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AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of July 26, 1996
among
FAIRCHILD HOLDING CORP.
as U.S. Borrower
KAYSEL
d/b/a/ Fairchild Finance Company
as U.K. Borrower
THE INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS LENDERS
THE INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS ISSUING BANKS
CITICORP USA, INC.
as Administrative Agent
and
NATIONSBANK, N.A.
as Documentation Agent
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ARTICLE I
DEFINITIONS
1.01. Certain Defined
2
1.02. Computation of Time Periods
35
1.03. Accounting Terms
35
1.04. Other Terms
36
1.05. Dollar Equivalents
36
ARTICLE II
AMOUNTS AND TERMS OF LOANS
2.01 Revolving Credit Facilities
37
2.02. General Terms
38
2.03. Authorized Officers and Administrative Agents On
41
2.04. Use of Proceeds of Loans
42
ARTICLE III LETTERS OF CREDIT3.01. Letters of Credit
43
3.02. Transitional Provisions
50
3.03. Obligations Several
50
ARTICLE IV PAYMENTS AND PREPAYMENTS 4.01 Prepayments; Reductions in
Commitments.51
4.02. Payments
53
4.03. Promise to Repay; Evidence of Indebtedness
57
4.04. Proceeds of Collateral; Concentration Account
Arrangements
58
4.05. Cash Collateral Account
60
4.06. Post-Default Withdrawals from the Concentration
Account and Cash Collateral Account
61
ARTICLE V
INTEREST AND FEES 5.01. Interest on the Loans and other Obligations
63
5.02. Special Provisions Governing Eurocurrency Rate Loans
65
5.03. Fees
68
ARTICLE VI CONDITIONS TO LOANS AND LETTERS OF CREDIT 6.01.
Conditions Precedent to the Initial Loans and Letters of Credit
70
6.02. Conditions Precedent to All Loans and Letters of Credit
72
6.03. Conditions Precedent to Initial U.K. Borrower Loans
73
ARTICLE VII
REPRESENTATIONS AND WARRANTIES 7.01
Representations and Warranties of the Borrowers
75
ARTICLE VIII REPORTING COVENANTS
8.01. Financial Statements; Communications with Accountants
85
8.02. Events of Default
87
8.03. Lawsuits.
88
8.04. Declaration of Dividends and Other Distributions; Intercompany
Loans 88
8.05. TFC/RHI Liquidity
89
8.06. Environmental Notices
89
8.07. Other Reports
90
8.08. Other Information
90
8.09. Borrowing Base Certificates
90
ARTICLE IX AFFIRMATIVE COVENANTS
9.01. Corporate Existence, Etc
91
9.02. Corporate Powers; Conduct of Business
91
9.03. Compliance with Laws, Etc
91
9.04. Payment of Taxes and Claims; Tax Consolidation
91
9.05. Insurance
92
9.06. Inspection of Property; Books and Records; Discussions
92
9.07. Insurance and Condemnation Proceeds
93
9.08. ERISA Compliance
94
9.09. Foreign Employee Benefit Plan Compliance
94
9.10. Collection Accounts
94
9.11. Maintenance of Property
94
9.12. Condemnation
94
9.13. Tax Allocation Agreement
94
9.14. Performance of Material Contracts
95
9.15. Further Assurances
95
ARTICLE X NEGATIVE COVENANTS
10.01. Indebtedness
96
10.02. Sales of Assets
98
10.03. Liens
98
10.04. Investments
99
10.05. Accommodation Obligations
100
10.06. Restricted Junior Payments
101
10.07. Conduct of Business; Accounting and Reporting Practices
102
10.08. Transactions with Shareholders and Affiliates
102
10.09. Restriction on Fundamental Changes
103
10.10. Sales and Leasebacks
103
10.11. Margin Regulations; Securities Laws
103
10.12. ERISA104
10.13. Issuance of Equity Securities
105
10.14. Organizational Documents; Material Contractual Obligations
105
10.15. Bank Accounts
105
10.16. Fiscal Year, Fiscal Months
105
ARTICLE XI FINANCIAL COVENANTS
11.01. Interest Coverage Ratio
106
11.02. Fixed Charge Coverage Ratio
106
11.03. Capital Expenditures
106
11.04. Minimum Net Worth
106
ARTICLE XII EVENTS OF DEFAULT; RIGHTS AND REMEDIES
12.01. Events of Default
107
12.02. Rights and Remedies
111
ARTICLE XIII THE ADMINISTRATIVE AGENT AND EUROPEAN AGENT 13.01 Appointment
114
13.02. Nature of Duties
114
13.03. Rights, Exculpation, Etc
115
13.04. Reliance
116
13.05. Indemnification
116
13.06. Citicorp Individually
117
13.07. Successor Administrative and European Agents
117
13.08. Relations Among Lenders
118
13.09. Concerning the Collateral and the Loan Documents
118
13.10. Documentation Agent
120
ARTICLE XIV YIELD PROTECTION 14.01 Taxes
121
14.02. Increased Capital
123
14.03. Changes; Legal Restrictions
124
14.04. Illegality
125
14.05. Compensation
125
14.06. Limitation on Additional Amounts Payable by the U.S. Borrower
126
14.07. Change in Lending Office
126
14.08. Judgment Currency
127
ARTICLE XV MISCELLANEOUS 15.01. Assignments and Participations
128
15.02. Expenses
130
15.03. Indemnity
132
15.04. Change in Accounting Principles
133
15.05. Setoff
133
15.06. Ratable Sharing
134
15.07. Amendments and Waivers
135
15.08. Notices
137
15.09. Survival of Warranties and Agreements
137
15.10. Failure or Indulgence Not Waiver; Remedies Cumulative
138
15.11. Marshalling; Payments Set Aside
138
15.12. Severability
138
15.13. Headings
138
15.14. Governing Law
138
15.15. Limitation of Liability
138
15.16. Successors and Assigns
139
15.17. Certain Consents and Waivers of the Borrowers
139
15.18. Counterparts; Effectiveness; Inconsistencies
140
15.19. Limitation on Agreements
141
15.20. Confidentiality
141
15.21. Entire Agreement
141
15.22. Advice of Counsel
141
AMENDED AND RESTATED CREDIT AGREEMENT
This Amended and Restated Credit Agreement dated as of July 26, 1996
(as amended, supplemented or modified from time to time, the "Agreement")
is entered into among Fairchild Holding Corp., a Delaware corporation
("FHC"), Kaysel, a private unlimited liability company formed under the
laws of The Republic of Ireland d/b/a Fairchild Finance Company, the
institutions from time to time a party hereto as Lenders, whether by
execution of this Agreement or an Assignment and Acceptance, the
institutions from time to time a party hereto as Issuing Banks, whether by
execution of this Agreement or an Assignment and Acceptance, and Citicorp
USA, Inc., a Delaware corporation ("Citicorp"), in its capacity as agent
for the Lenders and the Issuing Banks hereunder (in such capacity, the
"Administrative Agent").
W I T N E S S E T H:
WHEREAS, FHC entered into that certain Credit Agreement dated as of
March 13, 1996 with certain financial institutions as "Lenders" and
"Issuing Banks" and Citicorp in the capacity as agent for such "Lenders"
and "Issuing Banks" (the "Original Credit Agreement") pursuant to which
certain loans have heretofore been made to FHC and certain letters of
credit have heretofore been issued for the account of FHC and certain of
its Subsidiaries;
WHEREAS, FHC intends to repay in full the loans made under the
Original Credit Agreement on July 29, 1996 and has requested that the
Original Credit Agreement be amended to, among other things, extend the
"Revolving Credit Termination Date" thereunder, provide for additional
loans to be made to FHC and to its Wholly-Owned Subsidiary, Kaysel, d/b/a
Fairchild Finance Company, and permit the aforesaid letters of credit
issued under the Original Credit Agreement to remain outstanding;
WHEREAS, in view of the foregoing, certain of the "Lenders" and "Issuing
Banks" under the Original Credit Agreement have agreed to enter into this
Agreement in order to (i) restate and amend the terms and provisions of
the Original Credit Agreement in their entirety and (ii) set forth the
terms and conditions under which the Lenders will hereafter extend Loans
and the Issuing Banks will continue letters of credit issued under the
Original Credit Agreement and hereafter issue Letters of Credit to or for
the benefit of the U.S. Borrower and its Subsidiaries;
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.01. Certain Defined Terms. The following terms used in this
Agreement shall have the following meanings, applicable both to the
singular and the plural forms of the terms defined:
"Accommodation Obligation" means any Contractual Obligation,
contingent or otherwise, of one Person with respect to any Indebtedness,
obligation or liability of another, if the primary purpose or intent
thereof by the Person incurring the Accommodation Obligation is to provide
assurance to the obligee of such Indebtedness, obligation or liability of
another that such Indebtedness, obligation or liability will be paid or
discharged, or that any agreements relating thereto will be complied with,
or that the holders thereof will be protected (in whole or in part)
against loss in respect thereof including, without limitation, direct and
indirect guarantees, endorsements (except for collection or deposit in the
ordinary course of business), notes co-made or discounted, recourse
agreements, take-or-pay agreements, keep-well agreements, put options,
agreements to purchase or repurchase such Indebtedness, obligation or
liability or any security therefor or to provide funds for the payment or
discharge thereof, agreements to maintain solvency, assets, level of
income, or other financial condition, and agreements to make payment other
than for value received. The amount of any Accommodation Obligation shall
be equal to the amount of the Indebtedness, obligation or liability so
guaranteed or otherwise supported; provided, that (i) if the liability of
the Person extending such guaranty or support is limited with respect
thereto to an amount less than the Indebtedness, obligation or liability
guaranteed or supported, or is limited to recourse against a particular
asset or assets of such Person, the amount of the corresponding
Accommodation Obligation shall be limited (in the case of a guaranty or
other support limited by amount) to such lesser amount or (in the case of
a guaranty or other support limited by recourse to a particular asset or
assets) to the higher of the Fair Market Value of such asset or assets at
the date for determination of the amount of the Accommodation Obligation
or the value at which such asset or assets would, in conformity with GAAP,
be reflected on or valued for the purposes of preparing a consolidated
balance sheet of such Person as at such determination date; and (ii) if
any obligation or liability is guaranteed or otherwise supported jointly
and severally by a Person and others, then the amount of the obligation or
liability of such Person with respect to such guaranty or other support to
be included in the amount of such Person's Accommodation Obligation shall
be the whole principal amount so guaranteed or otherwise supported.
"Administrative Agent" means Citicorp and each successor
Administrative Agent appointed pursuant to the terms of Article XIII of
this Agreement.
"Affiliate", as applied to any Person, means any other Person that
directly or indirectly controls, is controlled by, or is 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 (10.0%) 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.
"Agreement" is defined in the preamble hereto.
"Applicable Lending Office" means, with respect to a particular
Lender, its Eurocurrency Lending Office in respect of provisions relating
to Eurocurrency Rate Loans and its Domestic Lending Office in respect of
provisions relating to Base Rate Loans.
"Appraised Value" means the orderly liquidation value determined by
the appraisers identified on Schedule 1.01.1 attached hereto and made a
part hereof in the appraisals identified on such Schedule.
"Assignment and Acceptance" means an Assignment and Acceptance in
substantially the form of Exhibit A attached hereto and made a part hereof
(with blanks appropriately completed) delivered to the Administrative
Agent in connection with an assignment of a Lender's interest under this
Agreement in accordance with the provisions of Section 15.01.
"Bankruptcy Code" means Title 11 of the United States Code (11 U.S.C.
101 et seq.), as amended from time to time, and any successor statute.
"Base Eurocurrency Rate" means, with respect to any Eurocurrency
Interest Period applicable to a Borrowing of Eurocurrency Rate Loans, an
interest rate per annum determined by the Administrative Agent to be the
average (rounded upward to the nearest whole multiple of one sixteenth of
one percent (0.0625%) per annum if such average is not such a multiple) of
the rates per annum specified by notice to the Administrative Agent by
Citibank as the rate per annum at which deposits in Dollars or DM, as
applicable, are offered by the principal office of Citibank in London,
England to major banks in the London interbank market at approximately
11:00 a.m. (London time) on the Eurocurrency Interest Rate Determination
Date for such Eurocurrency Interest Period for a period equal to such
Eurocurrency Interest Period and in an amount substantially equal to the
amount of the Eurocurrency Rate Loan to be outstanding to Citicorp for
such Eurocurrency Interest Period.
"Base Rate" means, 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 (i) the highest of:
(a) the rate of interest announced publicly by Citibank in New York,
New York from time to time, as Citibank's base rate; and
(b) the sum of (1) one-half of one percent (0.50%) per annum plus
(2) the Federal Funds Rate in effect from time to time during such period.
with respect to U.S. Borrower Loans and (ii) the rate of interest
announced publicly by Citibank London in London, England from time to
time, as Citibank London's base rate, with respect to U.K. Borrower Loans
denominated in Dollars.
"Base Rate Loans" means all Loans which bear interest at a rate
determined by reference to the Base Rate as provided in Section 5.01(a);
provided, however, no Loan denominated in DM shall be a Base Rate Loan.
"Base Rate Margin" means (i) with respect to Obligations of the U.S.
Borrower, a rate equal to one and one-half of one percent (1.50%) per
annum and (ii) with respect to Obligations of the U.K. Borrower, a rate
equal to two and one-half percent (2.50%) per annum.
"Benefit Plan" means a defined benefit plan as defined in Section
3(35) of ERISA (other than a Multiemployer Plan or Foreign Employee
Benefit Plan) in respect of which a Borrower or any ERISA Affiliate is, or
within the immediately preceding five (5) years was, an "employer" as
defined in Section 3(5) of ERISA.
"Borrowers" means, collectively, the U.K. Borrower and U.S. Borrower,
and, individually, either the U.K. Borrower or the U.S. Borrower.
"Borrowing" means a borrowing consisting of Loans of the same type
made, continued or converted on the same day and, in the case of
Eurocurrency Rate Loans, having the same Eurocurrency Interest Period.
"Borrowing Base Certificate" means a certificate, in substantially
the form of Exhibit B attached hereto and made a part hereof, setting
forth, as of the end of each Fiscal month, Eligible U.S. Receivables,
Eligible Inventory, the Appraised Value of Equipment and Real Property,
Eligible U.K. Receivables, the respective advance percentages with respect
to each of the foregoing, and the calculation of the resultant U.S.
Borrowing Base and U.K. Borrowing Base, in each instance, as of the date
of such certificate.
"Business Activity Report" means (A) a Notice of Business Activities
Report from the State of New Jersey Division of Taxation or (B) a
Minnesota Business Activity Report from the Minnesota Department of
Revenue.
"Business Day" means a day, in the applicable local time, which is
not a Saturday or Sunday or a legal holiday and on which banks are not
required or permitted by law or other governmental action to close (i) in
New York, New York or Chicago, Illinois and (ii) in the case of
Eurocurrency Rate Loans and U.K. Borrower Loans, in London, England and
(iii) in the case of Letter of Credit transactions for a particular
Issuing Bank, in the place where its office for issuance or administration
of the pertinent Letter of Credit is located.
"Capital Expenditures" means, for any period, the aggregate of all
expenditures (whether paid in cash or other Property or accrued as a
liability (but without duplication)) during such period that, in
conformity with GAAP, are required to be included in or reflected by the
U.S. Borrower's or any of its Subsidiaries' fixed asset accounts as
reflected in the consolidated balance sheet of the U.S. Borrower and its
Subsidiaries; provided, however, (i) Capital Expenditures shall include,
whether or not such a designation would be in conformity with GAAP, that
portion of Capital Leases which is capitalized on the consolidated balance
sheet of the U.S. Borrower and its Subsidiaries and (ii) Capital
Expenditures shall exclude, whether or not such a designation would be in
conformity with GAAP, expenditures made in connection with the replacement
or restoration of Property, to the extent reimbursed or financed from
insurance or other recoveries received on account of the loss of or damage
to the Property being replaced or restored or from condemnation awards
arising from the taking by condemnation or eminent domain of such Property
being replaced.
"Capital Lease" means any lease of any property (whether real,
personal or mixed) by a Person as lessee which, in conformity with GAAP,
is accounted for as a capital lease on the balance sheet of that Person.
"Capital Stock" means, with respect to any Person, any capital stock
of such Person, regardless of class or designation, and all warrants,
options, purchase rights, conversion or exchange rights, voting rights,
calls or claims of any character with respect thereto.
"Capitalization Date" means the date on which the U.S. Borrower
becomes the owner of ninety-nine percent (99%) of the Capital Stock of the
U.K. Borrower, which date shall be confirmed to the Administrative Agent,
in writing, within three (3) Business Days after the date on which such
event occurs.
"Cash" means money, currency or a credit balance in a Deposit
Account.
"Cash Collateral" means cash or Cash Equivalents held by the
Administrative Agent, any of the Issuing Banks or any of the Lenders as
security for the Obligations.
"Cash Collateral Account" means an interest bearing account at
Citibank's offices in New York, New York designated by the Administrative
Agent into which Cash Collateral shall be deposited. The Cash Collateral
Account shall be under the sole dominion and control of the Administrative
Agent, provided that all amounts deposited therein shall be held by the
Administrative Agent for the benefit of the Holders and shall be subject
to the terms of Sections 4.05 and 4.06.
"Cash Equivalents" means (i) marketable direct obligations issued or
unconditionally guaranteed by the United States government and backed by
the full faith and credit of the United States government; (ii) marketable
direct obligations issued by any state of the United States or any
political subdivision of any such state or any public instrumentality
thereof which, at the time of acquisition thereof, have the highest rating
obtainable from either Standard & Poor's Rating Group, a division of
McGraw-Hill, Inc. ("S&P") or Moody's Investors Service, Inc. (or if not
then rating such obligations, from such other nationally recognized rating
services as are reasonably acceptable to the Administrative Agent); (iii)
commercial paper which, at the time of acquisition thereof, has the
highest rating obtainable from either S & P or Moody's Investors Service,
Inc. (or if not then rating such obligations, from such other nationally
recognized rating services as are reasonably acceptable to the
Administrative Agent); (iv) domestic and Eurocurrency certificates of
deposit and time deposits, bankers' acceptances and floating rate
certificates of deposit issued by any Lender or any commercial bank
organized under the laws of the United States, any state thereof, or the
District of Columbia and having a combined capital and surplus in excess
of $250,000,000, which, at the time of acquisition, are rated A-1 (or
better) by S & P or P-1 (or better) by Moody's Investors Services, Inc.;
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 ninety (90) days after the date of such agreement; provided,
that the maturities of such Cash Equivalents shall not exceed ninety (90)
days.
"Cash Interest Expense" means, for any period, total interest expense
of the U.S. Borrower and its Subsidiaries, whether paid or accrued, but
without duplication, (including, without limitation, the interest
component of Capital Leases, all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance
financing and net of the difference between payments received by the
Borrowers on all Hedge Agreements and payments made by the Borrowers on
all Hedge Agreements other than the initial payments made to enter into
such Hedge Agreements; and excluding, interest expense not payable in cash
(including amortization of discount) and legal, commitment and closing
fees and expenses and other non-recurring fees and expenses and
transaction costs payable in cash, including, without limitation,
underwriting commissions and discounts, incurred in connection with the
execution and delivery of this Agreement and the transactions contemplated
hereby), which is payable in cash, all as determined in conformity with
GAAP. For the Fiscal Quarters ending September 29, 1996, December 29,
1996, and March 30, 1997, Cash Interest Expense shall be calculated using
annualized amounts paid or accrued to date.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, 42 U.S.C. 9601 et seq., any amendments thereto,
any successor statutes, and any regulations promulgated thereunder.
"Change of Control" means any of (i) fifty percent (50%) (on a fully
diluted basis) of the voting power of the voting Capital Stock of RHI
ceasing to be owned and controlled by Jeffrey J. Steiner and his
"associates" (as defined in the Securities Exchange Act) without fifty
percent (50%) (on a fully diluted basis) of the voting power of the voting
Capital Stock of TFC continuing to be owned and controlled by Jeffrey J.
Steiner and his "associates" or (ii) one hundred percent (100%) of the
Capital Stock of the U.S. Borrower ceasing to be owned and controlled by
RHI or, if fifty percent (50%) (on a fully diluted basis) of the voting
power of the voting Capital Stock of RHI ceases to be owned and controlled
by Jeffrey J. Steiner and his "associates", by TFC, or (iii) ninety-nine
percent (99%) of the Capital Stock of the U.K. Borrower ceasing to be
owned and controlled by the U.S. Borrower after the Capitalization Date.
"Citibank" means Citibank, N.A., a national banking association.
"Citicorp" is defined in the preamble of this Agreement.
"Claim" means any claim or demand, by any Person, of whatsoever kind
or nature for any alleged Liabilities and Costs, whether based in
contract, tort, implied or express warranty, strict liability, criminal or
civil statute, Permit, ordinance or regulation, common law or otherwise.
"Closing Date" means July 26, 1996.
"Collateral" means all Property and interests in Property now owned
or hereafter acquired by the U.S. Borrower or any of its Subsidiaries upon
which a Lien is granted under any of the Loan Documents.
"Collection Account" means each lock-box and blocked depository
account maintained by a Borrower or any Guarantor subject to a Collection
Account Agreement for the collection of Receivables and other proceeds of
Collateral.
"Collection Account Agreement" means a written agreement,
substantially in the form attached hereto as Exhibit C or Exhibit D with
such modifications as the Administrative Agent, from time to time, deems
acceptable, among a Borrower or a Guarantor, the Administrative Agent,
and, as applicable, each of the banks at which a Borrower or Guarantor
maintains a Collection Account.
"Commercial Letter of Credit" means any documentary letter of credit
issued by an Issuing Bank pursuant to Section 3.01 for the account of the
U.S. Borrower or for the account of any of the U.S. Borrower's Domestic
Subsidiaries if the U.S. Borrower is jointly and severally liable for
reimbursement of amounts drawn under such letter of credit, which is
drawable upon presentation of documents evidencing the sale or shipment of
goods purchased by the U.S. Borrower or such Domestic Subsidiary in the
ordinary course of its business.
"Commission" means the Securities and Exchange Commission and any
Person succeeding to the functions thereof.
"Commitment" means, with respect to any Lender at the time of
determination thereof, the amount of such Lender's U.S. Loan Commitment or
U.K. Loan Commitment; and "Commitments" means the aggregate amount of all
U.S. Loan Commitments and U.K. Loan Commitments.
"Commitment Fee" is defined in Section 5.03(c).
"Compliance Certificate" is defined in Section 8.01(d).
"Concentration Account" means the depository account maintained at
Citibank in New York, New York, Citibank London in London, England, or
such other financial institution designated for such purpose by the
Administrative Agent into which collections of Receivables of the U.S.
Borrower and its Domestic Subsidiaries or the European Subsidiary
Borrowers, other proceeds of Collateral and other amounts are transferred
pursuant to the terms of the Collection Account Agreements or otherwise as
described in Section 4.04.
"Consolidated Loan Availability" means, at any time of determination
thereof, the lesser of (i) the sum of (a) the U.K. Borrowing Base at such
time plus (b) the U.S. Borrowing Base at such time minus the sum of (c)
the U.S. Revolving Credit Obligations at such time plus (d) the
outstanding balance of the U.K. Borrower Loans at such time or (ii) the
EBITDA Borrowing Base at such time minus the sum of (a) the U.S. Revolving
Credit Obligations at such time plus (b) the outstanding balance of the
U.K. Borrower Loans at such time.
"Contaminant" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, radioactive materials, asbestos (in any form or
condition), polychlorinated biphenyls (PCBs), lead paint, or any
constituent of any such substance or waste, and includes, but is not
limited to, these terms as defined in federal, state or local laws or
regulations.
"Contractual Obligation", as applied to any Person, means any
provision of any Securities issued by that Person or any indenture,
mortgage, deed of trust, security agreement, pledge agreement, guaranty,
contract, undertaking, agreement or instrument 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.
"Cure Loans" is defined in Section 4.02(f)(iii).
"Customary Permitted Liens" means
(i) Liens (other than Environmental Liens and Liens in favor of the
PBGC) with respect to the payment of taxes, assessments or governmental
charges in all cases which are 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 GAAP;
(ii) statutory Liens of landlords and Liens of suppliers, mechanics,
carriers, materialmen, warehousemen or workmen 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 GAAP;
(iii) Liens (other than any Lien in favor of the PBGC) incurred or
deposits made in the ordinary course of business in connection with
worker's compensation, unemployment insurance or other types of social
security benefits or to secure the performance of bids, tenders, sales,
contracts (other than for the repayment of borrowed money), surety, appeal
and performance bonds; provided that (A) all such Liens do not in the
aggregate materially detract from the value of a Borrower's or any of its
Subsidiaries' assets or Property or materially impair the use thereof in
the operation of their respective businesses, and (B) all Liens of
attachment or judgment and Liens securing bonds to stay judgments or in
connection with appeals do not secure at any time an aggregate amount
exceeding $500,000; and
(iv) Liens arising with respect to zoning restrictions, easements,
licenses, reservations, covenants, rights-of-way, utility easements,
building restrictions and other similar charges or encumbrances on the use
of Real Property which do not interfere with the ordinary conduct of the
business of a Borrower or any of its Subsidiaries.
"Deposit Account" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate
of deposit.
"Designated Prepayment" means each mandatory prepayment required by
clauses (i), (ii), and (iii) of Section 4.01(b).
"DM" means the lawful money of the Federal Republic of Germany.
"DM Subfacility" means an amount equal to fifty percent (50%) of the
Dollar equivalent of the U.K. Loan Commitments as in effect from time to
time.
"Documentation Agent" means NationsBank, N.A.
"DOL" means the United States Department of Labor and any Person
succeeding to the functions thereof.
"Dollars" and "$" mean the lawful money of the United States.
"Domestic Lending Office" means, with respect to any Lender, such
Lender's office, located in the United States, specified as the "Domestic
Lending Office" under its name on the signature pages hereof or on the
Assignment and Acceptance by which it became a Lender or such other United
States office of such Lender as it may from time to time specify by
written notice to the U.S. Borrower and the Administrative Agent.
"Domestic Subsidiaries" means those Subsidiaries of the U.S. Borrower
identified on Schedule 1.01.2 attached hereto and made a part hereof.
"EBITDA" means, for any period, the amount calculated, without
duplication, for such period as the sum of the Operating Units' Operating
Profit and Equity Income/Minority Interest plus (to the extent deducted in
the determination of such Operating Profit and Equity Income/Minority
Interest) (i) depreciation expense, (ii) amortization expense, (iii) other
non-recurring non-cash charges and expenses not requiring the use of Cash,
(iv) losses arising other than in the ordinary course of business of the
Operating Units which have been included in the determination of such
Operating Profit and Equity Income/Minority Interest, and (v) increases in
the LIFO reserve, minus (to the extent included in the determination of
such Operating Profit and Equity Income/Minority Interest) (a) gains
arising other than in the ordinary course of business of the Operating
Units, (b) decreases in the LIFO reserve, and (c) other non-recurring
credits and income not generating Cash.
"EBITDA Borrowing Base" means, as of any date of determination, an
amount equal to the EBITDA for the then most recent four fiscal quarters
of the U.S. Borrower multiplied by two (2); provided, however, (i) for the
period ending on June 30, 1996, EBITDA shall be deemed to equal
$14,000,000 until the date on which the report of the U.S. Borrower's
independent certified public accountants described in Section 8.01(c) for
such Fiscal Year is delivered to the Administrative Agent and (ii) EBITDA
for each fiscal quarter of the Fiscal Year ending June 30, 1996 shall be
deemed to equal one-fourth (1/4) of $14,000,000 until the date on which
the report of the U.S. Borrower's independent certified public accountants
described in Section 8.01(c) for such Fiscal Year is delivered to the
Administrative Agent and one-fourth (1/4) of the EBITDA calculated based
on such report thereafter.
"Effective Date" means July 29, 1996.
"11 7/8% Senior Subordinated Debenture Indenture" means 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 Corporation and Irving Trust Company, as
trustee, and the Second Supplemental Indenture dated as of August 16,
1988, between RHI and Irving Trust Company, as trustee.
"Eligible Receivables" means, collectively, the U.K. Eligible
Receivables and the U.S. Eligible Receivables.
"Eligibility Reserves" means, as of three (3) Business Days after the
date of written notice of any determination thereof to the U.S. Borrower
by the Administrative Agent, such amounts as the Administrative Agent, in
the exercise of its reasonable credit judgment, may from time to time
establish against the gross amounts of Eligible Receivables and Eligible
Inventory to reflect material changes in risks or contingencies arising
after the Effective Date which may affect such items.
"Eligible Assignee" means (i) a Lender or any Affiliate thereof;
(ii) a commercial bank having total assets in excess of $2,500,000,000;
(iii) the central bank of any country which is a member of the
Organization for Economic Cooperation and Development; or (iv) a finance
company, insurance company, other financial institution or fund,
acceptable to the Administrative Agent, which is regularly engaged in
making, purchasing or investing in loans and having total assets in excess
of $300,000,000; provided, however, that no assignee shall be an "Eligible
Assignee" unless it has or obtains concurrently with its becoming a Lender
a U.S. Loan Commitment. In no event shall any Person which is a resident
of The Republic of Ireland or incorporated or licensed under the laws of
The Republic of Ireland be an "Eligible Assignee".
