500,000, or
integral multiples of $100,000 in excess thereof. Any such
notice of prepayment shall specify the date of such
prepayment and the aggregate principal amount of Loans to be
prepaid on such date.
SECTION 4.02 Mandatory Prepayments of Loans. (a) Upon
the occurrence of an Event of Default, and thereafter until
such time, if any, as such Event of Default shall be waived
in accordance with the terms of this Agreement, all funds
received by the Administrative Agent for the benefit of the
Senior Secured Creditors shall be transferred by the
Administrative Agent to the Collateral Account pending
application thereof to the Obligations in accordance with
the terms of this Agreement.
(b) The Borrower shall make prepayments of its Loans
and/or post cash collateral with the Administrative Agent
pursuant to agreements, in form and substance reasonably
acceptable to the Administrative Agent, to the extent
necessary to cause the sum of the Facility Availability
plus the Facility Outstandings to be no greater than the sum
of the Commitments plus the aggregate amount of cash
collateral posted (including cash collateral then being
posted as well as cash collateral previously posted) with
the Administrative Agent pursuant to this subsection
4.02(b).
(c) If any guarantor (other than a Subsidiary
Guarantor) of all or any portion of the Obligations
(i) revokes its guaranty of such Obligations or such
guaranty is terminated, in either case, prior to the date on
which such guaranty terminates in accordance with the terms
thereof or (ii) if one of the events described in
subsections 14.01(g), 14.01(h) or 14.01(j) occurs with
respect to such guarantor, then the Obligations which were
the subject of such guaranty shall, at the option of the
Requisite Senior Lenders, become immediately due and payable
in a principal amount equal to the maximum amount of such
guarantor's liability under such guaranty.
(d) The Borrower shall maintain, at all times, a
deposit of cash collateral with the Administrative Agent in
an amount equal to at least one hundred and five percent
(105%) of the Commitments subject to the Cash Collateral
Pledge Agreement.
(e) All payments shall be applied to payment of
accrued interest before application to principal.
SECTION 4.03 Reductions of Commitments. The Borrower
shall have the right, at any time and from time to time, to
terminate in whole or permanently reduce in part, without
premium or penalty, the Commitments in an amount up to the
Facility Availability at such time. The Borrower shall give
not less than three (3) Business Days' prior written notice
to the Administrative Agent designating the date (which
shall be a Business Day) of such termination or reduction
and the amount of any partial reduction. Promptly after
receipt of a notice of such termination or reduction, the
Administrative Agent shall notify each Senior Lender of the
proposed termination or reduction. Such termination or
partial reduction of the Commitments shall be effective on
the date specified in the Borrower's notice and shall reduce
the Commitment of each Senior Lender proportionately in
accordance with its Pro Rata Share. Any partial reduction
of a Commitment shall be in an aggregate minimum amount of
$1,000,000, and integral multiples of $1,000,000 in excess
of that amount.
SECTION 4.04 Intentionally omitted.
SECTION 4.05 Manner and Time of Payment. (a) All
payments of principal, interest, Reimbursement Obligations
and fees hereunder and under the Notes shall be made without
condition or reservation of right and in same day funds and
(except for mandatory prepayments of Loans made pursuant to
subsection 4.02(a)) delivered to the Administrative Agent
not later than 10:00 A.M. (Chicago time) on the date due to
such account of the Administrative Agent as the
Administrative Agent may designate, for the account of such
Senior Lender or such Issuing Bank, as the case may be; and
funds received by the Administrative Agent after that time
shall be deemed to have been paid on the next succeeding
Business Day. All payments of principal, interest,
Reimbursement Obligations and fees, and all reimbursements
for expenses pursuant to Section 16.03, may at the option of
the Administrative Agent and upon reasonable notice to the
Borrower, be paid from the proceeds of the Loans. The
Borrower hereby irrevocably authorizes the Senior Lenders to
make Loans to it for the purpose of paying principal,
interest, Reimbursement Obligations and fees due from it and
for the purpose of reimbursing the Administrative Agent and
the Senior Lenders for expenses pursuant to Section 16.03,
and agrees that all such Loans so made shall be Base Rate
Loans and shall be deemed to have been requested by the
Borrower.
(b) Except as provided in the immediately following
sentence, whenever any payment to be made by the Borrower
hereunder or under the Notes shall be stated to be due on a
day which is not a Business Day, payment shall be made on
the next succeeding Business Day and such extension of time
shall be included in the computation of the payment of
interest hereunder or under the Notes and of any of the fees
specified in Article VI, as the case may be. If a day on
which a payment relating to a Eurodollar Rate Loan is due is
not a Business Day and there are no subsequent Business Days
in the same month, then the due date for such payment shall
be the last Business Day of such month.
SECTION 4.06 Apportionment and Application of
Payments. (a) Subject to subsection (b) below, principal
and interest payments received by the Administrative Agent
in respect of the Loans and payments of the Non-Use Fees
shall be apportioned ratably among the Senior Lenders to
which such Loans and Non-Use Fees are owed, according to
such Senior Lenders' respective Pro Rata Shares in such
Loans and Non-Use Fees. All proceeds of Collateral received
by the Administrative Agent shall be applied, except as
otherwise provided in the other provisions of this
Agreement, first, to pay any fees, expense reimbursements or
indemnities then due to the Administrative Agent from the
Borrower hereunder; second, to pay any fees, expenses,
reimbursements or indemnities then due to the Senior Lenders
from the Borrower hereunder; third, to pay interest due in
respect of Loans and Letter of Credit Obligations; fourth,
to pay principal due in respect of all other Facility
Outstandings, and to the extent such Facility Outstandings
are contingent, to provide cash collateral therefor as
required pursuant to subsection 14.03(b), allocated, if
sufficient funds are not available to pay (or cash
collateralize) all such Facility Outstandings, to the Senior
Secured Creditors pro rata based on the aggregate amount of
all such Facility Outstandings and the respective share of
such Facility Outstandings owing to the respective Senior
Secured Creditors. The Administrative Agent shall promptly
distribute to each Senior Secured Creditor at the primary
address set forth for the applicable Senior Lender (or, in
the case of an Affiliate of a Senior Lender, the related
Senior Lender) or Issuing Bank on the appropriate signature
page hereof (or, in the case of a Senior Lender that is not
an original signatory of this Agreement, on the signature
page of the Assignment Agreement or amendment to this
Agreement executed by such Senior Lender), or at such other
address as such Senior Secured Creditor may request in
writing, such funds as it may be entitled to receive. The
foregoing apportionment of payments is solely for the
purpose of determining the obligations of the Borrower
hereunder and, notwithstanding such apportionment, any
Senior Secured Creditor may on its books and records
allocate payments received by it in a manner different from
that contemplated hereby. No such different allocation
shall alter the rights and obligations of the Borrower under
this Agreement determined in accordance with the
apportionment contemplated by this subsection 4.06(a).
Except as otherwise provided in subsection 3.14(e), each
payment and prepayment of principal on the Loans shall be
applied first to the Eurodollar Rate Loans maturing on the
date of such payment or prepayment, next to the Base Rate
Loans outstanding on the date of such payment or prepayment
and then to the other Eurodollar Rate Loans outstanding on
such date.
(b) Notwithstanding anything to the contrary contained
in this Agreement, in the event any Senior Lender fails to
fund its Pro Rata Share of any Borrowing of Loans requested
by the Borrower, which such Senior Lender is obligated to
fund under the terms of this Agreement (the funded portion
of any such Borrowing of Loans being hereinafter referred to
as a "Non Pro Rata Loan"), until the earlier of such Senior
Lender's cure of such failure and the termination of the
Commitments, the proceeds of all amounts thereafter repaid
to the Administrative Agent and otherwise required to be
applied to such Senior Lender's share of all other
Obligations pursuant to the terms of this Agreement shall be
advanced to the Borrower by the Administrative Agent on
behalf of such Senior Lender to cure, in full or in part,
such failure by such Senior Lender, but shall nevertheless
be deemed to have been paid to such Senior Lender in
satisfaction of such Obligations. The foregoing provisions
of this subsection 4.06(b) shall apply only with respect to
the proceeds of payments of Obligations and shall not affect
the conversion or continuation of Loans pursuant to Section
3.09. A Senior Lender shall be deemed to have cured its
failure to fund its Pro Rata Share of the Loans requested by
the Borrower at such time as an amount equal to such Senior
Lender's Pro Rata Share of the principal portion of the
requested Loans is fully funded to the Borrower, whether by
such Senior Lender itself or by operation of this subsection
4.06(b), and whether or not the Non Pro Rata Loan(s) with
respect thereto has been repaid, converted or continued.
Amounts advanced to the Borrower to cure, in full or in
part, any such Senior Lender's failure to fund its Pro Rata
Share of the Loans ("Cure Loans") shall bear interest at the
rate then applicable to Base Rate Loans, and for all
purposes of this Agreement shall be treated as if they were
Base Rate Loans. Regardless of whether or not an Event of
Default has occurred or is continuing, and notwithstanding
the instructions of the Borrower as to its desired
application, all repayments of principal which, in
accordance with the other terms of this Section 4.06, would
be applied to the outstanding Base Rate Loans, shall be
applied first, ratably to all such Base Rate Loans
constituting Non Pro Rata Loans, second, ratably to such
Base Rate Loans other than those constituting Non Pro Rata
Loans or Cure Loans and, third, ratably to such Base Rate
Loans constituting Cure Loans.
(c) Any accounting as to Loans, fees, Letters of
Credit or Letter of Credit Obligations which any Issuing
Bank or any Senior Lender at its option may provide to the
Borrower, including any monthly statement of account will be
presumed, rebuttably, to be correct.
SECTION 4.07 Required Additional Cash Collateral. The
Borrower shall, at all times when the principal amount of
its Obligations exceeds $4,250,000 due to Interest Rate
Exposure or Foreign Exchange Exposure, maintain a deposit of
cash collateral with the Administrative Agent (in addition
to cash collateral required under Section 4.02(d)) as part
of the Collateral securing the Obligations in an amount
equal to the amount by which its Obligations exceed
$4,250,000.
ARTICLE V
THE LETTER OF CREDIT SUBFACILITY
SECTION 5.01 Obligation to Issue. Subject to the
terms and conditions of this Agreement, and in reliance upon
the representations and warranties of the Borrower set forth
herein or in any other Loan Document, each Issuing Bank
hereby severally agrees, to issue, from time to time during
the Commitment Period, for the account of the Borrower
through such of the Issuing Bank's branches as it and the
Borrower may jointly agree, one or more Letters of Credit in
accordance with this Article V. Notwithstanding the
foregoing, no Issuing Bank shall have any obligation to
issue, and shall not issue, any Letter of Credit at any time
at which:
(a) the aggregate undrawn face amount of Letters of
Credit theretofore issued by such Issuing Bank, after giving
effect to all requested but unissued Letters of Credit,
exceeds any limit imposed by law or regulation upon such
Issuing Bank;
(b) the aggregate principal amount of Letter of Credit
Obligations with respect to Letters of Credit issued by such
Issuing Bank for the account of the Borrower (which amount
shall be calculated without giving effect to the
participation of the Senior Lenders pursuant to Section
5.05) would exceed the L/C Subfacility; or
(c) immediately after the issuance of such Letter of
Credit, the Letter of Credit Obligations would exceed the
L/C Subfacility.
No Letter of Credit shall be issued which has an expiration
date (a) more than one year after the date of issuance
(except for any Letter of Credit providing for automatic
annual extensions of the expiration date, so long as such
Letter of Credit is terminable by the Issuing Bank upon one
hundred twenty (120) days notice to the beneficiary thereof)
or (b) after the Business Day immediately preceding the
applicable Facility Termination Date.
SECTION 5.02 Conditions. The obligation of an Issuing
Bank to issue any Letter of Credit, and of each Senior
Lender to participate therein as provided in Section 5.05,
is subject to the satisfaction in full of the applicable
conditions precedent set forth in Section 5.01 and Article
VII and each of the following conditions:
(a) the Borrower shall have delivered to the Issuing
Bank, at such times and in such manner as such Issuing Bank
may prescribe, a Letter of Credit Reimbursement Agreement
and such other documents and materials as may be required
pursuant to the terms thereof and the terms of the proposed
Letter of Credit shall not be inconsistent with any term or
provision of this Agreement and otherwise shall be
satisfactory to such Issuing Bank;
(b) as of the date of issuance, no order, judgment or
decree of any court, arbitrator or Governmental Authority
shall purport by its terms to enjoin or restrain the Issuing
Bank from issuing the Letter of Credit and no law, rule or
regulation applicable to such Issuing Bank and no request or
directive (whether or not having the force of law) from any
Governmental Authority having jurisdiction over such Issuing
Bank shall prohibit or request that such Issuing Bank
refrain from the issuance of Letters of Credit generally or
the issuance of the proposed Letter of Credit; and
(c) the Administrative Agent shall have notified the
Issuing Bank, pursuant to Section 5.03, that the Unused L/C
Subfacility available to the Borrower is not less than the
amount of the requested Letter of Credit.
SECTION 5.03 Issuance of Letters of Credit. (a)The
Borrower shall give the Administrative Agent written notice
(or telephonic notice confirmed in writing by an authorized
officer or employee of the Borrower not later than the
requested issuance date of the Letter of Credit) of its
request for the issuance of a Letter of Credit no later than
10:00 A.M. (Chicago time) two (2) Business Days prior to the
date such Letter of Credit is requested to be issued. Such
notice shall be irrevocable and shall specify, with respect
to such requested Letter of Credit, the face amount,
beneficiary, effective date of issuance, expiry date (which
effective date and expiry date shall be Business Days and,
with respect to the expiry date, shall be no later than the
Business Day immediately preceding the Facility Termination
Date), the identity of the Issuing Bank selected by the
Borrower and the purpose for which such Letter of Credit is
to be issued. The Borrower shall also provide the
Administrative Agent with a copy of the form of Letter of
Credit that the proposed Issuing Bank has agreed to issue.
If the face amount of the requested Letter of Credit is less
than or equal to the Unused L/C Subfacility, as determined
by the Administrative Agent as of the close of business on
the date of its receipt of written notice of the requested
issuance, the Administrative Agent shall so notify the
proposed Issuing Bank in writing (or by telephonic notice
promptly confirmed thereafter in writing) not later than the
close of business on the second Business Day following the
Administrative Agent's receipt of the Borrower's written
notice and the Issuing Bank shall issue such Letter of
Credit on the date requested by the Borrower, unless (i) on
or before the Business Day prior to such issuance date, such
Issuing Bank shall have received written notice from the
Administrative Agent or any Senior Lender that the
conditions precedent to the issuance of a Letter of Credit
set forth in Section 5.02 have not been met or (ii) on the
requested issuance date such Issuing Bank has actual
knowledge that such conditions precedent have not been met.
If an Issuing Bank receives written notice, or has actual
knowledge, that the conditions precedent to the issuance of
a Letter of Credit have not been met, then such Issuing Bank
shall have no obligation to issue, and shall not issue, any
Letter of Credit until such notice is withdrawn or such
Issuing Bank receives a notice from the Administrative Agent
that the condition(s) described in such notice have been
waived in accordance with the provisions of this Agreement.
Any letter of credit issued by an Issuing Bank in compliance
with the provisions of this Section 5.03 shall be a Letter
of Credit. The Issuing Bank shall give the Administrative
Agent prompt written notice (or telephonic notice promptly
confirmed in writing) of the issuance of any Letter of
Credit.
(b) An Issuing Bank shall not extend or amend any
Letter of Credit unless the requirements of this Section
5.03 are met as though a new Letter of Credit was being
requested and issued.
(c) An Issuing Bank or any Senior Lender may issue
Non-Facility Letters of Credit for its own account, and at
its own risk, but without collateral security except as
permitted in subsection 11.01(e). None of the provisions of
this Article V shall apply to any such Non-Facility Letter
of Credit.
SECTION 5.04 Reimbursement Obligations; Duties of
Issuing Banks. (a) Notwithstanding any provisions to the
contrary in any Letter of Credit Reimbursement Agreement:
(i) The Borrower shall reimburse the applicable
Issuing Bank for drawings under a Letter of Credit issued by
such Issuing Bank for the account of the Borrower no later
than the earlier of (A) the time specified in the related
Letter of Credit Reimbursement Agreement, and (B) three (3)
Business Days after the payment of such drawings by such
Issuing Bank; and
(ii) the Borrower's Reimbursement Obligation with
respect to a drawing under a Letter of Credit issued for the
Borrower's account shall bear interest from the date of such
drawing to the date paid in full at the higher of (A) the
interest rate specified in the applicable Letter of Credit
Reimbursement Agreement or (B) the interest rate for past
due Base Rate Loans calculated in accordance with Section
6.02.
(b) No action taken or omitted to be taken by an
Issuing Bank in connection with any Letter of Credit shall
(i) result in any liability on the part of such Issuing Bank
to any Senior Lender, unless such Issuing Bank's action or
omission constitutes willful misconduct or gross negligence,
or (ii) relieve any Senior Lender of any of its obligations
to such Issuing Bank hereunder, unless the Letter of Credit
in question was issued in contravention of the provisions of
Section 5.03 or at a time during which a notice, described
in Section 5.03, from such Senior Lender to such Issuing
Bank remained in effect. Each Senior Lender agrees that,
prior to making any payment to a beneficiary with respect to
a drawing under a Letter of Credit, the Issuing Bank shall
be responsible only to confirm that documents required by
the terms of such Letter of Credit to be delivered as a
condition precedent to such drawing have been delivered and
that the same appear on their face to conform with the
requirements thereof. Each Senior Lender further agrees
that the Issuing Bank may assume that documents appearing on
their face to be the documents required to be delivered as a
condition precedent to a drawing do in fact comply.
SECTION 5.05 Participations. (a) Immediately upon
the issuance by an Issuing Bank, for the account of the
Borrower, of any Letter of Credit in compliance with the
provisions of Section 5.03, each Senior Lender shall be
deemed to have irrevocably and unconditionally purchased
and received from such Issuing Bank, without recourse or
warranty, an undivided interest and participation to the
extent of such Senior Lender's Pro Rata Share in such Letter
of Credit, including, without limitation, all obligations of
the Borrower with respect thereto (other than amounts owing
to the Issuing Bank under subsection 6.09(b)) and any
security therefor or guaranty pertaining thereto.
(b) An Issuing Bank shall promptly notify the
Administrative Agent, and the Administrative Agent shall
promptly notify the Senior Lenders, if the Borrower fails to
reimburse such Issuing Bank for payments made by such
Issuing Bank in respect of drawings by a beneficiary under a
Letter of Credit. Upon a Senior Lender's receipt of such
notice, such Senior Lender shall unconditionally pay to the
Administrative Agent, for the account of such Issuing Bank,
an amount equal to such Senior Lender's Pro Rata Share of
the unreimbursed payment made by such Issuing Bank under the
Letter of Credit. Such payment shall be made by such Senior
Lenders in Dollars and in same day funds on the day each
Senior Lender receives notice from the Administrative Agent
that such payment is owing, if such notice is received by
such Senior Lender prior to 10:00 A.M. (Chicago time) on a
Business Day; if such notice is not received by such time,
then such Senior Lender shall remit its payment on the next
Business Day following the day such notice is received. Any
amount payable by a Senior Lender under this subsection
5.05(b) which is not paid when due pursuant to the terms
hereof, shall be payable on demand, together with interest
thereon at the Federal Funds Rate (or, after the first three
(3) days, at the Base Rate) from the date such payment was
due until paid in full. The failure of any Senior Lender to
make any payment owing by it under this subsection 5.05(b)
shall neither relieve nor increase the obligation of any
other Senior Lender to make any payment owing by it under
this subsection 5.05(b). The Administrative Agent shall
promptly remit to the applicable Issuing Bank all amounts
received by the Administrative Agent, for the account of
such Issuing Bank, from the Senior Lenders pursuant to this
subsection 5.05(b). No payment made by a Senior Lender
pursuant to this subsection 5.05(b) shall prejudice the
ability of such Senior Lender to claim that the Issuing Bank
to which such payment is made is subject to liability under
subsection 5.04(b).
(c) Whenever an Issuing Bank receives a payment from
the Borrower with respect to a Reimbursement Obligation
(including any interest thereon) for which such Issuing Bank
has received payments from the Senior Lenders pursuant to
subsection 5.05(b), such Issuing Bank shall promptly remit
to the Administrative Agent and the Administrative Agent
shall promptly remit to each Senior Lender which has funded
its participating interest therein, in Dollars and in the
kind of funds so received, an amount equal to each such
Senior Lender's Pro Rata Share thereof. Each such payment
shall be made by the Issuing Bank or the Administrative
Agent, as the case may be, on the Business Day on which such
Person receives the funds paid to such Person pursuant to
the preceding sentence, if received prior to 10:00 A.M.
(Chicago time) on such Business Day, and otherwise on the
next succeeding Business Day.
(d) Upon the request of the Administrative Agent or
any Senior Lender, an Issuing Bank shall furnish to the
Administrative Agent or such Senior Lender copies of any
Letter of Credit, Letter of Credit Reimbursement Agreement,
and Letter of Credit application to which that Issuing Bank
is party and such other documentation as may reasonably be
requested by the Administrative Agent or such Senior Lender
with respect to Letters of Credit issued by such Issuing
Bank.
(e) The obligations of a Senior Lender under
subsection 5.05(b) to make payments to the Administrative
Agent for the account of an Issuing Bank with respect to a
Letter of Credit shall be irrevocable, not subject to any
qualification or exception whatsoever and shall be made in
accordance with, but not subject to, the terms and
conditions of this Agreement under all circumstances
(assuming that such Issuing Bank has issued such Letter of
Credit in compliance with the provisions of Section 5.03),
including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or
other right which the Borrower may have at any time against
a beneficiary named in a Letter of Credit or any transferee
of any Letter of Credit (or any Person for whom any such
transferee may be acting), the Administrative Agent, the
Issuing Bank, any Senior Lender, or any other Person,
whether in connection with this Agreement, any Letter of
Credit, the transactions contemplated herein or any
unrelated transactions (including any underlying
transactions between the Borrower or any Subsidiary thereof
and the beneficiary named in any Letter of Credit);
(iii) any draft, certificate of any other document
presented under the Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;
(iv) the surrender or impairment of any security for
the performance or observance of any of the terms of any of
the Loan Documents;
(v) any failure by the Administrative Agent or the
Issuing Bank to make any reports required pursuant to
Section 5.08; or
(vi) the occurrence of any Event of Default or
Potential Event of Default.
SECTION 5.06 Payment of Reimbursement Obligations.
(a) The Borrower agrees to pay to each Issuing Bank the
amount of all of the Reimbursement Obligations, interest and
other amounts payable to such Issuing Bank under or in
connection with any Letter of Credit issued for the account
of the Borrower immediately when due, irrespective of any
claim, set-off, defense or other right which the Borrower or
any Subsidiary thereof may have at any time against any
Issuing Bank or any other Person.