"Eligible Inventory" means, as of the date of determination therefor,
all Inventory of the U.S. Borrower and the Domestic Subsidiaries which are
Guarantors which, when scheduled to the Administrative Agent and at all
times thereafter, does not consist of:
(i) work-in-process unless specifically approved by the
Administrative Agent; or
(ii) obsolete goods or goods otherwise not currently saleable in the
ordinary course of such Person's business; or
(iii) damaged or rejected goods; or
(iv) goods not located at one of such Person's manufacturing,
warehouse or distribution facilities located within the United States and
set forth on Schedule 1.01.3 attached hereto and made a part hereof; or
(v) goods in transit; or
(vi) packaging materials, labels, name plates or supplies; or
(vii) returned goods; or
(viii) goods held on consignment or any similar arrangement,
including, without limitation, goods held by such Person but owned by a
customer of such Person; or
(ix) goods (a) with respect to which the Administrative Agent does
not have a perfected security interest senior in priority to any other,
(b) which are subject to a Lien in favor of a landlord or bailee, or (c)
which are subject to a Lien which is not permitted under Section 10.03; or
(x) goods located on premises which are not owned by the U.S.
Borrower and with respect to which the Administrative Agent has not
received, as appropriate in the circumstances, a landlord's waiver, bailee
agreement, or consignee agreement in form and substance satisfactory to
the Administrative Agent.
"Eligible U.K. Receivables" means each Receivable of the European
Subsidiary Borrowers which is pledged or assigned by way of security to
the Administrative Agent and, when scheduled to the Administrative Agent
and at all times thereafter, is not of any of the types set forth on
Schedule 1.01.4 attached hereto and made a part hereof.
"Eligible U.S. Receivables" means each Receivable of the U.S.
Borrower and the Domestic Subsidiaries which are Guarantors which, when
scheduled to the Administrative Agent and at all times thereafter, is not
of any of the types set forth on Schedule 1.01.5 attached hereto and made
a part hereof.
"Environmental, Health or Safety Requirements of Law" means all
Requirements of Law derived from or relating to any federal, state or
local law, ordinance, rule, regulation, Permit, license or other binding
determination of any Governmental Authority relating to, imposing
liability or standards concerning, or otherwise addressing, the
environment, health and/or safety, including, but not limited to the Clean
Air Act, the Clean Water Act, CERCLA, RCRA, any so-called "Superfund" or
"Superlien" law, the Toxic Substances Control Act, OSHA, and public health
codes, each as from time to time in effect.
"Environmental Lien" means a Lien in favor of any Governmental
Authority for any (i) liabilities under any Environmental, Health or
Safety Requirement of Law, or (ii) damages arising from, or costs incurred
by such Governmental Authority in response to, a Release or threatened
Release of a Contaminant into the environment.
"Equipment" means, with respect to any Person, all of such Person's
present and future (i) equipment, including, without limitation,
machinery, manufacturing, distribution, selling, data processing and
office equipment, assembly systems, tools, molds, dies, fixtures,
appliances, furniture, furnishings, vehicles, vessels, aircraft, aircraft
engines, and trade fixtures, (ii) other tangible personal property (other
than such Person's Inventory), and (iii) any and all accessions, parts and
appurtenances attached to any of the foregoing or used in connection
therewith, and any substitutions therefor and replacements, products and
proceeds thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, 29
U.S.C. 1000 et seq., any amendments thereto, any successor statutes, and
any regulations or guidance promulgated thereunder.
"ERISA Affiliate" means (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 U.S. Borrower; (ii) a
partnership or other 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 U.S. 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 U.S. Borrower, any corporation described in
clause (i) above or any partnership or trade or business described in
clause (ii) above.
"ERISA Event" means (i) the occurrence with respect to a Plan of a
Reportable Event, (ii) the provision by the administrator of any Plan of
a notice of intent to terminate such Plan, pursuant to Section 4041(a)(2)
of ERISA (including any such notice with respect to a plan amendment
referred to in Section 4041(e) of ERISA), (iii) the cessation of
operations at a facility of the U.S. Borrower or any ERISA Affiliate in
the circumstances described in Section 4062(e) of ERISA, (iv) the
withdrawal by the U.S. Borrower or an ERISA Affiliate from a Multiemployer
Plan during a plan year for which it was a substantial employer, as
defined in Section 4001(a)(2) of ERISA, (v) the conditions set forth in
Section 302(f)(1)(A) and (B) of ERISA to the creation of a Lien upon
Property or rights to Property of the U.S. Borrower or any ERISA Affiliate
for failure to make a required payment to a Plan are satisfied, (vi) the
adoption of an amendment to a Plan requiring the provision of security to
such Plan, pursuant to Section 307 of ERISA, or (vii) the institution by
the PBGC of proceedings to terminate a Plan, pursuant to Section 4042 of
ERISA, or the occurrence of any event or condition described in Section
4042 of ERISA that constitutes grounds for the termination of, or the
appointment of a trustee to administer, a Plan.
"Eurocurrency Affiliate" means, with respect to each Lender, the
Affiliate of such Lender (if any) set forth below such Lender's name under
the heading "Eurodollar Affiliate" on the signature pages hereof or
"Eurocurrency Affiliate" on the signature pages of the Assignment and
Acceptance by which it became a Lender or such Affiliate of a Lender as it
may from time to time specify by written notice to the U.S. Borrower and
the Administrative Agent.
"Eurocurrency Interest Payment Date" means, with respect to any
Eurocurrency Rate Loan, the last day of each Eurocurrency Interest Period
applicable to such Loan.
"Eurocurrency Interest Period" is defined in Section 5.02(b).
"Eurocurrency Interest Rate Determination Date" is defined in Section
5.02(c).
"Eurocurrency Lending Office" means, with respect to any Lender, the
office or offices of such Lender (if any) set forth below such Lender's
name under the heading "Eurodollar Lending Office" on the signature pages
hereof or "Eurocurrency Lending Office" on the signature pages of the
Assignment and Acceptance by which it became a Lender (or, if no such
office is specified, its Domestic Lending Office), or such office or
offices of such Lender as it may from time to time specify by written
notice to the U.S. Borrower and the Administrative Agent.
"Eurocurrency Rate" means, with respect to any Eurocurrency Interest
Period applicable to a Eurocurrency Rate Loan, an interest rate per annum
obtained by dividing (i) the Base Eurocurrency Rate applicable to that
Eurocurrency Interest Period by (ii) a percentage equal to 100% minus the
Eurocurrency Rate Reserve Percentage in effect on the relevant
Eurocurrency Interest Rate Determination Date.
"Eurocurrency Rate Loans" means those Loans outstanding which bear
interest at a rate determined by reference to a Eurocurrency Rate and the
Eurocurrency Rate Margin as provided in Section 5.01(a).
"Eurocurrency Rate Margin" means (i) with respect to Obligations of
the U.S. Borrower, a rate equal to two and three-quarters percent (2.75%)
per annum and (ii) with respect to Obligations of the U.K. Borrower, a
rate equal to two and one-half percent (2.50%) per annum.
"Eurodollar Rate Reserve Percentage" means, for any Lender for the
Eurocurrency Interest Period for any Eurocurrency Rate Loan denominated in
Dollars, the reserve percentage which is applicable three (3) Business
Days before the first day of such Eurocurrency Interest Period under the
regulations issued from time to time by the Federal Reserve Board for
determining the actual 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, New York with
deposits exceeding Five Billion Dollars ($5,000,000,000) with respect to
liabilities or assets consisting of or including "Eurocurrency Liabili-
ties" (or with respect to any other category of liabilities which includes
deposits by reference to which the interest rate on Eurocurrency Rate
Loans is determined) having a term equal to such Eurocurrency Interest
Period.
"European Administrator" means Citicorp Finance Ireland Limited.
"European Agent" means Citibank London.
"European Subsidiary Borrower" means any of the Persons identified as
such on Schedule 1.01.6 attached hereto and made a part hereof.
"Event of Default" means any of the occurrences set forth in Section
12.01 after the expiration of any applicable grace period, as expressly
provided in Section 12.01.
"Exchange Rate" means, in relation to the purchase of one currency
(for the purposes of this definition the "first currency") with another
currency (for the purposes of this definition the "second currency") on a
given date, Citibank's spot rate of exchange for the amount in question in
the London interbank market at 11:00 a.m. (London time) on such date for
the purchase of the first currency with the second currency, for delivery
three (3) Business Days later.
"Fair Market Value" means, with respect to any asset, the value of
the consideration obtainable in a sale of such asset in the open market,
assuming a sale by a willing seller to a willing purchaser dealing at
arm's length and arranged in an orderly manner over a reasonable period of
time, each having reasonable knowledge of the nature and characteristics
of such asset, neither being under any compulsion to act, and, if in
excess of $3,000,000, as determined (a) in good faith by the Board of
Directors of the U.S. Borrower or (b) in an appraisal of such asset,
provided that for purposes of Section 10.02, such appraisal was performed
relatively contemporaneously with such sale by an independent third party
appraiser and the basic assumptions underlying such appraisal have not
materially changed since the date thereof.
"Federal Funds Rate" means, 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 in New York,
New York, for the next preceding Business Day) in New York, New York by
the Federal Reserve Bank of New York, or if such rate is not so published
for any day which is a Business Day in New York, New York, the average of
the quotations for such day on such transactions received by the
Administrative Agent from three federal funds brokers of recognized
standing selected by the Administrative Agent.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System or any Governmental Authority succeeding to its functions.
"Fee Letter" means that certain fee letter addressed to Citicorp USA,
Inc. from the U.S. Borrower dated July 29, 1996.
"FII" means Fairchild Industries, Inc., a Delaware corporation.
"Financial Statements" means (i) statements of income and retained
earnings, statements of cash flow, and balance sheets, (ii) such other
financial statements as TFC, RHI, either Borrower and Subsidiaries of
either Borrower shall routinely and regularly prepare, and (iii) such
other financial statements as the Administrative Agent or the Requisite
Lenders may from time to time reasonably specify.
"Fiscal Month" means each of the month periods ending on the dates
set forth on Schedule 1.01.7 attached hereto and made a part hereof.
"Fiscal Year" means the fiscal year of the U.S. Borrower and its
Subsidiaries for accounting and tax purposes, which shall be the 12-month
period ending on June 30 of each calendar year.
"Fixed Charge Coverage Ratio" means, for any period, the ratio of (i)
EBITDA for such period minus Capital Expenditures made in such period to
(ii) the sum of (a) Cash Interest Expense for such period plus (b) the
amount paid by the U.S. Borrower in dividends (other than the dividend
described in Section 10.06(b)(i)) in such period plus (c) the aggregate
amount of loans made by the U.S. Borrower and its Subsidiaries to RHI
during such period minus the aggregate amount of payments made on such
loans during such period.
"Foreign Employee Benefit Plan" means any employee benefit plan as
defined in Section 3(3) of ERISA which is maintained or contributed to for
the benefit of the employees of a Borrower, any of its Subsidiaries or any
of its ERISA Affiliates and is not covered by ERISA pursuant to ERISA
Section 4(b)(4).
"Foreign Pension Plan" means any employee benefit plan as defined in
Section 3(3) of ERISA which (i) is maintained or contributed to for the
benefit of employees of a Borrower, any of its Subsidiaries or any of its
ERISA Affiliates, (ii) is not covered by ERISA pursuant to Section 4(b)(4)
of ERISA, and (iii) under applicable local law, is required to be funded
through a trust or other funding vehicle.
"Fronting Fee" is defined in Section 5.03(b).
"Funding Date" means, with respect to any Loan, the date of funding
of such Loan.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the American Institute of Certified
Public Accountants' Accounting Principles Board and Financial Accounting
Standards Board or in such other statements by such other entity as may be
in general use by significant segments of the accounting profession as in
effect on the date hereof (unless otherwise specified herein as in effect
on another date or dates).
"General Intangibles" means, with respect to any Person, all of such
Person's present and future (i) general intangibles, (ii) rights,
interests, choses in action, causes of action, claims and other intangible
Property of every kind and nature (other than Receivables), (iii)
corporate and other business records, (iv) loans, royalties, and other
obligations receivable, (v) trademarks, registered trademarks, trademark
applications, service marks, registered service marks, service mark
applications, patents, registered patents, patent applications, trade
names, rights of use of any name, labels, fictitious names, inventions,
designs, trade secrets, computer programs, software, printouts and other
computer materials, goodwill, registrations, copyrights, copyright
applications, permits, licenses, franchises, customer lists, credit files,
correspondence, and advertising materials, (vi) customer and supplier
contracts, firm sale orders, rights under license and franchise
agreements, rights under tax sharing agreements, and other contracts and
contract rights, (vii) interests in partnerships and joint ventures,
(viii) tax refunds and tax refund claims, (ix) right, title and interest
under leases, subleases, licenses and concessions and other agreements
relating to property, (x) deposit accounts (general or special) with any
bank or other financial institution, (xi) credits with and other claims
against third parties (including carriers and shippers), (xii) rights to
indemnification and with respect to support and keep-well agreements,
(xiii) reversionary interests in pension and profit sharing plans and
reversionary, beneficial and residual interests in trusts, (xiv) letters
of credit, guarantees, Liens, security interests and other security held
by or granted to such Person, (xvi) uncertificated securities and (xvii)
investment securities.
"Governmental Authority" means any nation or government, any federal,
state, local or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guarantors" means each of the Subsidiaries of the U.S. Borrower
identified on Schedule 1.01.8 attached hereto and made a part hereof and
any other Person executing and delivering a guaranty of payment and
performance of all or any portion of the Obligations.
"Hedge Agreement" means any agreement, including, without limitation,
interest rate exchange, swap, collar or cap agreement, interest rate
future or option contract, currency swap agreement, currency future or
option contract, and other similar agreement, evidencing an agreement or
arrangement intended to protect against fluctuation in interest rates
and/or foreign exchange rates or conversion rates for conversion of
foreign currencies to Dollars.
"Holder" means any Person entitled to enforce any of the Obligations,
whether or not such Person holds any evidence of Indebtedness, including,
without limitation, the Administrative Agent, each Lender and each Issuing
Bank.
"Indebtedness", as applied to any Person, means, at any time, without
duplication, (a) all indebtedness, obligations or other liabilities of
such Person (i) for borrowed money or evidenced by debt Securities,
debentures, acceptances, notes or other similar instruments, and any
accrued interest, fees and charges relating thereto, (ii) under profit
payment agreements or in respect of obligations to redeem, repurchase or
exchange any Securities of such Person or to pay dividends in respect of
any Capital Stock, (iii) with respect to letters of credit issued for such
Person's account, (iv) to pay the deferred purchase price of property or
services, except accounts payable and accrued expenses arising in the
ordinary course of business, (v) in respect of Capital Leases, (vi) which
are Accommodation Obligations or (vii) under warranties and indemnities;
(b) all indebtedness, obligations or other liabilities of such Person or
others secured by a Lien on any property of such Person, whether or not
such indebtedness, obligations or liabilities are assumed by such Person,
all as of such time; (c) all indebtedness, obligations or other liabil-
ities of such Person in respect of interest rate contracts, Hedge
Agreements and foreign exchange contracts, net of liabilities owed to such
Person by the counterparties thereon; (d) all preferred stock subject
(upon the occurrence of any contingency or otherwise) to mandatory redemp-
tion; and (e) all contingent Contractual Obligations with respect to any
of the foregoing.
"Indemnified Matters" is defined in Section 15.03.
"Indemnitees" is defined in Section 15.03.
"Interest Coverage Ratio" means, for any period, the ratio of (i)
EBITDA for such period to (ii) Cash Interest Expense for such period.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, any successor
statute and any regulations or guidance promulgated thereunder.
"Inventory" means, with respect to any Person, all of such Person's
present and future (i) inventory, (ii) goods, merchandise and other
personal property furnished or to be furnished under any contract of
service or intended for sale or lease, and all consigned goods and all
other items which have previously constituted Equipment of such Person but
are then currently being held for sale or lease in the ordinary course of
such Person's business, (iii) raw materials, work-in-process and finished
goods, (iv) materials and supplies of any kind, nature or description used
or consumed in such Person's business or in connection with the
manufacture, production, packing, shipping, advertising, finishing or sale
of any of the property described in clauses (i) through (iii) above, (v)
goods in which such Person has a joint or other interest or right of any
kind (including, without limitation, goods in which such Person has an
interest or right as consignee), and (vi) goods which are returned to or
repossessed by such Person; in each case whether in the possession of such
Person, a bailee, a consignee, or any other Person for sale, storage,
transit, processing, use or otherwise, and any and all documents for or
relating to any of the foregoing.
"Investment" means, with respect to any Person, (i) any purchase or
other acquisition by that Person of Securities, or of a beneficial
interest in Securities, issued by any other Person, (ii) any purchase by
that Person of all or substantially all of the assets of a business
conducted by another Person, and (iii) any loan, advance (other than
deposits with financial institutions available for withdrawal on demand,
prepaid expenses, accounts receivable, advances to employees and similar
items made or incurred in the ordinary course of business) or capital
contribution by that Person to any other Person, including all
Indebtedness to such Person arising from a sale of property by such Person
other than in the ordinary course of its business and all Indebtedness to
such Person which is not a current asset. The amount of any Investment
shall be the original cost of such Investment, plus the cost of all
additions thereto less the amount of any return of capital or principal to
the extent such return is in cash with respect to such Investment without
any adjustments for increases or decreases in value or write-ups, write-
downs or write-offs with respect to such Investment.
"IRS" means the Internal Revenue Service and any Person succeeding to
the functions thereof.
"Issuing Banks" means Citibank and each Lender designated as an
"Issuing Bank" on the signature pages hereof or the signature page of the
Assignment and Acceptance by which it became a Lender and each other
Lender approved by the Administrative Agent and the U.S. Borrower who has
agreed to become an Issuing Bank for the purpose of issuing Letters of
Credit pursuant to Section 3.01.
"Lender" means, as of the Closing Date, each financial institution a
signatory hereto as a Lender and, at any other given time, each financial
institution which is a party hereto as a Lender, whether as a signatory
hereto or pursuant to an Assignment and Acceptance.
"Letter of Credit" means any Commercial Letter of Credit or Standby
Letter of Credit.
"Letter of Credit Fee" is defined in Section 5.03(b).
"Letter of Credit Obligations" means, at any particular time, the sum
of (i) all outstanding Reimbursement Obligations, plus (ii) the aggregate
Dollar equivalent of the undrawn face amount of all outstanding Letters of
Credit, plus (iii) the aggregate Dollar equivalent of the face amount of
all Letters of Credit requested by the U.S. Borrower but not yet issued
(unless the request for an unissued Letter of Credit has been denied by
the designated Issuing Bank as referenced in Section 3.01(c)(i)).
"Letter of Credit Reimbursement Agreement" means, 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 the Letter of
Credit is requested may employ in the ordinary course of business for its
own account, with such modifications thereto as may be agreed upon by the
Issuing Bank and the U.S. Borrower and as are not materially adverse (in
the judgment of the Issuing Bank and Administrative Agent) to the
interests of the Lenders; provided, however, 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.
"Liabilities and Costs" means all liabilities, obligations,
responsibilities, losses, damages, personal injury, death, punitive
damages, economic damages, consequential damages, treble damages,
intentional, willful or wanton injury, damage or threat to the
environment, natural resources or public health or welfare, costs and
expenses (including, without limitation, attorney, expert and consulting
fees and costs and fees and costs associated with any investigation,
feasibility or Remedial Action studies), fines, penalties and monetary
sanctions, interest, direct or indirect, known or unknown, absolute or
contingent, past, present or future.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, conditional sale agreement, deposit arrangement, security
interest, encumbrance, lien (statutory or other and including, without
limitation, any Environmental Lien), deed of charge, preference, priority
or other security agreement or preferential arrangement of any kind or
nature whatsoever in respect of any property of a Person, whether granted
voluntarily or imposed by law, and includes the interest of a lessor under
a Capital Lease or under any financing lease having substantially the same
economic effect as any of the foregoing and the filing of any financing
statement or similar notice (other than a financing statement filed by a
"true" lessor pursuant to 9-408 of the Uniform Commercial Code), naming
the owner of such property as debtor, under the Uniform Commercial Code or
other comparable law of any jurisdiction.
"Loan Account" is defined in Section 4.03(b).
"Loan Documents" means this Agreement, the Notes, Hedge Agreements to
which any Lender or any Affiliate of a Lender is a party, foreign exchange
contracts to which any Lender or any Affiliate of a Lender is a party, and
all other instruments, agreements and written Contractual Obligations
between the Borrowers (or either of them) or any Subsidiary of a Borrower
and any of the Administrative Agent, any Lender or any Issuing Bank
delivered to either the Administrative Agent, such Lender or such Issuing
Bank pursuant to or in connection with the transactions contemplated
hereby.
"Loans" means all U.S. Borrower Loans and U.K. Borrower Loans,
whether Base Rate Loans or Eurocurrency Rate Loans.
"Margin Stock" means "margin stock" as such term is defined in
Regulation U and Regulation G.
"Material Adverse Effect" means a material adverse effect upon (i)
the financial condition, operations, assets or prospects of the Borrowers
and their Subsidiaries on a consolidated basis, (ii) the ability of a
Borrower or any of its Subsidiaries to perform their respective
obligations under the Loan Documents, (iii) the ability of the Lenders,
the Issuing Banks, or the Administrative Agent to enforce any of the Loan
Documents, or (iv) ability of the Lenders, the European Administrator, the
Administrative Agent or the U.K. Borrower to enforce any of the U.K. Loan
Documents.
"MIS" means computerized management information system for recording
and maintenance of information regarding purchases, sales, aging,
categorization, and locations of Inventory, creation and aging of
Receivables, and accounts payable (including agings thereof).
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA (other than a Foreign Employee Benefit Plan)
which (i) is, or within the immediately preceding six (6) years was,
contributed to by either a Borrower or any ERISA Affiliate or in respect
of which a Borrower or any ERISA Affiliate has assumed any liability and
(ii) is not a Foreign Employee Benefit Plan.
"Net Cash Proceeds of Issuance of Equity Securities" means (i) net
cash proceeds (including cash, equivalents readily convertible into cash,
and such proceeds of any notes received as consideration or any other non-
cash consideration) received by a Borrower or any of its Subsidiaries at
any time after the Effective Date on account of the issuance of equity
Securities of a Borrower or any of its Subsidiaries (other than (a)
Capital Stock of a Subsidiary issued to a Borrower or to a Subsidiary of
a Borrower and (b) Capital Stock issued to effect the transfer of the
Technologies Minority Interest) and (ii) proceeds received by a Borrower
at any time after the Effective Date as a contribution to its capital on
account of the issuance of equity Securities of such Borrower.
"Net Cash Proceeds of Issuance of Indebtedness" means Indebtedness
(other than Indebtedness permitted under Section 10.01) of a Borrower or
any of its Subsidiaries, in each case net of all transaction costs and
underwriters' discounts with respect thereto.
"Net Cash Proceeds of Sale" means (i) proceeds received by a Borrower
or any of its Subsidiaries in cash (including cash, equivalents readily
convertible into cash, and such proceeds of any notes received as
consideration or any other non-cash consideration) from the sale,
assignment or other disposition of (but not the lease or license of) any
Property, other than sales permitted under clauses (b) through (e) of
Section 10.02, net of (A) the costs of sale, assignment or other disposi-
tion, (B) any income, franchise, transfer or other tax liability arising
from such transaction and (C) amounts applied to the repayment of
Indebtedness (other than the Obligations) secured by a Lien permitted by
Section 10.03 on the asset disposed of, whether such net proceeds arise
from any individual sale, assignment or other disposition or from any
group of related sales, assignments or other dispositions; and (ii) to the
extent provided in Section 9.07(b), proceeds of insurance on account of
the loss of or damage to any such Property or Properties, and payments of
compensation for any such Property or Properties taken by condemnation or
eminent domain.
"Net Income" means, for any period, the net income (or loss) after
taxes of the Borrowers and their Subsidiaries on a consolidated basis for
such period taken as a single accounting period determined in conformity
with GAAP.
"Non Pro Rata Loan" is defined in Section 4.02(f).
"Note" means a promissory note in the form attached hereto as Exhibit
E payable to a Lender, evidencing certain of the Obligations of a Borrower
to such Lender and executed by a Borrower as required by Section 4.03(a),
as the same may be amended, supplemented, modified or restated from time
to time, and any promissory note issued in substitution therefor; "Notes"
means, collectively, all of such Notes outstanding at any given time.
"Notice of Borrowing" means a notice substantially in the form of
Exhibit F attached hereto and made a part hereof.
"Notice of Conversion/Continuation" means a notice substantially in
the form of Exhibit G attached hereto and made a part hereof with respect
to a proposed conversion or continuation of a Loan pursuant to Section
5.01(c).
"Obligations" means all Loans, advances, debts, liabilities,
obligations, covenants and duties owing by the Borrowers, individually or
collectively, to the Administrative Agent, any Lender, any Issuing Bank,
any Affiliate of the Administrative Agent, any Lender or any Issuing Bank,
or any Person entitled to indemnification pursuant to Section 15.03 of
this Agreement, of any kind or nature, present or future, whether or not
evidenced by any note, guaranty or other instrument, arising under this
Agreement, the Notes or any other Loan Document, whether or not for the
payment of money, whether arising by reason of an extension of credit,
opening or amendment of a Letter of Credit or payment of any draft drawn
thereunder, loan, guaranty, indemnification, foreign exchange contract,
Hedge Agreement 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 arising and however acquired.
The term includes, without limitation, all interest, charges, expenses,
fees, attorneys' fees and disbursements and any other sum chargeable to
the Borrowers, or either of them, under this Agreement or any other Loan
Document.
"Officer's Certificate" means, as to a corporation, a certificate
executed on behalf of such corporation by the chairman or vice-chairman of
its board of directors (if an officer of such corporation) or its presi-
dent, any of its vice presidents, or its treasurer.
"Operating Profit and Equity Income/Minority Interest" means an
amount equal to total sales minus cost of sales minus total operating
expenses and includes other (income)/expense, investment (income)/expense,
goodwill amortization, equity (in earnings)/loss, and minority interest
(income)/loss.
"Operating Lease" means, 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.
"Operating Units" means, collectively, those segments of the U.S.
Borrower's business known as (i) Fairchild Fasteners Worldwide, (ii)
Camloc (UK) Gas Spring Division, and (iii) Fairchild Technologies and
Related U.S. Operations; and each of the foregoing is an "Operating Unit".
"Organizational Documents" means, with respect to any corporation,
limited liability company, unlimited liability company, or partnership
(i) the articles/certificate of incorporation or articles of association
(or the equivalent organizational documents) of such corporation, limited
liability company, or unlimited liability company, (ii) the partnership
agreement executed by the partners in the partnership, (iii) the by-laws
(or the equivalent governing documents) of the corporation, limited
liability company, unlimited liability company, or partnership, and
(iv) any document setting forth the designation, amount and/or relative
rights, limitations and preferences of any class or series of such
corporation's Capital Stock or such limited liability company's, unlimited
liability company's or partnership's equity or ownership interests.
"Original Credit Agreement" is defined in the premises.
"OSHA" means the Occupational Safety and Health Act of 1970, 29
U.S.C. 651 et seq., any amendments thereto, any successor statutes and
any regulations or guidance promulgated thereunder.
"PBGC" means the Pension Benefit Guaranty Corporation and any Person
succeeding to the functions thereof.
"Permits" means any permit, approval, authorization license,
variance, or permission required from a Governmental Authority or other
Person under an applicable Requirement of Law.
"Permitted Dispositions" means the sale, lease, transfer or other
disposition of the operations and/or assets and/or Investments identified
on Schedule 1.01.9 attached hereto and made a part hereof.
"Permitted Equity Securities Options" means the subscriptions,
options, warrants, rights, convertible securities and other agreements or
commitments relating to the issuance of equity Securities identified on
Schedule 1.01.10 attached hereto and made a part hereof.
"Permitted Existing Accommodation Obligations" means those Accommo-
dation Obligations of the Subsidiaries of the U.S. Borrower identified on
Schedule 1.01.11 attached hereto and made a part hereof.
"Permitted Existing Indebtedness" means the Indebtedness of the U.S.
Borrower and its Subsidiaries identified on Schedule 1.01.12 attached
hereto and made a part hereof.
"Permitted Existing Investments" means those Investments identified
as such on Schedule 1.01.13 attached hereto and made a part hereof.
"Permitted Existing Liens" means the Liens on assets of the
Subsidiaries of the U.S. Borrower identified on Schedule 1.01.14 attached
hereto and made a part hereof.
"Person" means any natural person, corporation, limited liability
company, 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.
"Plan" means an employee benefit plan defined in Section 3(3) of
ERISA (other than a Foreign Employee Benefit Plan) (i) in respect of which
a Borrower or any ERISA Affiliate is, or within the immediately preceding
six (6) years was, an "employer" as defined in Section 3(5) of ERISA or a
Borrower or any ERISA Affiliate has assumed any liability and (ii) which
is not a Foreign Employee Benefit Plan.
"Potential Event of Default" means an event which, with the giving of
notice or the lapse of time, or both, would constitute an Event of
Default.
"Process Agent" is defined in Section 15.17(a)(i).
"Pro Forma" means the unaudited pro forma opening balance sheet of
U.S. Borrower and its Subsidiaries attached hereto as Exhibit H, prepared
in accordance with GAAP, dated the Closing Date, and giving effect to the
extensions of credit contemplated hereby.
"Projections" means the financial projections (including, without
limitation, capital expenditure budget) and assumptions prepared by the
U.S. Borrower dated the Closing Date and attached hereto as Exhibit I.
"Property" means any Real Property or personal property, plant,
building, facility, structure, underground storage tank or unit,
Equipment, Inventory, General Intangible, Receivable, or other asset
owned, leased or operated by a Borrower or any Subsidiary of a Borrower,
as applicable, (including any surface water thereon, and soil and
groundwater thereunder).
"Proposal Letter" means that certain letter addressed to the U.S.
Borrower from Citicorp Securities, Inc. dated June 12, 1996 and accepted
by the U.S. Borrower on June 12, 1996.
"Pro Rata Share" means, with respect to any Lender, the percentage
obtained by dividing (i) the sum of such Lender's U.S. Loan Commitments
plus such Lender's U.K. Loan Commitments (in each case, as adjusted from
time to time in accordance with the provisions of this Agreement or any
Assignment and Acceptance to which such Lender is a party) by (ii) the
aggregate amount of all of the Commitments (notwithstanding the
termination of any such Commitments).
"Protective Advance" is defined in Section 13.09(a).
"RCRA" means the Resource Conservation and Recovery Act of 1976, 42
U.S.C. 6901 et seq., any amendments thereto, any successor statutes, and
any regulations promulgated thereunder.
"Real Property" means, with respect to any Person, all of such
Person's present and future right, title and interest (including, without
limitation, any leasehold estate) in (i) any plots, pieces or parcels of
land, (ii) any improvements, buildings, structures and fixtures now or
hereafter located or erected thereon or attached thereto of every nature
whatsoever (the rights and interests described in clauses (i) and (ii)
above being the "Premises"), (iii) all easements, rights of way, gores of
land or any lands occupied by streets, ways, alleys, passages, sewer
rights, water courses, water rights and powers, and public places
adjoining such land, and any other interests in property constituting
appurtenances to the Premises, or which hereafter shall in any way belong,
relate or be appurtenant thereto, (iv) all hereditaments, gas, oil,
minerals (with the right to extract, sever and remove such gas, oil and
minerals), and easements, of every nature whatsoever, located in or on the
Premises and (v) all other rights and privileges thereunto belonging or
appertaining and all extensions, additions, improvements, betterments,
renewals, substitutions and replacements to or of any of the rights and
interests described in clauses (iii) and (iv) above.
"Receivables" means, with respect to any Person, all of such Person's
present and future (i) accounts, (ii) contract rights, chattel paper,
instruments, documents, deposit accounts, and other rights to payment of
any kind, whether or not arising out of or in connection with the sale or
lease of goods or the rendering of services, and whether or not earned by
performance, (iii) any of the foregoing which are not evidenced by
instruments or chattel paper, (iv) intercompany receivables, and any
security documents executed in connection therewith, (v) proceeds of any
letters of credit or insurance policies on which such Person is named as
beneficiary, (vi) claims against third parties for advances and other
financial accommodations and any other obligations whatsoever owing to
such Person, (vii) rights in and to all security agreements, leases,
guarantees, instruments, securities, documents of title and other
contracts securing, evidencing, supporting or otherwise relating to any of
the foregoing, together with all rights in any goods, merchandise or
Inventory which any of the foregoing may represent, and (viii) rights in
returned and repossessed goods, merchandise and Inventory which any of the
same may represent, including, without limitation, any right of stoppage
in transit.
"Register" is defined in Section 15.01(c).
"Regulation A" means Regulation A of the Federal Reserve Board as in
effect from time to time.
"Regulation G" means Regulation G of the Federal Reserve Board as in
effect from time to time.
"Regulation T" means Regulation T of the Federal Reserve Board as in
effect from time to time.
"Regulation U" means Regulation U of the Federal Reserve Board as in
effect from time to time.
"Regulation X" means Regulation X of the Federal Reserve Board as in
effect from time to time.
"Reimbursement Date" is defined in Section 3.01(d)(i)(A).
"Reimbursement Obligations" means the aggregate Dollar equivalent of
the non-contingent reimbursement or repayment obligations of the U.S.
Borrower with respect to amounts drawn under Letters of Credit.
"Release" means any release, spill, emission, leaking, pumping,
pouring, dumping, injection, deposit, disposal, abandonment, or discarding
of barrels, containers or other receptacles, discharge, emptying, escape,
dispersal, leaching or migration into the indoor or outdoor environment or
into or out of any Property, including the movement of Contaminants
through or in the air, soil, surface water, groundwater or Property.
"Remedial Action" means actions required to (i) clean up, remove,
treat or in any other way address Contaminants in the indoor or outdoor
environment; (ii) prevent the Release or threat of Release or minimize the
further Release of Contaminants; or (iii) investigate and determine if a
remedial response is needed and to design such a response and post-
remedial investigation, monitoring, operation and maintenance and care.
"Replacement Proceeds" means the amount of (i) proceeds of insurance
paid on account of the loss of or damage to any Property and awards of
compensation for Property taken by condemnation or eminent domain to the
extent actually used to replace, rebuild or restore the Property so lost,
damaged or taken, provided that U.S. Borrower shall have delivered written
notice to the Administrative Agent that it or its applicable Subsidiary
intends to so replace, rebuild or restore such Property within 90 days
after the Administrative Agent's receipt of the proceeds of such insurance
payment or condemnation award if such proceeds exceed $500,000 and (ii)
insurance paid on account of a business interruption occurrence to the
extent actually used in the restoration or conduct of the business
interrupted.
"Reportable Event" means any of the events described in Section
4043(c) of ERISA and the regulations promulgated thereunder as in effect
from time to time other than an event for which the thirty (30) day notice
requirement has been waived by the PBGC.
"Requirements of Law" means, 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, ERISA, the Fair
Labor Standards Act, the Worker Adjustment and Retraining Notification
Act, Americans with Disabilities Act of 1990, and any certificate of
occupancy, zoning ordinance, building, environmental or land use
requirement or Permit and Environmental, Health or Safety Requirement of
Law.
"Requisite Lenders" means Lenders whose Pro Rata Shares, in the
aggregate, are greater than fifty-one percent (51%); provided, however,
that, in the event any of the Lenders shall have failed to fund its Pro
Rata Share of any Loan requested by a Borrower which such Lenders are
obligated to fund under the terms of this Agreement and any such failure
has not been cured, then for so long as such failure continues, "Requisite
Lenders" means Lenders (excluding all Lenders whose failure to fund their
respective Pro Rata Shares of such Loans have not been so cured) whose Pro
Rata Shares represent more than fifty-one percent (51%) of the aggregate
Pro Rata Shares of such Lenders; provided, further, however, that, in the
event that the Commitments have been terminated pursuant to the terms of
this Agreement, "Requisite Lenders" means Lenders (without regard to such
Lenders' performance of their respective obligations hereunder) whose
aggregate ratable shares (stated as a percentage) of the aggregate
outstanding principal balance of all Loans are greater than fifty-one
percent (51%).
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of a Borrower or any of its Subsidiaries now or hereafter
outstanding, except a dividend payable solely in shares of that class of
stock or in any junior class of stock to the holders of that class, (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 equity Securities of a Borrower or any of its Subsidiaries now or
hereafter outstanding, (iii) any payment or prepayment of principal of,
premium, if any, or interest, fees or other charges on or with respect to,
and any redemption, purchase, retirement, defeasance, sinking fund or
similar payment and any claim for rescission with respect to, any
Indebtedness for borrowed money other than the Obligations and (iv) any
payment made to redeem, purchase, repurchase or retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of Capital Stock or other equity Securities of a
Borrower or any of its Subsidiaries now or hereafter outstanding.
"Revolving Credit Termination Date" means the earliest to occur of
(i) July 28, 2000 (or, if not a Business Day, the next preceding Business
Day), (ii) the date of termination of the Commitments pursuant to the
terms of this Agreement, and (iii) the date of acceleration of the
Obligations pursuant to Section 12.02.
"RHI" means RHI Holdings, Inc., a Delaware corporation.
"Securities" means any Capital Stock, shares, voting trust certif-
icates, limited partnership certificates, bonds, debentures, notes or
other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"investment securities" or "securities", including, without limitation,
any "security" as such term is defined in Section 8-102 of the Uniform
Commercial Code, whether certificated or uncertificated, 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" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
"Securities Exchange Act" means the Securities Exchange Act of 1934,
as amended from time to time, and any successor statute.
"Solvent", when used with respect to any Person, means that at the
time of determination:
(i) the Fair Market Value of its assets is in excess of the total
amount of its liabilities (including, without limitation, contingent
liabilities); and
(ii) the present fair saleable value of its assets is greater than
its probable liability on its existing debts as such debts become absolute
and matured; and
(iii) it is then able and expects to be able to pay its debts
(including, without limitation, contingent debts and other commitments) as
they mature; and
(iv) it has capital sufficient to carry on its business as conducted
and as proposed to be conducted.
"Standby Letter of Credit" means any letter of credit issued by an
Issuing Bank pursuant to Section 3.01 for the account of the U.S. Borrower
or for the account of any of the U.S. Borrower's Subsidiaries if the U.S.
Borrower is jointly and severally liable for reimbursement of amounts
drawn under such letter of credit, which is not a Commercial Letter of
Credit.
"Subsidiary" of a Person means any corporation, limited liability
company, general or limited partnership, or other entity of which
securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other Persons performing
similar functions with respect to such entity are at the time directly or
indirectly owned or controlled by such Person, one or more of the other
subsidiaries of such Person or any combination thereof. Notwithstanding
the foregoing, for purposes of this Agreement, Banner Aerospace, Inc.
shall not be included as a Subsidiary of the U.S. Borrower.
"Super-Majority Lenders" means Lenders whose Pro Rata Shares, in the
aggregate, are greater than sixty-seven percent (67%); provided, however,
that, in the event any of the Lenders shall have failed to fund its Pro
Rata Share of any Loan requested by a Borrower which such Lenders are
obligated to fund under the terms of this Agreement and any such failure
has not been cured, then for so long as such failure continues, "Super-
Majority Lenders" means Lenders (excluding all Lenders whose failure to
fund their respective Pro Rata Shares of such Loans have not been so
cured) whose Pro Rata Shares represent more than sixty-seven percent (67%)
of the aggregate Pro Rata Shares of such Lenders.
"Tax Allocation Agreement" means that certain Ninth Amended and
Restated Tax Allocation Agreement dated as of July 29, 1996 among TFC,
RHI, the U.S. Borrower and certain Affiliates thereof, as in effect on the
Effective Date.
"Taxes" is defined in Section 14.01(a).
"Technologies" means Fairchild Convac GmbH (which is changing its
name to Fairchild Technologies GmbH Gerate zur Halbleitertechnologie), a
corporation formed under the laws of the Federal Republic of Germany and
an indirect Subsidiary of the U.S. Borrower.
"Technologies Minority Interest" means (i) an interest in the Capital
Stock of Technologies issued by Technologies or transferred (whether by
sale, assignment, as the result of a merger, exchange of shares, or
otherwise) by VSI Holdings, Inc., a Delaware corporation and Wholly-Owned
Subsidiary, to a Person not an Affiliate of the Borrowers or (ii) an
interest in or the assets of Fairchild Germany, Inc. or its Subsidiaries,
Convac USA, Inc. and Fairchild Technologies USA, Inc.; Convac Equipment
for Semiconductor Technology, Ltd. (the name of which is to be changed to
Fairchild Technologies UK, Ltd.); Convac France S.A.; and Convac Dresden
(GmbH) which is permitted to be transferred (whether by sale, assignment,
as the result of a merger, exchange of shares, or otherwise) by the Person
which is the owner thereof on the Closing Date; provided that the issuance
or transfer thereof does not result in Technologies ceasing to be a
Subsidiary of the U.S. Borrower.
"Termination Event" means (i) a Reportable Event with respect to any
Benefit Plan; (ii) the withdrawal of a Borrower or any ERISA Affiliate
from a Benefit Plan during a plan year in which a Borrower or such ERISA
Affiliate was a "substantial employer" as defined in Section 4001(a)(2) of
ERISA or the cessation of operations which results in the termination of
employment of 20% of Benefit Plan participants who are employees of a
Borrower or any ERISA Affiliate; (iii) the imposition of an obligation on
a Borrower or any ERISA Affiliate under Section 4041 of ERISA to provide
affected parties written notice of intent to terminate a Benefit Plan in
a distress termination described in Section 4041(c) of ERISA; (iv) the
institution by the PBGC or any similar foreign Governmental Authority of
proceedings to terminate a Benefit Plan or a Foreign Pension Plan; (v) any
event or condition which could reasonably be expected to constitute
grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Benefit Plan; (vi) the
appointment by a foreign Governmental Authority of, or the institution of
proceedings by a foreign Governmental Authority to appoint, a trustee to
administer any Foreign Pension Plan; or (vii) the partial or complete
withdrawal of a Borrower or any ERISA Affiliate from a Multiemployer Plan
or a Foreign Pension Plan.
"TFC" means The Fairchild Corporation, a Delaware corporation.
"TFC/RHI Liquidity" means, as of any date of determination thereof,
an amount equal to (i) the amount of consolidated Cash and Cash
Equivalents of TFC, RHI and the U.S. Borrower as of such date of
determination, plus (ii) the amount of the Consolidated Loan Availability
as of such date of determination after giving effect to any requests for
Loans or Letters of Credit received by the Administrative Agent on such
date, minus (iii) the amount of Cash and Cash Equivalents of TFC, RHI, and
the U.S. Borrower required to secure Contractual Obligations of TFC, RHI
and the U.S. Borrower as of such date of determination.
"Transfer Documents" means, collectively, all corporate resolutions,
agreements and instruments executed and delivered in connection with (i)
the formation and capitalization of any Domestic Subsidiary or the U.K.
Borrower after the date of the Original Credit Agreement and on or prior
to the Effective Date and (ii) the transfer of the Capital Stock of
Fairchild Germany, Inc. by RHI to the U.S. Borrower after the date of the
Original Credit Agreement and on or prior to the Effective Date; "Transfer
Document" means any one of the Transfer Documents.
"U.K. Borrower" means, Kaysel d/b/a Fairchild Finance Company, a
Wholly-Owned Subsidiary of the U.S. Borrower formed as a private unlimited
liability company under the laws of The Republic of Ireland.
"U.K. Borrower Loans" is defined in Section 2.01(b).
"U.K. Borrowing Base" means, as of any date of determination, an
amount designated on a Borrowing Base Certificate dated as of such date of
determination, equal to the lesser of (a) the U.K. Loan Commitments then
in effect and (b) the sum of up to eighty-five percent (85%) of Eligible
U.K. Receivables as of such date. For purposes of this definition,
Eligible U.K. Receivables shall be determined after deduction of all
Eligibility Reserves then in effect.
"U.K. Lender" means any Lender having both a U.S. Loan Commitment and
a U.K. Loan Commitment designated on the signature pages hereof or the
signature page of the Assignment and Acceptance by which it became a
Lender; provided however that a Lender shall cease to be a U.K. Lender
upon an Assignment and Acceptance becoming effective whereby such Lender
has assigned its U.K. Loan Commitment in its entirety to another Person
which becomes a U.K. Lender.
"U.K. Loan Availability" means, at any date of determination, the
amount by which (i) the lesser of (a) the sum of the U.K. Borrowing Base
at such time plus the U.S. Borrowing Base at such time or (b) the EBITDA
Borrowing Base at such time exceeds (ii) the sum of the U.K. Borrower
Loans outstanding at such time plus the U.S. Revolving Credit Obligations
at such time; provided, that in no event shall the U.K. Loan Availability
at any time exceed the amount by which (c) the U.K. Loan Commitments at
such time exceeds (d) the U.K. Borrower Loans outstanding at such time.
"U.K. Loan Commitment" means, with respect to any Lender, the
obligation of such Lender to make Loans to the U.K. Borrower pursuant to
the terms and conditions of this Agreement, in an aggregate amount at any
time outstanding which shall not exceed the principal amount set forth
opposite such Lender's name under the heading "U.K. Loan Commitment" on
the signature pages hereof or the signature page of the Assignment and
Acceptance by which it became a Lender, as modified from time to time
pursuant to the terms of this Agreement or to give effect to any
applicable Assignment and Acceptance, and "U.K. Loan Commitments" means
the aggregate principal amount of the U.K. Loan Commitments of all
Lenders, the maximum amount of which shall be $12,000,000, as reduced from
time to time pursuant to Section 4.01.
"U.K. Loan Documents" means the notes, security agreements, pledge
agreements, notices to account debtors, and all other instruments,
agreements and written Contractual Obligations between any European
Subsidiary Borrower and any of the U.K. Borrower, the European
Administrator, the European Agent, any Lender or the Administrative Agent
pursuant to or in connection with loans or other advances made by the U.K.
Borrower to an European Subsidiary Borrower and the collateral securing
such loans and other advances.
"U.K. Loan Pro Rata Share" means, with respect to any U.K. Lender,
the percentage obtained by dividing (i) the sum of such U.K. Lender's U.K.
Loan Commitment (in each case, as adjusted from time to time in accordance
with the provisions of this Agreement or any Assignment and Acceptance to
which such U.K. Lender is a party) by (ii) the aggregate U.K. Loan
Commitments.
"Uniform Commercial Code" means the Uniform Commercial Code as
enacted in the State of New York, as it may be amended from time to time.
"U.S. Borrower" means Fairchild Holding Corp., a Delaware
corporation.
"U.S. Borrower Loans" is defined in Section 2.01(b).
"U.S. Borrowing Base" means, as of any date of determination, an
amount designated on a Borrowing Base Certificate dated as of such date of
determination, equal to the lesser of (a) the U.S. Loan Commitments then
in effect and (b) the sum of up to (1) eighty-five percent (85%) of
Eligible U.S. Receivables plus (2) sixty percent (60%) of Eligible
Inventory (calculated at the lesser of cost or market value on a first-in-
first-out basis) plus (3) seventy percent (70%) of the Appraised Value of
Equipment plus (4) fifty percent (50%) of the Appraised Value of Real
Property; provided, however, that during thirty (30) consecutive days in
each successive Fiscal Year ending after the Effective Date the U.S.
Borrowing Base shall be reduced by $7,000,000, each such thirty (30) day
period to be determined by the U.S. Borrower and designated in a written
notice to the Administrative Agent three (3) Business Days prior to the
commencement thereof. For purposes of this definition, Eligible U.S.
Receivables and Eligible Inventory shall be determined after deduction of
all Eligibility Reserves then in effect.
"U.S. Loan Availability" means, at any date of determination, the
amount by which (i) the lesser of (a) the U.S. Borrowing Base at such time
or (b) the EBITDA Borrowing Base at such time minus the U.K. Loans
outstanding at such time exceeds (ii) the U.S. Revolving Credit
Obligations at such time plus the amount by which the U.K. Borrower Loans
outstanding at such time exceeds the U.K. Borrowing Base at such time.
"U.S. Loan Commitment" means, with respect to any Lender, the
obligation of such Lender to make U.S. Borrower Loans and to participate
in Letters of Credit pursuant to the terms and conditions of this
Agreement, in an aggregate amount at any time outstanding which shall not
exceed the principal amount set forth opposite such Lender's name under
the heading "U.S. Loan Commitment" on the signature pages hereof or the
signature page of the Assignment and Acceptance by which it became a
Lender, as modified from time to time pursuant to the terms of this
Agreement or to give effect to any applicable Assignment and Acceptance,
and "U.S. Loan Commitments" means the aggregate principal amount of the
U.S. Loan Commitments of all the Lenders, the maximum amount of which
shall be (i) $52,000,000, as reduced from time to time pursuant to
Section 4.01, until the date on which the U.K. Loan Commitments become
effective, and (ii) $40,000,000, as reduced from time to time pursuant to
Section 4.01, from and after the date on which the U.K. Loan Commitments
become effective.
"U.S. Loan Pro Rata Share" means, with respect to any Lender, the
percentage obtained by dividing (i) the sum of such Lender's U.S. Loan
Commitment (in each case, as adjusted from time to time in accordance with
the provisions of this Agreement or any Assignment and Acceptance to which
such Lender is a party) by (ii) the aggregate U.S. Loan Commitments.
"U.S. Revolving Credit Obligations" means, at any particular time,
the sum of (i) the outstanding principal amount of the U.S. Borrower Loans
at such time, plus (ii) the Letter of Credit Obligations at such time.
"VSI" means VSI Corporation, a Delaware corporation.
"Wholly-Owned Subsidiary" means a corporation (i) one hundred percent
(100%) of the Capital Stock or other equity Securities of which is owned
by a Borrower or any Subsidiary of a Borrower or (ii) greater than ninety-
five percent (95%) of the Capital Stock or other equity Securities of
which is owned by a Borrower or a Subsidiary of a Borrower and the
remainder of which Capital Stock or other equity Securities is owned by a
nominee of such Borrower or such Subsidiary solely to comply with the
Requirements of Law of the jurisdiction governing such corporation's
organization and existence.
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 mean "to but excluding". Periods of days referred to in this
Agreement shall be counted in calendar days unless Business Days are
expressly prescribed. Any period determined hereunder by reference to a
month or months or year or years shall end on the day in the relevant
calendar month in the relevant year, if applicable, immediately preceding
the date numerically corresponding to the first day of such period;
provided that if such period commences on the last day of a calendar month
(or on a day for which there is no numerically corresponding day in the
calendar month during which such period is to end), such period shall,
unless otherwise expressly required by the other provisions of this
Agreement, end on the last day of the calendar month.
1.03. Accounting Terms. Subject to Section 15.04, for purposes of
this Agreement, all accounting terms not otherwise defined herein shall
have the meanings assigned to them in conformity with GAAP.
1.04. Other Terms. All other terms contained in this Agreement
shall, unless the context indicates otherwise, have the meanings assigned
to such terms by the Uniform Commercial Code to the extent the same are
defined therein.
1.05. Dollar Equivalents. For purposes of Dollar designations or
Dollar equivalent designations in this Agreement, all calculations thereof
shall be determined, with respect to amounts otherwise denominated in a
non-U.S. currency, based on the amount of Dollars required to purchase
such amount of non-U.S. currency at the Exchange Rate therefor which is in
effect on the date of determination.
ARTICLE II
AMOUNTS AND TERMS OF LOANS
2.01. Revolving Credit Facilities. (a) U.S. Borrower Loans.
Subject to the terms and conditions set forth in this Agreement, each
Lender hereby severally and not jointly agrees to make revolving loans, in
Dollars (each individually, a "U.S. Borrower Loan" and, collectively, the
"U.S. Borrower Loans") to the U.S. Borrower from time to time during the
period from the Effective Date to the Business Day next preceding the
Revolving Credit Termination Date, in an amount not to exceed such
Lender's U.S. Loan Pro Rata Share of the U.S. Loan Availability at such
time. All U.S. Borrower Loans comprising the same Borrowing under this
Agreement shall be made by the Lenders simultaneously and proportionately
to their then respective U.S. Loan Pro Rata Shares, it being understood
that no Lender shall be responsible for any failure by any other Lender to
perform its obligation to make a U.S. Borrower Loan hereunder nor shall
the U.S. Loan Commitment of any Lender be increased or decreased as a
result of any such failure. Subject to the provisions of this Agreement,
the U.S. Borrower may repay any outstanding U.S. Borrower Loan on any day
which is a Business Day and any amounts so repaid may be reborrowed, up to
the amount available under this Section 2.01(a) at the time of such
Borrowing, until the Business Day next preceding the Revolving Credit
Termination Date; provided, however, the U.S. Borrower shall, without
notice or demand of any kind, immediately make such repayments of the U.S.
Borrower Loans to the extent necessary to reduce the aggregate outstanding
principal amount of the Loans to an amount no greater than the difference
between the then U.S. Loan Availability and the Letter of Credit
Obligations as of such time. Each requested Borrowing of U.S. Borrower
Loans funded on any Funding Date therefor shall be (i) if Base Rate Loans,
in a principal amount of at least $100,000 and in integral multiples of
$100,000 in excess of that amount and (ii) if Eurocurrency Rate Loans, in
a principal amount of at least $1,000,000 and in integral multiples of
$100,000 in excess of that amount.
(b) U.K. Borrower Loans. Subject to the terms and conditions set
forth in this Agreement, each U.K. Lender hereby severally and not jointly
agrees to make revolving loans, in Dollars or DM (each individually, a
"U.K. Borrower Loan" and, collectively, the "U.K. Borrower Loans") to the
U.K. Borrower from time to time during the period from the first Business
Day on which the conditions set forth in Section 6.03 have been satisfied
or waived by the U.K. Lenders to the Business Day next preceding the
Revolving Credit Termination Date, in an amount in Dollars (or, if U.K.
Borrower Loans are requested to be denominated in DM, of the DM equivalent
of the amount in Dollars (calculated based on the Exchange Rate for DM
then in effect)) not to exceed such U.K. Lender's U.K. Loan Pro Rata Share
of the U.K. Loan Availability at such time. All U.K. Borrower Loans
comprising the same Borrowing under this Agreement shall be made by the
U.K. Lenders simultaneously and proportionately to their then respective
U.K. Loan Pro Rata Shares, it being understood that no U.K. Lender shall
be responsible for any failure by any other U.K. Lender to perform its
obligation to make a U.K. Borrower Loan hereunder nor shall the U.K. Loan
Commitment of any U.K. Lender be increased or decreased as a result of any
such failure. Subject to the provisions of this Agreement, the U.K.
Borrower may repay any outstanding U.K. Borrower Loan on any day which is
a Business Day and any amounts so repaid may be reborrowed, up to the
amount available under this Section 2.01(b) at the time of such Borrowing,
until the Business Day next preceding the Revolving Credit Termination
Date; provided, however, the U.K. Borrower shall on each Eurocurrency
Interest Payment Date, without notice or demand of any kind, immediately
make such repayments of the U.K. Borrower Loans denominated in DM to the
extent necessary to reduce the aggregate outstanding principal amount of
the U.K. Borrower Loans denominated in DM on the date on which a Notice of
Conversion/Continuation is delivered to the Administrative Agent with
respect to U.K. Borrower Loans for which interest is payable on such
Eurocurrency Interest Payment Date, to an amount no greater than the DM
Subfacility. Each requested Borrowing of U.K. Borrower Loans funded on any
Funding Date therefor shall be (i) if Base Rate Loans, in a principal
amount of at least $100,000 and in integral multiples of $100,000 in
excess of that amount and (ii) if Eurocurrency Rate Loans, in a principal
amount of at least $1,000,000 and in integral multiples of $100,000 in
excess of that amount or in a principal amount of at least DM1,000,000 and
in integral multiples of DM100,000 in excess of that amount.
2.02. General Terms. (a) Notice of Borrowing. When a Borrower
desires to borrow under Section 2.01, the U.S. Borrower shall deliver to
the Administrative Agent a Notice of Borrowing, signed on behalf of such
Borrower, (i) on the Effective Date, in the case of a Borrowing of U.S.
Borrower Loans on the Effective Date, (ii) no later than 11:00 a.m. (New
York time) on the proposed Funding Date therefor, in the case of a
Borrowing of Base Rate Loans after the Effective Date which are U.S.
Borrower Loans, (iii) no later than 11:00 a.m. (New York time) on the
Business Day immediately preceding the proposed Funding Date therefor, in
the case of a Borrowing of Base Rate Loans which are U.K. Borrower Loans,
and (iv) no later than 11:00 a.m. (New York time) at least two (2)
Business Days in advance of the proposed Funding Date therefor, in the
case of a Borrowing of Eurocurrency Rate Loans after the Effective Date
which are U.S. Borrower Loans, and (v) no later than 11:00 a.m. (New York
time) at least three (3) Business Days in advance of the proposed Funding
Date therefor, in the case of a Borrowing of Eurocurrency Rate Loans which
are U.K. Borrower Loans. Such Notice of Borrowing shall specify (i) the
proposed Funding Date (which shall be a Business Day), (ii) the amount of
the proposed Borrowing (which shall be denominated in the currency
requested for such Borrowing), (iii) the U.S. Loan Availability or U.K.
Loan Availability, as applicable, as of the date of such Notice of
Borrowing, (iv) whether the proposed Borrowing will be of Base Rate Loans
or Eurocurrency Rate Loans, (v) in the case of Eurocurrency Rate Loans,
the requested Eurocurrency Interest Period, (vi) in the case of U.K.
Borrower Loans, the unused U.K. Loan Commitments, (vii) the instructions
for the disbursement of the proceeds of the proposed Borrowing, and (viii)
in the case of U.S. Borrower Loans, (A) the portion of the proposed
Borrowing, if any, which will be used to pay a dividend on the U.S.