(b) In the event any payment by the Borrower or any
Subsidiary thereof received by an Issuing Bank with respect
to a Letter of Credit and distributed by the Administrative
Agent to the Senior Lenders on account of their
participations is thereafter set aside, avoided or recovered
from such Issuing Bank in connection with any receivership,
liquidation or bankruptcy proceeding, each Senior Lender
which received such distribution shall, upon demand by the
Issuing Bank, contribute such Senior Lender's Pro Rata Share
of the amount set aside, avoided or recovered together with
interest at the rate required to be paid by the Issuing Bank
upon the amount required to be repaid by it.
SECTION 5.07 Exoneration. As between the Borrower,
the Senior Lenders and each Issuing Bank issuing a Letter of
Credit for the account of the Borrower, such Borrower
assumes all risks of the acts and omissions of, or misuse of
such Letters of Credit by, the respective beneficiaries of
such Letters of Credit. In furtherance and not in
limitation of the foregoing, subject to the provisions of
the Letter of Credit applications, the Issuing Banks and the
related Senior Lenders shall not be responsible: (a) for
the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document submitted by any party in
connection with the application for and issuance of a Letter
of Credit, even if it should in fact prove to be in any or
all respects invalid, insufficient, inaccurate, fraudulent
or forged; (b) for the validity or sufficiency of any
instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any
reason; (c) for failure of the beneficiary of a Letter of
Credit to comply duly with conditions required in order to
draw upon such Letter of Credit, provided that the Issuing
Bank complies with the provisions of subsection 5.04(b); (d)
for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable,
telegraph, telex, telecopy or otherwise, whether or not they
be in cipher; (e) for errors in interpretation of technical
terms; (f) for any loss or delay in the transmission or
otherwise of any document required in order to make a
drawing under any Letter of Credit or of the proceeds
thereof; (g) for the misapplication by the beneficiary of a
Letter of Credit of the Letter of Credit; and (h) for any
consequences arising from causes beyond the control of the
Administrative Agent, the Issuing Banks and the Senior
Lenders including, without limitation, any act or omission,
whether rightful or wrongful, of any present or future de
jure or de facto government or Governmental Authority. In
furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken
or omitted by an Issuing Bank under or in connection with
the Letters of Credit or any related certificates, if taken
or omitted in good faith and not constituting gross
negligence or willful misconduct, shall not put the Issuing
Bank, the Administrative Agent, or any Senior Lender under
any resulting liability to the Borrower or relieve the
Borrower of any of its obligations hereunder to any such
Person.
SECTION 5.08 Issuing Bank Reporting Requirements.
Each Issuing Bank shall, no later than the tenth (10th)
Business Day following the last day of each month, provide
to the Administrative Agent and the Borrower separate
schedules for Commercial Letters of Credit and Standby
Letters of Credit issued as Letters of Credit, in form and
substance reasonably satisfactory to the Administrative
Agent, showing the date of issue, beneficiary, face amount,
expiration date and the reference number of each Letter of
Credit issued for the account of the Borrower by such
Issuing Bank which was outstanding at any time during such
month and the aggregate amount payable by the Borrower
during the month pursuant to Section 6.08.
ARTICLE VI
INTEREST AND FEES
SECTION 6.01 Interest Rate. (a) All Loans shall bear
interest on the unpaid principal amount thereof from the
date made until paid in full, at a rate determined by
reference to the Base Rate or the Eurodollar Rate, as
elected by the Borrower at the time a Notice of Borrowing or
a Notice of Conversion/Continuation is given pursuant to
Sections 3.07 and 3.09, respectively. Notwithstanding the
foregoing, the Borrower may not elect the Eurodollar Rate as
the applicable basis for determining the rate of interest on
a Loan if at the time of such election a Potential Event of
Default or an Event of Default exists. If on any day a Loan
is outstanding with respect to which the Borrower has not
delivered notice to the Administrative Agent in accordance
with the terms of this Agreement specifying the basis
elected by the Borrower for determining the rate of interest
thereon, then for that day such Loan shall be a Base Rate
Loan and shall bear interest at a rate determined by
reference to the Base Rate.
(b) Loans for which the Borrower has elected an
interest rate determined by reference to the Base Rate
("Base Rate Loans") shall bear interest at the Base Rate in
effect from time to time; Loans for which the Borrower has
elected an interest rate determined by reference to the
Eurodollar Rate ("Eurodollar Rate Loans") shall bear
interest at the sum of the Eurodollar Rate for the
applicable Interest Period plus the Applicable Eurodollar
Rate Margin in effect on the first day of such Interest
Period.
(c) Upon the reasonable request of the Borrower from
time to time, the Administrative Agent shall promptly
provide to the Borrower such information with respect to the
applicable Eurodollar Rate as may be reasonably required by
the Borrower.
SECTION 6.02 Default Interest. Notwithstanding the
rates of interest specified in subsection 6.01(b), effective
immediately upon the occurrence of an Event of Default under
subsections 14.01(a), (b)(ii), (f) (except an Event of
Default under subsection 14.01(f) resulting from the gross
negligence or willful misconduct of the Administrative
Agent), (g) or (h) and for as long thereafter as such Event
of Default shall be continuing, the principal balance of all
Obligations then outstanding, including to the extent
permitted by applicable law, any interest payments on any
Loans not paid when due, shall bear interest payable upon
demand at a rate which is two percent (2%) per annum in
excess of the rate of interest otherwise payable under this
Agreement.
SECTION 6.03 Computation of Interest. Interest on the
Loans shall be computed on the basis of a year of 360 days
and the actual number of days elapsed in the period during
which interest accrues. In computing interest on any Loan,
the date of the making of the Loan or the first day of an
Interest Period, as the case may be, shall be included and
the date of payment or the expiration date of an Interest
Period, as the case may be, shall be excluded; provided that
if a Loan is repaid on the same day on which it is made, one
day's interest shall be paid on that Loan.
SECTION 6.04 Interest Payments. Interest accrued on
each Base Rate Loan shall be payable in arrears on (a) the
first Business Day of each month, commencing with the month
following the month in which such Loan was made, (b) the day
of conversion thereof to an Eurodollar Rate Loan and (c) the
maturity thereof. Interest accrued on each Eurodollar Rate
Loan shall be payable in arrears on and to each Interest
Payment Date applicable to such Loan, and in any event, at
maturity.
SECTION 6.05 Administrative Agent's Fee. The Borrower
shall pay the Administrative Agent, solely for its own
account, an agent's fee, in such amounts and at such times
as are specified in a letter agreement dated August 15, 1988
among the Administrative Agent, Rexnord Inc., Borrower and
Rexnord Corporation. No Person other than the
Administrative Agent shall have any interest in the agent's
fee described in this Section 6.05 and in such letter.
SECTION 6.06 Intentionally omitted.
SECTION 6.07 Non-Use Fees. The Borrower agrees to pay
to the Administrative Agent, for the account of the Senior
Lenders, a non-use fee (together with the non-use fees
referred to in the third sentence of this section, the "Non-
Use Fee"), calculated on a monthly basis, equal to one-half
of one percent (0.5%) per annum multiplied by the Non-Use
Fee Base. The Non-Use Fee shall accrue from (and including)
the Closing Date, shall be calculated on the basis of a 360-
day year and the actual number of days elapsed, and shall be
payable in arrears on the first Business Day of the month
immediately following the month for which such Non-Use Fee
accrues and on the Facility Termination Date.
SECTION 6.08 Letter of Credit Fees; Issuing Bank
Charges. The Borrower agrees to pay to the Administrative
Agent a letter of credit fee with respect to each of the
Letters of Credit issued for the Borrower's account equal to
one and one-half percent (1.50%) per annum, multiplied by
the average undrawn face amount of such Letters of Credit
outstanding. Such letter of credit fees shall accrue from
(and including) the Closing Date, with respect to Letters of
Credit outstanding on such date, or, with respect to Letters
of Credit issued after the Closing Date, from and including
the date of issuance of each Letter of Credit, shall be
calculated on the basis of the actual number of days
outstanding (exclusive of its expiry date) and a year of 360
days and shall be payable monthly in arrears. Such fees
shall also be applicable to and payable with respect to
Letters of Credit for which the expiry date is extended or
which are modified to increase the maximum amount available
for drawing thereunder. The Administrative Agent shall
promptly remit all letter of credit fees, when paid, to the
Senior Lenders in accordance with their Pro Rata Shares
thereof.
SECTION 6.09 Payment of Fees. The obligation of the
Borrower to pay each fee described herein shall be in
addition to, and not in lieu of, the obligation of the
Borrower to pay interest, other fees described herein and
expenses otherwise described in this Agreement. Fees shall
be payable when due in immediately available funds, and the
Administrative Agent may direct, in connection therewith,
that the Borrower's loan account be debited to effect such
payment or, in the alternative, the Administrative Agent may
direct, and is hereby authorized to so direct, that Account
No. 0000-8061 of the Borrower at Citibank in New York, New
York be debited to effect such payment. All fees shall be
nonrefundable. All fees specified or referred to in this
Agreement due to the Administrative Agent or a Senior Lender
shall bear interest, if not paid when due, at the rate then
applicable to Base Rate Loans, shall constitute Obligations
and shall be secured by all of the Collateral.
(b) Each Issuing Bank shall have the right to receive
solely for its own account such amounts as it and the
Borrower may agree, in writing, to pay to such Issuing Bank
with respect to issuance fees and for such Issuing Bank's
out-of-pocket costs of issuing and servicing Letters of
Credit.
SECTION 6.10 Changes; Legal Restrictions. Except as
provided in subsection 3.14(d) with respect to certain
determinations on Interest Rate Determination Dates, in the
event that (a) the adoption of or any change in any law,
treaty, rule, regulation, guideline or determination of a
court or Governmental Authority or any change in the
interpretation or application thereof by a court or
Governmental Authority, or (b) compliance by any Senior
Lender or Issuing Bank with any request or directive
(whether or not having the force of law) from any central
bank or other Governmental Authority or quasi-governmental
authority:
(i) does or will (A) subject a Senior Lender or Issuing
Bank (or its applicable lending office or Eurodollar
Affiliate) to any tax, duty or other charge of any kind
which such Senior Lender or Issuing Bank reasonably
determines to be applicable to this Agreement, the Notes,
the Commitments, the Loans, the Secured F/X Contracts, the
Secured Interest Rate Contracts or the Letters of Credit or
(B) change the basis of taxation of payments to that Senior
Lender or Issuing Bank of principal, fees, interest, or any
other amount payable hereunder, except, in either case, for
taxes imposed on or measured by the overall net income of
that Senior Lender or Issuing Bank or its applicable lending
office or Eurodollar Affiliate or franchise taxes imposed by
the jurisdiction in which such Senior Lender's or Issuing
Bank's principal executive office, applicable lending office
or Eurodollar Affiliate is located (all such non-excepted
taxes, duties and other charges being hereinafter referred
to as "Taxes"); or
(ii) does or will impose, modify, or hold applicable,
in the determination of a Senior Lender or Issuing Bank, any
reserve, special deposit, compulsory loan, FDIC insurance,
capital allocation or similar requirement against assets
held by, or deposits or other liabilities (including those
pertaining to Letters of Credit) in or for the account of,
advances or loans by, Commitments of, or other credit
extended by, or any other acquisition of funds by, a Senior
Lender or any applicable lending office or Eurodollar
Affiliate of that Senior Lender or Issuing Bank (except,
with respect to Base Rate Loans, to the extent that the
reserve and FDIC insurance requirements are reflected in the
definition of "Base Rate" and, with respect to Eurodollar
Rate Loans, to the extent that the reserve requirements are
reflected in the definition of "Eurodollar Rate"); or
(iii) does or will impose on that Senior Lender or
Issuing Bank any other condition materially more burdensome
in nature, extent or consequence than those in existence on
the Closing Date with respect to all Loans;
and the result of any of the foregoing is to increase the
cost to that Senior Lender or Issuing Bank of making,
renewing or maintaining the Loans, or its Commitment(s), or
issuing or participating in the Letters of Credit or to
reduce any amount receivable thereunder; then, in any such
case, the applicable Borrower shall promptly pay to that
Senior Lender or Issuing Bank, upon demand, such amount or
amounts (based upon a reasonable allocation thereof by such
Senior Lender or Issuing Bank to the financing transactions
contemplated by this Agreement and affected by this Section
6.10) as may be necessary to compensate that Senior Lender
or Issuing Bank for any such additional cost incurred or
reduced amount received. Such Senior Lender or Issuing Bank
shall deliver to the Borrower a written statement of the
costs or reductions claimed and the basis therefor, and the
reasonable allocation made by that Senior Lender or Issuing
Bank of such costs and reductions shall be conclusive,
absent demonstrated error. Each Senior Lender and Issuing
Bank further agrees that it shall deliver to the Borrower,
if applicable, either (i) a statement that it is
incorporated in or organized under the laws of the United
States of America or (ii) if it is not so organized or
incorporated, a duly completed copy of the United States
Internal Revenue Service Form 1001 or 4224 or any successor
form thereto on or before the date that any such form
expires or promptly after the occurrence of any event
requiring a change in the most recent letter or form
previously delivered to the Borrower. If a Senior Lender or
Issuing Bank subsequently recovers, or receives a net
benefit with respect to, any amount previously paid by a
Borrower pursuant to this Section 6.10, such Senior Lender
or Issuing Bank shall, within thirty (30) days after receipt
in Cash of such refund or benefit and to the extent
permitted by law, pay to the Borrower the amount of any such
recovery or permanent net benefit.
SECTION 6.11 Increased Capital. If either (a) the
introduction of or any change in or in the interpretation of
any law or regulation or (b) compliance by any Senior Lender
with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of
law) affects or would affect the amount of capital required
or expected to be maintained by such Senior Lender or any
corporation controlling such Senior Lender and such Senior
Lender reasonably determines that the amount of such capital
is increased by or based upon the existence of such Senior
Lender's Commitment(s) and other commitments of this type
then, upon demand by such Senior Lender, the Borrower shall
immediately pay to such Senior Lender, from time to time as
specified by such Senior Lender, additional amounts
sufficient to compensate such Senior Lender in the light of
such circumstances, to the extent that such Senior Lender
reasonably determines such increase in capital to be
allocable to the existence of such Senior Lender's
Commitment. A certificate as to such amounts submitted to
the Borrower by such Senior Lender shall, in the absence of
demonstrated error, be conclusive and binding for all
purposes.
ARTICLE VII
CONDITIONS PRECEDENT
SECTION 7.01 Conditions to Effectiveness. The
effectiveness of this Agreement is subject to the
satisfaction of the conditions precedent set forth in
Section 7.02 and the satisfaction (or waiver by each of the
Senior Lenders) of the following additional conditions
precedent as of the Closing Date:
(a) The Administrative Agent shall have received all
of the following, each dated the Closing Date (unless
otherwise indicated) fully executed and in form and
substance satisfactory to the Administrative Agent and,
except for the Notes, in sufficient copies for the
Administrative Agent and each Senior Lender:
(1) certificates of the respective Secretaries or
Assistant Secretaries of the Borrower and each Subsidiary
Guarantor certifying (A) the authorization by the Board of
Directors of such Person of the execution by such Person of
this Agreement and/or each other Loan Document to be
executed by such Person in connection herewith, (B) the
names, incumbency and signatures of the officers of (i) the
Borrower authorized to execute this Agreement and each other
Loan Document to be executed by the Borrower and (ii) each
Subsidiary Guarantor authorized to execute Loan Documents to
be executed by such Subsidiary Guarantor, in connection
herewith, and (C) the accuracy and currency of the copies of
the Borrower's and each Subsidiary Guarantor's respective
Certificates of Incorporation and By-laws attached thereto;
(2) a favorable opinion addressed to the
Administrative Agent and each of the Senior Lenders from
Donald E. Miller, General Counsel to the Borrower,
addressing such matters as the Senior Lenders may require;
(3) each of the other documents described on the List
of Closing Documents attached hereto as Exhibit F, including
a certificate of a
Responsible Officer of the Borrower certifying that the
conditions described in subsection 7.01(b) have been
satisfied.
(b) No event shall have occurred at any time after
March 31, 1996, which, in the sole discretion of any Senior
Lender materially and adversely affects (A) the business,
management, ownership, operations, properties, assets,
conditions (financial or otherwise) or prospects of the
Borrower or any of the Borrower's material Subsidiaries
individually, or of the Borrower and its Subsidiaries taken
as a whole, or (B) the ability of the Borrower to perform
its obligations under the Loan Documents or Collateral
Documents to which it is a party.
(c) The Borrower shall have paid, or shall pay
concurrently with the initial funding under this Agreement,
(A) all interest and fees which have accrued under the 1992
Credit Agreement from the last date such fees were paid
through the Closing Date and (B) all fees referred to in
Article VI which are due and payable by the Borrower on or
before the Closing Date.
Satisfaction of the condition contained in clause (b) above
shall be conclusively presumed with respect to each Senior
Lender if, as of the Closing Date, such Senior Lender has
failed to notify the Administrative Agent (in conformity
with Section 16.10) that such Senior Lender has determined
that a material adverse change has occurred.
SECTION 7.02 Conditions Precedent to All Loans and the
Issuance of Letters of Credit. (a) The obligation of each
Senior Lender to make any Loan requested to be made by it
and the agreement of each Issuing Bank to issue any Letter
of Credit pursuant to Article V, on any Funding Date,
including, without limitation, the Closing Date, is subject
to the satisfaction of the following conditions precedent as
of such date:
(i) with respect to each requested Loan, the
Administrative Agent shall have received a Notice of
Borrowing conforming with the respective requirements of
Section 3.07 and, with respect to the issuance of any Letter
of Credit, all of the conditions precedent to such issuance
set forth in Sections 5.01 and 5.02 shall have been
satisfied;
(ii) the representations and warranties contained in
Article VIII shall be true and correct in all material
respects on and as of such date as if made on and as of such
date;
(iii) no Event of Default or Potential Event of Default
shall exist or would result from the making of the requested
Loan or issuance of the requested Letter of Credit;
(iv) no law or regulation shall prohibit, and no order,
judgment or decree of any Governmental Authority shall
enjoin or restrain, any Senior Lender or Issuing Bank from
making the requested Loan or issuing or participating in the
requested Letter of Credit; and
(v) the aggregate amount of the Loans to be made on
such date shall not exceed the Facility Availability as of
such date and/or the aggregate amount of Letters of Credit
to be issued on such date shall not exceed the Facility
Availability as of such date.
(b) Each submission by the Borrower to the Adminis-
trative Agent of a Notice of Borrowing and the acceptance by
the Borrower of the proceeds of each Loan made hereunder and
each request by the Borrower for the issuance of a Letter of
Credit, shall constitute a representation and warranty by
the Borrower as of the date of such Loan or the issuance of
such Letter of Credit that all the conditions contained in
this Section 7.02 have been satisfied.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
The Borrower, in order to induce the Senior Lenders and
the Issuing Banks to enter into this Agreement and to make
Loans to, issue Letters of Credit for the account of, and
enter into Foreign Exchange Contracts and Secured Interest
Rate Contracts with, the Borrower, hereby represents and
warrants to the Administrative Agent and each Senior Lender
and Issuing Bank that, unless a representation and warranty
is stated to be given on and as of a specific date (in which
case such representation and warranty shall be true, correct
and complete as of such date), on and as of the date hereof,
and thereafter, on each Funding Date with respect to a Loan
made to the Borrower and each date on which a Letter of
Credit is issued, amended or extended for the account of the
Borrower or a Foreign Exchange Contract or Secured Interest
Rate Contract is entered into by the Borrower, the following
statements are true, correct and complete.
SECTION 8.01 Organization; Corporate Powers. Except
as otherwise permitted under Section 11.04, the Borrower and
each of its Subsidiaries (a) is a corporation or partnership
as the case may be, duly organized, validly existing and in
good standing under the laws of the jurisdiction of its
organization, (b) is duly qualified as a foreign corporation
or partnership, as the case may be, and in good standing
under the laws of each jurisdiction in which it owns real
property or in which failure to be duly qualified and in
good standing would be likely to have a material adverse
effect on the business, management, ownership, operations,
properties, assets or condition (financial or otherwise) of
the Borrower or of the Borrower and its Subsidiaries taken
as a whole, and (c) has all requisite corporate (or
partnership) power and authority to own, operate and
encumber its property and assets and to conduct its business
as presently conducted and as proposed to be conducted in
connection with and following the consummation of the
transactions contemplated by this Agreement and the other
Loan Documents, and to execute, deliver and perform the Loan
Documents to which it is a party, and all other agreements,
documents and instruments, if any, to be executed in
connection with any of the foregoing or with the
transactions contemplated thereby.
SECTION 8.02 Authorization; Enforceability. The
execution, delivery and performance of the Loan Documents to
which the Borrower or any Subsidiary of the Borrower is a
party and the consummation of the transactions contemplated
thereby, have all been duly approved by the Board of
Directors of the Borrower and its Subsidiaries and no other
corporate, partnership or shareholder proceedings on the
part of the Borrower or any of its Subsidiaries are
necessary to consummate the transactions so contemplated.
The Loan Documents to which the Borrower or any of its
Subsidiaries is a party, have been duly executed and
delivered (or filed, as the case may be) by the Borrower or
such Subsidiaries and constitute the legal, valid and
binding obligations of the Borrower or such Subsidiaries
enforceable against the Borrower or such Subsidiaries in
accordance with their respective terms.
SECTION 8.03 No Conflict. The execution, delivery and
performance by the Borrower or respective Subsidiary
Guarantor, as applicable, of each Loan Document to which it
is a party do not and will not, and the consummation of the
transactions contemplated thereby will not (a) violate any
Requirements of Law or Contractual Obligation binding upon
the Borrower or such Subsidiary Guarantor, the consequences
of which violation, singly or in the aggregate, would be
likely to have an adverse effect on the ability of the
Borrower or such Subsidiary Guarantor to perform its
obligations under any such Loan Document or would be likely
to have a material adverse effect on the business,
management, ownership, operations, properties, assets, or
condition (financial or otherwise) of the Borrower or such
Subsidiary Guarantor or would be likely to subject the
Administrative Agent, any of the Senior Lenders, or any of
the Issuing Banks to any liability (whether criminal or
civil), (b) constitute a tortious interference with any such
Contractual Obligation or conflict with, result in a breach
of or constitute (with or without notice or lapse of time or
both) a default under any such Requirement of Law or
Contractual Obligation, the consequences of which tortious
interference, default or violation, singly or in the
aggregate, would be likely to have a material adverse effect
on the ability of the Borrower or such Subsidiary Guarantor
to perform its obligations under any such Loan Document or
would be likely to have a material adverse effect on the
business, management, ownership, operations, properties,
assets or condition (financial or otherwise) of the
Borrower, any Subsidiary Guarantor, or any of Borrower's
material Subsidiaries, individually, or the Borrower and its
Subsidiaries taken as a whole, or would be likely to subject
the Administrative Agent, any of the Senior Lenders, or any
of the Issuing Banks to any liability (whether criminal or
civil), or require the termination of any such Contractual
Obligation, (c) result in or require the creation or
imposition of any Lien whatsoever upon any of the material
properties or assets of the Borrower or any Subsidiary
Guarantor (other than Liens permitted in Section 11.01 and
Liens in favor of the Senior Lenders or in favor of the
Administrative Agent arising pursuant to the Loan
Documents), or (d) require any approval of the Borrower's
stockholders or any approval or consent of any Person under
any material Contractual Obligation of the Borrower or any
Subsidiary Guarantor, except such as have been duly obtained
or will be duly obtained in accordance with applicable law.