Borrower's Capital Stock or to make a loan or other advance to any
Affiliate of the U.S. Borrower and (B) if any portion of the proposed
Borrowing will be used for the purposes described in clause (A), the
calculation of the Fixed Charge Coverage Ratio as of the Funding Date for
such Loans after giving effect to such dividend and/or loan resulting in
such Fixed Charge Coverage Ratio being no less than 1.0 to 1.0. The Loans
made on the Effective Date shall initially be Base Rate Loans and there-
after may be continued as Base Rate Loans or converted into Eurocurrency
Rate Loans, in the manner provided in Section 5.01(c) and subject to the
conditions therein set forth and in Section 5.02. In lieu of delivering
such a Notice of Borrowing (except with respect to a Borrowing of Loans on
the Effective Date), the U.S. Borrower may give the Administrative Agent
telephonic notice of any proposed Borrowing by the time required under
this Section 2.02(a), if the U.S. Borrower confirms such notice by
delivery of the required Notice of Borrowing to the Administrative Agent
by facsimile transmission promptly, but in no event later than 5:00 p.m.
(New York time) on the same day, the original of which facsimile copy
shall be delivered to the Administrative Agent within three (3) days after
the date of such transmission. Any Notice of Borrowing (or telephonic
notice in lieu thereof) given pursuant to this Section 2.02(a) shall be
irrevocable.
(b) Making of Loans. (i) Promptly after receipt of a Notice of
Borrowing under Section 2.02(a) (or telephonic notice in lieu thereof),
the Administrative Agent shall notify (A) each Lender or (B) each U.K.
Lender and the European Agent, as applicable, by telecopy, or other
similar form of transmission, of the proposed Borrowing. Each Lender
obligated to make a Loan with respect to the requested Borrowing shall
deposit an amount equal to its U.S. Loan Pro Rata Share or U.K. Loan Pro
Rata Share, as applicable, of the Loan amount requested (1) with the
Administrative Agent at its office in New York, New York, in immediately
available funds, if the requested Borrowing is a Borrowing of U.S.
Borrower Loans or (2) with the European Agent at its office in London,
England, in immediately available funds, if the requested Borrowing is a
Borrowing of U.K. Borrower Loans, not later than 1:00 p.m. (New York time)
(a) on the applicable Funding Date therefor, if the Borrowing is of U.S.
Borrower Loans and (b) on the day immediately preceding the applicable
Funding Date therefor, if the Borrowing is of U.K. Borrower Loans.
Subject to the fulfillment of the conditions precedent set forth in
Section 6.01 or Section 6.02, as applicable, the Administrative Agent
shall make the proceeds of such amounts received by it with respect to
U.S. Borrower Loans available to the U.S. Borrower at the Administrative
Agent's office in New York, New York on such Funding Date (or on the date
received if later than such Funding Date) and shall disburse such proceeds
in accordance with the U.S. Borrower's disbursement instructions set forth
in the applicable Notice of Borrowing. Subject to the fulfillment of the
conditions precedent set forth in Section 6.02 and, if applicable, Section
6.03, the European Agent shall make the proceeds of such amounts received
by it with respect to U.K. Borrower Loans available to the U.K. Borrower
at the European Agent's office in London, England on such Funding Date (or
on the date received if later than such Funding Date) and shall disburse
such proceeds in accordance with the U.S. Borrower's disbursement
instructions set forth in the applicable Notice of Borrowing. The failure
of any Lender to deposit the amount described above with the
Administrative Agent or European Agent, as applicable, on the applicable
Funding Date shall not relieve any other Lender of its obligations
hereunder to make its Loan on such Funding Date. In the event the
conditions precedent set forth in Section 6.01, 6.02, or 6.03, as
applicable, are not fulfilled as of the proposed Funding Date for any
Borrowing, the Administrative Agent or European Agent, as applicable,
shall promptly return, by wire transfer of immediately available funds,
the amount deposited by each Lender to such Lender.
(ii) Unless the Administrative Agent shall have been notified by any
Lender (A) on the Business Day immediately preceding the applicable
Funding Date in respect of any Borrowing of Loans which are Eurocurrency
Rate Loans or (B) prior to the time of funding thereof as specified in
Section 2.02(a) in respect of any Borrowing of Loans which are Base Rate
Loans, that such Lender does not intend to fund its Loan requested to be
made on such Funding Date, the Administrative Agent and European Agent may
assume that such Lender has funded its Loan and is depositing the proceeds
thereof with the Administrative Agent or European Agent, as applicable, on
the Funding Date therefor, and the Administrative Agent or European Agent,
as applicable, in its sole discretion may, but shall not be obligated to,
disburse a corresponding amount to the applicable Borrower on the
applicable Funding Date. If the Loan proceeds corresponding to that
amount are advanced to a Borrower by the Administrative Agent or European
Agent but are not in fact deposited with the Administrative Agent or
European Agent by such Lender on or prior to the applicable Funding Date,
such Lender agrees to pay, and in addition the applicable Borrower agrees
to repay, to the Administrative Agent or European Agent, as applicable,
forthwith on demand such corresponding amount, together with interest
thereon, for each day from the date such amount is disbursed to or for the
benefit of such Borrower until the date such amount is paid or repaid to
the Administrative Agent or European Agent, as applicable, (A) in the case
of a Borrower, at the interest rate applicable to such Borrowing and (B)
in the case of such Lender, at the Federal Funds Rate for the first three
(3) Business Days, and thereafter at the interest rate applicable to such
Borrowing. If such Lender shall pay to the Administrative Agent or
European Agent, as applicable, the corresponding amount, the amount so
paid shall constitute such Lender's Loan, and if both such Lender and a
Borrower shall pay and repay such corresponding amount, the Administrative
Agent or European Agent, as applicable, shall promptly pay to such
Borrower such corresponding amount. This Section 2.02(b) does not relieve
any Lender of its obligation to make its Loan on any applicable Funding
Date.
(c) Revolving Credit Termination Date. The Commitments shall
terminate on the Revolving Credit Termination Date. Each Lender's obliga-
tion to make Loans shall terminate on the Business Day next preceding the
Revolving Credit Termination Date. All outstanding Obligations shall be
paid in full (or, in the case of unmatured Letter of Credit Obligations,
provision for payment in cash shall be made to the satisfaction of the
Issuing Banks and the Requisite Lenders) (i) if the Commitments are
terminated pursuant to Section 4.01, on the date such termination is
effective, and (ii) otherwise, on the earlier to occur of (A) July 28,
2000 or, if not a Business Day, the next preceding Business Day, and (B)
the date of acceleration of the Obligations pursuant to Section 12.02.
(d) Maximum Revolving Credit Facility. Notwithstanding anything in
this Agreement to the contrary, in no event shall the sum of the aggregate
principal balance of the Loans plus the Letter of Credit Obligations
exceed the Commitments as in effect from time to time.
2.03. Authorized Officers and Administrative Agents. On the Closing
Date the U.S. Borrower shall deliver, and from time to time thereafter the
U.S. Borrower may deliver, to the Administrative Agent an Officer's
Certificate setting forth the names of the officers, employees and agents
authorized to request Loans and Letters of Credit and to request a
conversion/continuation of any Loan, in each instance containing a
specimen signature of each such officer, employee or agent. The officers,
employees and agents so authorized shall also be authorized to act for the
Borrowers in respect of all other matters relating to the Loan Documents.
The Administrative Agent, European Agent, Lenders and Issuing Banks shall
be entitled to rely conclusively on such officer's, employee's, or agent's
authority to request such Loan or Letter of Credit or such conver-
sion/continuation until the Administrative Agent, European Agent, Lenders
and Issuing Banks receive written notice to the contrary. None of the
Administrative Agent, the European Agent, the Lenders, or the Issuing
Banks shall have any duty to verify the authenticity of the signature
appearing on any such Officer's Certificate, written Notice of Borrowing
or Notice of Conversion/Continuation, or any other document, and, with
respect to an oral request for such a Loan or Letter of Credit or such
conversion/continuation, the Administrative Agent shall have no duty to
verify the identity of any person representing himself or herself as one
of the officers, employees or agents authorized to make such request or
otherwise to act on behalf of the Borrowers. None of the Administrative
Agent, European Agent, any Lender or any Issuing Bank shall incur any
liability to the Borrower or any other Person in acting upon any
telephonic or facsimile notice referred to above which the Administrative
Agent, the European Agent, such Lender, or such Issuing Bank believes to
have been given by a duly authorized officer or other person authorized to
borrow on behalf of the Borrowers.
2.04. Use of Proceeds of Loans. The proceeds of the U.S. Borrower
Loans shall be used for working capital in the ordinary course of the
respective businesses of the U.S. Borrower and its Subsidiaries or for
other lawful general corporate purposes. The proceeds of the U.K. Borrower
Loans shall be used by the U.K. Borrower to make loans and other advances
to European Subsidiary Borrowers under the U.K. Loan Documents.
Notwithstanding the foregoing, in no event may proceeds of Loans be used
(directly or indirectly) to pay dividends to RHI or make loans to RHI at
any time when the Fixed Charge Coverage Ratio as of such time, after
giving effect to such dividends and/or loans, would be less than 1.0 to
1.0.
ARTICLE III
LETTERS OF CREDIT
3.01. Letters of Credit. Subject to the terms and conditions set
forth in this Agreement, each Issuing Bank hereby severally agrees to
issue for the account of the U.S. Borrower, or for the account of any of
the U.S. Borrower's Subsidiaries if the U.S. Borrower is jointly and
severally liable for reimbursement of amounts drawn under such Letter of
Credit, one or more Letters of Credit, subject to the following
provisions:
(a) Types and Amounts. An Issuing Bank shall not have any obligation
to issue, amend or extend, and shall not issue, amend or extend, any
Letter of Credit at any time:
(i)if the aggregate Letter of Credit Obligations with respect to such
Issuing Bank, after giving effect to the issuance, amendment or extension
of the Letter of Credit requested hereunder, shall exceed any limit
imposed by law or regulation upon such Issuing Bank;
(ii) if the Issuing Bank receives written notice from the
Administrative Agent at or before 11:00 a.m. (New York time) on the date
of the proposed issuance, amendment or extension of such Letter of Credit
that (A) immediately after giving effect to the issuance, amendment or
extension of such Letter of Credit, (I) the Letter of Credit Obligations
at such time would exceed $12,000,000, or (II) the U.S. Loan Availability
at such time would be less than zero, or (B) one or more of the conditions
precedent contained in Sections 6.01 or 6.02, as applicable, would not on
such date be satisfied, unless such conditions are thereafter satisfied
and written notice of such satisfaction is given to the Issuing Bank by
the Administrative Agent (and an Issuing Bank shall not otherwise be
required to determine that, or take notice whether, the conditions
precedent set forth in Sections 6.01 or 6.02, as applicable, have been
satisfied);
(iii) which is in a currency other than a currency in which such
Issuing Bank is then issuing letters of credit; or
(iv) which has an expiration date later than the date one (1) year
after the date of issuance (without regard to any automatic renewal
provisions thereof); provided, however, that on the Revolving Credit
Termination Date, Borrower shall deposit with the Administrative Agent (or
respective Issuing Bank(s) at the direction of the Administrative Agent)
Cash Collateral for deposit in the Cash Collateral Account or under other
agreements satisfactory to the Administrative Agent and Issuing Bank(s)
and in an amount equal to the then undrawn face amount of all Letters of
Credit which will continue outstanding after the Revolving Credit
Termination Date plus Letter of Credit Fees with respect to such Letters
of Credit for the period commencing on the Revolving Credit Termination
Date through the expiry date of such Letters of Credit.
For purposes of the Dollar limitations set forth above, all calculations
thereof shall be determined, with respect to Letters of Credit denominated
in a non-U.S. currency, based on the Dollar equivalent of such non-U.S.
currency at the Exchange Rate therefor which is in effect on the date of
determination.
(b) Conditions. In addition to being subject to the satisfaction of
the conditions precedent contained in Sections 6.01 and 6.02, as
applicable, the obligation of an Issuing Bank to issue, amend or extend
any Letter of Credit is subject to the satisfaction in full of the
following conditions:
(i) if the Issuing Bank so requests, the U.S. Borrower or, in the
case of Letters of Credit issued for the account of any of the U.S.
Borrower's Subsidiaries, the U.S. Borrower and such Subsidiary shall have
executed and delivered to such Issuing Bank and the Administrative Agent
a Letter of Credit Reimbursement Agreement and such other documents and
materials as may be required pursuant to the terms thereof; and
(ii) the terms of the proposed Letter of Credit shall be
satisfactory to the Issuing Bank in its sole discretion.
(c) Issuance of Letters of Credit. (i) The U.S. Borrower shall give
an Issuing Bank and the Administrative Agent written notice that it has
selected such Issuing Bank to issue a Letter of Credit not later than
11:00 a.m. (New York time) on the third (3rd) Business Day preceding the
requested date for issuance thereof under this Agreement, or such shorter
notice as may be acceptable to such Issuing Bank and the Administrative
Agent. Such notice shall be irrevocable unless and until such request is
denied by the applicable Issuing Bank and shall specify (A) that the
requested Letter of Credit is either a Commercial Letter of Credit or a
Standby Letter of Credit, (B) that such Letter of Credit is solely for the
account of the U.S. Borrower or the name of the Subsidiary of the U.S.
Borrower which is jointly and severally applying for such Letter of
Credit, (C) the stated amount of the Letter of Credit requested, (D) the
effective date (which shall be a Business Day) of issuance of such Letter
of Credit, (E) the date on which such Letter of Credit is to expire (which
shall be a Business Day and no later than the Business Day immediately
preceding the scheduled Revolving Credit Termination Date), (F) the Person
for whose benefit such Letter of Credit is to be issued, (G) other
relevant terms of such Letter of Credit, (H) the U.S. Loan Availability at
such time, and (I) the amount of the then outstanding Letter of Credit
Obligations. Such Issuing Bank shall notify the Administrative Agent
immediately upon receipt of a written notice from the U.S. Borrower
requesting that a Letter of Credit be issued, or that an existing Letter
of Credit be extended or amended and, upon the Administrative Agent's
request therefor, send a copy of such notice to the Administrative Agent.
(ii) The Issuing Bank shall give (A) the Administrative Agent
written notice, or telephonic notice confirmed promptly thereafter in
writing, of the issuance, amendment or extension of a Letter of Credit and
(B) promptly after issuance thereof, provide the Administrative Agent with
a copy of each Letter of Credit issued and each amendment thereto.
(d) Reimbursement Obligations; Duties of Issuing Banks. (i)
Notwithstanding any provisions to the contrary in any Letter of Credit
Reimbursement Agreement:
(A) the U.S. Borrower shall reimburse, or cause its Subsidiary for
whose account a Letter of Credit is issued to reimburse, the Issuing Bank
for amounts drawn under such Letter of Credit, in Dollars, no later than
the date (the "Reimbursement Date") which is the earlier of (I) the time
specified in the applicable Letter of Credit Reimbursement Agreement and
(II) one (1) Business Day after the U.S. Borrower receives written notice
from the Issuing Bank that payment has been made under such Letter of
Credit by the Issuing Bank; and
(B) all Reimbursement Obligations with respect to any Letter of
Credit shall bear interest at the rate applicable to Base Rate Loans in
accordance with Section 5.01(a) from the date of the relevant drawing
under such Letter of Credit until the Reimbursement Date and thereafter at
the rate applicable to Base Rate Loans in accordance with Section 5.01(d).
(ii) The Issuing Bank shall give the Administrative Agent written
notice, or telephonic notice confirmed promptly thereafter in writing, of
all drawings under a Letter of Credit and the payment (or the failure to
pay when due) by the U.S. Borrower or its applicable Subsidiary on account
of a Reimbursement Obligation (which notice the Administrative Agent shall
promptly transmit by telegram, telex, telecopy or similar transmission to
each Lender).
(iii) No action taken or omitted in good faith by an Issuing Bank
under or in connection with any Letter of Credit shall put such Issuing
Bank under any resulting liability to any Lender, the U.S. Borrower or any
of its Subsidiaries or, so long as it is not issued in violation of
Section 3.01(a), relieve any Lender of its obligations hereunder to such
Issuing Bank. Solely as between the Issuing Banks and the Lenders, in
determining whether to pay under any Letter of Credit, the respective
Issuing Bank shall have no obligation to the Lenders other than to confirm
that any documents required to be delivered under a respective Letter of
Credit appear to have been delivered and that they appear on their face to
comply with the requirements of such Letter of Credit.
(e) Participations. (i) Immediately upon issuance by an Issuing
Bank of any Letter of Credit in accordance with the procedures set forth
in this Section 3.01 and immediately upon conversion of a letter of credit
of an Issuing Bank to a Letter of Credit pursuant to Section 3.02, each
Lender shall be deemed to have irrevocably and unconditionally purchased
and received from that Issuing Bank, without recourse or warranty, an
undivided interest and participation in such Letter of Credit to the
extent of such Lender's U.S. Loan Pro Rata Share, including, without
limitation, all obligations of the U.S. Borrower with respect thereto
(other than amounts owing to the Issuing Bank under Section 3.01(g)) and
any security therefor and guaranty pertaining thereto.
(ii) If any Issuing Bank makes any payment under any Letter of
Credit and the U.S. Borrower or the Subsidiary of the U.S. Borrower for
whose account the Letter of Credit was issued does not repay such amount
to the Issuing Bank on the Reimbursement Date, the Issuing Bank shall
promptly notify the Administrative Agent, which shall promptly notify each
Lender, and each Lender shall promptly and unconditionally pay to the
Administrative Agent for the account of such Issuing Bank, in immediately
available funds, the amount of such Lender's U.S. Loan Pro Rata Share of
such payment (net of that portion of such payment, if any, made by such
Lender in its capacity as an Issuing Bank), and the Administrative Agent
shall promptly pay to the Issuing Bank such amounts received by it, and
any other amounts received by the Administrative Agent for the Issuing
Bank's account, pursuant to this Section 3.01(e). All amounts so paid to
the Issuing Bank shall be deemed to constitute U.S. Borrower Loans. If a
Lender does not make its U.S. Loan Pro Rata Share of the amount of such
payment available to the Administrative Agent, such Lender agrees to pay
to the Administrative Agent for the account of the Issuing Bank, forthwith
on demand, such amount together with interest thereon, for the first three
(3) Business Days after the date such payment was first due at the Federal
Funds Rate, and thereafter at the interest rate then applicable to Base
Rate Loans in accordance with Section 5.01(a). The failure of any Lender
to make available to the Administrative Agent for the account of an
Issuing Bank its U.S. Loan Pro Rata Share of any such payment shall
neither relieve any other Lender of its obligation hereunder to make
available to the Administrative Agent for the account of such Issuing Bank
such other Lender's U.S. Loan Pro Rata Share of any payment on the date
such payment is to be made nor increase the obligation of any other Lender
to make such payment to the Administrative Agent.
(iii) Whenever an Issuing Bank receives a payment on account of a
Reimbursement Obligation, including any interest thereon, as to which the
Administrative Agent has previously received payments from any Lender for
the account of such Issuing Bank pursuant to this Section 3.01(e), such
Issuing Bank shall promptly pay to the Administrative Agent and the
Administrative Agent shall promptly pay to such Lender an amount equal to
such Lender's U.S. Loan Pro Rata Share thereof. Each such payment shall
be made by such 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 11:00
a.m. (New York time) on such Business Day, and otherwise on the next
succeeding Business Day.
(iv) Upon the request of any Lender, an Issuing Bank shall furnish
such Lender copies of any Letter of Credit or Letter of Credit Reimburse-
ment Agreement to which such Issuing Bank is party and such other
documentation as reasonably may be requested by such Lender.
(v) The obligations of a Lender to make payments to the
Administrative Agent for the account of any Issuing Bank with respect to
a Letter of Credit shall be irrevocable, shall not be subject to any
qualification or exception whatsoever except willful misconduct or gross
negligence of such Issuing Bank, and shall be honored in accordance with
this Article III (irrespective of the satisfaction of the conditions
described in Sections 6.01 and 6.02, as applicable) under all
circumstances, including, without limitation, any of the following
circumstances:
(A) any lack of validity or enforceability of this Agreement or any
of the other Loan Documents;
(B) the existence of any claim, setoff, defense or other right which
the U.S. Borrower may have at any time against a beneficiary named in a
Letter of Credit or any transferee of a beneficiary named in a Letter of
Credit (or any Person for whom any such transferee may be acting), the
Administrative Agent, the Issuing Bank, any 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 account party and beneficiary
named in any Letter of Credit);
(C) any draft, certificate or any other document presented under the
Letter of Credit having been determined to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(D) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Loan Documents;
(E) any failure by that Issuing Bank to make any reports required
pursuant to Section 3.01(h) or the inaccuracy of any such report; or
(F) the occurrence of any Event of Default or Potential Event of
Default.
(f) Payment of Reimbursement Obligations. (i) The U.S. Borrower
unconditionally agrees to pay, or cause its Subsidiary for whose account
a Letter of Credit is issued to pay, to each Issuing Bank, in Dollars, the
amount of all Reimbursement Obligations, interest and other amounts
payable to such Issuing Bank under or in connection with the Letters of
Credit when such amounts are due and payable, irrespective of any claim,
setoff, defense or other right which the U.S. Borrower may have at any
time against any Issuing Bank or any other Person.
(ii) In the event any payment by the U.S. Borrower or such Subsidiary
received by an Issuing Bank with respect to a Letter of Credit and
distributed by the Administrative Agent to the 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 such Lender which received such distribution
shall, upon demand by such Issuing Bank, contribute such Lender's U.S.
Loan Pro Rata Share of the amount set aside, avoided or recovered together
with interest at the rate required to be paid by such Issuing Bank upon
the amount required to be repaid by it.
(g) Issuing Bank Charges. The U.S. Borrower shall pay, or cause its
Subsidiary for whose account a Letter of Credit is issued to pay, to each
Issuing Bank, solely for its own account, the standard charges assessed by
such Issuing Bank in connection with the issuance, administration,
amendment and payment or cancellation of Letters of Credit and such
compensation in respect of such Letters of Credit for the U.S. Borrower's
or such Subsidiary's account, as applicable, as may be agreed upon by the
U.S. Borrower and such Issuing Bank from time to time.
(h) Issuing Bank Reporting Requirements. Each Issuing Bank shall, no
later than the tenth (10th) Business Day following the last day of each
calendar month, provide to the Administrative Agent, the U.S. Borrower,
and each Lender 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, setting
forth the aggregate Letter of Credit Obligations outstanding to it at the
end of each month and, to the extent not otherwise provided in accordance
with the provisions of Section 3.01(c)(ii), any information requested by
the Administrative Agent or the U.S. Borrower relating to the date of
issue, account party, amount, expiration date and reference number of each
Letter of Credit issued by it.
(i) Indemnification; Exoneration. (i) In addition to all other
amounts payable to an Issuing Bank, the U.S. Borrower hereby agrees to
defend, indemnify, and save the Administrative Agent, each Issuing Bank
and each Lender harmless from and against any and all claims, demands,
liabilities, penalties, damages, losses (other than loss of profits),
costs, charges and expenses (including reasonable attorneys' fees but
excluding taxes) which the Administrative Agent, such Issuing Bank or such
Lender may incur or be subject to as a consequence, direct or indirect, of
(A) the issuance of any Letter of Credit other than as a result of the
gross negligence or willful misconduct of the Issuing Bank, as determined
by a court of competent jurisdiction, or (B) the failure of the Issuing
Bank issuing a Letter of Credit to honor a drawing under such Letter of
Credit as a result of any act or omission, whether rightful or wrongful,
of any present or future de jure or de facto government or Governmental
Authority.
(ii) As between the U.S. Borrower and any of its Subsidiaries for
whose account a Letter of Credit is issued on the one hand and the
Administrative Agent, the Lenders and the Issuing Banks on the other hand,
the U.S. Borrower assumes all risks of the acts and omissions of, or
misuse of Letters of Credit by, the respective beneficiaries of the
Letters of Credit. In furtherance and not in limitation of the foregoing,
subject to the provisions of the Letter of Credit Reimbursement
Agreements, the Issuing Banks and the Lenders shall not be responsible
for: (A) the form, validity, legality, sufficiency, accuracy, genuineness
or legal effect of any document submitted by any party in connection with
the application for and issuance of the Letters of Credit, even if it
should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (B) the validity, legality or suffi-
ciency 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) failure of the beneficiary of a Letter of
Credit to comply duly with conditions required in order to draw upon such
Letter of Credit; (D) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex
or otherwise, whether or not they be in cipher; (E) errors in
interpretation of technical terms; (F) any loss or delay in the
transmission or otherwise of any document required in order to make a
drawing under any Letter of Credit or of the proceeds thereof; (G) the
misapplication by the beneficiary of a Letter of Credit of the proceeds of
any drawing under such Letter of Credit; and (H) any consequences arising
from causes beyond the control of the Administrative Agent, the Issuing
Banks or the Lenders.
3.02. Transitional Provisions. Schedule 3.02 contains a schedule of
certain letters of credit issued prior to the Effective Date by Citibank
for the account of the U.S. Borrower or for the account of a Subsidiary of
the U.S. Borrower and on which the U.S. Borrower is jointly and severally
liable for reimbursement of amounts drawn thereunder. Subject to the
satisfaction of the conditions precedent contained in Section 6.01 on the
Effective Date (i) such letters of credit, to the extent still out-
standing, shall automatically and without further action of the parties
thereto be converted into Letters of Credit issued pursuant to this
Section 3.02 and subject to the provisions hereof, and for this purpose
the fees specified in Section 5.03(b) shall be payable as if such letters
of credit had been issued on the Effective Date, (ii) the face amount of
such letters of credit shall be included in the calculation of Letter of
Credit Obligations, and (iii) all liabilities of the U.S. Borrower with
respect to such letters of credit shall constitute Obligations. No letter
of credit converted in accordance with this Section 3.02 shall be amended,
extended or renewed without the prior written consent of the
Administrative Agent.
3.03. Obligations Several. The obligations of each Issuing Bank and
each Lender under this Article III are several and not joint, and no
Issuing Bank or Lender shall be responsible for the obligation to issue
Letters of Credit or participation obligation hereunder, respectively, of
any other Issuing Bank or Lender.
ARTICLE IV
PAYMENTS AND PREPAYMENTS
4.01. Prepayments; Reductions in Commitments.
(a) Voluntary Prepayments/Commitment Reductions. (i) Prepayments.
The Borrowers may prepay the Loans in whole or in part, at any time and
from time to time.
(ii) Voluntary Commitment Reductions. The Borrowers, upon at least
three (3) Business Days' prior written notice to the Administrative Agent
from the U.S. Borrower (which the Administrative Agent shall promptly
transmit to each Lender), shall have the right, at any time and from time
to time, to terminate in whole or permanently reduce in part the
respective U.S. Loan Commitments and U.K. Loan Commitments; provided that,
the Borrowers shall have made whatever payment may be required to reduce
the the respective outstanding U.K. Borrower Loans and/or U.S. Borrower
Loans, as applicable, by the aggregate amount required such that, (A) in
the case of a reduction or termination of the U.S. Loan Commitments, the
U.S. Revolving Credit Obligations, after giving effect to such payment,
will equal an amount less than or equal to the U.S. Loan Commitments as
reduced or terminated and (B) in the case of a reduction or termination of
the U.K. Loan Commitments, the outstanding balance of the U.K. Borrower
Loans, after giving effect to such payment, will equal an amount less than
or equal to the U.K. Loan Commitments as reduced or terminated. Any
partial reduction of the Commitments shall be in an aggregate minimum
amount of $1,000,000 and integral multiples of $1,000,000 in excess of
that amount. Each reduction of the U.S. Loan Commitments shall reduce the
U.S. Loan Commitment of each Lender proportionately in accordance with its
U.S. Loan Pro Rata Share and each reduction of the U.K. Loan Commitments
shall reduce the U.K. Loan Commitment of each U.K. Lender proportionately
in accordance with its U.K. Loan Pro Rata Share. Any notice of
termination or reduction given to the Administrative Agent under this Sec-
tion 4.01(a)(ii) shall specify the date (which shall be a Business Day) of
such termination or reduction and, with respect to a partial reduction,
the aggregate principal amount thereof. When notice of termination or
reduction is delivered as provided herein, the principal amount of the
Loans specified in the notice shall become due and payable on the date
specified in such notice.
(iii) Commitment Adjustments. In the event the conditions set forth
in Section 6.03 are satisfied, on the initial Funding Date for U.K.
Borrower Loans, the aggregate U.S. Loan Commitments shall be reduced by
$12,000,000 and the aggregate U.K. Loan Commitments shall be deemed to
equal $12,000,000. In the event at any time thereafter the U.S. Borrower
notifies the Administrative Agent of a reduction or termination of the
U.K. Loan Commitments as provided in clause (ii) above, the U.S. Loan
Commitments shall be increased by the amount of such reduction or, in the
event of a termination, by the amount of the U.K. Loan Commitments
terminated effective the date on which such reduction or termination
occurs.
(iv) Prepayment Fee. The prepayments and payments in respect of
reductions and terminations described in this Section 4.01 may be made
without premium or penalty (except as provided in Article XIV).
(b) Mandatory Prepayments/Reductions.
(i) Net Cash Proceeds of Sale. Within three (3) Business Days after
either Borrower's or any Subsidiary of either Borrower's receipt of any
Net Cash Proceeds of Sale (A) in excess of $2,000,000 generated from any
individual transaction or (B) in excess of $10,000,000 in the aggregate
generated from transactions consummated after the Effective Date, the U.S.
Borrower shall make or cause to be made a mandatory prepayment of the
Obligations in an amount equal to one hundred percent (100%) of such Net
Cash Proceeds of Sale.
(ii) Net Cash Proceeds of Issuance of Equity Securities.
Immediately upon either Borrower's or any Subsidiary of either Borrower's
receipt of any Net Cash Proceeds of Issuance of Equity Securities, the
U.S. Borrower shall make or cause to be made a mandatory prepayment in an
amount equal to one hundred percent (100%) of such Net Cash Proceeds of
Issuance of Equity Securities.
(iii) Net Cash Proceeds of Issuance of Indebtedness. Immediately
upon either Borrower's or any Subsidiary of either Borrower's receipt of
any Net Cash Proceeds of Issuance of Indebtedness, the U.S. Borrower shall
make or cause to be made a mandatory prepayment in an amount equal to one
hundred percent (100%) of such Net Cash Proceeds of Issuance of
Indebtedness.
(iv) No Waiver or Consent. Nothing in this Section 4.01(b) shall be
construed to constitute the Lenders' consent to any transaction referenced
in clauses (i) and (iii) above which is not expressly permitted by
Article X.
(v) Notice. The U.S. Borrower shall give the Administrative Agent
prior written notice or telephonic notice promptly confirmed in writing
(each of which the Administrative Agent shall promptly transmit to each
Lender), when a Designated Prepayment will be made (which date of
prepayment shall be no later than the date on which such Designated
Payment becomes due and payable pursuant to this Section 4.01(b)).
(vi) Application of Designated Prepayments. Designated Prepayments
shall be allocated and applied to the Obligations as follows:
(A) the amount of each Designated Prepayment shall be applied to the
principal balance of the Loans ratably based on the relative outstanding
principal balances thereof as of the date of application, with each
application being made first to the Loans which are Base Rate Loans until
paid in full and then to Loans which are Eurocurrency Rate Loans and shall
permanently reduce the respective Commitments of each Lender
proportionately in accordance with its U.S. Loan Pro Rata Share or U.K.
Loan Pro Rata Share, as applicable; and
(B) following the payment in full of the Loans, the remaining
balance of each Designated Prepayment shall be applied to the principal
balance of the Letter of Credit Obligations (or, to the extent such Letter
of Credit Obligations are contingent, deposited in the Cash Collateral
Account to provide Cash Collateral in respect of such Letter of Credit
Obligations).
4.02. Payments. (a) Manner and Time of Payment. All payments of
principal of and interest on the Loans and Reimbursement Obligations and
other Obligations (including, without limitation, fees and expenses) which
are payable to the Administrative Agent, the European Agent, the European
Administrator, the Lenders or any Issuing Bank shall be made without
condition, set-off, or reservation of right, and, with respect to payments
made other than from application of deposits in a Concentration Account,
in immediately available funds in the applicable currency, delivered to
(i) the Administrative Agent (or, in the case of Reimbursement
Obligations, to the pertinent Issuing Bank), if the payment relates to
Obligations of the U.S. Borrower, not later than 11:00 a.m. (New York
time) on the date and at the place due, to such account of the
Administrative Agent (or such Issuing Bank) as it may designate or (ii)
the European Agent, if the payment relates to Obligations of the U.K.
Borrower, not later than 11:00 a.m. (London time) on the date and at the
place due, to such account of the European Agent as it may designate; in
each instance, for the account of the Administrative Agent, the European
Agent, the European Administrator, the Lenders or such Issuing Bank, as
the case may be. Funds received by the Administrative Agent or European
Agent, including, without limitation, funds in respect of any Loans to be
made on that date, not later than 11:00 a.m. (New York time or London
time, as applicable) on any given Business Day shall be credited against
payment to be made that day and funds received by the Administrative Agent
or European Agent after that time shall be deemed to have been paid on the
next succeeding Business Day. Payments actually received by the
Administrative Agent or European Agent for the account of the Lenders or
the Issuing Banks, or any of them, shall be paid to them by the
Administrative Agent or European Agent, as applicable, promptly after
receipt thereof.
(b) Pre-Default Apportionment of Payments. Subject to the provisions
of Section 4.01 and Section 4.02(f), all payments of principal and
interest in respect of outstanding Loans, all payments in respect of Reim-
bursement Obligations, all payments of fees and all other payments in
respect of any other Obligations, shall be allocated among such of the
Lenders and Issuing Banks as are entitled thereto, in proportion to their
respective U.S. Loan Pro Rata Shares or U.K. Loan Pro Rata Shares, as
applicable, or otherwise as provided herein. Except as provided in
Section 4.02(c) with respect to payments and proceeds of Collateral
received after the occurrence of an Event of Default, all other payments,
proceeds of Collateral, and other amounts received by the Administrative
Agent or European Agent from or for the benefit of the Borrowers, or
either of them, shall be applied
(i) first, to pay principal of and interest on any portion of the Loans
which the Administrative Agent or European Agent may have advanced on
behalf of any Lender other than Citicorp for which the Administrative
Agent or European Agent has not then been reimbursed by such Lender or the
applicable Borrower,
(ii) second, to pay principal of and interest on any Protective Advance
for which the Administrative Agent has not then been paid by a Borrower or
reimbursed by the Lenders,
(iii) third, to pay the principal of the Loans then due and payable in
the order described hereinbelow and interest on such Loans then due and
payable, ratably, based on the then outstanding balances of the such
Loans,
(iv) fourth, to pay all other Obligations then due and payable, ratably,
and
(v) fifth, as the U.S. Borrower so designates.
All such principal and interest payments in respect of Loans shall be
applied first, to repay outstanding Base Rate Loans and then to repay
outstanding Eurocurrency Rate Loans with those Eurocurrency Rate Loans
which have earlier expiring Eurocurrency Interest Periods being repaid
prior to those which have later expiring Eurocurrency Interest Periods.
(c) Post-Default Apportionment of Payments. After the occurrence
of an Event of Default and while the same is continuing, the
Administrative Agent or European Agent, as applicable, shall apply all
payments in respect of any Obligations and all proceeds of Collateral in
the following order:
(i) first, to pay principal of and interest on any portion of the
Loans which the Administrative Agent or European Agent may have advanced
on behalf of any Lender other than Citicorp for which the Administrative
Agent or European Agent has not then been reimbursed by such Lender or a
Borrower;
(ii) second, to pay principal of and interest on any Protective
Advance for which the Administrative Agent has not then been paid by a
Borrower or reimbursed by the Lenders;
(iii) third, to pay Obligations in respect of any fees, expense
reimbursements or indemnities then due to the Administrative Agent,
European Agent, and/or European Administrator;
(iv) fourth, to pay principal of and interest on Letter of Credit
Obligations (or, to the extent such Obligations are contingent, deposited
in the Cash Collateral Account to provide Cash Collateral in respect of
such Obligations);
(v) fifth, to pay Obligations in respect of any fees, expense
reimbursements or indemnities then due to the Lenders and the Issuing
Banks;
(vi) sixth, to pay interest due in respect of the Loans, ratably, in
accordance with the Lenders' respective U.S. Loan Pro Rata Shares and U.K.
Loan Pro Rata Shares, as applicable;
(vii) seventh, to the ratable payment or prepayment of principal
outstanding on all Loans and Hedge Agreements to which any of the Lenders
or any Affiliate of any of the Lenders is a party, in accordance with the
Lender's respective U.S. Loan Pro Rata Shares and U.K. Loan Pro Rata
Shares, as applicable; and
(viii) eighth, to the ratable payment of all other Obligations.
(d) Administrative Agent Authority to Apply Funds. The
Administrative Agent, in its sole discretion subject only to the terms of
this Section 4.02(d), may pay from the proceeds of Loans made to the
Borrowers hereunder, whether made following a request by the U.S. Borrower
pursuant to Section 2.02 or a deemed request as provided in this
Section 4.02(d), all amounts payable by the Borrowers hereunder,
including, without limitation, amounts payable with respect to payments of
principal, interest, Reimbursement Obligations and fees and all
reimbursements for expenses pursuant to Section 15.02. Each of the
Borrowers hereby irrevocably authorize the Lenders to make Loans to it,
which Loans shall be Base Rate Loans, in each case, upon notice from the
Administrative Agent as described in the following sentence for the
purpose of paying principal, interest, Reimbursement Obligations and fees
due from such Borrower, reimbursing expenses pursuant to Section 15.02 and
paying any and all other amounts due and payable by such Borrower
hereunder or under the Notes, and agrees that all such Loans so made shall
be deemed to have been requested by it pursuant to Section 2.02 as of the
date of the aforementioned notice. The Administrative Agent shall request
Loans on behalf of the Borrowers as described in the preceding sentence by
notifying the Lenders by telecopy, telegram or other similar form of
transmission (which notice the Administrative Agent shall thereafter
promptly transmit to the U.S. Borrower and, if applicable, European
Agent), of the amount and Funding Date of the proposed Borrowing and that
such Borrowing is being requested on the respective Borrower's behalf
pursuant to this Section 4.02(d). On the proposed Funding Date for such
Loan, the Lenders shall make the requested Loans in accordance with the
procedures and subject to the conditions specified in Section 2.02.
(e) Priorities and Distributions of Payments. The orders of
priority set forth in Sections 4.02(b) and (c) and the related provisions
of this Agreement are set forth solely to determine the rights and
priorities of the Administrative Agent, the European Agent, the European
Administrator, the Lenders, the Issuing Banks and other Holders as among
themselves. Subject to Section 4.02(f), the Administrative Agent shall
promptly distribute to each Lender and Issuing Bank at its primary address
set forth on the appropriate signature page hereof or the signature page
to the Assignment and Acceptance by which it became a Lender or Issuing
Bank, or at such other address as a Lender, an Issuing Bank or other
Holder may request in writing, such funds as such Person may be entitled
to receive, subject to the provisions of Article XIV; provided that the
Administrative Agent shall under no circumstances be bound to inquire into
or determine the validity, scope or priority of any interest or
entitlement of any Holder and may suspend all payments or seek appropriate
relief (including, without limitation, instructions from the Requisite
Lenders or an action in the nature of interpleader) in the event of any
doubt or dispute as to any apportionment or distribution contemplated
hereby.
(f) Defaulting Lenders. In the event that any Lender fails to fund
its U.S. Loan Pro Rata Share of any U.S. Borrower Loan or any U.K. Lender
fails to fund its U.K. Loan Pro Rata Share of any U.K. Borrower Loan
requested by the U.S. Borrower which such Lender is obligated to fund
under the terms of this Agreement (the funded portion of such Loan being
hereinafter referred to as a "Non Pro Rata Loan"), until the earlier of
such Lender's cure of such failure and the termination of the U.S. Loan
Commitments or U.K. Loan Commitments, as applicable, the proceeds of all
amounts thereafter repaid to the Administrative Agent by a Borrower and
otherwise required to be applied to such Lender's share of all other
Obligations pursuant to the terms of this Agreement shall be advanced to
the U.S. Borrower or U.K. Borrower, as applicable, by the Administrative
Agent or European Agent, as applicable, on behalf of such Lender to cure,
in full or in part, such failure by such Lender, but shall nevertheless be
deemed to have been paid to such Lender in satisfaction of such other
Obligations. Notwithstanding anything in this Agreement to the contrary:
(i) the foregoing provisions of this Section 4.02(f) 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
5.01(c);
(ii) a Lender shall be deemed to have cured its failure to fund its
U.S. Loan Pro Rata Share or U.K. Loan Pro Rata Share of any Loan at such
time as an amount equal to such Lender's original U.S. Loan Pro Rata Share
or U.K. Loan Pro Rata Share of the requested principal portion of such
Loan is fully funded to the applicable Borrower, whether made by such
Lender itself or by operation of the terms of this Section 4.02(f), and
whether or not the Non Pro Rata Loan with respect thereto has been repaid,
converted or continued;
(iii) amounts advanced to a Borrower to cure, in full or in part,
any such Lender's failure to fund its U.S. Loan Pro Rata Share or U.K.
Loan Pro Rata Share of any Loan ("Cure Loans") shall bear interest at the
rate in effect from time to time pursuant to Section 5.01 and for all
other purposes of this Agreement shall be treated as if they were Base
Rate Loans; and
(iv) regardless of whether or not an Event of Default has occurred
or is continuing, and notwithstanding the instructions of either Borrower
as to its desired application, all repayments of principal which, in
accordance with the other terms of this Section 4.02, would be applied to
the outstanding Loans which are 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.
(g) Payments on Non-Business Days. Whenever any payment to be made
by a Borrower hereunder or under the Notes is stated to be due on a day
which is not a Business Day, the payment shall instead be due on the next
succeeding Business Day (except as set forth in Section 5.02(b)(iii) with
respect to payments due on the next preceding Business Day), and any such
extension of time shall be included in the computation of the payment of
interest and fees hereunder.
4.03. Promise to Repay; Evidence of Indebtedness.
(a) Promise to Repay. Each Borrower severally and not jointly
hereby agrees to pay when due the principal amount of each Loan which is
made to it, and further agrees to pay all unpaid interest accrued thereon,
in accordance with the terms of this Agreement and the Notes. The U.S.
Borrower shall execute and deliver to each Lender on the Effective Date a
promissory note, in form and substance acceptable to the Administrative
Agent and such Lender, evidencing the U.S. Borrower Loans and thereafter
shall execute and deliver such other promissory notes as are necessary to
evidence U.S. Borrower Loans owing to the Lenders after giving effect to
any assignment thereof pursuant to Section 15.01, all in form and
substance acceptable to the Administrative Agent and the parties to such
assignment. The U.K. Borrower shall execute and deliver to each U.K.
Lender on the Effective Date a promissory note, in form and substance
acceptable to the Administrative Agent and such U.K. Lender, evidencing
the U.K. Borrower Loans and thereafter shall execute and deliver such
other promissory notes as are necessary to evidence U.K. Borrower Loans
owing to the U.K. Lenders after giving effect to any assignment thereof
pursuant to Section 15.01, all in form and substance acceptable to the
Administrative Agent and the parties to such assignment.
(b) Loan Account. Each Lender shall maintain in accordance with its
usual practice an account or accounts (a "Loan Account") evidencing the
Indebtedness of the respective Borrowers to such Lender resulting from
each Loan owing to such Lender from time to time, including the amount of
principal and interest payable and paid to such Lender from time to time
hereunder and under the Notes.
(c) Control Account. The Register maintained by the Administrative
Agent pursuant to Section 15.01(c) shall include a control account, and a
subsidiary account for each Lender, in which accounts (taken together)
shall be recorded (i) the date and amount of each Borrowing made
hereunder, the type of Loan comprising such Borrowing and any Eurocurrency
Interest Period applicable thereto, (ii) the effective date and amount of
each Assignment and Acceptance delivered to and accepted by it and the
parties thereto, (iii) the amount of any principal or interest due and
payable or to become due and payable from a Borrower to each Lender
hereunder or under the Notes, and (iv) the amount of any sum received by
the Administrative Agent or European Agent from a Borrower hereunder and
each Lender's share thereof.
(d) Entries Binding. The entries made in the Register and each Loan
Account shall be conclusive and binding for all purposes, absent manifest
error.
4.04. Proceeds of Collateral; Concentration Account Arrangements.
(a) Establishment. The Borrowers shall establish and maintain, and shall
cause the Guarantors and European Subsidiary Borrowers to establish and
maintain, Collection Accounts into which all collections of Receivables
shall be deposited. All amounts deposited in Collection Accounts
established by the U.S. Borrower and its Domestic Subsidiaries shall be
promptly transferred directly to the Concentration Account established at
Citibank in New York, New York. All amounts deposited in Collection
Accounts established by the U.K. Borrower and the European Subsidiary
Borrowers shall be promptly transferred directly to the Concentration
Account established with the European Agent in London, England. Borrowers
shall cause all other proceeds of Collateral to be deposited in the
appropriate Concentration Account or pursuant to other similar
arrangements for the collection of such amounts established by the
Borrowers and the Administrative Agent. All collections of Receivables and
other proceeds of Collateral which are received directly by either
Borrower, any Domestic Subsidiary of the U.S. Borrower, or any European
Subsidiary Borrower shall be deemed to have been received by such Borrower
or such Subsidiary as the Administrative Agent's trustee and, upon such
Borrower's or such Subsidiary's receipt thereof, such Borrower or such
Subsidiary shall immediately transfer, or cause to be transferred, all
such amounts into the appropriate Concentration Account in their original
form. All collections of Receivables, all payments, and all proceeds of
other Collateral received by the Administrative Agent or European Agent,
whether through payment, deposit in a Concentration Account as described
above, or otherwise, will be deemed received by the Administrative Agent
or European Agent, as applicable, will be the sole property of the
Administrative Agent, and will be held by the Administrative Agent, for
the benefit of the Holders (i) for application to the Obligations pursuant
to Section 4.02 and (ii) thereafter, as Cash Collateral for the
Obligations, subject to the rights of the Borrowers set forth in Section
4.04(b) and the rights of the Administrative Agent set forth in Section
4.06.
(b) Pre-Default Withdrawals from Concentration Account. If
requested by the U.S. Borrower, the Administrative Agent shall, so long as
no Event of Default shall have occurred and be continuing or unwaived,
from time to time, (i) apply funds in the Concentration Accounts (A)
promptly after deposit therein to payment of the U.S. Borrower Loans, if
such funds are deposited in the Concentration Account established at
Citibank, (B) promptly after deposit therein to payment of the U.K.
Borrower Loans, if such funds are deposited in the Concentration Account
established with the European Agent, and (C) to payment of other
Obligations of the U.S. Borrower and U.K. Borrower, as applicable, as they
become due and payable, (ii) after giving effect to the aforesaid
payments, invest funds on deposit in the Concentration Accounts and
accrued interest thereon, reinvest proceeds of any such investments which
may mature or be sold, and invest interest or other income received from
such investments, in such Cash Equivalents as the U.S. Borrower may
select, and (iii) upon the U.S. Borrower's request therefor after giving
effect to the payments described in clause (i) above, transfer funds on
deposit in the Concentration Accounts to Borrowers' or their Subsidiaries'
designated accounts. Such funds, interest, proceeds, or income which are
not so disbursed, invested or reinvested shall be deposited and held in
the Concentration Account for the benefit of the Holders as provided in
Section 4.04(a). None of the Administrative Agent, the European Agent, any
Lender or any Issuing Bank shall be liable to either Borrower or any
Subsidiary of either Borrower for, or with respect to, any decline in
value of amounts on deposit in the Concentration Accounts which shall have
been invested pursuant to this Section 4.04(b). Cash Equivalents from time
to time purchased and held pursuant to this Section 4.04(b) shall
constitute Cash Collateral and shall, for purposes of this Agreement, be
deemed to be part of the funds held in the respective Concentration
Accounts in amounts equal to their respective outstanding principal
amounts.
(c) Reasonable Care. The Administrative Agent and European Agent
shall exercise reasonable care in the custody and preservation of any
funds held in the Concentration Accounts and shall be deemed to have
exercised such care if such funds are accorded treatment substantially
equivalent to that which the Administrative Agent accords its own like
property, it being understood that neither the Administrative Agent nor
the European Agent shall have any responsibility for taking any steps
necessary to preserve rights against any parties with respect to any such
funds but may do so at its option. All reasonable expenses incurred in
connection therewith shall be for the sole account of the Borrowers and
shall constitute Obligations hereunder.
4.05. Cash Collateral Account. (a) Investments. If requested by
the U.S. Borrower, the Administrative Agent shall, so long as no Event of
Default shall have occurred and be continuing, from time to time invest
funds on deposit in the Cash Collateral Account and accrued interest
thereon, reinvest proceeds of any such investments which may mature or be
sold, and invest interest or other income received from any such
Investments, in each case in such Cash Equivalents as the U.S. Borrower
may select; provided, however, that such accrued interest and other income
received from any such Investments, upon the request of the U.S. Borrower,
shall be remitted to the U.S. Borrower. Such funds, interest, proceeds or
income which are not so invested or reinvested in Cash Equivalents shall,
except as otherwise provided above or in Section 4.05(b) and Section 4.06,
be deposited and held by the Administrative Agent in the Cash Collateral
Account. None of the Administrative Agent, any Lender or any Issuing Bank
shall be liable to the U.S. Borrower for, or with respect to, any decline
in value of amounts on deposit in the Cash Collateral Account which shall
have been invested pursuant to this Section 4.05(a) at the direction of
the U.S. Borrower. Cash Equivalents from time to time purchased and held
pursuant to this Section 4.05(a) shall constitute Cash Collateral and
shall, for purposes of this Agreement, be deemed to be part of the funds
held in the Cash Collateral Account in amounts equal to their respective
outstanding principal amounts.
(b) Withdrawal Rights. Neither of the Borrowers and no Person or
entity claiming on behalf of or through either Borrower shall have any
right to withdraw any of the funds held in the Cash Collateral Account,
except that, upon the later to occur of (i) the expiration or termination
of all of the Letters of Credit in accordance with their respective terms
and (ii) the payment in full in cash of the Obligations, any funds
remaining in the Cash Collateral Account shall be returned by the
Administrative Agent to the U.S. Borrower or paid to whomever may be
legally entitled thereto.
(c) Additional Deposits. If at any time the Administrative Agent
determines that any funds held in the Cash Collateral Account are subject
to any interest, right, claim or Lien of any Person other than the
Administrative Agent, the U.S. Borrower will, forthwith upon demand by the
Administrative Agent, pay to the Administrative Agent, as additional funds
to be deposited and held in the Cash Collateral Account, an amount equal
to the amount of funds subject to such interest, right, claim or Lien.
(d) Reasonable Care. The Administrative Agent shall exercise
reasonable care in the custody and preservation of any funds held in the
Cash Collateral Account and shall be deemed to have exercised such care if
such funds are accorded treatment substantially equivalent to that which
the Administrative Agent accords its own like property, it being
understood that the Administrative Agent shall not have any responsibility
for taking any necessary steps to preserve rights against any parties with
respect to any such funds but may do so at its option. All expenses
incurred in connection therewith shall be for the sole account of the U.S.
Borrower and shall constitute Obligations hereunder.
(e) Foreign Exchange Requirements. In the event deposits have been
made to the Cash Collateral Account to secure Letter of Credit Obligations
denominated in a non-U.S. currency, the U.S. Borrower shall enter into a
Hedge Agreement for a forward foreign exchange contract reasonably
satisfactory to the Administrative Agent to protect against fluctuation in
the Exchange Rate for the amount of such Letter of Credit Obligations
until the same are paid in full.
4.06. Post-Default Withdrawals from the Concentration Account and
Cash Collateral Account. Notwithstanding any other provision of this
Agreement, from and after (a) the occurrence of an Event of Default
described in Section 12.01(a) and for so long as the same is continuing
unwaived or (b) the occurrence of any other Event of Default and the
Administrative Agent's receipt of written notice from the Requisite
Lenders that no further withdrawals may be made from the Concentration
Accounts other than for application on the Obligations for so long as the
same is continuing unwaived, neither Borrower and no other Person or
entity claiming on behalf of or through either Borrower shall have any
right to withdraw any of the funds held in a Concentration Account. The
Administrative Agent may, at any time during the period clause (a) or
clause (b) above is applicable, sell or cause to be sold any Cash
Equivalents being held by the Administrative Agent in the Concentration
Accounts or as Cash Collateral at any broker's board or at public or
private sale, in one or more sales or lots, at such price as the
Administrative Agent may deem best, without assumption of any credit risk,
and the purchaser of any or all such Cash Equivalents so sold shall
thereafter own the same, absolutely free from any claim, encumbrance or
right of any kind whatsoever. The Administrative Agent or any Holder may,
in its own name or in the name of a designee or nominee, buy such Cash
Equivalents at any public sale and, if permitted by applicable law, buy
such Cash Equivalents at any private sale. The Administrative Agent shall
apply the proceeds of any such sale, net of any reasonable expenses
incurred in connection therewith, and any other funds deposited in the
Concentration Accounts or Cash Collateral Account to the payment of the
Obligations in accordance with Section 4.02(c), other than amounts which
are being held as Cash Collateral for Reimbursement Obligations, which
shall be applied to such Reimbursement Obligations without regard to
Section 4.02(c). The Borrowers agree that any sale of Cash Equivalents
conducted in conformity with reasonable commercial practices of banks,
commercial finance companies, insurance companies or other financial
institutions disposing of property similar to such Cash Equivalents shall
be deemed to be commercially reasonable and any requirements of reasonable
notice shall be met if such notice is given by the Administrative Agent
within a commercially reasonable time prior to such disposition, the time
of delivery of which notice the parties hereto agree shall in no event be
required to be greater than five (5) Business Days before the date of the
intended sale or disposition. Any other requirement of notice, demand or
advertisement for sale is waived to the extent permitted by law. The
Administrative Agent may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor and such sale
may, without further notice, be made at the time and place to which it was
so adjourned.
ARTICLE V
INTEREST AND FEES
5.01. Interest on the Loans and other Obligations. (a) Rate of
Interest. (i) All Loans and the outstanding principal balance of all
other Obligations shall bear interest on the unpaid principal amount
thereof from the date such Loans are made and such other Obligations are
incurred until paid in full, except as otherwise provided in Section
5.01(d) or Section 14.04, as follows:
(A) If a Base Rate Loan or such other Obligation, at a rate per annum
equal to the sum of (1) the Base Rate, as in effect from time to time as
interest accrues plus (2) the applicable Base Rate Margin; and
(B) If a Eurocurrency Rate Loan, at a rate per annum equal to the sum
of (1) the applicable Eurocurrency Rate determined for such Eurocurrency
Rate Loan for the applicable Eurocurrency Interest Period, plus (2) the
applicable Eurocurrency Rate Margin.
(ii) The applicable basis for determining the rate of interest on
the Loans shall be selected by the U.S. Borrower at the time a Notice of
Borrowing or a Notice of Conversion/Continuation is delivered by the U.S.
Borrower to the Administrative Agent; provided, however, the U.S. Borrower
may not select a Eurocurrency Rate as the applicable basis for determining
the rate of interest on such a Loan if (A) such Loan is to be made on the
Effective Date or (B) at the time of such selection an Event of Default or
a Potential Event of Default would occur or has occurred and is
continuing. If on any day any Loan denominated in Dollars is outstanding
with respect to which notice has not been timely delivered to the
Administrative Agent in accordance with the terms of this Agreement speci-
fying the basis for determining the rate of interest on that day, then for
that day interest on that Loan shall be determined by reference to clause
(i)(A) above. If on any day any Loan denominated in DM is outstanding with
respect to which notice has not been timely delivered to the
Administrative Agent in accordance with the terms of this Agreement
specifying the basis for determining the rate of interest on that day,
then interest on that Loan shall be the applicable Eurocurrency Rate
determined therefor for the thirty (30) day period commencing on that day.
(b) Interest Payments. (i) Interest accrued on each Base Rate Loan
shall be payable in arrears (A) on the first Business Day of each calendar
quarter, commencing with the calendar quarter following the calendar
quarter in which such Loan was made and (B) if not theretofore paid in
full, at maturity (whether by acceleration or otherwise) of such Base Rate
Loan.
(ii) Interest accrued on each Eurocurrency Rate Loan shall be
payable in arrears (A) on each Eurocurrency Interest Payment Date
applicable to such Loan, (B) upon the payment or prepayment thereof in
full or in part, and (C) if not theretofore paid in full, at maturity
(whether by acceleration or otherwise) of such Eurocurrency Rate Loan.
(iii) Interest accrued on the principal balance of all other
Obligations shall be payable in arrears (A) on the first day of each
calendar quarter, commencing with the calendar quarter following the
calendar quarter in which such Obligation was incurred, (B) upon repayment
thereof in full or in part, and (C) if not theretofore paid in full, at
the time such other Obligation becomes due and payable (whether by
acceleration or otherwise).
(c) Conversion or Continuation. (i) The Borrowers shall have the
option (A) to convert at any time all or any part of outstanding Base Rate
Loans to Eurocurrency Rate Loans; (B) to convert all or any part of
outstanding Eurocurrency Rate Loans which are denominated in Dollars
having Eurocurrency Interest Periods which expire on the same date to Base
Rate Loans on such expiration date; or (C) to continue all or any part of
outstanding Eurocurrency Rate Loans having Eurocurrency Interest Periods
which expire on the same date as Eurocurrency Rate Loans, and the succeed-
ing Eurocurrency Interest Period of such continued Loans shall commence on
such expiration date; provided, however, no such outstanding Loan may be
continued as, or be converted into, a Eurocurrency Rate Loan (i) if such
continuation of, or conversion into, would violate any of the provisions
of Section 5.02 or (ii) if an Event of Default or a Potential Event of
Default would occur or has occurred and is continuing. Any conversion
into or continuation of Eurocurrency Rate Loans under this Section 5.01(c)
shall be in a minimum amount of $1,000,000 or DM1,000,000, as applicable,
and in integral multiples of $100,000 or DM100,000, as applicable, in
excess of that amount except in the case of a conversion into or a
continuation of an entire Borrowing of Non Pro Rata Loans.