SECTION 8.04 Governmental Consents. The execution,
delivery and performance by the Borrower and each Subsidiary
Guarantor of the Loan Documents to which it is a party, the
use of the proceeds of the Loans made to the Borrower and
the consummation of the transactions contemplated thereby do
not and will not require any registration with, consent or
approval of, or notice to, or other action to, with or by
any Governmental Authority, except filings, consents or
notices which have been, or will in due course, be made,
obtained or given (unless the failure to obtain any such
filing, consent or notice will not have a material adverse
effect on the business, management, ownership, operations,
properties, assets or condition (financial or otherwise) of
the Borrower and its Subsidiaries taken as a whole) and
except any consents, approvals or filings required as to a
Senior Lender because of a regulatory requirement applicable
to it in its capacity as a bank or a commercial lender.
SECTION 8.05 Subsidiaries and Ownership of Capital
Stock. Schedule 8.05 accurately sets forth all the
Subsidiaries of the Borrower as of the Closing Date, and
also sets forth as of the Closing Date the number of issued
and authorized shares of each class of capital stock of the
Borrower and each of its Subsidiaries and the identity of
the holders of all shares of common stock (other than
holders holding less than five percent (5%) in the aggregate
of such shares) of any Subsidiary of the Borrower. As of
the Closing Date, no capital stock (or any securities,
instruments, warrants, option or purchase rights, conversion
or exchange rights, calls, commitments or claims of any
character convertible into or exercisable for capital stock)
of the Borrower or any of its Subsidiaries is subject to
issuance under any security, instrument, warrant, option or
purchase rights, conversion or exchange rights, call,
commitment or claim of any character. The outstanding
capital stock of the Borrower and each of its Subsidiaries
is duly authorized, validly issued, fully paid and
nonassessable and is not Margin Stock.
SECTION 8.06 Pledge of Collateral. The Borrower and
each Subsidiary Guarantor has good, sufficient and legal
title to the Collateral pledged by it under the Collateral
Documents to which it is a party, and all such Collateral is
free and clear of all Liens except as specifically permitted
or contemplated by the terms and provisions of this
Agreement or the Collateral Document(s) relating to such
Collateral. The granting and perfecting of the security
interest in the capital stock constituting a portion of the
Collateral pledged by the Borrower or any Subsidiary
Guarantor for the benefit of the Senior Secured Creditors as
contemplated by the terms of the Collateral Documents
executed by the Borrower or any Subsidiary Guarantor is not
made in violation of the registration provisions of the
Securities Act, any other applicable federal securities
laws, applicable state securities or "Blue Sky" law, or any
applicable provisions of the corporate law of any relevant
state.
SECTION 8.07 Governmental Regulation. Neither the
Borrower nor any Subsidiary Guarantor is subject to
regulation under the Public Utility Holding Company Act of
1935, the Federal Power Act, the Interstate Commerce Act,
the Investment Company Act of 1940 or to any other federal
or state statute or regulation such that its ability to
incur indebtedness is limited or its ability to conduct its
business or to consummate the transactions contemplated by
the Loan Documents to which it is a party is materially
impaired.
SECTION 8.08 Litigation; Adverse Effects. Except as
set forth in Schedule 8.08 and except as permitted in this
Agreement, on and as of the Closing Date, there is no, and
on and as of any other date the Borrower does not have
Requisite Knowledge of any (a) action, suit, proceeding,
governmental investigation or arbitration (whether or not by
its terms purportedly on behalf of the Borrower or any of
its Subsidiaries) at law or in equity or before or by any
federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality,
domestic or foreign, pending, or to the knowledge of the
Borrower, probable of assertion against the Borrower or any
of its Subsidiaries or any property of the Borrower or any
of its Subsidiaries which could reasonably be expected (i)
to result in any material adverse change in the business,
management, ownership, operations, properties, assets or
condition (financial or otherwise) of the Borrower and its
Subsidiaries, taken as a whole, (ii) to adversely affect the
ability of the Borrower or any of its Subsidiaries, as the
case may be, to perform in any material respect its
obligations under any Loan Documents to which the Borrower
or such Subsidiary of the Borrower is a party, or (iii) to
materially and adversely affect the ability of the Senior
Lenders to enforce such obligations, and (b) there is no
material loss contingency within the meaning of GAAP which
has not been reflected in the financial statements of the
Borrower. On and as of the Closing Date, neither the
Borrower nor any of its Subsidiaries is, and on and as of
any other date, the Borrower does not have Requisite
Knowledge of any fact, event, condition or circumstance
which would cause the Borrower or any of its Subsidiaries to
be, (a) in violation of any applicable law, which violation
materially and adversely affects or is likely to materially
and adversely affect the business, management, ownership,
operations, properties, assets, or condition (financial or
otherwise) of the Borrower and its Subsidiaries, taken as a
whole, or (b) subject to or in default with respect to any
final judgment, writ, injunction, decree, rule or regulation
of any court or Governmental Authority which would have a
material adverse effect on the business, management,
ownership, operations, properties, assets condition
(financial or otherwise) of the Borrower and its
Subsidiaries, taken as a whole. On and as of the Closing
Date, there is no, and on and as of any other date, the
Borrower does not have Requisite Knowledge of any action,
suit, proceeding or investigation pending or, to the
knowledge of the Borrower, threatened against or affecting
the Borrower or any of its Subsidiaries challenging the
validity or the enforceability of any of the Loan Documents
to which the Borrower or any of its Subsidiaries is a party.
SECTION 8.09 No Material Adverse Change. Since March
31, 1996, no event has occurred which materially and
adversely affects, and there has been no material adverse
change in, the business, management, ownership, operations,
properties, assets or condition (financial or otherwise) or
prospects of the Borrower or any of its material
Subsidiaries individually, or the Borrower and its
Subsidiaries taken as a whole, or the ability of the
Borrower or any of its Subsidiaries to perform its
obligations under the Loan Documents to which the Borrower
or any of its Subsidiaries is a party.
SECTION 8.10 Payment of Taxes. All tax returns and
reports of the Borrower and its Subsidiaries required to be
filed, the failure of which to file is likely to have a
material adverse effect on the business, management,
ownership, operations, properties, assets or condition
(financial or otherwise) of the Borrower and its
Subsidiaries, taken as a whole, have been timely filed, and
all taxes, assessments, fees and other governmental charges
thereupon and upon their respective properties, assets,
income and franchises which are due and payable, the failure
of which to pay when due and payable is likely to have a
material adverse effect on the business, management,
ownership, operations, properties, assets or condition
(financial or otherwise) of the Borrower and its
Subsidiaries, taken as a whole, have been paid when due and
payable. The Borrower does not have Requisite Knowledge of
any proposed tax assessment against it or any of its
Subsidiaries that would be material to the business,
management, ownership, operations, properties, assets or
condition (financial or otherwise) of the Borrower or its
Subsidiaries, taken as a whole, which is not being actively
contested in good faith by the Borrower or any such
Subsidiary to the extent affected thereby.
SECTION 8.11 Material Adverse Agreements. Neither the
Borrower nor any of its Subsidiaries is a party to or
subject to any material Contractual Obligation or other
restriction contained in its Articles or Certificate of
Incorporation, By-laws, a resolution of its Board of
Directors, or similar governing document, as the case may
be, which materially and adversely affects the ability of
the Borrower or any Subsidiary of the Borrower to perform
its obligations under the Loan Documents to which the
Borrower or such Subsidiary is a party.
SECTION 8.12 Performance. On and as of the Closing
Date, neither the Borrower nor any of its Subsidiaries is,
and on and as of any other date, the Borrower does not have
Requisite Knowledge of any fact, event, condition or
circumstance which would cause the Borrower or any of its
Subsidiaries to be in default in the performance, observance
or fulfillment of any of the obligations, covenants or
conditions contained in any Contractual Obligation of the
Borrower or such Subsidiary and no condition exists which,
with the giving of notice or the lapse of time or both,
would constitute such a default, in each case, except where
the consequences, direct or indirect, of such default or
defaults, if any, would not have a material adverse effect
on the business, management, ownership, operations,
properties, assets or condition (financial or otherwise) of
the Borrower and its Subsidiaries, taken as a whole.
SECTION 8.13 Securities Activities. Neither the
Borrower nor any of its Subsidiaries is engaged principally
in the business of extending credit for the purpose of
purchasing or carrying any Margin Stock.
SECTION 8.14 Requirements of Law. On and as of the
Closing Date, the Borrower, its Subsidiaries, and each
Person acting on the Borrower's behalf is, and on and as of
any other date, the Borrower does not have Requisite
Knowledge of any fact, event, condition or circumstance
which would cause the Borrower or any Person acting on the
Borrower's or any such Subsidiary's behalf not to be, in
compliance with all Requirements of Law (including, without
limitation, the Securities Act and the Securities Exchange
Act, and the applicable rules and regulations thereunder,
state securities law and "Blue Sky" law) applicable to the
Borrower, its Subsidiaries or their respective businesses,
in each case where the failure to so comply would have a
materially adverse effect on the business, management,
ownership, operations, properties or assets or condition
(financial or otherwise) of the Borrower and its
Subsidiaries taken as a whole.
SECTION 8.15 Patents, Trademarks, Permits, etc. The
Borrower and each of its Subsidiaries owns, is licensed or
otherwise has the lawful right to use, or has all permits
and other governmental approvals, patents, trademarks, trade
names, copyrights, technology, know-how and processes used
in or necessary for the conduct of its businesses as
currently conducted, which are material to the business,
management, ownership, operations, properties, assets or
condition (financial or otherwise) of the Borrower and its
Subsidiaries, taken as a whole. To the best of the
knowledge of the Borrower, the use of such permits and other
governmental approvals, patents, trademarks, trade names,
copyrights, technology, know-how and processes by the
Borrower or any of its Subsidiaries does not infringe on the
rights of any Person, subject to such claims and
infringements as do not, in the aggregate, give rise to any
liability on the part of the Borrower or its Subsidiaries
which is material to the business, management, ownership,
operations, properties, assets or condition (financial or
otherwise) of the Borrower and its Subsidiaries, taken as a
whole. To the best of the Borrower's knowledge, the rights
of the Borrower and its Subsidiaries to sell, franchise or
license under such brand names then being used by any of
them may be transferred by the Borrower and its Subsidiaries
in connection with any sale of assets or stock of the
related business by the Borrower and its Subsidiaries with
only such exceptions as are not material to the business,
management, ownership, operations, properties, assets or
condition (financial or otherwise) of the Borrower and its
Subsidiaries, taken as a whole. The consummation of the
transactions contemplated by the Loan Documents to which the
Borrower or any of its Subsidiaries is a party will not in
any material manner or to any material extent impair the
ownership of or rights under (or the license or other right
to use, as the case may be) any of the permits and
governmental approvals, patents, trademarks, trade names,
copyrights, technology, know-how or processes utilized by
the Borrower or any of its Subsidiaries.
SECTION 8.16 Environmental Matters. Except as
disclosed on Schedule 8.16 or fully resolved prior to the
Closing Date: (a) neither the Borrower nor any Subsidiary
of the Borrower has received any notice from any federal,
state or local agency to the effect that its operations are
not in compliance with any of the requirements of applicable
federal, state and local environmental, health and safety
statutes and regulations or the subject of any federal or
state investigation evaluating whether any remedial action
is needed to respond to a release of any toxic or hazardous
waste, substance or constituent, or other substance into the
environment; (b) neither the Borrower nor any Subsidiary of
the Borrower has filed any notice under any federal or state
law or regulation indicating past or present treatment,
storage or disposal of a hazardous waste or reporting a
spill or release of a hazardous or toxic waste, substance or
constituent, or other substance into the environment; (c)
neither the Borrower nor any Subsidiary of the Borrower has
received notice from any federal or state governmental
agency that it is potentially liable for cleanup costs or
damages in material amounts arising out of the release of a
hazardous substance; and (d) neither the Borrower nor any
Subsidiary of the Borrower has any material contingent
liability in connection with the release of any hazardous or
toxic waste, substance or constituent, or other substance
into the environment.
SECTION 8.17 No Default. No Potential Event of
Default or Event of Default with respect to the Borrower or
any Subsidiary of the Borrower has occurred and is
continuing.
SECTION 8.18 ERISA. Neither the Borrower nor any of
its Subsidiaries maintains or contributes to any
Multiemployer Plan. The Borrower and each of its ERISA
Affiliates have made available to the Administrative Agent
copies of all Benefit Plans that are currently maintained or
contributed to in respect of their respective employees or
former employees and that are in existence as of the date
this representation and warranty is made and copies of the
most recent annual reports (Form 5500 Series), including
Schedule B thereto, for such Benefit Plans. No Defined
Benefit Plan of the Borrower or any of its Subsidiaries has
incurred any "accumulated funding deficiency," as defined in
Section 302(a)(2) of ERISA and Section 412(a) of the
Internal Revenue Code, whether or not waived, for which the
Borrower is or could be directly or indirectly liable. No
other Defined Benefit Plan (other than a Defined Benefit
Plan of an Excluded ERISA Affiliate) has outstanding any
such accumulated funding deficiency in excess of $250,000,
and the aggregate of accumulated funding deficiencies for
all such Defined Benefit Plans is not in excess of
$1,000,000. Each Benefit Plan currently maintained or
contributed to by the Borrower or any of its Subsidiaries
which is intended to be a qualified plan under Section
401(a) of the Internal Revenue Code as currently in effect
has been determined by the Internal Revenue Service or by
advice of counsel to be qualified under Section 401(a) of
the Internal Revenue (or applications for approval are
pending with the Internal Revenue Service) and the trust
related thereto is exempt from federal income tax under
Section 501(a) of the Internal Revenue Code, and nothing has
occurred since the dates of such letters which would cause
any such Benefit Plan to cease being so qualified (except to
the extent that any requirements added by such occurrence
may be satisfied by adopting retroactive amendments as
permitted by statute, regulation or other authority).
Neither the Borrower nor any of its ERISA Affiliates has any
liability to the PBGC other than the payment of premiums,
and there are no premium payments which have become due
which are unpaid. Neither the Borrower nor any of its
Subsidiaries has breached any of the responsibilities,
obligations or duties imposed on it by ERISA with respect to
any Benefit Plan in respect of which the Borrower or any
such Subsidiary has any material obligation to pay money or
would in the future have any material obligation to pay
money. No other ERISA Affiliate of the Borrower (other than
an Excluded ERISA Affiliate) has committed any such breach
which has given rise to, or which would in the future give
rise to any obligation of such ERISA Affiliate to pay money
in excess of $250,000, and the aggregate of all obligations
to pay money for all such breaches is not in excess of
$1,000,000. Neither the Borrower nor any of its
Subsidiaries nor any fiduciary of or any trustee to any
Benefit Plan of the Borrower or any of its Subsidiaries has
engaged in a nonexempt "prohibited transaction" described in
Section 406 of ERISA or Section 4975 of the Internal Revenue
Code, or taken any action with respect to any Benefit Plan,
which would constitute or result in a Termination Event with
respect to any Benefit Plan in respect of which the Borrower
or any such Subsidiary has any material obligation to pay
money or would in the future have any material obligation to
pay money. No other ERISA Affiliate (other than an Excluded
ERISA Affiliate) or fiduciary or trustee to any Benefit Plan
of any such other ERISA Affiliate of the Borrower has
engaged in such a transaction, or taken such action, which
has given rise to, or would in the future give rise to, an
obligation of such other ERISA Affiliate to pay money in
excess of $250,000, and the aggregate of all obligations to
pay money for all such transactions and actions is not in
excess of $1,000,000. Except as provided on Schedule 8.18,
neither the Borrower nor any ERISA Affiliate of the Borrower
(other than an Excluded ERISA Affiliate) maintains or
contributes to any welfare plan within the meaning of
Section 3(1) of ERISA, which provides benefits to employees
after termination of employment other than as required by
Section 601 of ERISA. Neither the Borrower nor any ERISA
Affiliate of the Borrower (other than an Excluded ERISA
Affiliate) has failed to make a required installment or any
other payment under Section 412 of the Internal Revenue Code
on or before the due date for such installment or payment.
Neither the Borrower nor any ERISA Affiliate of the Borrower
(other than an Excluded ERISA Affiliate) is required to
provide security to a Defined Benefit Plan under
Section 401(a)(29) of the Internal Revenue Code due to a
Benefit Plan amendment that results in an increase in
current liability for the plan year. With respect to all of
the representations and warranties made by the Borrower in
this Section 8.18, except any such representations and
warranties specifically stated to be made on a particular
date, such representations and warranties shall be qualified
by the Requisite Knowledge of the Borrower on and as of all
dates except for the Closing Date, in all of which cases,
such representations and warranties are made by the Borrower
on an absolute and unqualified basis.
SECTION 8.19 Tax Examinations. As of the Closing
Date, the Federal income tax returns on which the Borrower's
income is reported have been examined by the Internal
Revenue Service (or closed by applicable statutes) for all
tax periods prior to and including the taxable years shown
on Schedule 8.19, as submitted to the Senior Lenders on the
Closing Date and periodically updated thereafter, and except
as set forth on Schedule 8.19, as submitted to the Senior
Lenders on the Closing Date and periodically updated
thereafter, there are no other tax examinations in progress.
All deficiencies which have been asserted against the
Borrower as a result of such examinations have been fully
paid or finally settled or are being contested in good
faith, and, except as set forth on Schedule 8.19, no issue
has been raised in any such examinations which, by
application of similar principles, reasonably can be
expected to result in assertion of a deficiency for any
other year not so examined. The Borrower does not
anticipate any further material tax liability with respect
to the years which have not been closed, taken as a whole,
other than liability reserved for in accordance with sound
accounting practices. Except as set forth in Schedule 8.19,
there are no outstanding agreements or waivers extending the
statute of limitations with respect to, and the Borrower is
not now subject to any extension of a period for, the
assessment of any Federal income tax or other tax, domestic
or foreign.
SECTION 8.20 Financial Condition. All financial
statements (other than projections and internal reports)
included in materials furnished to any Senior Lender have
been prepared in conformity with GAAP, except as otherwise
noted therein, and fairly present the consolidated financial
position of the Borrower and its Subsidiaries as at the
respective dates thereof and the consolidated results of
operations and changes in the financial position of the
Borrower and its Subsidiaries for each of the periods
covered thereby, subject, in the case of any unaudited
interim financial statements, to changes resulting from
audit and normal year-end adjustments. The Borrower has no
Accommodation Obligation, contingent liability or liability
for any taxes, long-term lease or unusual or long-term
commitment, which based upon circumstances presently known
to management of the Borrower is materially adverse to the
business, management, ownership, operations, properties,
assets or condition (financial or otherwise) of the Borrower
and its Subsidiaries, taken as a whole. The projected
financial data of the Borrower and its Subsidiaries and
operating divisions which are included in the materials
delivered by the Borrower to the Senior Lenders have been
prepared on a basis consistent with past practices. The
internal financial reports of the Borrower and its
Subsidiaries and operating divisions which were included in
the materials delivered by the Borrower to the Senior
Lenders are consistent with past practices of the Borrower
and its Subsidiaries and operating divisions.
SECTION 8.21 Guaranties. The Borrower has not
guaranteed payment or performance of any of the material
obligations of any of the Borrower's Subsidiaries to any
Person.
SECTION 8.22 Senior Indebtedness. The obligations of
the Borrower for principal and interest on all Loans and
other extensions of credit or financial accommodations made
to it or for its account under this Agreement and, solely
with respect to the Senior Subordinated Debentures, all
fees, expenses, reimbursements, indemnities, premiums and
other amounts payable by it hereunder or under any other
document relating to this Agreement, in any case owing to
the Administrative Agent, any Senior Lender or any Issuing
Bank (whether or not such Person is then acting in its
capacity as a Senior Lender or Issuing Bank) constitute
"Senior Indebtedness" or "Senior Funded Indebtedness" within
the respective meanings ascribed to such terms, if any, in
any instrument or document governing Subordinated
Indebtedness of the Borrower.
ARTICLE IX
REPORTING COVENANTS
The Borrower covenants and agrees that so long as any
Commitment shall be in effect and until payment in full of
all Obligations and the expiration of all Letters of Credit,
unless the Requisite Senior Lenders shall otherwise give
prior written consent thereto:
SECTION 9.01 Financial Statements. The Borrower shall
maintain or cause to be maintained a system of accounting
established and administered in accordance with sound
business practices to permit preparation of financial
statements in conformity with GAAP, and each of the
financial statements described below shall be prepared from
such system and records. The Borrower shall deliver to each
of the Senior Lenders:
(a) Quarterly Financial Statements. As soon as
practicable, and in any event within fifty-five (55) days
after the end of each fiscal quarter in each Fiscal Year
(other than the fiscal quarter ending in June), commencing
with the fiscal quarter ending in September, 1996, (i) the
consolidated and consolidating balance sheets of the
Borrower and each of its consolidated Subsidiaries as at the
end of such quarter and (ii) related consolidated and
consolidating statements of income of the Borrower and its
Subsidiaries and consolidated statements of cash flow of the
Borrower and its consolidated subsidiaries, for such
quarter, setting forth in comparative form in each case the
consolidated and consolidating, as applicable, figures for
the corresponding periods of the previous Fiscal Year, all
in reasonable detail.
(b) Annual Financial Statements. As soon as
practicable, and in any event within one hundred (100) days
after the end of each Fiscal Year, (i) consolidated and
consolidating balance sheets of the Borrower and each of its
consolidated Subsidiaries as at the end of such Fiscal Year
and (ii) the related consolidated and consolidating
statements of income of the Borrower and its Subsidiaries
and consolidated statements of stockholder's equity and cash
flow of the Borrower and its consolidated subsidiaries for
such Fiscal Year, setting forth in each case in comparative
form the consolidated and consolidating, as applicable,
figures for the previous Fiscal Year, all in reasonable
detail and accompanied by a report thereon of Arthur
Andersen LLP or other independent certified public
accountants of recognized national standing satisfactory to
the Requisite Senior Lenders, which report shall be
unqualified and shall state that such consolidated financial
statements present fairly the financial position of the
Borrower and its consolidated Subsidiaries, as at the dates
indicated and the results of their operations and changes in
their financial position for the periods indicated in
conformity with GAAP applied on a basis consistent with
prior years (or, in the event of a change in accounting
principles, such accountants' concurrence with such change)
and that the examination by such accountants in connection
with such consolidated financial statements has been made in
accordance with generally accepted auditing standards.