(ii) To convert or continue a Loan under Section 5.01(c)(i), the
U.S. Borrower shall deliver a Notice of Conversion/Continuation to the
Administrative Agent no later than 11:00 a.m. (New York time) at least
three (3) Business Days in advance of the proposed conversion/continuation
date. A Notice of Conversion/Continuation shall specify (A) the proposed
conversion/continuation date (which shall be a Business Day), (B) the
aggregate principal amount of the respective U.S. Borrower Loans or U.K.
Borrower Loans to be converted/continued, (C) whether such Loan shall be
converted and/or continued, (D) in the case of a conversion to, or
continuation of, a Eurocurrency Rate Loan, the requested Eurocurrency
Interest Period and (E) if such notice is delivered with respect to U.K.
Borrower Loans, the Dollar equivalent as of the date of such notice of
U.K. Borrower Loans denominated in DM. In lieu of delivering a Notice of
Conversion/Continuation, the U.S. Borrower may give the Administrative
Agent telephonic notice of any proposed conversion/continuation by the
time required under this Section 5.01(c)(ii), and such notice shall be
confirmed in writing delivered to the Administrative Agent by facsimile
transmission promptly (but in no event later than 5:00 p.m. (New York
time) on the same day), the original of which facsimile copy shall be
delivered to the Administrative Agent within three (3) days after the date
of such transmission. Promptly after receipt of a Notice of
Conversion/Continuation under this Section 5.01(c)(ii) (or telephonic
notice in lieu thereof), the Administrative Agent shall notify each Lender
or U.K. Lender, as applicable, by telecopy or other similar form of trans-
mission, of the proposed conversion/continuation. Any Notice of Conver-
sion/Continuation for conversion to, or continuation of, a Loan (or
telephonic notice in lieu thereof) shall be irrevocable, and the Borrowers
shall be bound to convert or continue in accordance therewith.
(d) Default Interest. Notwithstanding the rates of interest
specified in Section 5.01(a), effective immediately upon (i) the
occurrence of an Event of Default described in Sections 12.01(a), (b) (as
it pertains to defaults under Article XI), (f), (g), (h), or (i) (except
an Event of Default under (i) resulting from the gross negligence or
willful misconduct of the Administrative Agent) or (ii) the occurrence of
any other Event of Default and notice from the Requisite Lenders of the
effectiveness of this Section 5.01(d), and for as long thereafter as such
Event of Default shall be continuing unwaived, the principal balance of
all Obligations, including, to the extent permitted by applicable law,
accrued interest unpaid when due, shall bear interest, payable on demand,
at a rate which is two percent (2.0%) per annum in excess of the rate of
interest specified in Section 5.01(a)(i).
(e) Computation of Interest. Interest on all Obligations shall be
computed on the basis of the actual number of days elapsed in the period
during which interest accrues and a year of 360 days. In computing
interest on any Loan, the date of the making of the Loan or the first day
of a Eurocurrency Interest Period, as the case may be, shall be included
and the date of payment or the expiration date of a Eurocurrency Interest
Period, as the case may be, shall be excluded; provided, however, if a
Loan is repaid on the same day on which it is made, one (1) day's interest
shall be paid on such Loan.
5.02. Special Provisions Governing Eurocurrency Rate Loans. With
respect to Eurocurrency Rate Loans:
(a) Amount of Eurocurrency Rate Loans. Each Borrowing of
Eurocurrency Rate Loans shall be for a minimum amount of $1,000,000 or
DM1,000,000, as applicable, and in integral multiples of $100,000 or
DM100,000, as applicable, in excess of that amount.
(b) Determination of Eurocurrency Interest Period. By giving notice
as set forth in Section 2.02(b) (with respect to a Borrowing of
Eurocurrency Rate Loans) or Section 5.01(c) (with respect to a conversion
into or continuation of Eurocurrency Rate Loans), the Borrowers shall have
the option, subject to the other provisions of this Section 5.02, to
select an interest period (each, a "Eurocurrency Interest Period") to
apply to the Loans described in such notice, subject to the following
provisions:
(i) The Borrowers may only select, as to a particular Borrowing of
Eurocurrency Rate Loans, a Eurocurrency Interest Period of one, two, three
or six months in duration;
(ii) In the case of immediately successive Eurocurrency Interest
Periods applicable to a Borrowing of Eurocurrency Rate Loans, each
successive Eurocurrency Interest Period shall commence on the day on which
the next preceding Eurocurrency Interest Period expires;
(iii) If any Eurocurrency Interest Period would otherwise expire on
a day which is not a Business Day, such Eurocurrency Interest Period shall
be extended to expire on the next succeeding Business Day if the next
succeeding Business Day occurs in the same calendar month, and if there
will be no succeeding Business Day in such calendar month, the
Eurocurrency Interest Period shall expire on the immediately preceding
Business Day;
(iv) The Borrowers may not select a Eurocurrency Interest Period as
to any Loan if such Eurocurrency Interest Period terminates later than the
scheduled Revolving Credit Termination Date; and
(v) There shall be no more than six (6) Eurocurrency Interest
Periods in effect at any one time.
(c) Determination of Interest Rate. As soon as practicable on the
second Business Day prior to the first day of each Eurocurrency Interest
Period (the "Eurocurrency Interest Rate Determination Date"), the
Administrative Agent shall determine (pursuant to the procedures set forth
in the definition of "Eurocurrency Rate") the interest rate which shall
apply to the Eurocurrency Rate Loans for which an interest rate is then
being determined for the applicable Eurocurrency Interest Period and shall
promptly give notice thereof (in writing or by telephone confirmed in
writing) to the U.S. Borrower and to each Lender. The Administrative
Agent's determination shall be presumed to be correct, absent manifest
error, and shall be binding upon the Borrowers.
(d) Interest Rate Unascertainable, Inadequate or Unfair. In the
event that at least one (1) Business Day before the Eurocurrency Interest
Rate Determination Date:
(i) the Administrative Agent is advised by Citibank that deposits in
Dollars or DM, as applicable (in the applicable amounts) are not being
offered by Citibank in the London interbank market for such Eurocurrency
Interest Period; or
(ii) the Administrative Agent determines that adequate and fair means
do not exist for ascertaining the applicable interest rates by reference
to which the Eurocurrency Rate then being determined is to be fixed; or
(iii) the Requisite Lenders advise the Administrative Agent that the
Eurocurrency Rate for Eurocurrency Rate Loans comprising such Borrowing
will not adequately reflect the cost to such Requisite Lenders of
obtaining funds in Dollars or DM, as applicable, in the London interbank
market in the amount substantially equal to such Lenders' Eurocurrency
Rate Loans in Dollars or DM, as applicable, and for a period equal to such
Eurocurrency Interest Period;
then the Administrative Agent shall forthwith give notice thereof to the
U.S. Borrower, whereupon (until the Administrative Agent notifies the U.S.
Borrower that the circumstances giving rise to such suspension no longer
exist) the right of the Borrowers to elect to have Loans bear interest
based upon the Eurocurrency Rate shall be suspended and each outstanding
Eurocurrency Rate Loan shall be converted into a Base Rate Loan on the
last day of the then current Eurocurrency Interest Period therefor,
notwithstanding any prior election by the Borrowers to the contrary.
(f) Booking of Eurocurrency Rate Loans. Any Lender may make, carry
or transfer Eurocurrency Rate Loans at, to, or for the account of, its
Eurocurrency Lending Office or Eurocurrency Affiliate or its other offices
or Affiliates. No Lender shall be entitled, however, to receive any
greater amount under Article XIV as a result of the transfer of any such
Eurocurrency Rate Loan to any office (other than such Eurocurrency Lending
Office) or any Affiliate (other than such Eurocurrency Affiliate) than
such Lender would have been entitled to receive immediately prior thereto,
unless (i) the transfer occurred at a time when circumstances giving rise
to the claim for such greater amount did not exist and (ii) such claim
would have arisen even if such transfer had not occurred.
(g) Affiliates Not Obligated. No Eurocurrency Affiliate or other
Affiliate of any Lender shall be deemed a party to this Agreement or shall
have any liability or obligation under this Agreement.
5.03. Fees. (a) Administrative Agent's Fee. The U.S. Borrower
shall pay to the Administrative Agent, solely for the account of the
Administrative Agent, the fee provided in the Fee Letter as and when set
forth therein during the term of this Agreement.
(b) Letter of Credit Fee. In addition to any charges paid pursuant
to Section 3.01(g), the U.S. Borrower shall pay (i) to the Issuing Bank,
a fee equal to one-quarter of one percent (0.25%) on the face amount of
each Letter of Credit issued by such Issuing Bank, upon issuance of such
Letter of Credit (the "Fronting Fee") and (ii) to the Administrative
Agent, for the account of the Lenders based on their respective U.S. Loan
Pro Rata Shares, a fee (the "Letter of Credit Fee") accruing at a per
annum rate equal to the Eurocurrency Rate Margin on the undrawn face
amount of each outstanding Letter of Credit, payable quarterly, in
arrears, on the first day of each calendar quarter and the Revolving
Credit Termination Date; provided, however, that in the event the
unsecured short term debt Securities of any Lender at any time after the
Effective Date shall be rated less than AA- by Standard & Poor's Rating
Group the amount of the Fronting Fee shall be increased to one-half of one
percent (0.50%) per annum during the period commencing on the date such
minimum rating requirement is not met for any Lender and continuing until
all Lenders shall have attained at least a rating of AA-; and provided
further that upon (A) the occurrence of an Event of Default referenced in
Section 5.01(d)(i) or (B) the occurrence of any other Event of Default and
notice from the Requisite Lenders of the effectiveness of Section 5.01(d),
and for so long thereafter as such Event of Default shall be continuing
unwaived, the rate at which the Letter of Credit Fee shall accrue and be
payable shall be equal to two percent (2.0%) per annum plus the
Eurocurrency Rate Margin.
(c) Commitment Fee. (i) The U.S. Borrower shall pay to the
Administrative Agent, for the account of the Lenders in accordance with
their respective Pro Rata Shares, a fee (the "Commitment Fee"), accruing
at the rate of one-half of one percent (0.50%) per annum on the average
amount by which the Commitments exceed the sum of the U.S. Revolving
Credit Obligations plus the U.K. Borrower Loans, such Commitment Fee being
payable (1) quarterly, in arrears, commencing on the first day of the
calendar quarter next succeeding the Effective Date and (2) on the
Revolving Credit Termination Date.
(ii) Notwithstanding the foregoing, in the event that any Lender
fails to fund its U.S. Loan Pro Rata Share of any U.S. Borrower Loan or
its U.K. Loan Pro Rata Share of any U.K. Borrower Loan which such Lender
is obligated to fund under the terms of this Agreement, (A) such Lender
shall not be entitled to any Commitment Fees with respect to its
Commitments until such failure has been cured in accordance with Section
4.02(f)(ii) and (B) until such time, the Commitment Fee shall accrue in
favor of the Lenders which have funded their respective U.S. Loan Pro Rata
Shares and U.K. Loan Pro Rata Shares of such requested Loan, shall be
allocated among such performing Lenders ratably based upon their relative
U.S. Loan Commitments or U.K. Loan Commitments, as applicable, and shall
be calculated based upon the average amount by which the aggregate of such
Commitments of such performing Lenders exceeds the sum of (1) the U.S.
Revolving Credit Obligations owing to such performing Lenders, plus (2)
the U.K. Borrower Loans owing to such performing Lenders, plus (3) the
aggregate participation interests of such performing Lenders arising
pursuant to Section 3.01(e) with respect to undrawn and outstanding
Letters of Credit.
(d) Calculation and Payment of Fees. All of the above fees shall be
calculated on the basis of the actual number of days elapsed in a 360-day
year. All such fees shall be payable in addition to, and not in lieu of,
interest, compensation, expense reimbursements, indemnification and other
Obligations payable under this Agreement, to the Administrative Agent at
its office in New York, New York in immediately available funds. All fees
shall be fully earned and nonrefundable when paid. All fees specified or
referred to in this Agreement due to the Administrative Agent, the
European Agent, the European Administrator, any Issuing Bank or any
Lender, including, without limitation, those referred to in this Section
5.03, shall bear interest, if not paid when due, at the interest rate for
Base Rate Loans set forth in Section 5.01(d), shall constitute Obligations
and shall be secured by all of the Collateral in which Liens are granted
by the U.S. Borrower and Domestic Subsidiaries.
ARTICLE VI
CONDITIONS TO LOANS AND LETTERS OF CREDIT
6.01. Conditions Precedent to the Initial Loans and Letters of
Credit. The effectiveness of this Agreement, the obligation of each
Lender on the Effective Date to make the Loan requested to be made by it,
and the agreement of each Issuing Bank on the Effective Date to issue or
continue Letters of Credit, shall be subject to the satisfaction of all of
the following conditions precedent on or before the Effective Date:
(a) Documents. The Administrative Agent shall have received on or
before the Effective Date all of the following:
(i) this Agreement, the Notes and all other agreements, documents and
instruments relating to the loan and other credit transactions
contemplated by this Agreement and described in the List of Closing
Documents attached hereto as Exhibit J attached hereto and made a part
hereof, each duly executed where appropriate and in form and substance
satisfactory to the Administrative Agent; without limiting the foregoing,
the Borrowers hereby direct their counsel, A&L Goodbody and Cahill, Gordon
& Reindel, and their General Counsel, Donald E. Miller, to prepare and
deliver to the Administrative Agent, the European Agent, the European
Administrator, the Lenders, the Issuing Banks and Sidley & Austin, the
opinions referred to in such List of Closing Documents;
(ii) the Pro Forma and Projections, in form and substance
satisfactory to the Administrative Agent;
(iii) an Officer's Certificate executed and delivered by the
president or vice president of the U.S. Borrower certifying that all
conditions precedent have been met;
(iv) the Tax Allocation Agreement in form and substance satisfactory
to the Administrative Agent; and
(v) such additional documentation as the Administrative Agent may
reasonably request.
(b) Perfection of Liens; Title Insurance. Evidence that all
financing statements, mortgages, leasehold mortgages, and other required
notices relating to the Collateral located in the United States have been
filed or recorded, certificates representing Capital Stock of the Domestic
Subsidiaries have been delivered to the Administrative Agent (with duly
executed stock powers), and all title charges, recording fees and filing
taxes have been paid. Title insurance policies (or commitments therefor)
in form and substance satisfactory to the Administrative Agent and
relating to any Real Property or interests in Real Property comprising
part of the Collateral shall have been delivered to the Administrative
Agent by insurers satisfactory to the Administrative Agent.
(c) The Stock Transfers. The Capital Stock of Fairchild Germany,
Inc. shall have been contributed to the U.S. Borrower by RHI in conformity
with all applicable laws and regulatory approval requirements and all
contractual approval and consent requirements.
(d) Due Diligence. The Administrative Agent and its counsel shall
have completed their updated due diligence review of the financial
condition, business, operations, assets, liabilities (environmental, by
way of indemnification, and otherwise), pending and threatened litigation,
corporate, capital, legal and management structure and Contractual
Obligations of Borrowers and their Subsidiaries, the results of which
shall have provided the Administrative Agent, each Lender and each Issuing
Bank with results and information which, in the judgment of such Person,
are satisfactory to permit the Administrative Agent, each Lender and each
Issuing Bank to enter into the financing transactions contemplated hereby.
All Schedules to this Agreement shall be acceptable to the Administrative
Agent and Lenders.
(f) No Legal Impediments. No law, regulation, order, judgment or
decree of any Governmental Authority shall, and the Administrative Agent
shall not have received any notice that litigation is pending or
threatened which is likely to, (i) enjoin, prohibit or restrain the making
of the Loans and/or the issuance or continuation of Letters of Credit on
the Effective Date or (ii) result in a Material Adverse Effect.
(g) No Change in Condition. No change in the business, assets,
management, operations, financial condition or prospects of the Operating
Units or any business, assets, management, operations, financial condition
or prospects of the Borrowers' Subsidiaries shall have occurred since
March 31, 1996, which change, in the judgment of the Requisite Lenders,
will, or is reasonably likely to, result in a Material Adverse Effect.
(h) No Loss of Material Agreements and Licenses. No agreement or
license which, in the judgment of the Requisite Lenders, is material to
the business, operations or employee relations of the Borrowers or any
Subsidiary of a Borrower shall have been terminated, modified, revoked,
breached or declared to be in default.
(i) No Market Changes. Since June 12, 1996, no material adverse
change shall have occurred in the conditions in the capital markets or the
market for loan syndications generally.
(j) No Default. No Event of Default or Potential Event of Default
shall have occurred and be continuing or would result from the making of
the Loans and no "Event of Default" (as defined in the Original Credit
Agreement) shall have occurred and be continuing unwaived.
(k) Representations and Warranties. All of the representations and
warranties contained in Section 7.01 and in any of the other Loan
Documents shall be true and correct in all material respects on and as of
the Effective Date.
(l) Fees and Expenses Paid. There shall have been paid to the
Administrative Agent, for the accounts of the Lenders, Issuing Banks, and
the Administrative Agent, as applicable, all fees and expenses due and
payable on or before the Effective Date.
(m) Loans, Fees and Expenses Under Original Credit Agreement Paid.
All unpaid principal of the Loans made under the Original Agreement,
together with all fees and interest accrued under the terms of the
Original Credit Agreement through the Effective Date, shall have been paid
in full in immediately available funds.
(n) Appraisals. The Administrative Agent and Lenders shall have
received appraisals of the assets of each Borrower and Guarantor prepared
by independent appraisers satisfactory to the Administrative Agent and
Lenders, which appraisals shall have been determined to be satisfactory in
form and substance to the Administrative Agent and Lenders.
6.02. Conditions Precedent to All Loans and Letters of Credit. The
obligation of each Lender to make any Loan requested to be made by it on
any Funding Date and the agreement of each Issuing Bank to issue any
Letter of Credit on any date is subject to the following conditions
precedent as of each such date, both before and after giving effect to the
Loans to be made and/or the Letter of Credit to be issued on such date:
(a) Representations and Warranties. All of the representations and
warranties of the Borrowers contained in Section 7.01 and in any other
Loan Document (other than representations and warranties which expressly
speak as of a different date) shall be true and correct in all material
respects.
(b) No Defaults. No Event of Default or Potential Event of Default
shall have occurred and be continuing or would result from the making of
the requested Loan or issuance of the requested Letter of Credit.
(c) No Legal Impediments. No law, regulation, order, judgment or
decree of any Governmental Authority shall, and the Administrative Agent
shall not have received from any Lender or Issuing Bank notice that, in
the judgment of such Lender or Issuing Bank, litigation is pending or
threatened which is likely to, enjoin, prohibit or restrain, or impose or
result in the imposition of any material adverse condition upon, (i) such
Lender's making of the requested Loan or participation in the requested
Letter of Credit or (ii) such Issuing Bank's issuance of the requested
Letter of Credit.
(d) No Material Adverse Effect. No event shall have occurred since
the date of this Agreement which has resulted, or is reasonably likely to
result, in a Material Adverse Effect.
(e) Notice of Borrowing and Borrowing Base Certificate. The U.S.
Borrower shall have executed and delivered to the Administrative Agent a
Notice of Borrowing in accordance with the provisions of Section 2.02
together with a Borrowing Base Certificate dated no more than thirty (30)
calendar days prior to the date of such Notice of Borrowing.
Each submission by the U.S. Borrower to the Administrative Agent of a
Notice of Borrowing with respect to any Loan or a Notice of
Conversion/Continuation with respect to any Loan, each acceptance by a
Borrower of the proceeds of each Loan made, converted or continued
hereunder, each submission by the U.S. Borrower to an Issuing Bank of a
request for issuance of a Letter of Credit and the issuance of such Letter
of Credit, shall constitute a representation and warranty by the Borrowers
as of the Funding Date in respect of such Loan, the date of conversion or
continuation and the date of issuance of such Letter of Credit, that all
the conditions contained in this Section 6.02 have been satisfied or
waived in accordance with Section 15.07.
6.03. Conditions Precedent to Initial U.K. Borrower Loans. The
obligation of each U.K. Lender to make the initial U.K. Borrower Loan
requested to be made by it is subject to the satisfaction of the following
conditions precedent, in addition to the satisfaction of the conditions
precedent set forth in Section 6.02, as of the date such U.K. Borrower
Loan is requested to be made, both before and after giving effect to the
Loans to be made on such date:
(a) Documents. The Administrative Agent shall have received on or
before such date all of the following:
(i) Notes executed and delivered by the U.K. Borrower evidencing the
U.K. Borrower Loans;
(ii) All other agreements, documents, and instruments relating to
the U.K. Borrower Loans and the use of proceeds thereof contemplated by
this Agreement (including, without limitation, the U.K. Loan Documents)
and described in the List of Closing Documents attached hereto as Exhibit
J-1 and made a part hereof, each duly executed where appropriate and in
form and substance satisfactory to the Administrative Agent; without
limiting the foregoing, the U.K. Borrower hereby directs its counsel, A&L
Goodbody, Boesebeck, Barz & Partner, and local counsel in each "Eligible
Jurisdiction" (as defined in such List of Closing Documents) to prepare
and deliver to the Administrative Agent, the European Agent, the European
Administrator, the U.K. Lenders and Sidley & Austin the opinions referred
to in such List of Closing Documents;
(iii) An Officer's Certificate executed and delivered by the
president or vice president of the U.S. Borrower certifying that all
conditions precedent to the making of the initial U.K. Borrower Loans have
been met and no Potential Event of Default or Event of Default has
occurred or is continuing;
(iv) Written notice from the U.S. Borrower to the Administrative
Agent as required by Section 4.01(a)(ii) of the U.S. Borrower's reduction
of the U.S. Loan Commitments by $12,000,000; and
(v) A Notice of Borrowing and Borrowing Base Certificate duly
executed and delivered by the U.S. Borrower on behalf of the U.K. Borrower
dated no more than thirty (30) calendar days prior to the date on which
such Borrowing is requested to be made.
(b) Cash Management. A cash management system for the U.K. Borrower
and each of the European Subsidiary Borrowers shall have been established
which is satisfactory to the Administrative Agent and which shall include
both disbursement and collection accounts.
(c) U.K. Borrower. The U.K. Borrower shall have (i) become fully
registered and licensed as a private unlimited liability company in The
Republic of Ireland and (ii) received a contribution to its capital in
Cash from the U.S. Borrower in the amount of $1,500,000 in the aggregate
and issued shares representing ninety-nine percent (99%) of its Capital
Stock to the U.S. Borrower and one percent (1%) of its Capital Stock to
Camloc Holdings Inc., a Delaware corporation and Wholly-Owned Subsidiary
of the U.S. Borrower.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
7.01. Representations and Warranties of the Borrowers. In order to
induce the Lenders and the Issuing Banks to enter into this Agreement and
to make the Loans and the other financial accommodations to the Borrowers
and to issue the Letters of Credit described herein, the Borrowers hereby
represent and warrant to each Lender, each Issuing Bank and the
Administrative Agent that the following statements are true, correct and
complete:
(a) Organization; Corporate Powers. (i) Each Borrower and each
Subsidiary of a Borrower (A) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, (B) is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each jurisdiction in
which failure to be so qualified and in good standing will have or is
reasonably likely to have a Material Adverse Effect, (C) which is a
Domestic Subsidiary has filed and maintained effective (unless exempt from
the requirements for filing) a current Business Activity Report with the
appropriate Governmental Authority in the states of Minnesota and New
Jersey, and (D) has all requisite corporate power and authority to own,
operate and encumber its Property 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.
(ii) True, correct and complete copies of the Organizational
Documents identified on Schedule 7.01-A attached hereto have been
delivered to the Administrative Agent, each of which is in full force and
effect, has not been modified or amended except to the extent indicated
therein and, to the best of the Borrowers' knowledge, there are no
defaults under such Organizational Documents and no events which, with the
passage of time or giving of notice or both, would constitute a default
under such Organizational Documents.
(b) Authority. (i) Each Borrower and each Subsidiary of a Borrower
has the requisite corporate power and authority (A) to execute, deliver
and perform each of the Loan Documents which have been executed by it as
required by this Agreement on or prior to the Effective Date and (B) to
file or record the Loan Documents which have been filed or recorded by it
with any Governmental Authority as required by this Agreement on or prior
to the Effective Date.
(ii) The execution, delivery, performance and filing or recording,
as the case may be, of each of the Loan Documents which have been
executed, filed or recorded as required by this Agreement on or prior to
the Effective Date and to which either Borrower or any Subsidiary of a
Borrower is party and the consummation of the transactions contemplated
thereby, have been duly approved by the respective boards of directors (or
substantially similar governance bodies, as applicable) and, if necessary,
the shareholders of such Person and such approvals have not been
rescinded. No other corporate action or proceedings on the part of either
Borrower or any Subsidiary of a Borrower are necessary to consummate such
transactions.
(iii) Each of the Loan Documents to which either Borrower or any
Subsidiary of a Borrower is a party (A) has been duly executed, delivered,
filed or recorded, as the case may be, by it, (B) where applicable,
creates valid and perfected first Liens in the Collateral covered thereby
securing the payment of all of the Obligations purported to be secured
thereby, (C) constitutes such Person's respective legal, valid and binding
obligation, enforceable against it in accordance with its terms, and (D)
is in full force and effect and no material term or condition thereof has
been amended, modified or waived from the terms and conditions contained
therein as delivered to the Administrative Agent pursuant to
Section 6.01(a) without the prior written consent of the Requisite
Lenders. All parties to the Loan Documents have performed and complied
with all the terms, provisions, agreements and conditions set forth
therein and required to be performed or complied with by such parties on
or before the Effective Date, all filings and recordings and other actions
which are necessary or desirable to perfect and protect the Liens granted
pursuant to the Loan Documents and preserve their required priority have
been duly taken, and no Potential Event of Default, Event of Default or
breach of any covenant by any such party exists thereunder.
(c) Subsidiaries; Ownership of Equity Securities. Schedule 7.01-C
attached hereto (i) contains a diagram indicating the corporate structure
of the U.S. Borrower, its Subsidiaries and any other Person in which the
U.S. Borrower or any of its Subsidiaries holds a direct or indirect
partnership, joint venture or other equity interest and indicates the
nature of such interest with respect to each Person included in such
diagram; and (ii) accurately sets forth (A) the correct legal name of such
Person, the jurisdiction of its incorporation or organization and the
jurisdictions in which it is qualified to transact business as a foreign
corporation or otherwise and (B) the authorized, issued and outstanding
shares or interests of each class of equity Securities of the U.S.
Borrower and each of its Subsidiaries and the owners of such shares or
interests. None of such issued and outstanding equity Securities is
subject to any vesting, redemption, or repurchase agreement, and there are
no warrants, puts, or options (other than Permitted Equity Securities
Options) outstanding with respect to such equity Securities other than as
disclosed on Schedule 7.01-C. The outstanding equity Securities of the
U.S. Borrower and each of its Subsidiaries are duly authorized, validly
issued, fully paid and nonassessable free and clear of any Liens, except
for the Liens granted pursuant to the Loan Documents, and are not Margin
Stock.
(d) No Conflict. The execution, delivery and performance of each of
the Loan Documents to which either Borrower or any Subsidiary of a
Borrower is a party do not and will not (i) conflict with the
Organizational Documents of such Person, (ii) constitute a tortious
interference with any Contractual Obligation of any Person or conflict
with, result in a breach of or constitute (with or without notice or lapse
of time or both) a default under any Requirement of Law or Contractual
Obligation of such Person, or require termination of any Contractual
Obligation, the consequences of which violation, breach, default or
termination, singly or in the aggregate, will, or is reasonably likely to,
result in a Material Adverse Effect or may subject the Administrative
Agent, the European Agent, the European Administrator, any of the Lenders
or any of the Issuing Banks to any liability, (iii) result in or require
the creation or imposition of any Lien whatsoever upon any of the Property
or assets of such Person, other than Liens contemplated by the Loan
Documents, or (iv) require any approval of such Person's shareholders,
which has not been obtained.
(e) Governmental Consents. The execution, delivery and performance
of each of the Loan Documents to which either Borrower or any Subsidiary
of a Borrower is a party 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 (i) filings, consents or notices which
have been made, obtained or given and (ii) filings necessary to create or
perfect the Administrative Agent's security interests in the Collateral.
(f) Governmental Regulation. Neither Borrower, and no Subsidiary of
a Borrower, is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce Act,
or the Investment Company Act of 1940, or any other federal or state
statute or regulation or other Requirement of Law which limits its ability
to incur indebtedness or its ability to consummate the transactions
contemplated hereby or by the Loan Documents.
(g) Restricted Junior Payments. Neither Borrower has directly or
indirectly declared, ordered, paid or made or set apart any sum or
Property for any Restricted Junior Payment or agreed to do so, except as
permitted pursuant to Section 10.06.
(h) Financial Position. Complete and accurate copies of the
following Financial Statements, materials and other information have been
delivered to the Administrative Agent: (i) the Pro Forma and Projections,
(ii) a statement as to the TFC/RHI Liquidity as of the Effective Date, and
a Borrowing Base Certificate dated as of May 26, 1996 indicating a minimum
U.S. Loan Availability of $15,000,000 as of the date thereof. All
Financial Statements included in such materials were prepared in all
material respects in conformity with GAAP, except as otherwise noted
therein, and fairly present in all material respects the respective con-
solidated financial positions, and the consolidated results of operations
and cash flows for each of the periods covered thereby of the applicable
Person as at the respective dates thereof. Neither Borrower and no
Subsidiary of a Borrower has any Accommodation Obligation, contingent
liability or liability for any taxes, long-term leases or commitments, not
disclosed in writing to the Administrative Agent and the Lenders prior to
the Closing Date, which will have or is reasonably likely to have a
Material Adverse Effect.
(i) Pro Forma Financials. The Pro Forma, copies of which have been
furnished to the Lenders on the Effective Date, fairly presents on a pro
forma basis the financial condition of the Operating Units as of the date
designated therein. The Projections and the assumptions expressed in the
Pro Forma are reasonable based on the information available to the U.S.
Borrower at the time so furnished.
(j) Indebtedness; Refinanced Indebtedness. Schedule 1.01.12 sets
forth all Indebtedness for borrowed money of the Borrowers and their
Subsidiaries and there are no defaults in the payment of principal or
interest on any such Indebtedness and no payments thereunder have been
deferred or extended beyond their stated maturity (except as disclosed on
such Schedule). The outstanding principal balance of the "Loans" made
under the Original Credit Agreement and all accrued and unpaid interest
thereon has been paid in full on the Effective Date.
(k) Litigation; Adverse Effects. Except as set forth in
Schedule 7.01-K attached hereto, there is no action, suit, proceeding,
Claim, investigation or arbitration before or by any Governmental
Authority or private arbitrator pending or, to the knowledge of the U.S.
Borrower or any of its Subsidiaries, threatened against VSI or FII (with
respect to which the U.S. Borrower or any of its Subsidiaries may have
successor liability), TFC, RHI, either Borrower or any Subsidiary of a
Borrower or any of the Property (i) challenging the validity or the
enforceability of any of the Loan Documents, (ii) which will, or is
reasonably likely to, result in any Material Adverse Effect, or (iii)
under the Racketeering Influenced and Corrupt Organizations Act or any
similar federal or state statute where such Person is a defendant in a
criminal indictment that provides for the forfeiture of assets to any
Governmental Authority as a criminal penalty. There is no material loss
contingency within the meaning of GAAP which has not been reflected in the
Pro Forma or, after the Effective Date, the consolidated Financial
Statements of the U.S. Borrower. None of TFC, RHI, either Borrower or any
Subsidiary of a Borrower is (A) in violation of any applicable
Requirements of Law which violation will result, or is reasonably likely
to result, in a Material Adverse Effect, or (B) subject to or in default
with respect to any final judgment, writ, injunction, restraining order or
order of any nature, decree, rule or regulation of any court or
Governmental Authority which will, or is reasonably likely to, result in
a Material Adverse Effect.
(l) No Material Adverse Effect. Since March 31, 1996, there has
occurred no event with respect to either Borrower or any Affiliate of
either Borrower which has resulted, or is reasonably likely to result, in
a Material Adverse Effect.
(m) Tax Examinations. The IRS has examined (or is foreclosed from
examining by applicable statutes) the consolidated federal income tax
returns of TFC for all tax periods prior to and including the taxable year
ending June 30, 1991. All deficiencies which have been asserted against
VSI or any of its Subsidiaries as a result of any federal, state, local or
foreign tax examination for each taxable year in respect of which an
examination has been conducted have been fully paid or finally settled or
are being contested in good faith, and no issue has been raised in any
such examination which, by application of similar principles, reasonably
can be expected to result in assertion of a material deficiency for any
other year not so examined which has not been reserved for in (i) VSI's
consolidated Financial Statements heretofore delivered to the
Administrative Agent and (ii) the U.S. Borrower's consolidated Financial
Statements delivered to the Administrative Agent, in each instance, to the
extent, if any, required by GAAP. Neither VSI nor either Borrower has
taken any reporting positions for which it does not have a reasonable
basis and does not anticipate any further material adverse tax liability
with respect to the years which have not been closed pursuant to
applicable law and which are not reserved in the Financial Statements
described above in clauses (i) and (ii).
(n) Payment of Taxes. All tax returns and reports of each of TFC,
the Borrowers and their Subsidiaries (or the respective predecessors in
interest of the U.S. Borrower and its Subsidiaries) required to be filed
have been timely filed, and all taxes, assessments, fees and other charges
of Governmental Authorities thereupon and upon or relating to their
respective Property, assets, income and franchises which are shown in such
returns or reports to be due and payable have been paid, except to the
extent (i) such taxes, assessments, fees and other charges are being
contested in good faith by an appropriate proceeding diligently pursued as
permitted by the terms of Section 9.04 and (ii) non-payment of the amounts
thereof would not, individually or in the aggregate, result in a Material
Adverse Effect. Neither Borrower has any knowledge of any proposed tax
assessment against TFC, either Borrower or any Subsidiary of a Borrower
(or the respective predecessors in interest of the U.S. Borrower and its
Subsidiaries) that will, or is reasonably likely to, result in a Material
Adverse Effect.
(o) Performance. No Borrower, no Subsidiary of a Borrower, and no
predecessor in interest of the U.S. Borrower or any of its Subsidiaries,
has received any notice, citation, or allegation, nor has actual
knowledge, that (i) it is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained
in any Contractual Obligation applicable to it, (ii) any Property of
either Borrower or any Subsidiary of a Borrower is in violation of any
Requirement of Law, or (iii) any condition exists which, with the giving
of notice or the lapse of time or both, would constitute a default with
respect to any such Contractual Obligation, in each case, except where
such default or defaults, if any, will not, or is not reasonably likely
to, result in a Material Adverse Effect.
(p) Disclosure. The representations and warranties of the Borrowers
and their Subsidiaries contained in the Loan Documents, and all
certificates and other documents delivered to the Administrative Agent
pursuant to the terms thereof, do not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements contained herein or therein, in light of the circumstances
under which they were made, not misleading. Neither Borrower has
intentionally withheld any fact from the Administrative Agent, the Issuing
Banks or the Lenders in regard to any matter which will, or is reasonably
likely to, result in a Material Adverse Effect.
(q) Requirements of Law. Each Borrower and each Subsidiary of a
Borrower, respectively, is in compliance with all Requirements of Law
applicable to it and its respective businesses, in each case where the
failure to so comply individually or in the aggregate will, or is reason-
ably likely to, result in a Material Adverse Effect.
(r) Environmental Matters. (i) Except as disclosed on
Schedule 7.01-R attached hereto:
(A) neither the U.S. Borrower nor any Domestic Subsidiary (or any of
their respective predecessors in interest) has received any unresolved
notice from any federal, state or local agency to the effect that its
operations are not in compliance with any applicable Environmental, Health
or Safety Requirements of Law or the subject of any federal or state
investigation evaluating whether any remedial action is needed to respond
to a Release of a Contaminant into the environment;
(B) to the knowledge of the U.S. Borrower, none of the U.S. Borrower,
the Domestic Subsidiaries (or any of their respective predecessors in
interest), or any of its their respective present or past Property or
operations, are subject to or the subject of any judicial or
administrative proceeding, order, judgment, decree, dispute, negotiations,
agreement, or settlement respecting (I) any Environmental, Health or
Safety Requirements of Law, (II) any Remedial Action, (III) any Claims or
Liabilities and Costs arising from the Release or threatened Release of a
Contaminant into the environment, or (IV) any violation of or liability
under any Environmental, Health or Safety Requirement of Law that the U.S.
Borrower or Domestic Subsidiaries reasonably believe will result in a
material expenditure of money;
(C) none of the U.S. Borrower, any Domestic Subsidiary, or any of
their respective predecessors in interest has filed any notice under any
applicable Requirement of Law (I) reporting a Release of a Contaminant
where remedial action has not been conducted to the satisfaction of the
appropriate Governmental Authority; or (II) reporting a violation of any
applicable Environmental, Health or Safety Requirement of Law where such
violation has not been corrected to the satisfaction of the appropriate
Governmental Authority;
(D) none of the U.S. Borrower's or the Domestic Subsidiaries'
present or past Property is listed or, to the knowledge of the U.S.
Borrower, proposed for listing on the National Priorities List ("NPL")
pursuant to CERCLA or on the Comprehensive Environmental Response
Compensation Liability Information System List ("CERCLIS") or any similar
state list of sites requiring Remedial Action;
(E) to the knowledge of the U.S. Borrower, neither the U.S. Borrower
nor any Domestic Subsidiary has any material contingent liability in
connection with any Release or threatened Release of any Contaminants into
the environment; and
(F) no Environmental Lien has attached to any Property.
(ii) the U.S. Borrower and each Domestic Subsidiary are conducting
and will continue to conduct their respective business and operations in
an environmentally responsible manner in material compliance with
Environmental, Health or Safety Requirements of Law, and the U.S. Borrower
and its Subsidiaries, taken as a whole, have not been, and have no reason
to believe that they will be, subject to Liabilities and Costs arising out
of or relating to environmental, health or safety matters that have or
will result in material cash expenditures by the U.S. Borrower and the
Domestic Subsidiaries in the aggregate for the Fiscal Year ending June 30,
1997 in excess of the reserves established therefor.
(s) ERISA. Neither Borrower and no Subsidiary of a Borrower
contributes to any Benefit Plan, Multiemployer Plan or Foreign Pension
Plan. No ERISA Event has occurred or is reasonably expected to occur that
has resulted or is reasonably likely to result in a material liability of
either Borrower or any Subsidiary of a Borrower. Schedule B (Actuarial
Information) to the 1995 annual report (Form 5500 Series) for each Benefit
Plan, copies of which have been filed with the Internal Revenue Service
and furnished to the Administrative Agent, is complete and accurate and
fairly presents the funding status of such Benefit Plan, and since the
date of such Schedule B there has been no material adverse change in such
funding status. Neither Borrower and no ERISA Affiliate has incurred or is
reasonably expected to incur any withdrawal liability to any Multiemployer
Plan. Neither Borrower and no ERISA Affiliate has been notified by the
sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or has been terminated, within the meaning of Title IV of
ERISA, and no Multiemployer Plan is reasonably expected to be in
reorganization or to be terminated, within the meaning of Title IV of
ERISA. The aggregate annualized cost (including, without limitation, the
cost of insurance premiums) with respect to post-retirement benefits under
Benefit Plans for which either Borrower is liable does not exceed
$10,000,000.
(t) Foreign Employee Benefit Matters. Each Foreign Employee Benefit
Plan is in compliance in all material respects with all laws, regulations
and rules applicable thereto and the respective requirements of the
governing documents for such Plan. The aggregate of the liabilities to
provide all of the accrued benefits under any Foreign Pension Plan does
not exceed the current Fair Market Value of the assets held in the trust
or other funding vehicle for such Plan. With respect to any Foreign
Employee Benefit Plan maintained or contributed to by a Borrower, any of
its Subsidiaries or any ERISA Affiliate (other than a Foreign Pension
Plan), reasonable reserves have been established in accordance with
prudent business practice or where required by ordinary accounting
practices in the jurisdiction in which such Plan is maintained. The
aggregate unfunded liabilities, after giving effect to any reserves for
such liabilities, with respect to such Plans does not exceed the current
Fair Market Value of the assets held in the trust or other funding vehicle
for such Plan. There are no actions, suits or claims (other than routine
claims for benefits) pending or, to the best knowledge of the U.S.
Borrower, threatened against either Borrower, any Subsidiary of a Borrower
or any ERISA Affiliate with respect to any Foreign Employee Benefit Plan.
(u) Labor Matters. Schedule 7.01-U accurately sets forth all labor
contracts, other than national union agreements to which any Subsidiary of
the U.S. Borrower domiciled in Europe is a party, to which either Borrower
or any Subsidiary of a Borrower is a party on the date hereof and the
expiration date of each such contract. There are no strikes, lockouts or
other grievances relating to any collective bargaining or similar
agreement to which either Borrower or any Subsidiary of a Borrower is a
party.
(v) Securities Activities. Neither Borrower and no Subsidiary of a
Borrower is engaged in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
(w) Solvency. After giving effect to the Loans to be made and
Letters of Credit to be issued or continued on the Effective Date or such
other date as Loans requested hereunder are made or Letters of Credit
requested hereunder are issued, and the disbursement of the proceeds of
such Loans pursuant to the Borrowers' instructions, each Borrower and each
Subsidiary of a Borrower is Solvent.
(x) Patents, Trademarks, Permits, Etc.; Government Approvals. (i)
Each Borrower and each Subsidiary of a Borrower, as applicable, 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, permits and processes used in or
necessary for the conduct of its respective business as currently
conducted which are material to its condition (financial or otherwise),
operations, performance and prospects, taken as a whole. Except as set
forth on Schedule 7.01-X attached hereto, no claims are pending or, to the
best of U.S. Borrower's knowledge following diligent inquiry, threatened
that either Borrower or any Subsidiary of a Borrower is infringing or
otherwise adversely affecting the rights of any Person with respect to
such Permits and other governmental approvals, patents, trademarks, trade
names, copyrights, technology, know-how, permits and processes, except for
such claims and infringements as do not, in the aggregate, give rise to
any liability on the part of either Borrower or any Subsidiary of a
Borrower which will, or is reasonably likely to, result in a Material
Adverse Effect.
(ii) The consummation of the transactions contemplated by the Loan
Documents will not impair the ownership of or rights under (or the license
or other right to use, as the case may be) any Permits and governmental
approvals, patents, trademarks, trade names, copyrights, technology, know-
how, permits or processes by either Borrower or any Subsidiary of a
Borrower in any manner which will, or is reasonably likely to, result in
a Material Adverse Effect.
(y) Assets and Properties. Each Borrower and each Subsidiary of a
Borrower has good and marketable title to all of the assets and Property
(tangible and intangible) owned by it (except insofar as marketability may
be limited by any laws or regulations of any Governmental Authority
affecting such assets), and all such assets and Property are free and
clear of all Liens except Liens securing the Obligations and Liens
permitted under Section 10.03. Substantially all of the assets and
Property owned by, leased to, or used by the Borrowers and/or each
Subsidiary of a Borrower in their respective businesses is in adequate
operating condition and repair, ordinary wear and tear excepted, is free
and clear of any known defects except such defects as do not substantially
interfere with the continued use thereof in the conduct of normal opera-
tions, and is able to serve the function for which they are currently
being used, except in each case where the failure of such asset to meet
such requirements would not, or is not reasonably likely to, result in a
Material Adverse Effect. Neither this Agreement nor any other Loan Docu-
ment, nor any transaction contemplated under any such agreement, will
affect any right, title or interest of either Borrower or any Subsidiary
of a Borrower in and to any of such assets in a manner that would, or is
reasonably likely to, result in a Material Adverse Effect.
(z) Insurance. Schedule 7.01-Z attached hereto accurately sets
forth as of the Effective Date all insurance policies and programs
currently in effect with respect to the respective Property and assets and
business of the Borrowers and their Subsidiaries, specifying for each such
policy and program, (i) the amount thereof, (ii) the risks insured against
thereby, (iii) the name of the insurer and each insured party thereunder,
(iv) the policy or other identification number thereof, and (v) the
expiration date thereof. The U.S. Borrower has delivered to the
Administrative Agent copies of all such insurance policies. Such
insurance policies and programs are currently in full force and effect, in
compliance with the requirements of Section 9.05 and are in amounts
sufficient to cover the replacement value of the respective Property and
assets of the Borrowers and their Subsidiaries.
(aa) Asset Transfers. All conditions precedent to, and all consents
necessary to the Transfer Documents' becoming effective, have been
satisfied or delivered, or waived with the prior written consent of the
Requisite Lenders, and no material breach of any term or provision of the
Transfer Documents has occurred and no action has been taken by any
competent authority which restrains, prevents or imposes material adverse
conditions upon, or seeks to restrain, prevent or impose material adverse
conditions upon, the effectiveness of the Transfer Documents.
(bb) Pledge of Capital Stock. The grant and perfection of the
security interest in the Capital Stock of the Subsidiaries of the U.S.
Borrower constituting a portion of the Collateral for the benefit of the
Holders, as contemplated by the terms of the Loan Documents, is not made
in violation of the registration provisions of the Securities Act, any
applicable provisions of other federal securities laws, state securities
or "Blue Sky" law, foreign securities law, or applicable general
corporation law or in violation of any other Requirement of Law.
ARTICLE VIII
REPORTING COVENANTS
The Borrowers covenant and agree that so long as any Commitments are
outstanding and thereafter until payment in full of all of the Obligations
(other than indemnities not yet due), unless the Requisite Lenders shall
otherwise give their prior written consent thereto:
8.01. Financial Statements; Communications with Accountants. The U.S.
Borrower shall maintain, and cause each of its Subsidiaries to maintain,
a system of accounting established and administered in accordance with
sound business practices to permit preparation of consolidated Financial
Statements in conformity with GAAP and each of the Financial Statements
described below shall be prepared from such system and records.
(a) Monthly Financial Reports. The U.S. Borrower shall deliver or
cause to be delivered to the Administrative Agent and the Lenders (i)
"flash reports" for each Operating Unit for each Fiscal Month ending in
June, July or August of each Fiscal Year as soon as practicable and in any
event within forty-five (45) days after the end of each Fiscal Month
ending in June and thirty (30) days after the end of each such Fiscal
Month ending in July or August, (ii) consolidated balance sheets of each
Operating Unit and the related consolidated statements of income for each
Fiscal Month, as soon as practicable, and in any event within (A) one
hundred (100) days after the end of each Fiscal Month ending in June, (B)
ninety (90) days after the end of each Fiscal Month ending in July, (C)
seventy-five (75) days after each Fiscal Month ending in August, and (D)
fifty-five (55) days after the end of each other Fiscal Month, in each
case for the Fiscal Month then ending.
(b) Quarterly Financial Reports. The U.S. Borrower shall deliver or
cause to be delivered to the Administrative Agent and the Lenders (i)
consolidated and consolidating balance sheets of (A) TFC and its
Subsidiaries, related consolidated and consolidating statements of income,
and related consolidated statements of cash flow and stockholders' equity
on a Fiscal Year to date basis, (B) RHI and its Subsidiaries, related
consolidated and consolidating statements of income, and related
consolidated statements of cash flow and stockholders' equity on a Fiscal
Year to date basis, and (C) the U.S. Borrower and its Subsidiaries,
related consolidated and consolidating statements of income, and related
consolidated statements of cash flow and stockholders' equity on a Fiscal
Year to date basis, and (ii) schedules of the Investments of each of TFC
and RHI as of the end of the applicable Fiscal Quarter then ending, in
each event as soon as practicable, and in any event (1) within fifty-five
(55) days after the end of each of the first three Fiscal Quarters in each
Fiscal Year for the Fiscal Quarter then ending and (2) within one hundred
(100) days after the end of the fourth Fiscal Quarter in each Fiscal Year
for the Fiscal Quarter then ending.
(c) Annual Financial Statements. The U.S. Borrower shall deliver or
cause to be delivered to the Administrative Agent and the Lenders (i) for
the Fiscal Year ending June 30, 1996, (A) consolidated and consolidating
balance sheets of each of TFC and RHI and the related consolidated and
consolidating statements of income and consolidated statements of
stockholder's equity and cash flow and (B) unaudited pro forma combined
and combining profit and loss statements including the operating income of
each Operating Unit and schedules of depreciation and amortization,
working capital account changes, and capital expenditures of each
Operating Unit, and (ii) for each Fiscal Year ending after June 30, 1996,
(A) consolidated and consolidating balance sheets of each of TFC and its
consolidated Subsidiaries, RHI and its consolidated Subsidiaries, and the
U.S. Borrower and each of its consolidated Subsidiaries as at the end of
such Fiscal Year and (B) the related consolidated and consolidating
statements of income and consolidated statements of stockholder's equity
and cash flow for such Fiscal Year, as soon as practicable and in any
event within one hundred (100) days after the end of each Fiscal Year. The
Financial Statements for Fiscal Years ending after June 30, 1997 and
described in clause (ii) (A) above shall set forth, in comparative form,
the consolidated figures for the previous Fiscal Year, all in reasonable
detail. The consolidated Financial Statements of TFC, RHI and the U.S.
Borrower shall be accompanied by a report thereon of Arthur Andersen LLP
or other independent certified public accountants of recognized national
standing satisfactory to the Requisite Lenders, which report shall be
unqualified and shall state that such consolidated financial statements
present fairly the financial position of the applicable Persons, 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.
(d) An Officer's Certificate of TFC substantially in the form of
Exhibit K attached hereto and made a part hereof shall accompany the
Financial Statements referenced in clause (b) above and an Officer's
Certificate of the U.S. Borrower substantially in the form of Exhibit K
shall accompany the Financial Statements referenced in clauses (a) and (c)
above certifying that such Financial Statements fairly present the
financial position of the respective Operating Units or Persons, as
applicable, as at the dates indicated and the results of their operations
for the periods indicated in accordance with GAAP, subject to normal year
end adjustments, and stating that the officer of the U.S. Borrower
signatory thereto has reviewed the terms of the Loan Documents, and has
made, or caused to be made under his/her supervision, a review in
reasonable detail of the transactions and consolidated financial condition
of the Operating Units during the accounting period covered by such
Financial Statements, that such review has not disclosed the existence
during or at the end of such accounting period, and that such Person 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, or, if any such condition or event
existed or exists, specifying the nature and period of existence thereof
and what action the Borrowers or their Subsidiaries has/have taken, is/are
taking and proposes/propose to take with respect thereto. The Financial
Statements referenced in clause (b) above shall also be accompanied by a
certificate (the "Compliance Certificate"), signed by the treasurer or
vice president of the U.S. Borrower, setting forth calculations (with such
specificity as the Administrative Agent may reasonably request) for the
period then ended which demonstrate compliance with the provisions of
Article XI, including, without limitation, the amount of Capital
Expenditures made, on a cumulative basis since the beginning of the
respective Fiscal Year.
(e) Other Financial Information. With reasonable promptness, the
U.S. Borrower shall deliver such other information, reports, filings,
projections, business plans and data with respect to the Borrowers and
their Subsidiaries as from time to time may be reasonably requested by any
Lender.
(f) Communications with Accountants. The Borrowers authorize (i)
the Administrative Agent and European Administrator, after giving the U.S.
Borrower reasonable prior written notice of its intent to do so, to
communicate directly with Borrowers' independent certified public
accountants concerning the Financial Statements; provided that the U.S.
Borrower is not precluded by the Administrative Agent or European
Administrator from being present for such communication and (ii) such
independent certified public accountants, upon the Administrative Agent's
written request with a copy to Borrower, to provide to the Administrative
Agent and/or European Administrator copies of any financial schedules
prepared by such accountants for either Borrower or Subsidiaries of either
Borrower.
8.02. Events of Default. Promptly upon any of the chief executive
officer, chief operating officer, or treasurer of the U.S. Borrower
obtaining knowledge (a) of any condition or event which constitutes an
Event of Default or Potential Event of Default, or becoming aware that any
Lender or the Administrative Agent has given any notice with respect to a
claimed Event of Default or Potential Event of Default under this
Agreement, (b) that any Person has given any notice to a Borrower or any
Subsidiary of a Borrower or taken any other action with respect to a
claimed default or event or condition of the type referred to in Section
12.01(e), or (c) of any condition or event which has resulted, or is
reasonably likely to result, in a Material Adverse Effect or affect the
value of, or the Administrative Agent's interest in, the Collateral in any
material respect, the U.S. Borrower shall deliver to the Administrative
Agent and the Lenders an Officer's Certificate specifying (i) the nature
and period of existence of any such claimed default, Event of Default,
Potential Event of Default, condition or event, (ii) the notice given or
action taken by such Person in connection therewith, and (iii) what action
the applicable Borrower or Subsidiary of a Borrower has taken, is taking
and proposes to take with respect thereto.
8.03. Lawsuits. Promptly upon the U.S. Borrower obtaining knowledge
of the institution of, or written threat of, any action, suit, proceeding,
governmental investigation or arbitration against or affecting either
Borrower or any Subsidiary of a Borrower or any of the Property not
previously disclosed pursuant to Section 7.01(k), which action, suit,
proceeding, governmental investigation or arbitration exposes, or in the
case of multiple actions, suits, proceedings, governmental investigations
or arbitrations arising out of the same general allegations or
circumstances which expose, in the U.S. Borrower's reasonable judgment,
either Borrower and/or any Subsidiary of a Borrower to liability in an
amount aggregating $5,000,000 or more (exclusive of claims covered by
insurance policies of the U.S. Borrower and its Subsidiaries unless the
insurers of such claims have disclaimed coverage or reserved the right to
disclaim coverage on such claims), the U.S. Borrower shall give written
notice thereof to the Administrative Agent and the Lenders and provide
such other information as may be reasonably available to enable each
Lender and the Administrative Agent and its counsel to evaluate such
matters. The U.S. Borrower upon request of the Administrative Agent or the
Requisite Lenders shall promptly give written notice of the status of any
action, suit, proceeding, governmental investigation or arbitration
covered by a report delivered in accordance herewith and provide such
other information as may be reasonably available to it to enable each
Lender and the Administrative Agent and its counsel to evaluate such
matters.
8.04. Declaration of Dividends and Other Distributions; Intercompany
Loans. Except with respect to the dividend in the amount of up to
$125,000,000 to be made on the Capital Stock of the U.S. Borrower on the
Effective Date, the U.S. Borrower shall provide to the Administrative
Agent written notification (or telephonic notice promptly confirmed in
writing) of each dividend or other distribution to be made on the Capital
Stock of either Borrower no less than thirty (30) days prior to the
payment date for such dividend or other distribution accompanied by a
calculation of the Fixed Charge Coverage Ratio as of the end of the then
most recent fiscal quarter as adjusted to give effect to such dividend or
other distribution, resulting in such Fixed Charge Coverage Ratio being no
less than 1.0 to 1.0. The U.S. Borrower shall provide to the
Administrative Agent written notification (or telephonic notice promptly
confirmed in writing) of each loan to be made by either Borrower to RHI no
less than fourteen (14) days prior to the funding date for such loan
accompanied by a calculation of the Fixed Charge Coverage Ratio as of the
end of the then most recent fiscal quarter as adjusted to give effect to
such loan, resulting in such Fixed Charge Coverage Ratio being no less
than 1.0 to 1.0.
8.05. TFC/RHI Liquidity. The U.S. Borrower shall deliver to the
Administrative Agent and the Lenders, within ten (10) days after the end
of each Fiscal Quarter, an Officer's Certificate in the form of Exhibit L
attached hereto setting forth the calculation of the TFC/RHI Liquidity as
of the end of such Fiscal Quarter.
8.06. Environmental Notices. The U.S. Borrower shall notify the
Administrative Agent and the Lenders in writing, promptly upon the U.S.
Borrower's learning thereof, of any:
(i) notice or claim to the effect that the U.S. Borrower or any
Subsidiary of the U.S. Borrower is subject to investigation or may be
subject to investigation or liable in an amount exceeding $2,000,000 to
any Person as a result of the Release or threatened Release of any
Contaminant into the environment;
(ii) notice that any Property is subject to an Environmental Lien;
and
(iii) notice to the U.S. Borrower or any Subsidiary of the U.S.
Borrower of any material violation of any Environmental, Health or Safety
Requirement of Law or the commencement or threat of any judicial or
administrative proceeding alleging such a material violation by the U.S.
Borrower or any Subsidiary of the U.S. Borrower.
Concurrently with the annual delivery to the independent accountants of
the U.S. Borrower of a letter relating to financial exposure of the U.S.
Borrower and its Subsidiaries with respect to Environmental Liabilities
and Costs substantially in the form of that letter dated March 12, 1996
addressed to Arthur Andersen & Co., a copy of which has been delivered to
the Administrative Agent prior to the Closing Date, the U.S. Borrower
shall deliver a like letter addressed to the Administrative Agent;;
provided, however, that in the event no such letter is provided to the
independent accountants of the U.S. Borrower with respect to any given
Fiscal Year, such letter shall be prepared with respect to such Fiscal
Year and delivered to the Administrative Agent on October 31 of the
calendar year in which such Fiscal Year ends.
8.07. Other Reports. The U.S. Borrower shall deliver or cause to be
delivered to the Administrative Agent and the Lenders copies of all
Financial Statements, reports and notices, if any, sent or made available
generally by TFC, RHI, or the U.S. Borrower to its Securities holders or
filed with the Commission and all press releases made available generally
by TFC, RHI, the Borrowers or any Subsidiary of a Borrower to the public
concerning material developments in the business of a Borrower or any
Subsidiary of a Borrower, and all notifications received by the U.S.
Borrower or any Subsidiary of the U.S. Borrower pursuant to the Securities
Exchange Act and the rules promulgated thereunder.
8.08. Other Information. Promptly upon receiving a request therefor
from the Administrative Agent or the Requisite Lenders, the U.S. Borrower
shall prepare and deliver to the Administrative Agent and the Lenders such
other information with respect to the Borrowers, any of their
Subsidiaries, or the Collateral, including, without limitation, schedules
identifying and describing the Collateral and any dispositions thereof, as
from time to time may be reasonably requested by the Administrative Agent
or the Requisite Lenders.
8.09. Borrowing Base Certificates. The U.S. Borrower shall prepare
and deliver to the Administrative Agent and the Lenders a Borrowing Base
Certificate dated as of the end of each Fiscal Month within fourteen (14)
calendar days after the end of such Fiscal Month.