SECTION 9.02 Certificates to Accompany Financial
Statements. (a) Together with each delivery of any
financial statements pursuant to subsections 9.01(a) and
9.01(b) the Borrower shall also deliver (i) an Officer's
Certificate of the Borrower substantially in the form of
Exhibit G executed by the chief financial officer,
treasurer, or controller of the Borrower, stating that (A)
the officer executing such certificate has reviewed the
terms of this Agreement and the other principal Loan
Documents to which the Borrower is a party, and has made, or
caused to be made under his/her supervision, a review in
reasonable detail of the transactions and condition of the
Borrower and its Subsidiaries, taken as a whole, during the
accounting period covered by such financial statements, and
that such review has not disclosed the existence during or
at the end of such accounting period, and that such officer
does not have knowledge of the existence as at the date of
such Officer's Certificate, of any condition or event which
constitutes an Event of Default or Potential Event of
Default with respect to the Borrower, or, if any such
condition or event existed or exists, specifying the nature
and period of existence thereof and what action the Borrower
or any of its Subsidiaries has taken, is taking and proposes
to take with respect thereto and (B) such financial
statements fairly present the financial condition of the
Borrower and its consolidated Subsidiaries, as at the dates
indicated, subject, in the case of financial statements
submitted under Section 9.01(a), to changes resulting from
audit and normal year-end adjustments; and (ii) a Compliance
Certificate of the Borrower demonstrating in reasonable
detail compliance during and at the end of such accounting
periods with Sections 11.01, 11.06, 11.12, 11.14 and 11.16
through 11.22.
(b) Simultaneously with the delivery of each set of
financial statements referred to in subsection 9.01(b)
above, the Borrower shall also deliver a statement of the
independent public accountants which reported on such
financial statements (i) as to whether anything has come to
their attention to cause them to believe that there existed
on the date of such financial statements any Event of
Default or Potential Event of Default and (ii) confirming
the calculations set forth in the Compliance Certificate
delivered simultaneously therewith pursuant to subsection
9.02(a) above.
SECTION 9.03 Intentionally omitted.
SECTION 9.04 Officer's Certificates Regarding
Investments and Indebtedness. (a) As soon as practicable,
and in any event within fifty-five (55) days (or, solely for
the fiscal quarter ending in June, within one hundred (100)
days) after the end of each fiscal quarter in each Fiscal
Year commencing with the fiscal quarter ending in June,
1996, the Borrower shall deliver to each Senior Lender an
Officer's Certificate of the Borrower, substantially in the
form of Exhibit H attached hereto, setting forth, as of the
last day of such fiscal quarter, (i) all outstanding
Investments of the Borrower and its Subsidiaries and of TFC,
(ii) a summary of all Indebtedness of the Borrower's Foreign
Subsidiaries (if any), setting forth the outstanding
balances of all such Indebtedness, the changes in such
balances from the last report, and the aggregate book value
of the total assets of the Borrower's Foreign Subsidiaries
which are located outside the territorial United States,
determined on a pro forma consolidated basis, (iii) the
outstanding balance of all Loans and the aggregate amount of
all Letter of Credit Obligations, (iv) the balances of the
Borrower's Cash and Cash Equivalents on the last day of such
fiscal quarter, and (v) the value (on a mark to market basis
in Dollars) of the Borrower's Marketable Securities on the
last day of such fiscal quarter.
(b) As soon as practicable, and in any event within
fifty-five (55) days (or solely for the fiscal month of
July, within seventy-five (75) days) after the end of each
fiscal month in each Fiscal Year, commencing with May, 1996,
the Borrower shall deliver to each Senior Lender an
Officer's Certificate of the Borrower setting forth, (i)
with respect to each Letter of Credit (other than Issuing
Bank's Letter of Credit No. NY-30013537) issued or otherwise
outstanding at any time during such month, or as to which
there exists any Reimbursement Obligation, (A) the date of
issuance, type (i.e., Commercial or Standby), face amount
and tenor of such Letter of Credit and (B) all amounts
available for drawing thereunder and all Reimbursement
Obligations with respect thereto, (ii) with respect to each
Non-Facility Letter of Credit issued or otherwise
outstanding for the account of the Borrower at any time
during such month, or as to which there exists any
reimbursement obligation, (A) the date of issuance, type
(i.e., Commercial or Standby), face amount and tenor of such
Non-Facility Letter of Credit and (B) all Non-Facility
Letter of Credit Obligations of the Borrower with respect
thereto, and (iii) with respect to each Secured F/X Contract
and Secured Interest Rate Contract entered into or otherwise
in existence at any time during such month to which the
Borrower is a party, (A) the date of such contract and (B) a
summary of the major terms thereof; provided, however, that
in the event no Indebtedness of the type described in
clauses (i) through (iii) above are outstanding during any
fiscal month of any Fiscal Year, no such Officer's
Certificate shall be required to be delivered hereunder for
such fiscal month.
(c) Within three (3) days after the end of each week,
the Borrower shall deliver to each Senior Lender, a report
setting forth (i) the balances of Borrower's Cash and Cash
Equivalents on the last day of such week and (ii) the value
(on a mark to market basis in Dollars) of the Borrower's
Marketable Securities on the last day of such week.
SECTION 9.05 Intentionally omitted.
SECTION 9.06 Other Financial Information. With
reasonable promptness, the Borrower shall deliver such other
information, reports, filings, projections, business plans
and data with respect to the Borrower or any of its
Subsidiaries as from time to time may be reasonably
requested by any Senior Lender, including, without
limitation, appraisals of the Borrower's assets by
appraisers satisfactory to the Requisite Senior Lenders.
SECTION 9.07 Environmental Notices. The Borrower
shall:
(a) Notify each Senior Lender in writing, promptly
upon the learning thereof by a Responsible Officer of the
Borrower, of (i) any written notice of a material claim to
the effect that the Borrower or any of its Subsidiaries is
or may be liable to any Person (including, without
limitation, any individual or government, whether national,
federal, state, county, city or municipal) as a result of
the release by the Borrower, any of its Subsidiaries, or any
other Person of any toxic or hazardous waste or substance
into the environment; (ii) any written notice that any
operations of the Borrower or any of its Subsidiaries are
not in material compliance with requirements of applicable
federal, state or local environmental, health or safety
statutes and regulations; (iii) any written notice that the
Borrower or any of its Subsidiaries is subject to any
federal or state investigation evaluating whether any
remedial action is needed to respond to the release of any
hazardous or toxic waste, substance or constituent, or other
substance into the environment, which action is likely to
subject the Borrower or any of its Subsidiaries to material
Environmental Liabilities and Costs; (iv) any written notice
that any properties or assets of the Borrower or any of its
Subsidiaries are subject to an Environmental Lien; (v) any
violation by the Borrower or any of its Subsidiaries of any
federal, state or local environmental, health or safety law
or regulation, which would, in any case, have a material
adverse effect upon the operations of the Borrower and its
Subsidiaries, taken as a whole; (vi) any new or proposed
changes to any existing environmental, health or safety
Requirement of Law that could have a material effect on the
operations of the Borrower and its Subsidiaries; (vii) any
proposed acquisition by the Borrower or any of its
Subsidiaries of stock, assets, real estate, or leasing of
property, or any other action by the Borrower or its
Subsidiaries that could subject the Borrower or its
Subsidiaries to material environmental, health or safety
Environmental Liabilities and Costs; or (viii) the
termination, cancellation or non-renewal of any insurance
policy maintained by the Borrower or any of its Subsidiaries
to insure against environmental risks of the Borrower or any
of its Subsidiaries, and the reason(s) for such termination,
cancellation or non-renewal;
(b) By December 31 of each calendar year, commencing
with December 31, 1996, submit to the Administrative Agent a
report providing an update of the status of each compliance
and contingency issue and each other potential environmental
liability related to the Borrower or any of its Subsidiaries
identified on Schedule 8.16 and each issue identified in any
report provided by the Borrower under this Section 9.07; and
(c) Permit the Administrative Agent and any of the
Senior Lenders or any of their respective agents or repre-
sentatives, to inspect during normal business hours each of
the facilities and premises owned or operated by the
Borrower or any of its Subsidiaries to confirm the matters
of which such notice is required to be given or with respect
to which such report is required to be given by the Borrower
or any of its Subsidiaries.
SECTION 9.08 Declaration of Dividends and Other
Distributions. The Borrower shall provide to the
Administrative Agent written notification (or telephonic
notice promptly confirmed in writing) of a dividend or other
distribution to be made on the Borrower's capital stock
within two (2) Business Days after a declaration by the
Board of Directors of the Borrower of such dividend or other
distribution on such Borrower's capital stock; provided,
that, the Borrower shall provide no less than ninety (90)
days prior written notice thereof to the Administrative
Agent. The Borrower shall specify in such notice the date
on which such dividend or other distribution is to be paid.
SECTION 9.09 Notices Concerning Defaults, Material
Adverse Change and Litigation. (a) Promptly upon any
officer of the Borrower (i) obtaining knowledge of any
condition or event which constitutes an Event of Default or
Potential Event of Default or becoming aware that any Senior
Lender has given any notice or taken any other action with
respect to a claimed Event of Default or Potential Event of
Default, (ii) obtaining knowledge of any condition or event
which would be required to be disclosed in a current report
filed by the Borrower with the Commission on Form 8-K
(Items 1, 2 and 4 of such Form as in effect on the Closing
Date), or (iii) obtaining knowledge of a material adverse
change in the business, management, ownership, operations,
properties, assets condition (financial or otherwise) or
prospects of any of the Borrower or its Subsidiaries, the
Borrower shall deliver to each Senior Lender an Officer's
Certificate specifying the nature and period of existence of
any such condition or event, or specifying the notice given
or action taken by such Senior Lender and the nature of such
claimed default, Event of Default, Potential Event of
Default, event or condition, and what action the Borrower
has taken, is taking and proposes to take with respect
thereto.
(b) Promptly upon any officer of the Borrower
obtaining knowledge of (i) the institution of, or threat of,
any action, suit, proceeding, governmental investigation or
arbitration against or affecting the Borrower or any of its
Subsidiaries or any property of the Borrower or any of its
Subsidiaries not previously disclosed in writing by the
Borrower to the Senior Lenders, or (ii) any material
development in any action, suit, proceeding, governmental
investigation or arbitration already disclosed, which is
likely to, in either case, materially and adversely affect
the business, operations, properties, assets, condition
(financial or otherwise) or prospects of the Borrower or any
of its Subsidiaries, the Borrower shall deliver to each
Senior Lender notice thereof and such other information as
may be reasonably available to it to enable each Senior
Lender and its counsel to evaluate such matters.
SECTION 9.10 ERISA Reporting. (a) Promptly upon
becoming aware of the occurrence of any Termination Event,
or a nonexempt "prohibited transaction", as such term is
defined in Section 4975 of the Internal Revenue Code, in
connection with (i) any Benefit Plan maintained by or
contributed to by the Borrower or any of its Subsidiaries or
any trust created thereunder, or (ii) any other Benefit Plan
or any trust created thereunder, which Termination Event or
nonexempt prohibited transaction has given rise to, or would
in the future give rise to, an obligation of the Borrower or
any of its Subsidiaries to pay money in excess of $250,000
or to pay money in a lesser amount, which when combined with
the aggregate of all other obligations to pay money for all
such Events and transactions of the Borrower or any of its
Subsidiaries, exceeds $1,000,000, a written notice
specifying the nature thereof, what action the Borrower or
any ERISA Affiliate of the Borrower, as applicable, has
taken, and, when known, any action taken or threatened by
the Internal Revenue Service, the Department of Labor or the
PBGC with respect thereto, will be provided to the
Administrative Agent.
(b) With reasonable promptness, copies of (i) all
notices received by the Borrower or any ERISA Affiliate of
the Borrower of the PBGC's intent to terminate any Defined
Benefit Plan maintained by or contributed to by the Borrower
or any of its Subsidiaries or to have a trustee appointed to
administer any such Defined Benefit Plan; (ii) upon the
reasonable request of any Senior Lender, each Schedule B
(Actuarial Information) to the annual report (Form 5500
Series) filed by the Borrower or any of its Subsidiaries
with the Internal Revenue Service and the most recent
actuarial report with respect to any or all Benefit Plans
maintained by or contributed to by the Borrower or any of
its Subsidiaries; (iii) all funding waiver requests filed by
the Borrower or any of its ERISA Affiliates with the
Internal Revenue Service with respect to any Defined Benefit
Plan maintained by or contributed to by the Borrower or any
of its Subsidiaries and all communications received by the
Borrower or any of its ERISA Affiliates from the Internal
Revenue Service with respect to any such funding waiver
request; and (iv) any unfavorable determination letter
received by the Borrower or any of its Subsidiaries from the
Internal Revenue Service regarding the qualification of a
Benefit Plan maintained by or contributed to by the Borrower
or any such Subsidiary under Section 401(a) of the Internal
Revenue Code, will be provided to the Administrative Agent.
(c) Promptly upon becoming aware of any failure by
the Borrower or any ERISA Affiliate to make a required
installment under Section 412 of the Internal Revenue Code
or any other required payment under Section 412 of the
Internal Revenue Code on or before the due date for such
installment or payment, if such failure would give rise to a
Lien under Section 412(n) of the Internal Revenue Code,
notice of such failure, will be provided to the
Administrative Agent.
SECTION 9.11 Other Reports. Promptly after the same
are available to it, the Borrower shall deliver to the
Senior Lenders (a) copies of all financial statements,
reports, notices, and proxy statements, if any, sent or made
available generally by the Borrower to its Securities
holders, and of all regular and periodic reports and other
filings made by the Borrower with any securities exchange or
the Commission and of all press releases made available
generally by the Borrower or a Subsidiary of the Borrower to
the public concerning material developments in the business
of the Borrower or any such Subsidiary and (b) copies of all
reports, if any, submitted to the Borrower or its Board of
Directors by its independent public accountants, including,
without limitation, any management report prepared in
connection with the annual audit.
SECTION 9.12 Independent Certified Public Accountants.
The Borrower authorizes (i) the Administrative Agent, after
giving the Borrower reasonable prior written notice of its
intent to do so, to communicate directly with the Borrower's
independent certified public accountants concerning any
financial statement delivered to the Administrative Agent
pursuant to subsection 9.01(b), provided that the Borrower
is not precluded by the Administrative Agent from being
present for such communication, and (ii) such independent
certified public accountants, upon the Administrative
Agent's written request with a copy to the Borrower, to
provide to the Administrative Agent copies of any financial
schedules prepared by such accountants for the Borrower.
For each of the Fiscal Years, prior to the date on which the
Borrower's independent certified public accountants begin
their audit of the Borrower's financial statements with
respect to the then closing Fiscal Year, the Borrower shall
execute and deliver to such independent certified public
accountants, a letter in form and substance satisfactory to
the Administrative Agent, indicating that it is a primary
intention of the Borrower in engaging such accountants that
the Administrative Agent and the Senior Lenders may rely
upon such financial statements.
SECTION 9.13 TFC/RHI Consolidated Liquidity. The
Borrower shall deliver to the Administrative Agent and the
Senior Lenders, within ten (10) days after the end of each
fiscal quarter of each Fiscal Year, commencing with the
fiscal quarter ending on June 30, 1996, an Officer's
Certificate of the Borrower in the form attached to this
Agreement as Exhibit I setting forth the calculation of the
sum of the amounts set forth in Section 14.01(r) for such
fiscal quarter.
ARTICLE X
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that so long as any
Commitment shall be in effect and until payment in full of
all Obligations and the expiration of all Letters of Credit,
unless the Requisite Senior Lenders shall otherwise give
prior written consent:
SECTION 10.01 Corporate Existence, etc. The Borrower
shall, and shall cause all Subsidiary Guarantors to, at all
times preserve and keep, or cause to be preserved and kept,
in full force and effect its corporate existence and rights
and franchises material to its businesses and the corporate
existence and rights and franchises material to the business
of each of its Subsidiaries, except for transactions per-
mitted pursuant to Section 11.04. The Borrower may
incorporate wholly owned, indirect Subsidiaries of the
Borrower without the consent of the Senior Lenders so long
as the aggregate amount of the capital provided to such
Subsidiaries does not exceed the amount permitted pursuant
to subsection 11.18(h); provided that the Borrower shall
deliver to the Administrative Agent within sixty (60) days
after the incorporation of such indirect Subsidiaries
written notice setting forth the complete name of such
Subsidiary, its relation to the Borrower, its state of
incorporation and the amount of capital provided to such
Subsidiary. The Borrower shall promptly provide the
Administrative Agent and each of the Senior Lenders with a
complete list of its Subsidiaries upon the occurrence of any
change in the list of such Subsidiaries as set forth on
Schedule 8.05.
SECTION 10.02 Compliance with Laws, etc. The Borrower
shall, and shall cause its Subsidiaries to, exercise all due
diligence to comply with all Requirements of Law and all
restrictive covenants binding on the Borrower and its Sub-
sidiaries, respectively, the noncompliance with which would
materially adversely affect the business, properties,
assets, operations or condition (financial or otherwise) of
the Borrower or any of its Subsidiaries, as the case may be.
SECTION 10.03 Payment of Taxes. The Borrower shall
pay, and cause each of its Subsidiaries to pay, (a) all
taxes, assessments and other governmental charges imposed
upon it or on any of its properties or assets or in respect
of any of its franchises, business, income or property
before any penalty or interest accrues thereon, and (b) all
claims (including, without limitation, claims for labor,
services, materials and supplies) for sums, material in the
aggregate to the Borrower or any such Subsidiary, as the
case may be, which have become due and payable and which by
law have or may become a Lien (other than a Customary
Permitted Lien) upon any of the Borrower's or such Sub-
sidiary's properties or assets, prior to the time when any
penalty or fine shall be incurred with respect thereto;
provided that no such taxes, assessments or governmental
charges referred to in clause (a) above or claims referred
to in clause (b) above need be paid if the same are being
contested by the Borrower or such Subsidiary in good faith
by appropriate proceedings promptly instituted and
diligently conducted and if such reserve or other
appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made by the Borrower or
such Subsidiary therefor. The Borrower will not file or
consent to the filing of, or permit any of its Subsidiaries
to file or consent to the filing of, any consolidated tax
return with any Person (other than TFC or any of its
Subsidiaries or such other Person as may be reasonably
acceptable to the Requisite Senior Lenders).
SECTION 10.04 Maintenance of Properties; Insurance.
The Borrower shall maintain or cause to be maintained in
good repair, working order and condition, excepting ordinary
wear and tear and damage due to casualty, all Fixed Assets
and other properties material to the operations of the
Borrower and its Subsidiaries, and from time to time will
make or cause to be made all appropriate repairs, renewals
and replacements thereof. The Borrower shall maintain or
cause to be maintained, with financially sound and reputable
insurers, the insurance policies listed on Schedule 10.04
and covering the properties and assets of the Borrower and
its Subsidiaries or substantially similar policies and
amounts or other policies and amounts acceptable to the
Administrative Agent. Within thirty (30) days after the
renewal, replacement or material modification of any such
policy, the Borrower shall deliver to the Administrative
Agent a detailed schedule setting forth for each such
policy: (a) the amount of such policy, (b) the risks
insured against by such policy, (c) the name of the insurer
and each insured party under such policy, (d) the policy
number of such policy, and (e) such other information as any
Senior Lender shall reasonably request, which shall be
provided at such Senior Lender's expense and such other
information as the Administrative Agent shall reasonably
request, which shall be provided at the Borrower's expense.
SECTION 10.05 Inspection of Property; Books and
Records; Discussions. The Borrower shall permit, and shall
cause each of its Subsidiaries to permit, any authorized
representative(s) designated by the Administrative Agent,
any Agent or any Senior Lender to visit and inspect any of
the properties of the Borrower or any of its Subsidiaries,
including their financial and accounting records, and to
make copies and take extracts therefrom, and to discuss
their affairs, finances and accounts with their officers and
independent public accountants, all upon reasonable notice
and at such reasonable times during normal business hours,
as often as may be reasonably requested. Each such
visitation and inspection by or on behalf of (a) any Senior
Lender shall be at such Senior Lender's expense and (b) the
Administrative Agent shall be at the Borrower's expense.
The Borrower will, and will cause each of its Subsidiaries
to, keep proper books of record and account in which true
and proper entries in conformity with GAAP (and all legal
requirements) shall be made of all dealings and transactions
in relation to their businesses and activities. The
Borrower shall deliver to the Administrative Agent any
instrument necessary for the Administrative Agent to obtain
records from any service bureau maintaining records for the
Borrower.
SECTION 10.06 Intentionally omitted.
SECTION 10.07 Use of Proceeds. The proceeds of all
Loans made to the Borrower hereunder and all Letters of
Credit issued hereunder shall be used by the Borrower for
lawful and permitted corporate purposes and not for any
purpose constituting a breach of this Agreement. The
Borrower and its Subsidiaries shall use Foreign Exchange
Contracts only for their respective foreign exchange needs
in the ordinary course of their respective businesses. No
portion of the proceeds of any credit extended under this
Agreement shall be used by the Borrower in any manner which
might cause the extension of credit or the application of
such proceeds to violate Regulation G, Regulation U,
Regulation T or Regulation X or any other regulation of the
Federal Reserve Board or to violate the Securities Exchange
Act or the Securities Act, in each case as in effect on the
date or dates of such Borrowing and such use of proceeds.
SECTION 10.08 Intentionally omitted.
SECTION 10.09 Receipt of Certain Funds. Together with
the Officer's Certificate required under subsection 4.02(a),
after receipt by the Borrower or any Domestic Subsidiary of
the Borrower of any Net Cash Proceeds of Sale constituting
insurance proceeds, a condemnation or court award or other
recovery with respect to the Borrower's or such Domestic
Subsidiary's property, the Borrower shall provide to the
Administrative Agent a written notice containing a
description of the property damaged, lost or taken. The
Borrower shall specify in such notice whether or not the
property damaged, lost or taken will be restored or
replaced, and if so, the Borrower shall include a
description of its plans to restore or replace such
property.
SECTION 10.10 Maintenance of Tax Allocation Agreement.
The Borrower shall maintain or cause to be maintained, in
full force and effect, the Tax Allocation Agreement in form
and substance substantially similar to that in effect on the
Closing Date except for modifications required due to
acquisitions and dispositions otherwise permitted by this
Agreement, without amendment or modification unless
consented to by the Requisite Senior Lenders.
SECTION 10.11 Separate Corporate Existence. The
Borrower shall take all reasonable steps (including, without
limitation, all steps which the Administrative Agent or any
Senior Lender may from time to time reasonably request) to
maintain its identity as a separate legal entity and to make
it apparent to third parties that the Borrower is an entity
with assets and liabilities distinct from those of TFC, FHC,
and each member of the Aerospace Group. Without limiting
the generality of the foregoing, the Borrower shall:
(a) require that all full-time employees of the
Borrower identify themselves as such and not as employees of
TFC, FHC or any member of the Aerospace Group (including,
without limitation, by means of providing appropriate
employees with business or identification cards identifying
such employees solely as the Borrower's employees);
(b) compensate all employees, consultants and agents
directly, from the Borrower's bank accounts, for services
provided to the Borrower by such employees, consultants and
agents and, to the extent any employee, consultant or agent
of the Borrower is also an employee, consultant or agent of
TFC, FHC or a member of the Aerospace Group, allocate the
compensation of such employee, consultant or agent between
the Borrower and such other Person on a basis which reflects
the services rendered to the Borrower and such other Person
in accordance with the Allocation Memorandum;
(c) allocate all overhead expenses (including, without
limitation, telephone and other utility charges) for items
shared between the Borrower and TFC, FHC and/or a member of
the Aerospace Group on the basis of actual use to the extent
practicable and, to the extent such allocation is not
practicable, on a basis reasonably related to actual use in
accordance with the Allocation Memorandum;
(d) cause the Borrower to be named as an insured on
the insurance policy covering its property, or enter into an
agreement with the holder of such policy whereby in the
event of a loss in connection with such property, proceeds
are paid to the Borrower;
(e) maintain the Borrower's books and records complete
and separate from those of TFC, FHC and the Aerospace Group;
(f) not maintain bank accounts or other Depository
Accounts to which TFC, FHC or any member of the Aerospace
Group is an account party, into which TFC, FHC or any
member of the Aerospace Group makes deposits or from which
TFC, FHC or any member of the Aerospace Group has the power
to make withdrawals;
(g) not permit TFC, FHC or any member of the Aerospace
Group to pay any of the Borrower's operating expenses
(except when paid and charged pursuant to the Allocation
Memorandum); and
(h) (i) not permit (A) more than two-thirds of the
members of the Borrower's board of directors to simul-
taneously be members of the board of directors or officers
or employees of TFC, FHC or any member of the Aerospace
Group and (B) more than two-thirds of the officers of the
Borrower to simultaneously be members of the board of
directors or officers or employees of TFC, FHC or any member
of the Aerospace Group and (ii) at all times have at least
one member of the Borrower's board of directors who is
neither an officer or employee of any of TFC, FHC or any
member of the Aerospace Group, nor an officer or employee of
the Borrower.
SECTION 10.12 Consolidated Net Worth of the Borrower;
Liquidity. The Borrower shall at all times maintain its
assets, liabilities and income, as reported in financial
statements prepared and delivered in conformity with
subsections 9.01(a) and (b), so that the Consolidated Net
Worth of the Borrower shall at all times be equal to or
greater than $175,000,000.
SECTION 10.13 Future Liens for the Benefit of the
Senior Lenders. The Borrower shall execute and deliver to
the Administrative Agent for the benefit of the Senior
Secured Creditors, (a) immediately upon the acquisition or
leasing of any real property, a mortgage, deed of trust,
assignment or other appropriate instrument evidencing a Lien
upon any such acquired property, lease or interest, the same
to be in form and substance satisfactory to the
Administrative Agent, and (b) on the eighty-fifth (85th) day
after the date of its acquisition of any aircraft or
aircraft engine subject to registration with the Federal
Aviation Administration, if ownership of such aircraft or
aircraft engine is anticipated to continue in the name of
Borrower for more than ninety (90) days after such date of
acquisition, an aircraft mortgage or other appropriate
instrument evidencing a Lien on such property in form and
substance satisfactory to the Administrative Agent; and in
each instance under clauses (a) and (b), to be subject only
to (i) Liens permitted under Section 11.01 and (ii) such
other Liens as the Requisite Senior Lenders may reasonably
approve, it being understood that the granting of such
additional security for the Obligations is a material
inducement to the execution and delivery of this Agreement
by each Senior Lender.
ARTICLE XI
NEGATIVE COVENANTS
The Borrower covenants and agrees that so long as any
Commitment shall be in effect and until payment in full of
all Obligations and the expiration of all Letters of Credit,
unless the Requisite Senior Lenders shall otherwise give
their prior written consent:
SECTION 11.01 Liens. The Borrower shall not, and
shall not permit its Subsidiaries to, directly or
indirectly, create, incur, assume or permit to exist, any
Lien on or with respect to any of its properties or assets
(including any Collateral in which the Borrower or any such
Subsidiary has an interest) except:
(a) Liens granted to or held by the Administrative
Agent for the benefit of the Senior Secured Creditors;
(b) any interest or title of a lessor or secured by a
lessor's interest under any lease permitted by this
Agreement;
(c) Intentionally omitted
(d) Customary Permitted Liens;
(e) Liens arising in connection with Commercial
Letters of Credit issued for the account of the Borrower or
any such Subsidiary permitted by subsection 11.16(g) and
covering only the documents and goods financed by means of
such Commercial Letters of Credit;
(f) Liens on assets of a Foreign Subsidiary of the
Borrower securing Indebtedness of such Foreign Subsidiary
permitted by subsection 11.16(h);
(g) purchase money Liens (including the interest of a
lessor under a Capital Lease), not in default or
foreclosure, created in connection with the incurrence of
Indebtedness permitted by subsection 11.16(j); and
(h) Liens with respect to judgments which do not
result in an Event of Default or a Potential Event of
Default under, or other breach of, this Agreement.
For the purposes of this Section 11.01, if a Lien is
permitted under one of the exceptions set forth above, but
limited to a specified amount of Indebtedness, the same
Indebtedness shall not be taken into account in applying an
Indebtedness limitation contained in another of the
exceptions set forth in this Section 11.01.
SECTION 11.02 Conduct of Business. The Borrower shall
not engage in, or permit any of its Subsidiaries to engage
in, any business other than the business engaged in by the
Borrower or such Subsidiary on the Closing Date and any
business or activities substantially similar or related
thereto.
SECTION 11.03 Transactions with Shareholders and
Affiliates. The Borrower shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, enter
into or permit to exist, any transaction (including, without
limitation, the purchase, sale, lease or exchange of any
property or the rendering of any service) with any Affiliate
of the Borrower or of any such Subsidiary, on terms that are
less favorable to any such Person than those that might be
obtained in an arm's-length transaction at the time from
Persons who are not such an Affiliate, other than those
management contracts and service agreements listed on
Schedule 11.03 to which the Borrower or any such Subsidiary
of the Borrower is a party, as such contracts and agreements
may be amended, supplemented or modified without materially
impairing the Borrower's ability to repay its Obligations
hereunder, provided, that, notwithstanding the foregoing,
all allocations of costs and expenses by or among the
Borrower and any of its Affiliates shall be made in
accordance with the Allocation Memorandum. Nothing
contained in this Section 11.03 shall prohibit any
transaction expressly permitted by Section 11.19 or any
other Section of this Agreement.
SECTION 11.04 Restriction on Fundamental Changes.
(a) The Borrower shall not, and shall not permit any of its
Subsidiaries to, enter into any merger or consolidation, or
liquidate, wind-up or dissolve (or suffer any liquidation or
dissolution), or convey, lease, sell, transfer or otherwise
dispose of, in one transaction or series of transactions,
all or any substantial part of its business, property or
assets, whether now or hereafter acquired, except for (i)
dispositions of assets expressly permitted under Section
11.17, (ii) the merger of a Subsidiary of the Borrower with
and into the Borrower or into another Subsidiary of the
Borrower, provided that in the case of the merger of a
Subsidiary Guarantor into a Subsidiary which is not a
Subsidiary Guarantor, the surviving corporation assumes the
obligations of such Subsidiary Guarantor under its
Subsidiary Guaranty, and (iii) with prior written notice to
the Administrative Agent, the liquidation of a Subsidiary of
the Borrower into the Borrower or another Subsidiary of the
Borrower, provided that in the case of the liquidation of a
Subsidiary Guarantor into a Subsidiary which is not a
Subsidiary Guarantor, the surviving corporation assumes the
obligations of such Subsidiary Guarantor under its
Subsidiary Guaranty.
(b) Except as permitted pursuant to subsection 11.18,
the Borrower shall not acquire, or allow any of its
Subsidiaries to acquire, by purchase or otherwise, the stock
or other evidence of beneficial ownership of any Person or
all or substantially all of the business, property or assets
of any Person, except for such acquisitions which are
permitted under subsection 11.04(a).
SECTION 11.05 ERISA. The Borrower shall not, and
shall not permit any of its Subsidiaries to:
(a) Engage in any prohibited transaction for which an
exemption is not available or has not been previously
obtained from the Department of Labor and in connection with
which the Borrower or any ERISA Affiliate of the Borrower
could be subject to either a civil penalty assessed pursuant
to Section 502(i) of ERISA in excess of $250,000 or a tax
imposed by Section 4975 of the Internal Revenue Code in
excess of $250,000 or the Borrower and all ERISA Affiliates
could be subject to aggregate penalties and taxes in excess
of $1,000,000 for all such prohibited transactions;
(b) Fail to make full payment when due of all amounts
which, under the provisions of any Defined Benefit Plan, the
Borrower or any of its Subsidiaries is required to pay as
contributions thereto, or permit to exist any accumulated
funding deficiency (as defined in Section 302(a) of ERISA
and Section 412(a) of the Internal Revenue Code), or fail to
pay any installment necessary to amortize each waived
funding deficiency, with respect to any Defined Benefit Plan
contributed to or maintained by the Borrower or any of its
Subsidiaries;
(c) Permit to exist any occurrence of any reportable
event (described in Section 4043 of ERISA), or any other
event or condition, which in the reasonable opinion of the
Agents presents a material risk of a material liability of
the Borrower and its ERISA Affiliates under ERISA or the
Internal Revenue Code; or
(d) Enter into any new Benefit Plan, or modify any
existing Benefit Plan contributed to or maintained by the
Borrower or any of its Subsidiaries, so as to materially
increase the obligations of the Borrower or any of its
Subsidiaries.
SECTION 11.06 Sales and Leasebacks. The Borrower
shall not become liable or permit any of its Subsidiaries to
become liable, directly or by way of Accommodation
Obligation, with respect to any lease, whether an Operating
Lease or a Capital Lease, of any property (whether real or
personal or mixed) whether now owned or hereafter acquired,
(a) which the Borrower or one of its Subsidiaries has sold
or transferred or is to sell or transfer to any other
Person, or (b) which the Borrower or one of its Subsidiaries
intends to use for substantially the same purposes as any
other property which has been or is to be sold or
transferred by that entity to any other Person in connection
with such lease, unless, after giving effect to each such
lease the Borrower is in compliance with subsection
11.16(d), Section 11.17 and Section 11.21.
SECTION 11.07 Subordinated Indebtedness.
(a) No Change. The Borrower shall not, and shall not
permit any of its Subsidiaries to, (i) amend, modify or
otherwise change any terms contained, as of the Closing
Date, in any agreement or document evidencing or related to
any Subordinated Indebtedness of the Borrower or Subsidiary,
if the effect of such amendment, modification or change
would adversely affect the rights of the Administrative
Agent or Senior Lenders or would be materially more
burdensome or restrictive on the Borrower and, without
limiting the generality of the foregoing, none of the
provisions of such agreements or documents relating to the
terms of subordination or definitions of Indebtedness to
which such Subordinated Indebtedness is subordinated or to
payments, whether of principal, premiums, or interest
(except to defer a payment to a later date or to waive any
default thereunder) shall be amended or modified in any
respect or (ii) make any payment required as a result of an
amendment or change thereto, in each instance, without the
prior written consent of the Requisite Senior Lenders.
(b) Notices. The Borrower shall deliver to the
Administrative Agent (i) a copy of each notice or other com-
munication delivered by or on behalf of the Borrower to any
trustee under any Subordinated Indebtedness indenture to
which the Borrower is a party, such delivery to be made at
the same time and by the same means as such notice or other
communication is delivered to such trustee, and (ii) a copy
of each notice or other communication received by the
Borrower from any trustee under any Subordinated
Indebtedness indenture to which the Borrower is a party,
such delivery to be made promptly after such notice or other
communication is received by the Borrower.
(c) Paying Agents. Neither the Borrower nor any of
its Subsidiaries shall act as paying agent under any
Subordinated Indebtedness indenture to which the Borrower is
a party, nor shall the Borrower appoint any Person as such
paying agent other than the trustee under any such
Subordinated Indebtedness indenture.
SECTION 11.08 Amendment of Charter or By-laws. The
Borrower shall not amend, or permit any of its Subsidiaries
to amend, the Borrower's or such Subsidiary's Certificate or
Articles of Incorporation or By-Laws, except upon at least
ten (10) days' prior written notice to the Senior Lenders,
and then only if no Event of Default or Potential Event of
Default then exists or would result therefrom.
SECTION 11.09 Issuance and Disposal of Stock. Except
as permitted by Section 11.17 in connection with the
formation of a new Subsidiary to effect the sale of Eagle
Environmental as described on Schedule 1.01-B, the Borrower
will not (a) directly or indirectly issue, sell, assign,
pledge, encumber or dispose of any shares of capital stock
or other equity securities of (or warrants, rights or
options to acquire shares or other equity securities of) any
of its Subsidiaries, except to qualify directors if required
by applicable law, or (b) permit any of its Subsidiaries
directly or indirectly to issue, sell, assign, pledge,
encumber or dispose of any shares of capital stock or other
Securities of (or warrants, rights or options to acquire
shares or other securities of) such Subsidiary, or any other
Subsidiary of the Borrower, except to qualify directors if
required by applicable law.
SECTION 11.10 Interest Exchange Agreements. The
Borrower shall not enter into, or permit any of its
Subsidiaries to enter into, any Interest Rate Contracts
other than Secured Interest Rate Contracts.
SECTION 11.11 Asset Transfers. Except as otherwise
permitted by Sections 11.17 and 11.04, the Borrower shall
not transfer, or permit any of its Subsidiaries to transfer,
any assets of the Borrower or any of its Subsidiaries to any
other Person, except in the ordinary course of the
Borrower's or such Subsidiary's business.
SECTION 11.12 Consulting Contracts. The Borrower
shall not become obligated, or permit any of its
Subsidiaries to become obligated, with respect to consulting
or like contracts with Persons who have been employees or
directors of the Borrower or such Subsidiary during the
immediately preceding five (5) year period, in amounts
aggregating in any Fiscal Year an amount in excess of
$1,000,000.
SECTION 11.13 Intentionally omitted.
SECTION 11.14 Consolidated Capital Expenditures.
The Borrower shall not, and shall not permit any of its
Subsidiaries to make or incur Consolidated Capital
Expenditures in any Fiscal Year, in an aggregate amount in
excess of the sum of (a) $2,000,000 plus leasehold
improvements made with respect to the Virginia Real Property
and (b) Borrower's Selling Price of Fixed Assets for such
Fiscal Year.
SECTION 11.15 Intercompany Indebtedness.
(a) Intentionally omitted.
(b) The Borrower shall not make any payments of
principal or interest on any amount of Indebtedness owing to
an Affiliate of the Borrower at any time at which an Event
of Default or a Potential Event of Default exists or would
result therefrom and interest on any amount of such
Indebtedness shall in any event not exceed at any time a per
annum rate approximating the rate then being offered in the
U.S. or European capital markets (as applicable to the
underlying Indebtedness) for credit facilities having an
equivalent commercial risk rating and tenor.
SECTION 11.16 Indebtedness. The Borrower shall not
directly or indirectly create, incur, assume or otherwise
become or remain directly or indirectly liable with respect
to, or permit any of its Subsidiaries to directly or
indirectly create, incur, assume or otherwise become or
remain directly or indirectly liable with respect to, any
Indebtedness, except:
(a) the Obligations;
(b) Permitted Existing Indebtedness of the Borrower or
any such Subsidiary;
(c) Subordinated Indebtedness of the Borrower, on
terms and conditions satisfactory in form and substance to
the Senior Lenders, the proceeds of which are applied as
prepayments of the Obligations or used to refinance then
existing Subordinated Indebtedness of the Borrower;
(d) Capital Lease obligations of the Borrower or any
such Subsidiary in an amount not exceeding (in the aggregate
for the Borrower and all such Subsidiaries) $1,000,000;
(e) Indebtedness of the Borrower or any such
Subsidiary evidenced by industrial revenue bonds in an
amount not exceeding (in the aggregate for the Borrower and
all such Subsidiaries) $500,000;
(f) Indebtedness of the Borrower to any of its
Subsidiaries or of such Subsidiaries to the Borrower;
(g) Indebtedness of the Borrower or any such
Subsidiary arising from Non-Facility Letters of Credit
issued for the account of the Borrower or such Subsidiary in
an amount not exceeding (in the aggregate for the Borrower
and all such Subsidiaries) $5,000,000;
(h) Indebtedness of a Foreign Subsidiary of the Borrower;
provided that the proceeds of such Indebtedness are used by
such Foreign Subsidiary or the Borrower in the routine
conduct of its business;
(i) trade payables, wages and other accrued expenses
incurred by the Borrower or any such Subsidiary in the
ordinary course of its business;
(j) Indebtedness of the Borrower or any such
Subsidiary constituting Purchase Money Indebtedness in an
amount not exceeding (in the aggregate for the Borrower and
all such Subsidiaries) $1,000,000;
(k) other unsecured Indebtedness of the Borrower or
any such Subsidiary not supported by a Letter of Credit in
an amount not exceeding $25,000,000; provided, that the
Borrower shall not issue commercial paper (i) at a time and
in an amount such that the sum, after the issuance of such
commercial paper, of (A) the outstanding Loans, (B) Letter
of Credit Obligations outstanding, (C) the sum of the
aggregate amount of the Borrower's Secured F/X Contracts
outstanding and the aggregate amount of the Secured Interest
Rate Contracts outstanding and (D) the aggregate outstanding
amount of commercial paper issued by the Borrower, exceeds
the Commitments and (ii) in any single maturity that exceeds
$10,000,000;
(l) Operating Lease obligations of the Borrower or any
such Subsidiary complying with limitations thereon set forth
in Section 11.21;
(m) if the Borrower is a member of the "The Fairchild
Corporation Group" (as defined in the Tax Allocation
Agreement), Indebtedness of the Borrower owing under the Tax
Allocation Agreement; and
(n) any renewal, extension or refinancing of the
foregoing Indebtedness of the Borrower or its Subsidiaries
in an amount not in excess of the amount outstanding at the
time of such renewal or extension.
No Indebtedness of the Borrower or any Subsidiary of the
Borrower for borrowed money permitted hereunder, except for
Permitted Existing Indebtedness of the Borrower or any such
Subsidiary, to the extent otherwise provided therein, shall
contain any provisions making a "default" under or in
respect of some other Indebtedness for money borrowed, a
"default" thereunder, unless such cross-default provisions
are applicable only with respect to "defaults" which have
resulted in the acceleration of payment obligations for
money borrowed in an amount not less than, in any particular
case, $3,000,000.
SECTION 11.17 Sales of Assets. Except for Excluded
Dispositions, the Borrower shall not, and shall not permit
any of its Subsidiaries to, sell, assign, transfer, lease,
convey or otherwise dispose of any of its properties or
assets, whether now owned or hereafter acquired, or any
income or profits therefrom, other than pursuant to a sale,
assignment, transfer, lease, conveyance or other disposition
(a) of the Borrower's or any such Subsidiary's Inventory in
the ordinary course of its business or Inventory of the
Borrower consisting of aircraft which has been purchased
from a member of the Aerospace Group and is re-sold to such
member of the Aerospace Group to the extent permitted under
the Aerospace Credit Agreement, (b) involving assets of the
Borrower or any such Subsidiary with a fair market value not
exceeding an aggregate amount in any Fiscal Year of
$2,000,000 (plus the Net Proceeds of Sale of any Excluded
Dispositions), provided, that the consideration received by
the Borrower, or such Subsidiary in each such transaction
constitutes at least fair market value, (c) of the
Borrower's or any such Subsidiary's Equipment to the extent
that such Equipment is traded in for credit against the
purchase price of replacement Equipment or that the proceeds
of such disposition are reasonably promptly applied to the
purchase price of such replacement Equipment, (d) of
Accounts of Foreign Subsidiaries of the Borrower by such
Subsidiaries pursuant to and in accordance with
Section 11.22, and (e) of Marketable Securities and other
Investments held by the Borrower, other than such Marketable
Securities on which perfected Liens exist in favor of the
Administrative Agent. Notwithstanding the foregoing, sales
of the Borrower's assets may be consummated provided that
(a) the Senior Lenders of the Borrower have consented
thereto, which consent shall not be unreasonably withheld,
and (b) the proceeds thereof are remitted to the
Administrative Agent for application in accordance with the
terms of this Agreement. The Borrower shall not permit
Mairoll, Inc., an indirect subsidiary of the Borrower, to
(i) sell, assign, transfer, convey or otherwise dispose of
all or any portion of its partnership interest in Hartz-Rex
Associates or (ii) permit Hartz-Rex Associates to sell,
assign, transfer, convey, lease (other than pursuant to the
Hasbrouck Heights Lease) or otherwise dispose of all or any
portion of the Hasbrouck Heights Real Property until the
Issuing Bank's Letter of Credit No. NY-30013537 or any
Letter of Credit issued hereunder in substitution therefor
is cancelled or expires or, if drawn, the Reimbursement
Obligations with respect thereto have been paid in full.
SECTION 11.18 Investments. The Borrower shall not,
and shall not permit any of its Subsidiaries to, directly or
indirectly make or own, any Investment in any Person except:
(a) Investments of the Borrower or any such Subsidiary
in Cash Equivalents; provided that the Borrower shall have
no limitation on the amount of Investments in Cash
Equivalents held by it as long as the Administrative Agent
can, if requested, perfect a security interest in all such
Investments that are delivered to the Administrative Agent
and any reinvestments of such Investments;
(b) an Investment of the Borrower or any such
Subsidiary resulting from the exchange of Securities
consisting of capital stock of Existing Investments of the
Borrower or any such Subsidiary (whether paid with respect
to and by reason of any such Investment pursuant to a
subscription and stock purchase agreement, warrant, option,
commitment, capital calls or similar agreement or
otherwise), in an amount not exceeding the amount
outstanding with respect thereto on the Closing Date, as
increased or decreased as required under GAAP as a result of
monthly adjustments made to Investments accounted for under
the equity method;
(c) an Investment of approximately $300,000 in cash to
Convac USA, Inc., a Delaware corporation and Subsidiary of
Borrower, to facilitate Convac USA, Inc.'s acquisition of
the balance of the issued and outstanding capital stock of
Fairchild Technologies USA, Inc., formerly known as Applied
Process Technology, Inc., a California corporation, a
Subsidiary of Borrower, representing ten percent (10%) of
all issued and outstanding capital stock of Fairchild
Technologies USA, Inc.;
(d) Investments of the Borrower or any such Subsidiary
which represent defaulted or extended obligations previously
contracted in the ordinary course of business and payable on
terms necessary to effectuate the collection thereof, in an
amount not to exceed at any one time outstanding (in the
aggregate for the Borrower and all of its Subsidiaries)
$2,000,000; provided that the amount of such Investments by
the Borrower in any one obligor shall not exceed $1,000,000
in the aggregate at any one time outstanding;
(e) Investments of the Borrower or any such Subsidiary
arising from Indebtedness between the Borrower and its
Subsidiaries permitted by subsection 11.16(f);
(f) Investments of the Borrower in the form of notes
or other Securities taken by the Borrower in connection with
sales of assets by the Borrower consented to by the
Requisite Senior Lenders and Investments by the Borrower in
notes or other Securities or arising under royalty
agreements which are proceeds of sales of Excluded
Dispositions or otherwise described on Schedule 1.01-B;
(g) Intentionally omitted
(h) Investments in an aggregate amount not to
exceed $100,000 at any time consisting of capital
contributions made by the Borrower or its Subsidiaries to
wholly owned direct or indirect Subsidiaries of the Borrower
formed after the Closing Date;
(i) Intentionally omitted;
(j) Investments in any Indebtedness of TFC and its
Subsidiaries;
(k) Investments (other than as permitted in subsection
11.18(b)) of up to $2,000,000 in TFC's common stock
purchased from Persons other than Affiliates of TFC; and
(l) Investments (other than Prohibited Investments) of
up to $10,000,000 in the aggregate minus Investments made as
permitted in subsection 11.18(k);
provided, to the extent that any such Investment would (A)
result in the Borrower and its Subsidiaries, on a combined
basis, owning sufficient equity in a Person to enable the
Borrower or one of its Subsidiaries to control the Board of
Directors (or comparable governing body) of such Person or
to direct the management and operations of such Person, or
(B) require the Borrower or one of its Subsidiaries to make
a public disclosure of such Investment, other than any
disclosure required to be made in the financial statements
of the Borrower or such Subsidiary, then the Borrower shall
give the Administrative Agent, to the extent practicable, at
least two (2) Business Days' notice prior to the issuance of
any form of public notice, statement or other disclosure of
or relating to such Investment, and provided that no
provisions of Section 11.18 shall be construed to prohibit
the Borrower from (a) retaining its Investment in any
Person which, as of the Closing Date, was an Affiliate of
the Borrower or (b) increasing its Investment in Aerospace
or any Person which, as of the Closing Date, was a wholly-
owned Subsidiary of the Borrower or FHC.
No provision of this Agreement shall be deemed to prohibit
any Investment which is specifically permitted by this
Section 11.18 and the Borrower shall not be deemed to be in
breach of, or default under, any other provision of this
Agreement if such breach or default is solely attributable
to the making of, or owning, an Investment which is
specifically permitted by this Section 11.18. For purposes
of this Section 11.18, a breach or default will be
considered to be "solely attributable to the making of, or
owning, an Investment" if such breach or default
(i) occurred or existed immediately upon the making of such
Investment but not prior thereto, (ii) is not attributable
to an event or transaction occurring subsequent to the
making of such Investment and (iii) would not have occurred
or would not exist if such Investment were not owned or had
not been made.
SECTION 11.19 Restricted Junior Payments. The
Borrower shall not declare or make, or permit any of its
Subsidiaries to declare or make, any Restricted Junior
Payment, except:
(a) so long as no Event of Default or Potential Event
of Default exists or would result therefrom, payments of
principal and interest (including payments made to a sinking
fund) due (on an unaccelerated basis in accordance with the
original amortization schedule) on the Borrower's
Indebtedness evidenced by the Senior Subordinated
Debentures, and other Subordinated Indebtedness of the
Borrower, except to the extent that any such payments are
prohibited by the subordination restrictions applicable
thereto;
(b) the payment of dividends or distributions on the
Borrower's or such Subsidiary's capital stock if the purpose
thereof is to provide TFC with funds necessary to service
Indebtedness (as defined in the Senior Subordinated
Debenture Indenture) of TFC, but only to the extent TFC does
not have cash, cash equivalents or readily marketable
securities available to provide funds to otherwise service
such Indebtedness, after taking into account reasonable
working capital needs of TFC and its Subsidiaries; provided,
that the exception set forth in this subsection 11.19(b)
shall not be effective if and to the extent and during the
period that the holders of TFC's 13-1/8% Subordinated
Debentures due 2006 have waived the benefits of Section 4.05
of the Indenture dated as of March 13, 1986 pursuant to
which such Subordinated Debentures were issued and the
holders of TFC's Intermediate Subordinated Debentures due
2001 have waived the benefits of Section 4.05 of the
Indenture dated as of October 15, 1986 pursuant to which
such Intermediate Subordinated Debentures were issued; and,
provided, further, that such exception shall be available in
any event only so long as at least one of the Indentures
described above remains in effect and continues to restrict
TFC from permitting any of its subsidiaries from entering
into an agreement restricting the payment of dividends or
the making of other distributions on any subsidiary's
capital stock which are necessary to service indebtedness of
TFC;
(c) the payment of dividends by the Borrower in an
aggregate amount not in excess of $10,000,000 in any Fiscal
Year; plus, in each such Fiscal Year, an amount equal to (i)
the sum of (A) fifty percent (50%) of the aggregate
Consolidated Net Income of the Borrower accrued on a
cumulative basis subsequent to August 15, 1988 and (B) the
aggregate net proceeds, including the fair market value of
property other than cash received by the Borrower from the
issue or sale after August 15, 1988 of capital stock of the
Borrower minus (ii) its aggregate amount of all dividends
paid on the capital stock of the Borrower subsequent to
August 15, 1988;
(d) dividends to the Borrower arising from the
cancellation of intercompany Indebtedness upon the sale of a
Subsidiary of the Borrower, which sale is permitted under
Section 11.17;
(e) any payment in respect of Investments permitted by
subsections 11.03(B)(i) or (j) or any prepayments or
redemptions of Indebtedness described therein; and
(f) dividends deemed paid by virtue of cancellation of
Indebtedness of the Borrower and/or TFC after the making of
an Investment therein by the Borrower as permitted by
subsection 11.18(j).
Notwithstanding anything to the contrary contained herein,
so long as a majority of the Borrower's capital stock is
owned by TFC, any payment of a dividend or other
distribution with respect to the Borrower's capital stock
shall be permitted under subsection 11.19(b) only after a
period of at least ninety (90) days has elapsed since the
declaration of such dividend or other distribution by the
Borrower's Board of Directors.
SECTION 11.20 Accommodation Obligations. The Borrower
shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly create or become or remain liable in
respect of any Accommodation Obligation except (a)
guaranties resulting from endorsement of negotiable
instruments for collection in the ordinary course of
business; (b) any guaranty of the Obligations by a
Subsidiary of the Borrower; (c) obligations, warranties and
indemnities of the Borrower or any such Subsidiary, not
relating to Indebtedness of any Person and not in default,
which are undertaken or made in the ordinary course of its
business, or in connection with Excluded Dispositions and
other dispositions of assets otherwise consented to under
the terms of this Agreement, and not in favor of an
Affiliate of the Borrower; (d) unsecured guaranties of the
Borrower guaranteeing Indebtedness of its Foreign
Subsidiaries and permitted by subsection 11.16(h); (e)
additional Accommodation Obligations of the Borrower or any
such Subsidiary which, when combined with outstanding
Indebtedness permitted under subsection 11.16(l), do not
exceed the amount permitted by such subsection; (f)
Accommodation Obligations of the Borrower with respect to
any Operating Lease obligations of the Borrower or any
Subsidiary of the Borrower to the extent permitted under
Section 11.21; and (g) unsecured guaranties of Fairchild
Germany, Inc. guaranteeing Indebtedness of Fairchild Convac
GmbH described on Schedule 11.20.
SECTION 11.21 Restriction on Operating Leases. During
any Fiscal Year, the Borrower shall not become liable in any
way, or permit any of its Subsidiaries to become liable in
any way, whether directly or by assignment or by
Accommodation Obligations, for the obligations of the lessee
under any Operating Lease unless, immediately after giving
effect to the incurrence of liability with respect to such
Operating Lease, the amount of all of the Borrower's and
such Subsidiaries' Consolidated Rental Payments for such
Fiscal Year (exclusive of any reimbursement for taxes,
insurance, maintenance or other expenses) shall not exceed
(in the aggregate) $2,000,000.
SECTION 11.22 Sale of Accounts. Except as otherwise
permitted hereunder:
(a) the Borrower shall not, and shall not permit any
of its Domestic Subsidiaries to, directly or indirectly,
transfer, with recourse or without, or discount or otherwise
sell any of its Accounts or any of its notes or obligations
receivable in any amount (other than, in the case of such
Subsidiaries, the sale of Accounts owing from foreign
account debtors (i) not to exceed $250,000 in the aggregate
during each Fiscal Year or (ii) which are otherwise included
in any asset securitization program entered into which is
contemplated or permitted by the FHC Credit Agreement), and
(b) the Borrower shall not permit any of its Foreign
Subsidiaries to, directly or indirectly, sell or discount,
or otherwise transfer to any Person, any of its Accounts or
any of its notes or obligations receivable in any amount
except (i) sales by Foreign Subsidiaries of the Borrower of
Accounts, notes or obligations receivable which result in
recourse obligations of such Foreign Subsidiaries in an
aggregate amount not in excess of $2,500,000, (ii) sales by
Foreign Subsidiaries of the Borrower of up to a total of an
additional $15,000,000 in face amount of Accounts in the
aggregate during the term of this Agreement, without
recourse, to such Foreign Subsidiaries, and (iii) sales by
Foreign Subsidiaries of the Borrower of Accounts arising
from sales of Inventory to Delta Air Lines and or any of its
Affiliates; provided that, with respect to all such sales of
Accounts, notes or other obligations receivable, whether
with or without recourse, the consideration received for
such Accounts and other assets constitutes at least the fair
market value thereof.
ARTICLE XIA
INTENTIONALLY OMITTED
ARTICLE XIB
INTENTIONALLY OMITTED
ARTICLE XIC
INTENTIONALLY OMITTED
ARTICLE XII
INTENTIONALLY OMITTED
ARTICLE XIII
INTENTIONALLY OMITTED
ARTICLE XIV
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
SECTION 14.01 Events of Default. Each of the
following occurrences shall constitute an Event of Default
under this Agreement:
(a) Failure to Make Payments When Due. The Borrower
shall fail to pay when due any Obligations, including,
without limitation, (i) any Reimbursement Obligation,
(ii) any amount payable for principal on the Loans, includ-
ing, without limitation, any mandatory prepayment payable
under Section 4.02, but excluding any voluntary prepayment
payable under Section 4.01, or (iii) any interest on any
Loan or any fee or other amount payable hereunder (other
than amounts described in clauses (i) and (ii) above),
provided, that an Event of Default shall not be deemed to
have occurred under this clause (iii) unless such failure
shall have continued for three (3) Business Days.
(b) Breach of Certain Covenants. The Borrower shall
fail to duly and punctually perform or observe any
agreement, covenant or obligation binding on the Borrower
under (i) Article XI or (ii) under Section 8 of the
applicable Security Agreement, other than an agreement,
covenant or obligation covered by subsection 14.01(a).
(c) Breach of Warranty. Any representation or
warranty made by the Borrower or any Subsidiary of the
Borrower to the Administrative Agent or a Senior Lender or
Issuing Bank herein or in any Collateral Document or any of
the other Loan Documents to which the Borrower or such
Subsidiary is a party or in any statement or certificate at
any time given by the Borrower or any of its Subsidiaries in
writing pursuant to any of the Loan Documents shall be false
or misleading in any material respect on the date as of
which made.
(d) Other Defaults. (i) The Borrower shall default in
the payment of any Obligation (other than those Obligations
referred to in subsection 14.01(a)), or (ii) the Borrower or
any of its Subsidiaries shall default in the performance of
or compliance with any term contained in this Agreement or
in any of the other Loan Documents to which the Borrower or
any such Subsidiary is a party or any default or event of
default shall occur under any of the Collateral Documents to
which the Borrower or any such Subsidiary is a party (other
than as covered by subsection 14.01(b)), and such default or
event of default shall continue for thirty (30) days after
(A) the Administrative Agent or any Senior Lender (acting
through the Administrative Agent) notifies the Borrower or
such Subsidiary of any such default, or (B) the Borrower or
such Subsidiary acknowledges such default to the
Administrative Agent in writing.
(e) Default as to Other Indebtedness. The Borrower or
any of its Subsidiaries shall fail to make any payment when
due on any Indebtedness of the Borrower or any such
Subsidiary (other than the Obligations), the aggregate
amount of which Indebtedness equals or exceeds $2,000,000,
or any breach, default or event of default shall occur under
any instrument, agreement or indenture pertaining thereto,
if the effect thereof (with or without the giving of notice
or lapse of time or both) is to accelerate, or permit the
holder(s) of such Indebtedness to accelerate, the maturity
of any such Indebtedness; or the holder of any Lien, in any
amount, shall commence foreclosure of such Lien upon
property of the Borrower or any such Subsidiary having a
value in excess of $500,000 and such foreclosure shall
continue against such property to a date less than thirty
(30) Business Days prior to the date of the proposed
foreclosure sale.
(f) Collateral Documents; Failure of Security or
Subordination. (i) On or after the date of the execution
and delivery thereof, for any reason any Collateral Document
to which the Borrower is a party ceases to be in full force
and effect with respect to the Borrower or any Subsidiary
Guaranty ceases to be in full force and effect or the Liens
on the Borrower's or any Subsidiary Guarantor's assets
intended to be created thereby cease to be or are not valid
and perfected (except to the extent perfection of such Liens
is not required pursuant to the terms of the applicable
Collateral Document or to the extent the failure to perfect
is due to the negligence of the Administrative Agent) and
remains invalid or unperfected for a period of at least
three
(3) Business Days after the Administrative Agent notifies
the Borrower thereof or the Borrower acknowledges that such
Lien has ceased to be or is not valid and perfected; or
(ii) any Lien granted by the Borrower or any Subsidiary
Guarantor on its assets in favor of the Administrative Agent
or to secure the Obligations which is contemplated by this
Agreement or the Collateral Documents to which the Borrower
is a party, or the subordination provisions of any document
or instrument evidencing any Subordinated Indebtedness of
the Borrower shall, at any time, be invalidated or otherwise
cease to be in full force and effect, or any such Liens or
Obligations shall be subordinated or shall not have the
priority contemplated by this Agreement, the Collateral
Documents or such subordination provisions, for any reason.
(g) Involuntary Bankruptcy; Appointment of Receiver;
etc. (i) An involuntary case shall be commenced against
the Borrower or any of its Subsidiaries, unless (A) the
petition is controverted within ten (10) days, and (B) the
petition is dismissed within sixty (60) days, after
commencement of the case; or a court having jurisdiction in
the premises shall enter a decree or order for relief in
respect of the Borrower or any of its Subsidiaries in an
involuntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect; or any
other similar relief shall be granted under any applicable
federal or state law; or
(ii) A decree or order of a court having jurisdiction
in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other
officer having similar powers over the Borrower or any of
its Subsidiaries, or over all or a substantial part of the
property of the Borrower or any of its Subsidiaries shall
have been entered; or an interim receiver, trustee or other
custodian of the Borrower or any of its Subsidiaries or of
all or a substantial part of the property of the Borrower or
any of its Subsidiaries shall have been appointed; or a
warrant of attachment, execution or similar process against
any substantial part of the property of the Borrower or any
of its Subsidiaries shall have been issued; and in any such
event not stayed, dismissed, bonded or discharged within
thirty (30) days of entry, appointment or issuance.
(h) Voluntary Bankruptcy; Appointment of Receiver;
etc. The Borrower or any of its Subsidiaries shall have an
order for relief entered with respect to it or commence a
voluntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect, or shall
consent to the entry of an order for relief in an
involuntary case, or to the conversion of an involuntary
case to a voluntary case, under any such law, or shall
consent to the appointment of or taking possession by a
receiver, trustee or other custodian for all or a
substantial part of its property; the Borrower or any of its
Subsidiaries shall make any assignment for the benefit of
creditors or shall be unable or fail, or admit in writing
its inability, to pay its debts as such debts become due; or
the Board of Directors of the Borrower or any of its
Subsidiaries (or any committee thereof) shall adopt any
resolution or otherwise authorize action to approve any of
the foregoing.
(i) Judgments and Attachments. (i) Any money judgment
(other than a money judgment covered by insurance, but only
if the insurer has admitted liability with respect to such
money judgment), writ or warrant of attachment, or similar
process involving in any case an amount in excess of
$500,000 shall be entered or filed against the Borrower or
any of its Subsidiaries, or any of their respective assets,
and shall remain undischarged, unvacated, unbonded or
unstayed for a period in excess of thirty (30) days or in
any event later than five (5) days prior to the date of any
proposed sale thereunder or (ii) any judgment or order of
any court or administrative agency awarding material damages
shall be entered against the Borrower in any action under
the Federal securities laws seeking rescission of the
purchase or sale of, or for damages arising from the
purchase or sale of, any Subordinated Indebtedness of the
Borrower or in any action seeking reimbursement, indemni-
fication or contribution with respect to the payment of any
such claim and such judgment or order shall have become
final after exhaustion of all available appellate remedies.
(j) Dissolution. Any order, judgment or decree shall
be entered against the Borrower or any of its Subsidiaries
decreeing its involuntary dissolution or split up and such
order shall remain undischarged and unstayed for a period in
excess of sixty (60) days; or the Borrower or any of its
Subsidiaries shall otherwise dissolve or cease to exist.
(k) Change in Control. At any time a single Person or
"Group" as defined by the Commission, other than Jeffrey J.
Steiner and his "associates" (as defined in the Securities
Exchange Act), shall acquire fifty percent (50%) or more of
the stock of the Borrower (on a fully diluted basis),
directly or indirectly.
(l) Unfunded ERISA Liabilities. Any Defined Benefit
Plan maintained by the Borrower or any ERISA Affiliate shall
be terminated within the meaning of Title IV of ERISA or a
trustee shall be appointed by an appropriate United States
District Court to administer any Defined Benefit Plan of the
Borrower or the PBGC (or any successor thereto) shall
institute proceedings to terminate any such Defined Benefit
Plan or to appoint a trustee to administer any such Defined
Benefit Plan, if, as of the date of such termination,
appointment or institution of proceedings, the liability
(after giving effect to the tax consequences thereof) of the
Borrower or a Subsidiary of the Borrower or any Excluded
ERISA Affiliate to the PBGC (or any successor thereto) for
the amount of unfunded benefit liabilities (as defined in
Section 4001(a)(18) of ERISA) under the Defined Benefit Plan
exceeds (i) $500,000 in the case of a Defined Benefit Plan
of the Borrower or a Subsidiary of the Borrower, or
(ii) $2,500,000 in the case of a Defined Benefit Plan of
such Excluded ERISA Affiliate (or in the case of a
termination of a Defined Benefit Plan involving a
"substantial employer" (as defined in Section 4001(a)(2) of
ERISA), the Borrower's or any such Excluded ERISA
Affiliate's proportionate share of such excess shall exceed
(i) $250,000 in the case of the Borrower or a Subsidiary of
the Borrower, or (ii) $2,500,000 in the case of such
Excluded ERISA Affiliate) or if the aggregate of all such
liabilities for all such Defined Benefit Plans exceeds
(i) $1,000,000 in the case of all such Defined Benefit Plans
of the Borrower or a Subsidiary of the Borrower, or
(ii) $2,500,000 in the case of all such Defined Benefit
Plans of such Excluded ERISA Affiliate.
(m) Intentionally omitted.
(n) Material Adverse Change. Since March 31, 1996,
there shall have been a material adverse change in the
business, management, ownership, operations, properties,
assets, condition (financial or otherwise) or prospects of
the Borrower or any of its material Subsidiaries
individually, or the Borrower and its Subsidiaries taken as
a whole.
(o) Environmental Liabilities. The Borrower or any of
its Subsidiaries shall become subject to any Environmental
Liabilities and Costs in excess of the reserves established
therefor by the Borrower plus $5,000,000 which Environmental
Liabilities and Costs would have a material adverse impact
on the Borrower or any such Subsidiary, arising out of or
related to (i) the release of any toxic or hazardous waste,
substance or constituent or other substance into the
environment or any remedial action in response thereto, or
(ii) any violation of any environmental, health and safety
Requirements of Law.
(p) Intentionally omitted.
(q) Intentionally omitted.
(r) TFC/RHI Consolidated Liquidity. The sum, as of
any given date of determination, of (i) the amount of
consolidated Cash and Cash Equivalents of TFC and the
Borrower as of such date of determination, plus (ii) the
amount of the "Revolving Credit Availability" (as defined in
the FHC Credit Agreement) as of such date of determination
after giving effect to any requests for loans or letters of
credit received by the administrative agent under the FHC
Credit Agreement on such date of determination, minus (ii)
the amount of Cash and Cash Equivalents of TFC and the
Borrower required to secure Contractual Obligations of TFC
and the Borrower as of such date of determination shall be
less than $10,000,000.
SECTION 14.02 Intentionally omitted.
SECTION 14.03 Rights and Remedies.
(a) Acceleration. Upon the occurrence of any Event of
Default described in the foregoing subsection 14.01(g),
14.01(h) or 14.01(j), the Commitments shall automatically
and immediately terminate and the unpaid principal amount
of, and any and all accrued interest on the Loans, and all
Reimbursement Obligations shall automatically become immedi-
ately due and payable, without presentment, demand, or
protest or other requirements of any kind, all of which are
hereby expressly waived by the Borrower, and the obligation
of each Senior Lender to make any Loan hereunder and of each
Senior Lender or Issuing Bank to issue or participate in any
Letter of Credit shall thereupon terminate; and upon the
occurrence and during the continuance of any other Event of
Default, the Requisite Senior Lenders may, by written notice
to the Borrower, immediately terminate the Commitments
and/or declare all of the Loans and all Reimbursement
Obligations to be, and the same shall forthwith become,
immediately due and payable together with accrued interest
thereon, and the obligation of each Senior Lender to make
any Loan hereunder and of each Senior Lender or Issuing Bank
to issue or participate in any Letter of Credit hereunder
shall thereupon terminate.
(b) Intentionally omitted.
(c) Rescission. If at any time after acceleration of
the maturity of the Loans, the Borrower shall pay all
arrears of interest and all payments on account of principal
and Reimbursement Obligations which shall have become due
from the Borrower to the Senior Lenders and the Issuing
Banks otherwise than by acceleration (with interest on
principal and, to the extent permitted by law, on overdue
interest, at the rates specified in this Agreement) and all
Events of Default and Potential Events of Default (other
than nonpayment of principal of and accrued interest on the
Loans due and payable solely by virtue of acceleration)
shall be remedied or waived pursuant to Section 16.08, then
by written notice to the Borrower, the Requisite Senior
Lenders may elect, in the sole discretion of such Requisite
Senior Lenders, to rescind and annul the acceleration and
its consequences; but such action shall not affect any
subsequent Event of Default or Potential Event of Default or
impair any right or remedy consequent thereon. The
provisions of the preceding sentence are intended merely to
bind the Senior Lenders and the Issuing Banks to a decision
which may be made at the election of the Requisite Senior
Lenders; they are not intended to benefit the Borrower and
do not give the Borrower the right to require the Senior
Lenders to rescind or annul any acceleration hereunder, even
if the conditions set forth herein are met.
ARTICLE XV
THE ADMINISTRATIVE AGENT
SECTION 15.01 Appointment. Each Senior Lender hereby
designates and appoints the Administrative Agent as the
agent of such Senior Lender under this Agreement, the
Collateral Documents and the other Loan Documents, and each
Senior Lender hereby irrevocably authorizes, and each holder
of any Note by the acceptance thereof will be deemed
irrevocably to authorize, the Administrative Agent to take
such action on their behalf under the provisions of this
Agreement, the Collateral Documents and the other Loan
Documents and to exercise such powers as are set forth
herein or therein, together with such other powers as are
reasonably incidental thereto. The Administrative Agent
agrees to act as such on the express conditions contained in
this Article XV. The provisions of this Article XV (other
than Sections 15.07 and 15.08) are solely for the benefit of
the Administrative Agent and the Senior Lenders, and neither
the Borrower nor any Subsidiary of the Borrower shall have
any rights as a third party beneficiary of any of the
provisions hereof (other than Sections 15.07 and 15.08). In
performing its functions and duties under this Agreement,
the Administrative Agent shall act solely as the agent of
the Senior Lenders and does not assume and shall not be
deemed to have assumed any obligation toward or relationship
of agency or trust with or for the Borrower or any
Subsidiary of the Borrower. The Administrative Agent may
perform any of its duties hereunder, or under the other Loan
Documents, by or through its agents or employees.
SECTION 15.02 Nature of Duties. The Administrative
Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement or in the other Loan
Documents. The duties of the Administrative Agent shall be
mechanical and administrative in nature. The Administrative
Agent shall not have by reason of this Agreement a fiduciary
relationship in respect of any Senior Lender or any Issuing
Bank. Nothing in this Agreement, the Collateral Documents
or any of the other Loan Documents, expressed or implied, is
intended to or shall be construed to impose upon the
Administrative Agent any obligations in respect of this
Agreement, the Collateral Documents or any of the other Loan
Documents except as expressly set forth herein or therein.
Each Senior Lender and each Issuing Bank shall make its own
independent investigation of the financial condition and
affairs of the Borrower in connection with the making and
the continuance of the Loans hereunder and with the issuance
of the Letters of Credit and shall make its own appraisal of
the creditworthiness of the Borrower, and the Administrative
Agent shall have no duty or responsibility, either initially
or on a continuing basis, to provide any Senior Lender or
Issuing Bank with any credit or other information with
respect thereto. If the Administrative Agent seeks the
consent or approval of the Requisite Senior Lenders to the
taking or refraining from taking any action hereunder, the
Administrative Agent shall send notice thereof to each
Senior Lender. The Administrative Agent shall promptly
notify each Senior Lender at any time that the Requisite
Senior Lenders have instructed the Administrative Agent to
act or refrain from acting pursuant hereto.
SECTION 15.03 Rights, Exculpation, etc. Neither the
Administrative Agent nor any of its officers, directors,
employees or agents shall be liable to any Senior Lender or
Issuing Bank for any action taken or omitted by them
hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, except that the
Administrative Agent shall be obligated on the terms set
forth herein for performance of its express obligations
hereunder and except that no Person shall be relieved of any
liability arising solely as a result of such Person's gross
negligence or willful misconduct. The Administrative Agent
shall not be responsible to any Senior Lender or Issuing
Bank for any recitals, statements, representations or
warranties herein or for the execution, effectiveness,
genuineness, validity, enforceability, collectibility, or
sufficiency of this Agreement, any of the Collateral
Documents or any of the other Loan Documents or the
transactions contemplated hereby or thereby, or for the
financial condition of the Borrower or any of its
Subsidiaries. The Administrative Agent shall not be
required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or
conditions of this Agreement, the Collateral Documents or
any of the other Loan Documents or the financial condition
of the Borrower or any of its Subsidiaries, or the existence
or possible existence of any Potential Event of Default or
Event of Default. The Administrative Agent may at any time
request instructions from the Senior Lenders with respect to
any actions or approvals which by the terms of this
Agreement or of any of the other Loan Documents the
Administrative Agent is permitted or required to take or to
grant, and if such instructions are promptly requested, the
Administrative Agent shall be absolutely entitled to refrain
from taking any action or to withhold any approval and shall
not be under any liability whatsoever to any Person for
refraining from any action or withholding any approval under
any of the Loan Documents until they shall have received
such instructions from the Requisite Senior Lenders.
Without limiting the foregoing, no Senior Lender or Issuing
Bank shall have any right of action whatsoever against the
Administrative Agent as a result of the Administrative
Agent's acting or refraining from acting under this
Agreement, the Notes, the Collateral Documents or any of the
other Loan Documents in accordance with the instructions of
the Requisite Senior Lenders.
SECTION 15.04 Reliance. The Administrative Agent
shall be entitled to rely upon any written notices,
statements, certificates, orders or other documents or any
telephone message believed by them in good faith to be
genuine and correct and to have been signed, sent or made by
the proper Person, and with respect to all matters
pertaining to this Agreement, the Collateral Documents or
any of the other Loan Documents and its duties hereunder or
thereunder, upon advice of counsel selected by it.
SECTION 15.05 Indemnification. To the extent that the
Administrative Agent is not reimbursed and indemnified by
the Borrower, the Senior Lenders will reimburse and
indemnify the Administrative Agent for and against any and
all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against the Administrative Agent in
any way relating to or arising out of this Agreement, the
Collateral Documents or any of the other Loan Documents or
any action taken or omitted by the Administrative Agent
under this Agreement, the Collateral Documents or any of the
other Loan Documents, in proportion to each Senior Lender's
Pro Rata Share; provided, that no Senior Lender shall be
liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the
Administrative Agent's gross negligence or willful
misconduct. Without limitation of the foregoing, the Senior
Lenders hereby authorize the Administrative Agent to enter
into any indemnification agreement(s) that may be required
by the Borrower's independent certified public accountants
as a condition to access to such accountants' work papers,
books and records, and hereby agree to reimburse and
indemnify the Administrative Agent against any and all
liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against the Administrative Agent in
connection therewith. The obligations of the Senior Lenders
under this Section 15.05 shall survive the payment in full
of the Loans and Reimbursement Obligations and the
termination of this Agreement.
SECTION 15.06 The Administrative Agent Individually.
With respect to its Pro Rata Share of the Commitments
hereunder, the Loans made by it and any Notes issued to or
held by it, the Administrative Agent shall have and may
exercise the same rights and powers hereunder and are
subject to the same obligations and liabilities as and to
the extent set forth herein for any other Senior Lender or
holder of a Note. The terms "Senior Lenders" or "Requisite
Senior Lenders" or any similar terms shall, unless the
context clearly otherwise indicates, include the
Administrative Agent in its individual capacity as Senior
Lenders or as one of the Requisite Senior Lenders. The
Administrative Agent may accept deposits from, lend money
to, and generally engage in any kind of banking, trust or
other business with the Borrower or any of its Subsidiaries
as if it were not acting as Administrative Agent pursuant
hereto.
SECTION 15.07 Successor Administrative Agents. (a)
The Administrative Agent may resign from the performance of
all its functions and duties hereunder at any time by giving
at least thirty (30) Business Days' prior written notice to
the Borrower and the Senior Lenders. Such resignation shall
take effect upon the acceptance by a successor
Administrative Agent of appointment pursuant to subsection
15.07(b) or (c) below.
(b) Upon any such notice of resignation, the Requisite
Senior Lenders shall appoint a successor Administrative
Agent which shall be satisfactory to the Borrower and shall
be an incorporated bank or trust company.
(c) If a successor Administrative Agent shall not have
been so appointed within such thirty (30) Business Day
notice period, the retiring Administrative Agent, with the
consent of the Borrower, shall then appoint a successor
Administrative Agent who shall serve as an Administrative
Agent until such time, if any, as the Requisite Senior
Lenders, with the consent of the Borrower, appoint a
successor Administrative Agent as provided above.
SECTION 15.08 Collateral Management. The Administra-
tive Agent is hereby authorized on behalf of all of the
Senior Lenders and Issuing Banks, without the necessity of
any notice to or further consent from any Senior Lender or
Issuing Bank, from time to time prior to an Event of
Default, to take any action with respect to any Collateral
or Collateral Documents, which may be necessary (i) to
perfect and maintain perfected the security interest in and
liens upon the Collateral; and (ii) to release portions of
the Collateral from the security interests and liens imposed
by the Collateral Documents in connection with any
dispositions of such portions of the Collateral permitted by
this Agreement. In the event that the Borrower desires to
sell or otherwise dispose of any assets comprising part of
the Collateral and such sale or disposition is permitted by
this Agreement, the Administrative Agent shall, upon timely
receipt from the Borrower of an Officer's Certificate of the
Borrower setting forth in reasonable detail the circum-
stances of such proposed sale or disposition (including a
description of the Collateral of the Borrower to be sold or
otherwise disposed of, the consideration to be received and
such information as may be required regarding compliance
with the relevant provisions of Article XI), the
Administrative Agent may release such portions of the
Collateral from the security interests and Liens imposed by
the Collateral Documents as may be specified by the Borrower
in order for the Borrower to consummate such proposed sale
or disposition.
ARTICLE XVI
MISCELLANEOUS
SECTION 16.01 Concerning the Collateral Documents.
Each Senior Lender and each Issuing Bank which is also a
Senior Lender consents and agrees to the terms of the
Collateral Documents and authorizes and directs the
Administrative Agent to enter into such Collateral Documents
to which the Administrative Agent is a party. Each Senior
Lender and each Issuing Bank which is also a Senior Lender
hereby agrees, and each holder of any Note, by the
acceptance thereof, will be deemed to agree, that any action
taken by the Requisite Senior Lenders in accordance with the
provisions of this Agreement or the Collateral Documents and
the exercise by the Requisite Senior Lenders of the powers
set forth herein or therein, together with such other powers
as are reasonably incidental thereto, shall be authorized
and binding upon all of the Senior Lenders and Issuing Banks
and the holders of any Note.
SECTION 16.02 Assignment of Loans; Participation in
the Facilities. (a) Each Senior Lender shall have the
right (i) at any time to contract to sell, assign, transfer
or negotiate all or any part of its Commitment and its
interest in the Obligations hereunder to one or more Senior
Lenders, commercial banks or other financial institutions
and (ii) at any time (A) upon written notice to the
Administrative Agent of its intent to do so, (1) to sell,
assign, transfer or negotiate all or any part of its
Commitment and its interest in the Obligations hereunder to
one or more Senior Lenders and (2) to sell, assign, transfer
or negotiate all or any part of its Commitment and its
interest in the Obligations hereunder to one or commercial
banks or other financial institutions (other than Senior
Lenders), if such sale, assignment, transfer or negotiation
consists of (i) an assignment by such Senior Lender of all
of its rights and obligations with respect to this
Agreement, (ii) an assignment by such Senior Lender of all
of its rights and obligations with respect to its
Commitment, if the aggregate outstanding principal balance
of the Loans made by such Senior Lender is $5,000,000 or
less, and (B) with respect to any such sale, assignment,
transfer or negotiation which is not otherwise covered by
clause (A) above, with the prior consent of the
Administrative Agent and the Borrower (which consents shall
not be unreasonably delayed or withheld), to sell, assign,
transfer or negotiate its Commitment and its interest in the
Obligations of the Borrower, to one or more commercial banks
or other financial institutions (other than Senior Lenders);
provided, that, any such sale, assignment, transfer or
negotiation under this clause (B) by a Senior Lender of any
part of its Commitment and its interest in the Obligations
hereunder to a commercial bank or other institution (other
than a Senior Lender) shall be in a minimum amount of
$5,000,000. In the case of any sale, assignment, transfer
or negotiation by any Senior Lender of all or part of its
Commitment and its interest in the Obligations hereunder
authorized under this Section 16.02, (i) such Senior Lender
shall promptly (A) notify the Borrower thereof and deliver,
or cause to be delivered, to the Borrower a statement
executed by the assignee, transferee or recipient (other
than a Senior Lender) that such assignee, transferee or
recipient is incorporated in, or organized under, the laws
of the United States of America or, if it is not so
organized or incorporated, a duly completed copy of United
States Internal Revenue Service Form 1001 or 4224 or any
successor form thereto and (B) pay to the Administrative
Agent a fee in the amount of $3,000 in consideration of its
processing such assignment and (ii) the assignee, transferee
or recipient shall have, to the extent of such sale,
assignment, transfer or negotiation, the same rights,
benefits and obligations as it would if it were a Senior
Lender hereunder and a holder of a Note, including, without
limitation, (A) the right to approve or disapprove actions
which, in accordance with the terms hereof, require the
approval of the Senior Lenders or Requisite Senior Lenders,
and (B) the right to enter into Secured F/X Contracts and
Secured Interest Rate Contracts.
(b) Each Senior Lender may grant participations in all
or any part of its Commitment, the Loans made by it
hereunder, or the Notes held by it or the Letters of Credit
issued by it to one or more other Persons; provided, that
(i) any such disposition shall not, without the consent of
the Borrower, require the Borrower to file a registration
statement with the Commission or apply to qualify the Loans
or the Notes under the "Blue Sky" law of any state; (ii) the
applicable participation agreement shall contain provisions
requiring ratable sharing by such participant with all
Senior Lenders of any funds obtained by such participant as
a result of the exercise by such participant of any right of
counterclaim, set-off, banker's lien or similar right with
respect to any Obligations, (iii) such Senior Lender shall
make and receive all payments for the account of its
participant and shall retain exclusively, and shall continue
to exercise exclusively, all rights of approval and
administration available hereunder with respect to such
Senior Lender's Commitment and Pro Rata Share of the Loans
and Letters of Credit, even after giving effect to the sale
of any such participation, and such Senior Lender shall make
such arrangements with its participants as may be necessary
to accomplish the foregoing, except that any such
participant may be given the right to require such Senior
Lender to vote such participant's interest with respect to
any amendment, modification or waiver of any provision
relating to the principal amount of the Loans and Letters of
Credit, the time or amount of any mandatory prepayments
pursuant to Section 4.02, the maturity dates of the Loans
and the Reimbursement Obligations, the interest rates borne
by the Loans or the amount of fees payable hereunder, in any
case by which such participant would be affected, and with
respect to the release of all or substantially all of the
Collateral. No holder of a participation in all or any part
of the Loans or the Notes shall be a "Senior Lender" for any
purpose under this Agreement; provided, that subject to the
following sentence, each holder of a participation shall
have the rights of a Senior Lender (including any right to
receive payment) under Sections 6.10 and 6.11 and
subsections 3.14(f) and 3.14(h). The right of each holder
of a participation to receive payment under Sections 6.10
and 6.11 and subsections 3.14(f) and 3.14(h) shall be
limited to the lesser of (i) the amounts actually incurred
by such holder for which payment is provided under said
Sections and (ii) the amounts that would have been payable
under said Sections by the Borrower to the Senior Lender
granting the participation to such holder, had such
participation not been granted.
(c) It is expressly agreed that, in connection with
offers for the sale and transfer of all or any part of any
Senior Lender's Commitment or any Senior Lender's interest
in any of the Obligations or any participation in any of the
Loans or the Notes or the Letters of Credit pursuant to this
Section 16.02, each Senior Lender may provide such informa-
tion pertaining to the Borrower or any Affiliate of the
Borrower as such Senior Lender may deem appropriate.
(d) Notwithstanding the foregoing provisions of this
Section 16.02 and the provisions of subsection 16.02(e)
below, each Senior Lender may at any time (i) sell, assign,
transfer, or negotiate all or any part of the Loans or its
interest in the L/C Subfacility to any Affiliate of such
Senior Lender and (ii) create a security interest in all or
any portion of its rights hereunder (including, without
limitation, the Loans owing to it and the Note held by it)
in favor of any Federal Reserve Bank in accordance with
Regulation A of the Board of Governors of the Federal
Reserve System; provided, that such Senior Lender and not
the Affiliate to whom such disposition has been made shall
be considered a "Senior Lender" for purposes of
Section 16.08, but such Affiliate shall be considered a
"Senior Lender" for purposes of Sections 16.06 and 16,07;
and provided, further, that the Borrower shall not incur any
additional expenses solely as a result of such sale,
assignment, transfer or negotiation.
(e) No Senior Lender shall, as between the Borrower
and that Senior Lender, be relieved of any of its
obligations hereunder as a result of any granting of
participations in all or any part of the Loans or the Notes
or the L/C Subfacility of such Senior Lender or other
Obligations owed to such Senior Lender.
(f) Upon its receipt of an Assignment Agreement
executed by an assigning Senior Lender and an assignee,
together with the payment of the aforesaid $3,000 fee and,
in the event the assignment is an assignment of all of the
assigning Senior Lender's Loans and Commitment, the Note
evidencing such assigning Senior Lender's Loans, the
Administrative Agent shall, if such Assignment Agreement has
been completed and is in substantially the form of Exhibit
A, (i) accept such Assignment Agreement, (ii) record the
information contained therein, and (iii) give prompt notice
thereof to the Borrower. Within five (5) Business Days
after the Borrower's receipt of such notice, the Borrower
shall execute and deliver to the Administrative Agent, a
Note payable to the order of such assignee in an amount
corresponding to the interest in the Loans acquired by it
pursuant to such Assignment Agreement, which Note, if the
assigning Senior Lender has retained no interest in the
Loans, shall be executed and delivered in exchange for the
assigning Senior Lender's Note. Upon exchange of any Note
issued to the assignee Senior Lender for the Note of an
assigning Senior Lender as aforesaid, the surrendered Note
shall be cancelled by the Administrative Agent and returned
to the Borrower.
SECTION 16.03 Expenses.
(a) Generally. The Borrower agrees upon demand to
pay, or reimburse the Administrative Agent for, all the
Administrative Agent's reasonable internal and external
audit, legal, appraisal, valuation and investigation
expenses and for all other reasonable out-of-pocket costs
and expenses of every type and nature (including, without
limitation, the reasonable fees, expenses and disbursements
of attorneys, including allocated costs of internal counsel,
legal assistants, auditors, accountants, appraisers,
investment bankers, printers, insurance and environmental
advisers, and other consultants and agents) incurred by the
Administrative Agent in connection with (A) its own audit
and investigation of the Borrower and its Subsidiaries; (B)
the negotiation, preparation and execution of this
Agreement, the Collateral Documents to which the Borrower is
a party and the other Loan Documents to which the Borrower
is a party, any amendments, modifications or waivers thereto
or thereof, the satisfaction or attempted satisfaction of
the conditions set forth in Article VII or Section 5.02 and
the making of the Loans to the Borrower hereunder; (C) the
creation, perfection, protection or satisfaction of the
Administrative Agent's Liens on the Collateral of the
Borrower (pursuant to the terms of the Collateral Documents
to which the Administrative Agent is a party or otherwise)
and the search for other liens (including, without
limitation, fees and expenses for title and lien searches,
local counsel in various jurisdictions, survey costs, title
commitment and insurance fees, filing and recording fees and
taxes, duplication costs and corporate search fees); and (D)
the protection, collection or enforcement of any of the
Obligations or the Collateral of the Borrower. In addition,
the Borrower shall also pay, or reimburse the Administrative
Agent, the Issuing Banks, and the Senior Lenders for all
out-of-pocket costs and expenses, including, without
limitation, reasonable attorneys' and legal assistants' fees
(including allocated costs of internal counsel, and costs of
settlement) incurred by the Administrative Agent, any
Issuing Bank or Senior Lender prior to the occurrence of an
Event of Default in commencing, defending or intervening in
any litigation or in filing a petition, complaint, answer,
motion or other pleading in any legal proceeding relating to
the Borrower and arising out of or in connection with any of
the Loan Documents.
(b) After Default. The Borrower further agrees to
pay, or reimburse the Administrative Agent, the Issuing
Banks and the Senior Lenders for all out-of-pocket costs and
expenses, including, without limitation, reasonable
attorneys' and legal assistants' fees (including allocated
costs of internal counsel, and costs of settlement) incurred
by the Administrative Agent, any Issuing Bank or Senior
Lender after the occurrence of an Event of Default (i) in
enforcing any Obligation or in foreclosing against the
Collateral or exercising or enforcing any other right or
remedy available by reason of such Event of Default; (ii) in
connection with any refinancing or restructuring of the
credit arrangements provided under this Agreement in the
nature of a "work-out" or of any insolvency or bankruptcy
proceeding; (iii) in commencing, defending or intervening in
any litigation or in filing a petition, complaint, answer,
motion or other pleading in any legal proceeding relating to
the Borrower; (iv) in taking any other action in or with
respect to any suit or proceeding (bankruptcy or otherwise)
relating to the Borrower; (v) in protecting, preserving,
collecting, leasing, selling, taking possession of, or
liquidating any of the Collateral; or (vi) attempting to
enforce or enforcing any security interest in any of the
Collateral or any other rights under the Collateral
Documents.
SECTION 16.04 Indemnity. The Borrower agrees to
defend, protect, indemnify, and hold harmless the Senior
Lenders, the Issuing Banks and the Administrative Agent and
their respective officers, directors, employees, attorneys
and agents (collectively, the "Indemnitees") from and
against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims,
costs, expenses and disbursements of any kind or nature
whatsoever (including, without limitation, the reasonable
fees and disbursements of counsel for each such Indemnitee
in connection with any investigative, administrative or
judicial proceeding, whether or not any such Indemnitee
shall be designated a party thereto), imposed on, incurred
by, or asserted against any such Indemnitees (whether
direct, indirect or consequential and whether based on any
federal or state laws or other statutory regulations,
including, without limitation, securities, environmental and
commercial laws and regulations, under common law or at
equitable cause, or on contract or otherwise) in any manner
relating to or arising out of this Agreement, the 1992
Credit Agreement or any predecessor agreement thereto, the
Collateral Documents or other Loan Documents, or any act,
event or transaction related or attendant thereto, the
Commitments, the making of and participation in the Loans is
the obligor and the issuance of and participation in Letters
of Credit issued hereunder, the entering into of Secured F/X
Contracts and Secured Interest Rate Contracts with the
Borrower, the management of such Loans or Letters of Credit
(including any liabilities or claims under Federal, state or
local environmental laws or regulations), or the use or
intended use of the proceeds of such Loans or Letters of
Credit hereunder, including, without limitation, any and all
liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against the Administrative Agent,
the Senior Lenders, the Issuing Banks, or any of them, in
connection with any indemnification agreement(s) which may
be required by the Borrower's independent certified public
accountants as a condition to access to such accountant's
work papers, books and records (collectively, the
"Indemnified Matters"); provided, that the Borrower shall
have no obligation to an Indemnitee hereunder with respect
to (i) matters for which such Indemnitee has been
compensated pursuant to Section 6.10 or (ii) Indemnified
Matters caused by or resulting from the willful misconduct
or gross negligence of such Indemnitee. An Indemnitee will
promptly notify the Borrower of the commencement of any
legal proceedings which may give rise to an Indemnified
Matter, shall permit the Borrower to participate in the
defense of the Indemnitee in such legal proceeding and shall
not settle or compromise any Indemnified Matter unless the
Borrower shall consent to such settlement or compromise. To
the extent that the Borrower's undertaking to indemnify, pay
and hold harmless set forth herein may be unenforceable
because it is violative of any law or public policy, the
Borrower shall contribute the maximum portion which it is
permitted to pay and satisfy under applicable law to the
payment and satisfaction of the Indemnified Matters and the
Indemnitees.
SECTION 16.05 Change in Accounting Principles. Except
as otherwise provided herein, if any changes in accounting
principles from those used in the preparation of the
financial statements referred to in Section 8.20 are
hereafter occasioned by the promulgation of rules,
regulations, pronouncements and opinions by or required by
the Financial Accounting Standards Board or the American
Institute of Certified Public Accountants (or successors
thereto or agencies with similar functions) which result in
a change in the method of calculation of any of the
financial covenants, standards or terms found in Article X,
Article XI, the parties hereto agree to enter into
negotiations in order to amend such provisions so as to
equitably reflect such changes with the desired result that
the criteria for evaluating the Borrower's financial
condition shall be the same after such changes as if such
changes had not been made.
SECTION 16.06 Set-Off. Subject to the rights of the
Senior Secured Creditors with respect to any Collateral in
which the Borrower has an interest, and in addition to any
Liens granted by the Borrower to the Administrative Agent or
any Senior Lender or Issuing Bank and any rights now or
hereafter granted under applicable law and not by way of
limitation of any such Lien or rights, upon the occurrence
and during the continuance of any Event of Default, each
Senior Lender (including each Person to whom such Senior
Lender has granted a participation pursuant to subsection
16.02(b)) and each subsequent holder of any Note and each
Issuing Bank, is hereby authorized by the Borrower at any
time or from time to time, without notice to the Borrower,
or to any other Person (any such notice being hereby
expressly waived) to set off and to appropriate and to apply
any and all deposits of the Borrower (general or special,
including, but not limited to, indebtedness evidenced by
certificates of deposit, whether matured or unmatured but
not including trust accounts) and any other Indebtedness at
any time held or owing by that Senior Lender, participant or
subsequent holder or that Issuing Bank to or for the credit
or the account of the Borrower against and on account of the
Obligations of the Borrower to that Senior Lender or that
subsequent holder or the Issuing Bank including, but not
limited to, all Loans made and Letters of Credit issued and
all claims against the Borrower of any nature or description
arising out of or connected with this Agreement or the
Notes, irrespective of whether or not (i) that Senior Lender
(or participant) or that subsequent holder or that Issuing
Bank shall have made any demand hereunder or (ii) the
Requisite Senior Lenders shall have declared the principal
of and interest on such Loans and Notes and other amounts
due from the Borrower hereunder to be due and payable as
permitted by Article XIV and although such obligations and
liabilities, or any of them, may be contingent or unmatured.
Each Senior Lender and each Issuing Bank agrees that it
shall not, without the express consent of the Administrative
Agent, and that it shall, to the extent it is lawfully
entitled to do so, upon the request of the Requisite Senior
Lenders, exercise its set-off rights hereunder against any
accounts of the Borrower now or hereafter maintained with
such Senior Lender or the Issuing Bank.
SECTION 16.07 Ratable Sharing. Subject to subsection
4.06(b), the Senior Lenders and each subsequent holder by
acceptance of a Note and each Issuing Bank agree among
themselves that (a) with respect to all amounts received by
them which are applicable to the payment of the Obligations,
equitable adjustment will be made so that, in effect, all
such amounts will be shared among them ratably and in the
order of priority set forth in Section 4.06(a), whether
received by voluntary payment, by the exercise of the right
of set-off or banker's lien, by counterclaim or cross action
or by the enforcement of any or all of the Obligations or
any rights with respect to the Collateral, (b) if any of
them shall exercise any right of counterclaim, set-off,
banker's lien or similar right with respect to any
Obligations owed to that Senior Lender or holder or that
Issuing Bank, as the case may be, such Person shall apply
the amount recovered as a result of the exercise of such
right first to the payment of any Loans made to the extent
lawful, and thereafter to all amounts otherwise owed by the
Borrower to it, and (c) notwithstanding anything to the
contrary contained herein, if, following the occurrence and
during the continuance of an Event of Default, any of them
shall receive, whether received by voluntary payment, by the
exercise of the rights of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any or
all of the Obligations or any rights with respect to the
Collateral, payment of a proportion of the aggregate amount
of the Obligations held by it, which is greater than the
proportion received by any other of them, the one receiving
such proportionately greater payment shall purchase, without
recourse or warranty, an undivided interest and
participation (which it shall be deemed to have done
simultaneously upon the receipt of such payment) in the
Obligations of such Borrower owed to the others so that all
such recoveries with respect to the Obligations shall be
applied ratably and in the order of the priority set forth
in Section 4.06; provided, that if all or part of such
proportionately greater payment received by the purchasing
party is thereafter recovered from it, those purchases shall
be rescinded and the purchase prices paid for such
participations shall be returned to that party to the extent
necessary to adjust for such recovery, but without interest
except to the extent the purchasing party is required to pay
interest in connection with such recovery.
SECTION 16.08 Amendments and Waivers. (a) No
amendment or modification of any provision of this Agreement
or of the Notes shall be effective without the written
agreement of the Borrower and the Requisite Senior Lenders,
and no termination or waiver of any provision of this
Agreement or of the Notes, or consent to any departure by
the Borrower therefrom, shall in any event be effective
without the written concurrence of the Requisite Senior
Lenders, which the Requisite Senior Lenders shall have the
right to grant or withhold at their sole discretion; except
that
(i) any amendment, modification, or waiver of any
provision relating to (A) any renewal of the Commitments,
(B) the principal amount of the Loans made and Letters of
Credit issued, (C) the manner in which the Pro Rata Shares
of the Senior Lenders are calculated, (D) the maturity dates
of the Loans or the Reimbursement Obligations (other than as
a result of a change in the calculation or application of
prepayments, which shall only require Requisite Senior
Lender consent), (E) any reduction of the interest rates
borne by the Loans, (F) the dates interest is payable with
respect to the Loans, (G) any reduction of the amount of
fees payable to the Senior Lenders hereunder or the dates on
which such fees are payable, (H) the provisions contained in
Section 5.02 and Section 5.03, (I) the conditions set forth
in Article VII with respect to the making of Loans and the
issuance of Letters of Credit, and (J) the maximum duration
of Interest Periods shall be effective only if evidenced by
a writing signed by or on behalf of all Senior Lenders;
(ii) any amendment, modification or waiver of Section
11.18 (other than subsection 11.18(k)), Section 11.19(e),
clause (iii) of the proviso to the first paragraph of
Section 14.01 and subsection 14.01(p) (other than
subsections 14.01(p)(i) and 14.01(p)(ii)(K)), shall be
effective only if evidenced by a writing signed by or on
behalf of the Requisite Senior Lenders; and
(iii) any amendment, modification, or waiver of any
provision relating to (A) the definitions of "Requisite
Senior Lenders", (B) the maximum duration of Interest
Periods, (C) subsections 14.01(a), (g), (h) and (j) and this
Section 16.08, and (D) the number of Senior Lenders of any
Borrower or required to take any action hereunder (E) the
release of all or substantially all of the Collateral, shall
be effective only if evidenced by a writing signed by or on
behalf of all Senior Lenders.
No amendment, modification, termination or waiver of any
provision of any Note (other than provisions included
therein by cross-reference to this Agreement the amendment,
modification, termination or waiver of which is otherwise
governed by the terms of this Agreement) shall be effective
without the written concurrence of the holder of that Note.
No amendment, modification, termination, or waiver of any
provision of Article XV hereof or any other provision
identifying or referring to the Administrative Agent shall
be effective without the written concurrence of the
Administrative Agent. The Administrative Agent may, with
the concurrence of any of the Senior Lenders, but shall have
no obligation to, execute amendments, modifications, waivers
or consents on behalf of that Senior Lender. Any waiver or
consent shall be effective only in the specific instance and
for the specific purpose for which it was given. No notice
to or demand on the Borrower in any case shall entitle the
Borrower to any other or further notice or demand in similar
or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with
this Section 16.08 shall be binding on each holder of the
Notes at the time outstanding, each future holder of the
Notes, and, if signed by the Borrower, on the Borrower.
(b) Notwithstanding anything herein to the contrary,
in the event that the Borrower shall have requested, in
writing, that any Senior Lender agree to an amendment,
modification, waiver or consent with respect to any
particular provision or provisions of this Agreement, and
such Senior Lender shall have failed to state, in writing,
that it either agrees or disagrees (in full or in part) with
all such requests (in the case of its statement of
agreement, subject to satisfactory documentation and such
other conditions it amy specify) within thirty (30) days of
such request, then such Senior Lender hereby irrevocably
authorizes the Administrative Agent to agree or disagree, in
full or in part, and in the Administrative Agent's sole
discretion, to such requests on behalf of such Senior Lender
as such Senior Lender's attorney-in-fact and to execute and
deliver any writing approved by the Administrative Agent
which evidences such agreement as such Senior Lender's duly
authorized agent for such purposes.
SECTION 16.09 Independence of Covenants. All
covenants hereunder shall be given independent effect so
that if a particular action or condition is not permitted by
any of such covenants, the fact that it would be permitted
by an exception to, or be otherwise within the limitations
of, another covenant shall not avoid the occurrence of an
Event of Default or Potential Event of Default if such
action is taken or condition exists.
SECTION 16.10 Notices. Unless otherwise specifically
provided herein, any notice or other communication herein
required or permitted to be given shall be in writing and
may be personally served, telecopied, telexed or sent by
courier service or United States mail and shall be deemed to
have been given when delivered in person or by courier
service, upon receipt of a telecopy or telex or four (4)
Business Days after deposit in the United States mail
(registered or certified, with postage prepaid and properly
addressed). Notices to the Administrative Agent shall not
be effective until received by the Administrative Agent.
For the purposes hereof, the addresses of the parties hereto
(until notice of a change thereof is delivered as provided
in this Section 16.10) shall be as set forth below each
party's name on the signature pages hereof (or, in the case
of a Senior Lender which became a party hereto pursuant to
Subsection 16.02(a), on the signature page of the Assignment
Agreement pursuant to which such Senior Lender became a
Senior Lender); provided, that Borrower shall not be
required to send copies of notices given by the Borrower
under Article III, IV, or V to any Person designated to
receive copies of notice on the signature pages hereof.
SECTION 16.11 Survival of Warranties and Certain
Agreements. All agreements, representations and warranties
made herein shall survive the execution and delivery of this
Agreement, the Notes and the other Loan Documents, the
making and repayment of the Loans and issuance and discharge
of Letters of Credit hereunder.
SECTION 16.12 Failure or Indulgence Not Waiver;
Remedies Cumulative. No failure or delay on the part of the
Administrative Agent, any Senior Lender, any holder of a
Note or any Issuing Bank in the exercise of any power, right
or privilege under this Agreement, any of the Collateral
Documents or any of the other Loan Documents shall impair
such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or
privilege preclude any other or further exercise thereof or
of any other right, power or privilege. All rights and
remedies existing under this Agreement, the Collateral
Documents and the other Loan Documents are cumulative to and
not exclusive of any rights or remedies otherwise available.
SECTION 16.13 Marshalling; Payments Set Aside.
Neither any Senior Lender nor the Administrative Agent shall
be under any obligation to marshall any assets in favor of
the Borrower or any other party or against or in payment of
any or all of the Obligations. To the extent that the
Borrower makes a payment or payments to the Administrative
Agent or the Senior Lenders, or the Administrative Agent or
any Senior Lender enforces its security interests or
exercises its rights of setoff, and such payment or payments
or the proceeds of such enforcement or setoff or any part
thereof are subsequently invalidated, declared to be fraudu-
lent or preferential, set aside and/or required to be repaid
to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or
equitable cause, then to the extent of such recovery, the
obligation or part thereof originally intended to be
satisfied, and all Liens, rights and remedies therefor,
shall be revived and continued in full force and effect as
if such payment had not been made or such enforcement or
set-off had not occurred.
SECTION 16.14 Severability. In case any provision in
or obligation under this Agreement or the Notes or the
Collateral Documents or the other Loan Documents shall be
invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or
obligation in any other jurisdiction, shall not in any way
be affected or impaired thereby.
SECTION 16.15 Obligations Several. The obligation of
each Senior Lender is several, and no Senior Lender shall be
responsible for the obligation or Commitment of any other
Senior Lender hereunder. Nothing contained in this
Agreement and no action taken by any Senior Lender pursuant
hereto shall be deemed to constitute the Senior Lenders to
be a partnership, an association, a joint venture or any
other kind of entity.
SECTION 16.16 Headings. Article, section and
subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 16.17 Governing Law. This Agreement and the
Notes shall be governed by, and shall be construed and
enforced in accordance with, the law of the State of New
York.
SECTION 16.18 Limitation of Liability. No claim may
be made by the Borrower or any Senior Lender against the
Administrative Agent or any other Senior Lender or the
Affiliates, directors, officers, employees, attorneys or
agents of the Administrative Agent or any other Senior
Lender for any special, indirect, consequential or punitive
damages in respect of any claim for breach of contract
arising out of or related to the transactions contemplated
by this Agreement, or any act, omission or event occurring
in connection therewith; and the Borrower and each Senior
Lender hereby waives, releases and agrees not to sue upon
any claim for any such damages, whether or not accrued and
whether or not known or suspected to exist in its favor.
SECTION 16.19 Successors and Assigns; Subsequent
Holders of Notes. This Agreement, the Collateral Documents
and the other Loan Documents shall be binding upon the
parties thereto and their respective successors and assigns
and shall inure to the benefit of the parties thereto and,
to the extent that any Senior Lender is a party thereto, to
the successors and permitted assigns of such Senior Lender.
The terms and provisions of this Agreement shall inure to
the benefit of any assignee or transferee of the Notes, and
in the event of such transfer or assignment, the rights and
privileges herein conferred upon the Senior Lenders shall
automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions hereof.
Neither the Borrower's rights nor any interest therein
hereunder may be assigned without the written consent of all
of the Senior Lenders.
SECTION 16.20 Consent to Jurisdiction and Service of
Process; Waiver of Jury Trial; Bankruptcy Venue. (a) All
judicial proceedings brought against the Borrower with
respect to this Agreement or any Note may be brought in any
state or federal court of competent jurisdiction in the
State of New York, and by execution and delivery of this
Agreement, the Borrower accepts for itself and in connection
with its properties, generally and unconditionally, the
nonexclusive jurisdiction of the aforesaid courts, and
irrevocably agrees to be bound by any final judgment
rendered thereby in connection with this Agreement from
which no appeal has been taken or is available. The
Borrower irrevocably designates and appoints TFC as its
agent to receive on its behalf service of all process in any
such proceedings in any such court, such service being
hereby acknowledged by the Borrower to be effective and
binding service in every respect. The Borrower irrevocably
consents to the service of process of any of the
aforementioned courts in any such action or proceeding by
the mailing of copies thereof by registered or certified
mail, postage prepaid, to its notice address specified
pursuant to Section 16.10, such service to become effective
ten (10) days after such mailing.
(b) THE BORROWER IRREVOCABLY WAIVES TRIAL BY JURY AND
ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION
OF THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH
JURISDICTION. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall
limit the right of the Administrative Agent or any Senior
Lender to bring proceedings against the Borrower in the
courts of any other jurisdiction.
SECTION 16.21 Counterparts; Effectiveness; Inconsis-
tencies. This Agreement shall become effective and the 1992
Credit Agreement shall be of no further effect with respect
to the Borrower and the Senior Lenders on the Closing Date.
This Agreement and any amendments, waivers, consents, or
supplements may be executed in counterparts, each of which
when so executed and delivered shall be deemed an original,
but all such counterparts together shall constitute but one
and the same instrument. This Agreement, the Collateral
Documents and the other Loan Documents shall be construed to
the extent reasonable to be consistent one with the other,
but to the extent that the terms and conditions of this
Agreement are actually inconsistent with the terms and
conditions of any Collateral Document or any other Loan
Document, this Agreement shall govern.
SECTION 16.22 Performance of Obligations. The
Borrower agrees that the Administrative Agent, the Senior
Lenders and the Issuing Banks, or any one or more of them,
may, but shall have no obligation to, make any payment or
perform any act required of the Borrower under the Loan
Documents to which the Borrower is a party or any of them,
or take any other action which such party in its reasonable
discretion deems necessary or desirable to protect or
preserve the Collateral in which the Borrower has an
interest, including, without limitation, any action to
(i) pay or discharge taxes, liens, security interests or
other encumbrances levied or placed on or threatened against
any such Collateral and (ii) effect any repairs or obtain
any insurance called for by the terms of any of the Loan
Documents and to pay all or any part of the premiums
therefor and the costs thereof.
SECTION 16.23 Intentionally omitted.
SECTION 16.24 Replacement of Certain Senior Lenders.
In the event a Senior Lender ("Affected Lender") shall have:
(i) failed to fund its Pro Rata Share of any Loans
requested by the Borrower which such Senior Lender is
obligated to fund under the terms of this Agreement and
which such failure has not been cured, (ii) failed to issue
a Letter of Credit requested hereunder which such Senior
Lender is obligated to issue as an Issuing Bank under the
terms of this Agreement, (iii) has requested compensation
from the Borrower under Sections 6.10 or 6.11 to recover
increased costs incurred by such Senior Lender which are not
being incurred generally by the other Senior Lenders, or
(iv) delivered a notice pursuant to Section 3.14(e) claiming
that such Senior Lender is unable to extend Eurodollar Rate
Loans to the Borrower for reasons not generally applicable
to the other Senior Lenders, then, in any such case, the
Borrower or the Administrative Agent may make written demand
on such Affected Lender (with a copy to the Administrative
Agent in the case of a demand by the Borrower and a copy to
the Borrower in the case of a demand by the Administrative
Agent) for the Affected Lender to assign, and such Affected
Lender shall assign pursuant to one or more duly executed
Assignment Agreements five (5) Business Days after the date
of such demand, to one or more assignees which the Borrower
or the Administrative Agent, as the case may be, shall have
engaged for such purpose, all of such Affected Lender's
rights and obligations under this Agreement (including,
without limitation, its Commitment, all Loans owing to it,
all of its participation interests in existing Letters of
Credit, and its obligation to participate in additional
Letters of Credit hereunder) in accordance with this Section
16.24. Further, with respect to such assignment:
(A) the Borrower shall have taken, or arranged for,
one or more of the following actions (as the Borrower may
elect in respect of each such Letter of Credit) with respect
to each outstanding Letter of Credit with respect to which
the Affected Lender is the Issuing Bank:
(I) the Borrower shall have provided the Affected
Lender with Cash Collateral in an amount equal to the
aggregate undrawn face amount of such Letter of Credit (such
Cash Collateral to be governed by terms and conditions as
shall be mutually agreed to by such Borrower and such
Affected Lender); or
(II) the beneficiary or beneficiaries of such Letter
of Credit shall have surrendered such Letter of Credit in
exchange for the issuance of a substitute Letter of Credit
by an Issuing Bank other than the Affected Lender or a
substitute letter of credit by another Person (not a Senior
Lender) otherwise qualifying as an assignee; or
(III) the Borrower shall have arranged for a letter of
credit with respect to such Letter of Credit (v) to be
issued by an Issuing Bank other than the Affected Lender or
another Person (not a Senior Lender) otherwise qualifying as
an assignee, (w) naming such Affected Lender as beneficiary
thereof, (x) in a face amount equal to the aggregate undrawn
face amount of such Letter of Credit, (y) having the same
expiry date (plus ten (10) days) as such Letter of Credit
issued by such Affected Lender and (z) becoming effective on
the date of replacement of the Affected Lender; or
(IV) such other arrangement in respect of such Letter
of Credit as shall be mutually acceptable to the Borrower
and such Affected Lender; and
(B) the Affected Lender shall have concurrently
received, in Cash, all amounts owed to the Affected Lender
hereunder or under any other Loan Document, including,
without limitation, the aggregate outstanding principal
amount of the Loans owed to such Senior Lender, together
with accrued interest thereon through the date of such
assignment.
Upon the replacement of any Affected Lender pursuant to this
Section 16.27, (x) each Letter of Credit issued by such
Affected Lender shall cease to be a Letter of Credit under
this Agreement, shall cease to have any participation in,
entitlement to, or other right to share in the security
interests and liens of the Administrative Agent and the
Senior Lenders in the Collateral and shall no longer be
subject to the participation provisions of Section 5.05, all
of which participations shall be deemed to have terminated
and been repurchased by the Issuing Banks hereunder and (y)
the provisions of Section 4.06(b) shall continue to apply
with respect to Loans which are then outstanding with
respect to which the Affected Lender failed to fund its Pro
Rata Share and which failure has not been cured.
SECTION 16.25 No Default Under 1992 Credit Agreement.
Notwithstanding anything to the contrary contained herein or
in the 1992 Credit Agreement, the Administrative Agent and
each of the Senior Lenders hereby acknowledge and agree that
satisfaction of any of the conditions precedent set forth in
Article VII by the Borrower, including, without limitation
the transactions described in subsections 7.02(b) and
7.02(c), shall not constitute an Event of Default.
IN WITNESS WHEREOF, this Agreement has been duly
executed on the dates set forth below.
RHI HOLDINGS, INC.
By: Karen L. Schneckenburger
Title: Treasurer
Notice Address:
300 West Service Road
Chantilly, Virginia 22021
Attn: Michael T. Alcox
CITICORP NORTH AMERICA,
INC., as Administrative
Agent and as
a Senior Lender
By: Colin M. Cohen
Managing Director
Notice Address:
Citicorp North America, Inc.
200 South Wacker Drive
Chicago, Illinois 60606
Attn: Colin M. Cohen
With copies to:
Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
Attn: DeVerille A. Huston
Eurodollar Affiliate:
Citibank, N.A.
Pro Rata Share Commitment
100% $4,250,000