ARTICLE IX
AFFIRMATIVE COVENANTS
The U.S. Borrower covenants and agrees that so long as any
Commitments are outstanding and thereafter until payment in full of all of
the Obligations (other than indemnities not yet due), unless the Requisite
Lenders shall otherwise give prior written consent:
9.01. Corporate Existence, Etc. The U.S. Borrower shall, and shall
cause each of its Subsidiaries to, at all times maintain its corporate
existence and preserve and keep, or cause to be preserved and kept, in
full force and effect its rights and franchises material to its
businesses, except where the loss or termination of such rights and
franchises is not likely to result in a Material Adverse Effect. The U.S.
Borrower shall cause the U.K. Borrower to maintain a certificate relating
to its trading operations in the International Financial Services Centre,
Ireland, from the Minister of Finance in Ireland, pursuant to Section 39B
of the Irish Finance Act of 1980, as inserted by Section 30 of the Irish
Income Act of 1987.
9.02. Corporate Powers; Conduct of Business. The U.S. Borrower
shall, and shall cause each of its Subsidiaries to, qualify and remain
qualified to do business and maintain its good standing in each
jurisdiction in which the nature of its business and the ownership of its
Property requires it to be so qualified and in good standing.
9.03. Compliance with Laws, Etc. The U.S. Borrower shall, and shall
cause each of its Subsidiaries to, (a) comply with all Requirements of Law
and all restrictive covenants affecting it or its business, Property,
assets or operations and (b) obtain as needed all Permits necessary for
its operations and maintain such Permits in good standing, except in the
case where noncompliance with either clause (a) or (b) above is not
reasonably likely to result in a Material Adverse Effect.
9.04. Payment of Taxes and Claims; Tax Consolidation. The U.S.
Borrower shall, and shall cause each of its Subsidiaries to, pay (a) all
taxes, assessments and other governmental charges imposed upon it or on
any of its Property 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 which have become due
and payable and which by law have or may become a Lien (other than a Lien
permitted by Section 10.03) upon any Property or assets of a Borrower or
such Subsidiary, prior to the time when any penalty or fine shall be
incurred with respect thereto; provided, however, that no such taxes,
assessments and governmental charges referred to in clause (a) above or
Claims referred to in clause (b) above need be paid if being contested in
good faith by appropriate proceedings diligently instituted and conducted
and if such reserve or other appropriate provision, if any, as shall be
required in conformity with GAAP shall have been made therefor. The U.S.
Borrower will not, nor will it permit any of its Subsidiaries to, file or
consent to the filing of any consolidated income tax return with any
Person (other than TFC and its Subsidiaries).
9.05. Insurance. The U.S. Borrower shall maintain for itself and
its Subsidiaries, or shall cause each of its Subsidiaries to maintain, in
full force and effect the insurance policies and programs listed on
Schedule 7.01-Z or substantially similar policies and programs or other
policies and programs as are reasonably acceptable to the Administrative
Agent. All such policies and programs shall be maintained with
responsible and reputable insurance companies engaged in similar
businesses and owning similar property in the same general geographic
areas in which the Borrowers and/or their Subsidiaries operate. Each
certificate and policy relating to Property damage, boiler and machinery
and/or business interruption coverage shall contain an endorsement, in
form and substance reasonably acceptable to the Administrative Agent,
showing loss payable to the Administrative Agent, for the benefit of the
Holders, and, if required by the Administrative Agent, naming the
Administrative Agent as an additional insured under such policy. Each
certificate and policy relating to coverage other than the foregoing
shall, if required by the Administrative Agent, contain an endorsement
naming the Administrative Agent as an additional insured or mortgagee
payee, as applicable, under such policy. Such endorsement or an
independent instrument furnished to the Administrative Agent shall provide
that the insurance companies will give the Administrative Agent at least
thirty (30) days' written notice before any such policy or policies of
insurance shall be altered adversely to the interests of the Holders or
canceled and that no act, whether willful or negligent, or default of
either Borrower, any Subsidiary of a Borrower or any other Person shall
affect the right of the Administrative Agent to recover under such policy
or policies of insurance in case of loss or damage. In the event the U.S.
Borrower or any of its Subsidiaries, at any time or times hereafter shall
fail to obtain or maintain any of the policies or insurance required
herein or to pay any premium in whole or in part relating thereto, then
the Administrative Agent, without waiving or releasing any obligations or
resulting Event of Default hereunder, may at any time or times thereafter
(but shall be under no obligation to do so) obtain and maintain such
policies of insurance and pay such premiums and take any other action with
respect thereto which the Administrative Agent deems advisable. All sums
so disbursed by the Administrative Agent shall constitute Protective
Advances hereunder and be part of the Obligations, payable as provided in
this Agreement.
9.06. Inspection of Property; Books and Records; Discussions. The
U.S. Borrower shall, and shall cause each of its Subsidiaries to, permit
any authorized representative(s) designated by either the Administrative
Agent or any Lender to visit and inspect, whether by access to the U.S.
Borrower's and its Subsidiaries' MIS or otherwise, any of the Property, to
examine, audit, check and make copies of its respective financial and
accounting records, books, journals, orders, receipts and any
correspondence (other than privileged correspondence with legal counsel)
and other data relating to their respective businesses or the transactions
contemplated hereby or referenced herein (including, without limitation,
in connection with environmental compliance, hazard or liability), and to
discuss their affairs, finances and accounts with their officers,
management personnel, and independent certified public accountants, all
upon reasonable written notice and at such reasonable times during normal
business hours, as often as may be reasonably requested. Each such
visitation and inspection (i) by or on behalf of any Lender shall be at
such Lender's expense and (ii) by or on behalf of the Administrative Agent
shall be at the U.S. Borrower's expense. The U.S. Borrower shall keep and
maintain, and cause each of its Subsidiaries to keep and maintain, in all
material respects on its MIS and otherwise proper books of record and
account in which entries in conformity with GAAP shall be made of all
dealings and transactions in relation to its respective businesses and
activities, including, without limitation, transactions and other dealings
with respect to the Collateral. If an Event of Default has occurred and
is continuing, the U.S. Borrower, upon the Administrative Agent's request,
shall, and shall cause each of its Subsidiaries to, turn over any such
records to the Administrative Agent or its representatives; provided,
however, that the U.S. Borrower may, in its discretion, retain copies of
such records.
9.07. Insurance and Condemnation Proceeds. (a) Direction to
Insurers. The U.S. Borrower hereby directs (and, if applicable, shall
cause its Subsidiaries to direct) all insurers under policies of Property
damage, boiler and machinery and business interruption insurance and
payors of any condemnation claim or award relating to the Property to pay
all proceeds payable under such policies or with respect to such claim or
award directly to the Administrative Agent, for the benefit of the
Administrative Agent, the Issuing Banks and the Lenders. In no case shall
such proceeds be payable to the U.S. Borrower or one or more of its
Subsidiaries and the Administrative Agent.
(b) Application of Proceeds. The Administrative Agent shall, upon
receipt of such proceeds, apply all of the proceeds so received in
repayment of the Obligations in the manner set forth in Section
4.01(b)(vi). Notwithstanding the foregoing, in the event proceeds of
insurance received by the Administrative Agent under property damage,
boiler and machinery policies or business interruption insurance policies
(i) is less than $500,000 or (ii) constitutes Replacement Proceeds, the
Administrative Agent shall, upon receipt of such proceeds, remit the
amount so received to the U.S. Borrower or a Subsidiary of the U.S.
Borrower, as applicable provided that there shall not then exist an Event
of Default which is continuing unwaived.
9.08. ERISA Compliance. The U.S. Borrower shall, and shall cause
each of its Subsidiaries and ERISA Affiliates to, establish, maintain and
operate all Plans to comply in all material respects with the provisions
of ERISA, the Internal Revenue Code, all other applicable laws, and the
regulations and interpretations thereunder and the respective requirements
of the governing documents for such Plans.
9.09. Foreign Employee Benefit Plan Compliance. The U.S. Borrower
shall, and shall cause each of its Subsidiaries and ERISA Affiliates to,
establish, maintain and operate all Foreign Employee Benefit Plans to
comply in all material respects with all laws, regulations and rules
applicable thereto and the respective requirements of the governing
documents for such Plans.
9.10. Collection Accounts. Within one hundred twenty (120) days
after the Closing Date (but in no event later than the date the initial
Notice of Borrowing is delivered with respect to U.K. Borrower Loans), the
U.K. Borrower shall, and shall cause each of the European Subsidiary
Borrowers to, enter into Collection Account Agreements with respect to
each of their respective depository accounts into which collections of
Receivables and other proceeds of Collateral are deposited.
9.11. Maintenance of Property. The U.S. Borrower shall, and shall
cause each of its Subsidiaries to, maintain in all material respects all
of its respective owned and leased Property in good, safe and insurable
condition and repair, and not permit, commit or suffer any waste or
abandonment of any such Property and from time to time shall make or cause
to be made all material repairs, renewal and replacements thereof,
including, without limitation, any capital improvements which may be
required; provided, however, that such Property may be altered or
renovated in the ordinary course of the U.S. Borrower's or its
Subsidiaries' business.
9.12. Condemnation. Immediately upon learning of the institution of
any proceeding for the condemnation or other taking of any of the owned or
leased Real Property of the U.S. Borrower or any Subsidiary of the U.S.
Borrower, the U.S. Borrower shall notify the Administrative Agent of the
pendency of such proceeding, and permit the Administrative Agent to
participate in any such proceeding, and from time to time will deliver to
the Administrative Agent all instruments reasonably requested by the
Administrative Agent to permit such participation.
9.13. Tax Allocation Agreement. The U.S. Borrower shall maintain or
cause to be maintained, in full force and effect, the Tax Allocation
Agreement, without amendment or modification unless consented to by the
Requisite Lenders.
9.14. Performance of Material Contracts. The U.S. Borrower shall,
and shall cause each of its Subsidiaries to, perform and observe all the
terms and provisions of each material Contractual Obligation to be
performed or observed by it, maintain each such material Contractual
Obligation in full force and effect, enforce each such material
Contractual Obligation in accordance with its terms, take all such action
to such end as may be from time to time requested by the Administrative
Agent and, upon request of the Administrative Agent, make to each other
party to each such material Contractual Obligation such demands and
requests for information and reports or for action as the U.S. Borrower or
such Subsidiary is entitled to make under such material Contractual
Obligation.
9.15. Further Assurances. Upon the request of the Administrative
Agent, the U.S. Borrower shall, and shall cause the U.K. Borrower and each
Guarantor to, execute and deliver to the Administrative Agent, for the
benefit of the Holders, such other agreements, documents, and instruments
which the Administrative Agent deems necessary or desirable, in form and
substance satisfactory to the Administrative Agent, to enable the
Administrative Agent to perfect, or maintain perfected, Liens in the
Collateral. Within thirty (30) days after the Effective Date, the U.S.
Borrower shall deliver to the Administrative Agent a commitment for
mortgagee title insurance from a title insurer satisfactory to the
Administrative Agent which commitment shall pertain to the Lien granted to
the Administrative Agent against all Real Property which is part of the
Collateral and provide insurance in an amount and subject only to such
exceptions as are deemed reasonably acceptable to the Administrative
Agent. The Borrowers hereby acknowledge and agree that the Appraised Value
of such Real Property shall not be included in any determination of the
U.S. Borrowing Base unless and until such title insurance commitment is
delivered to the Administrative Agent as aforesaid and accepted thereby.
ARTICLE X
NEGATIVE COVENANTS
The U.S. Borrower covenants and agrees that it shall comply with the
following covenants so long as any Commitments are outstanding and
thereafter until payment in full of all of the Obligations (other than
indemnities not yet due), unless the Requisite Lenders shall otherwise
give prior written consent:
10.01. Indebtedness. The U.S. Borrower shall not and shall not
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) Indebtedness for trade payables, wages and other accrued
expenses incurred in the ordinary course of business;
(c) Permitted Existing Indebtedness and any extensions, renewals,
refundings or replacements thereof, provided that any such extension,
renewal, refunding or replacement is in an aggregate principal amount not
greater than the principal amount of, and is on terms no less favorable to
the applicable Borrower or its Subsidiary than the terms of, the Permitted
Existing Indebtedness so extended, renewed, refunded or replaced;
(d) to the extent permitted by Article XI and in any event in an
aggregate amount not to exceed $15,000,000 at any time, Capital Leases and
purchase money Indebtedness incurred to finance the acquisition of fixed
assets, and Indebtedness incurred to refinance such Capital Leases and
purchase money Indebtedness; provided, however, prior to incurring Capital
Lease obligations owing to any one lessor or group of affiliated or
related lessors or purchase money Indebtedness owing to any one holder or
group of affiliated or related holders thereof, which in either case
aggregate(s) more than $2,000,000, the U.S. Borrower shall obtain, or
cause such Subsidiary to obtain, from such lessor(s) or holder(s) a duly
executed intercreditor agreement in form and substance satisfactory to the
Administrative Agent;
(e) Indebtedness in respect of the Tax Allocation Agreement and
taxes, assessments, governmental charges and Claims for labor, materials
or supplies, to the extent that payment thereof is not required pursuant
to Section 9.04;
(f) Indebtedness, without duplication, constituting Accommodation
Obligations permitted by Section 10.05;
(g) Indebtedness arising from intercompany loans (i) from the U.S.
Borrower to any of its Subsidiaries which is a Guarantor or from any such
Subsidiary to the U.S. Borrower or any other such Subsidiary, (ii) from
the U.K. Borrower to any of the European Subsidiary Borrower, (iii) from
the U.K. Borrower to the U.S. Borrower in the amount of $1,450,000
evidenced by a promissory note in form and substance satisfactory to the
Administrative Agent, (iv) from RHI to the U.S. Borrower provided that
such loans are subordinated to the payment and performance of the
Obligations and are evidenced by a promissory note in form and substance
satisfactory to the Administrative Agent, and (v) in an aggregate amount
outstanding at any time not to exceed $10,000,000 from the U.S. Borrower
to any Subsidiary not described in clauses (i) through (iii) above or from
any such Subsidiary to the U.S. Borrower;
(h) Indebtedness in respect of profit sharing plans to the extent
permitted under Section 10.04;
(i) Indebtedness in respect of the Hedge Agreements in respect of
interest rates or foreign exchange contracts containing terms reasonably
acceptable to the Administrative Agent and purchased from a Lender, an
Affiliate of a Lender or such other Person reasonably acceptable as a
credit matter to the Administrative Agent;
(j) Indebtedness with respect to reasonable warranties and
indemnities made under any agreements for asset sales permitted under
Section 10.02 and Contractual Obligations of a Borrower or any Subsidiary
of a Borrower entered into in the ordinary course of its business;
(k) Indebtedness under appeal bonds in connection with judgments
which do not result in an Event of Default or a Potential Event of Default
or any other breach hereunder, or bid or performance bonds, provided that
the aggregate amount of all such Indebtedness does not exceed $2,000,000;
and
(l) in addition to the Indebtedness permitted by clauses (a)
through (k) above, other unsecured Indebtedness in an aggregate amount
which, when combined with outstanding Accommodation Obligations permitted
under Section 10.05(d), does not exceed $10,000,000 outstanding.
10.02. Sales of Assets. The U.S. Borrower shall not and shall not
permit any of its Subsidiaries to sell, assign, transfer, lease, convey or
otherwise dispose of any Property, whether now owned or hereafter acquired
by it, or any income or profits therefrom, or enter into any agreement to
do so, except:
(a) the sale, assignment, transfer, lease, conveyance or other
disposition of Property for consideration not less than the Fair Market
Value thereof so long as (i) any non-cash consideration resulting from
such sale, assignment, transfer, lease, conveyance or other disposition
shall be pledged or assigned to the Administrative Agent, for the benefit
of the Holders, pursuant to an instrument in form and substance acceptable
to the Administrative Agent and (ii) the Borrowers comply with the
mandatory prepayment provisions set forth in Section 4.01(b) and the
conditions to the release of Collateral described in Section 13.09(c);
(b) the sale of Inventory in the ordinary course of a Borrower's and
its Subsidiaries respective businesses;
(c) the disposition of Equipment if such Equipment is traded in for
credit against the purchase price of replacement Equipment or the proceeds
of such disposition are reasonably promptly applied to the purchase price
of such replacement Equipment, is obsolete, or is no longer useful in the
ordinary course of a Borrower's or a Subsidiary of a Borrower's business;
(d) the sale of Investments in Cash Equivalents permitted pursuant
to Section 10.04(a);
(e) the sale, lease, transfer or other disposition of Permitted
Dispositions;
(f) the transfer of the Capital Stock of Convac Equipment for
Semiconductor Technology, Ltd. (the name of which is changing to Fairchild
Technologies UK, Ltd.) by Technologies to Banner Investments (U.K.) PLC
for book value; and
(g) the transfer permitted pursuant to Section 10.09(c).
10.03. Liens. The U.S. Borrower shall not and shall not permit any
of its Subsidiaries to directly or indirectly create, incur, assume or
permit to exist any Lien or negative pledge on or with respect to any of
their respective Property or assets except:
(a) Liens created pursuant to the Loan Documents;
(b) Permitted Existing Liens;
(c) Customary Permitted Liens;
(d) Liens arising due to the creation of escrows of proceeds from
any sale, assignment, lease, transfer or other disposition permitted under
Section 10.02; and
(e) Liens securing appeal bonds permitted under Section 10.01(k).
10.04. Investments. The U.S. Borrower shall not and shall not
permit any of its Subsidiaries to directly or indirectly make or own any
Investment except:
(a) Investments in Cash Equivalents;
(b) Permitted Existing Investments, in each case increased or
decreased as required under GAAP as a result of annual adjustments made to
Investments accounted for under the equity method;
(c) Investments in the form of (i) advances to employees in the
ordinary course of business for moving, relocation and travel expenses and
(ii) loans to employees in an aggregate amount not to exceed $250,000 at
any time for any other purpose; provided that Investments described in
clause (ii) shall be evidenced by a promissory note;
(d) Investments received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement or composition
of delinquent obligations of, and other disputes with, customers and
suppliers arising in the ordinary course of business;
(e) Investments by a Borrower in its Subsidiaries which, if in the
form of intercompany loans, would be permitted under Section 10.01(g);
(f) an Investment by the U.S. Borrower, VSI Holdings, Inc. or
Technologies in connection with the acquisition of an additional fifteen
percent (15%) of the issued and outstanding Capital Stock of Voi-Shan
Diessel GmbH, a Subsidiary of Technologies; provided that a cash capital
contribution is made to the U.S. Borrower in exchange for equity
Securities of the U.S. Borrower of an existing class of Capital Stock and
on terms and conditions satisfactory to the Administrative Agent;
(g) Investments in the form of intercompany loans made by the U.S.
Borrower or its Subsidiaries to RHI prior to the occurrence of an Event of
Default or Potential Event of Default;
(h) Investments in an aggregate amount not to exceed $5,000,000 made
in connection with acquisitions of assets or equity Securities of any
Person engaged in a business substantially similar to a business in which
the U.S. Borrower and its Subsidiaries are engaged as of the Closing Date;
provided that after giving effect to the making of such Investment, no
Potential Event of Default or Event of Default would occur;
(i) an Investment by Fairchild Germany, Inc. in connection with the
acquisition of an additional ten percent (10%) of the issued and
outstanding Capital Stock of Fairchild Technologies USA, Inc.; provided
that a cash capital contribution is made to the U.S. Borrower in exchange
for equity Securities of the U.S. Borrower of an existing class of Capital
Stock and on terms and conditions satisfactory to the Administrative Agent
and such cash is used to effect such Investment;
(j) Investments in the form of notes or equity Securities payable to
the U.S. Borrower or any of its Subsidiaries in connection with a
Permitted Disposition or transaction permitted under Section 10.02(a); and
(k) Investments in an amount not to exceed $100,000 in the
aggregate in Subsidiaries of the U.S. Borrower formed after the Effective
Date.
In no event shall the U.S. Borrower or any of its Subsidiaries form,
create or establish any additional Subsidiaries or become a general
partner in any Person without the prior written consent of the Requisite
Lenders other than in connection with the sale, lease, transfer or other
disposition of Permitted Dispositions and subject to the limitations set
forth in clause (k) above. No other provision of this Agreement shall be
deemed to prohibit any Investment which is specifically permitted by this
Section 10.04.
10.05. Accommodation Obligations. The U.S. Borrower shall not and
shall not permit any of its Subsidiaries to directly or indirectly create
or become or be liable with respect to any Accommodation Obligation,
except:
(a) recourse obligations resulting from endorsement of negotiable
instruments for collection in the ordinary course of its business;
(b) Permitted Existing Accommodation Obligations and any extensions,
renewals or replacements thereof, provided that the aggregate Indebtedness
under any such extension, renewal or replacement is not greater than the
Indebtedness under, and shall be on terms no less favorable to the
applicable Borrower or Subsidiary than the terms of, the Permitted
Existing Accommodation Obligation so extended, renewed or replaced;
(c) Accommodation Obligations arising under the Loan Documents;
(d) Accommodation Obligations arising with respect to guarantees
provided by banks organized under the laws of jurisdictions outside of the
United States on behalf of Subsidiaries of the U.S. Borrower which are not
Domestic Subsidiaries in an aggregate amount not to exceed $5,000,000 at
any time outstanding;
(e) Accommodation Obligations arising with respect to appeal, bid or
performance bonds otherwise permitted under this Agreement which bonds are
supported by Letters of Credit issued under this Agreement;
(f) Accommodation Obligations arising with respect to Indebtedness
permitted under Section 10.01(j); and
(g) in addition to the Accommodation Obligations permitted by
clauses (a) through (f) above, other unsecured Accommodation Obligations
in an aggregate amount which, when combined with outstanding Indebtedness
permitted by Section 10.01(l), does not exceed $5,000,000 at any time
outstanding.
10.06. Restricted Junior Payments. The U.S. Borrower shall not and
shall not permit any of its Subsidiaries to declare or make any Restricted
Junior Payment, except:
(a) dividends or distributions to a Borrower on the Capital Stock of
any of its Wholly-Owned Subsidiaries or to any of a Borrower's Wholly-
Owned Subsidiaries from any other Wholly-Owned Subsidiary of such Borrower
or any Subsidiary of such Borrower existing on the date of this Agreement;
and
(b) dividends or distributions by the U.S. Borrower to RHI on its
Capital Stock
(i) in the amount of up to $125,000,000 on the Effective Date; and
(ii) if the purpose thereof is to provide TFC with funds necessary to
service Indebtedness (as defined in the 11 7/8% 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 clause (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 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
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) cancellations of intercompany Indebtedness which are treated as
dividends.
Notwithstanding anything to the contrary contained herein, so long as a
majority of the U.S. Borrower's common stock is owned by RHI, any payment
of a dividend or other distribution with respect to the U.S. Borrower's
Capital Stock shall be permitted hereunder only after a period of at least
ninety (90) days has elapsed since the declaration of such dividend or
other distribution by the U.S. Borrower's Board of Directors and provided
that before and after giving effect to each such payment, the U.S.
Borrower is Solvent.
10.07. Conduct of Business; Accounting and Reporting Practices. The
U.S. Borrower shall not and shall not permit any of its Subsidiaries to
(a) engage in any business other than (i) the businesses engaged in by the
U.S. Borrower and its Subsidiaries on the Effective Date and (ii) any
business or activities which are substantially similar, related or
incidental thereto or (b) change any of its or their accounting or
financial reporting policies or practices from those in effect on the
Closing Date.
10.08. Transactions with Shareholders and Affiliates. The U.S.
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 on terms
that are less favorable to a Borrower or such Subsidiary, as applicable,
than those that might be obtained in an arm's length transaction at the
time from Persons who are not an Affiliate. Nothing contained in this
Section 10.08 shall prohibit (a) any transaction expressly permitted by
Sections 10.05 and 10.06; (b) increases in compensation and benefits for
officers and employees of the U.S. Borrower or any of its Subsidiaries
which are customary in the industry or consistent with the past business
practice of the U.S. Borrower or such Subsidiary, provided that no Event
of Default or Potential Event of Default has occurred and is continuing;
(c) payment of customary directors' fees and indemnities; (d) performance
of any obligations arising under the Transfer Documents or (e) performance
of any obligations arising under the Tax Allocation Agreement.
10.09. Restriction on Fundamental Changes. The U.S. Borrower shall
not and shall not permit any of its Subsidiaries to (a) enter into any
merger or consolidation, or liquidate, wind-up or dissolve (or suffer any
liquidation or dissolution), or (b) convey, lease, sell, transfer or
otherwise dispose of, in one transaction or series of transactions, all or
substantially all of such Person's business or Property, whether now or
hereafter acquired, except:
(a) the liquidation of Convac Dresden GmbH;
(b) the liquidation or dissolution of Fairchild Fastener Group Ltd.
and JJS Limited;
(c) the transfer of the Capital Stock of Camloc (U.K.) Ltd. by
Fairchild Fastener Group Ltd. to Banner Investments (U.K.) PLC;
(d) the merger or liquidation of Convac France S.A. into
Technologies;
(e) the merger or liquidation of any Subsidiary of the U.S. Borrower
with and into the U.S. Borrower or any Guarantor; and
(f) the sale, lease, transfers or other dispositions described in
Sections 10.02 (e) and (f).
10.10. Sales and Leasebacks. The U.S. Borrower shall not and shall
not permit any of its Subsidiaries to become liable, directly, by assump-
tion or by Accommodation Obligation, with respect to any lease, whether an
Operating Lease or a Capital Lease, of any Property (whether real or
personal or mixed) which it or one of its Subsidiaries (a) sold or
transferred or is to sell or transfer to any other Person, or (b) intends
to use for substantially the same purposes as any other Property which has
been or is to be sold or transferred by it or one of its Subsidiaries to
any other Person, in either instance, in connection with such lease.
10.11. Margin Regulations; Securities Laws. The U.S. Borrower shall
not or permit any of its Subsidiaries to use all or any portion of the
proceeds of any credit extended under this Agreement to purchase or carry
Margin Stock or for purposes other than those described in Section 2.04.
10.12. ERISA. The U.S. Borrower shall not:
(a) engage, or permit any of its Subsidiaries to engage, in any
prohibited transaction described in Sections 406 of ERISA or 4975 of the
Internal Revenue Code for which a statutory or class exemption is not
available or a private exemption has not been previously obtained from the
DOL;
(b) permit to exist any accumulated funding deficiency (as defined
in Sections 302 of ERISA and 412 of the Internal Revenue Code), with
respect to any Benefit Plan, whether or not waived;
(c) fail, or permit any ERISA Affiliate to fail, to pay timely
required contributions or annual installments due with respect to any
waived funding deficiency to any Benefit Plan;
(d) terminate, or permit any ERISA Affiliate to terminate, any
Benefit Plan which would result in any liability of a Borrower or any
ERISA Affiliate under Title IV of ERISA;
(e) fail to make any contribution or payment to any Multiemployer
Plan which a Borrower or any ERISA Affiliate may be required to make under
any agreement relating to such Multiemployer Plan, or any law pertaining
thereto;
(f) fail, or permit any ERISA Affiliate to fail, to pay any required
installment or any other payment required under Section 412 of the
Internal Revenue Code on or before the due date for such installment or
other payment;
(g) amend, or permit any ERISA Affiliate to amend, a Benefit Plan
resulting in an increase in current liability for the plan year such that
a Borrower or any ERISA Affiliate is required to provide security to such
Plan under Section 401(a)(29) of the Internal Revenue Code;
(h) permit any unfunded liabilities with respect to any Foreign
Pension Plan; or
(i) fail, or permit any of its Subsidiaries or ERISA Affiliates to
fail, to pay any required contributions or payments to a Foreign Pension
Plan on or before the due date for such required installment or payment
if such event results, either singly or in the aggregate, after taking
into account all other such events and any liabilities associated
therewith, in an aggregate liability in excess of $2,000,000.
10.13. Issuance of Equity Securities. The U.S. Borrower shall not
and shall not permit any of its Subsidiaries to issue any equity
Securities except equity Securities of the U.S. Borrower pursuant to
Permitted Equity Securities Options and in connection with effecting the
transfer of the Technologies Minority Interest.
10.14. Organizational Documents; Material Contractual Obligations.
The U.S. Borrower shall not and shall not permit any of its Subsidiaries
to amend, modify or otherwise change any of the terms or provisions in any
of (a) their respective Organizational Documents as in effect on the
Closing Date, except (i) with respect to which written notice shall have
been provided to the Administrative Agent no less than ten (10) days prior
to the effective date of any such amendment, modification or change and
(ii) if no Event of Default or Potential Event of Default would result
therefrom or (b) Contractual Obligations evidencing any debt Securities or
other material Contractual Obligations.
10.15. Bank Accounts. The U.S. Borrower shall not and shall not
permit any of its Subsidiaries to establish or maintain any Deposit
Account into which collections of Receivables and proceeds of other
Collateral are deposited other than those identified as existing on the
Effective Date and disclosed on Schedule 10.15 attached hereto or which
are established after the Effective Date with the prior written approval
of the Administrative Agent and which, if collections of Receivables or
proceeds of Collateral are deposited therein, are subject to Collection
Account Agreements or other arrangements satisfactory to the
Administrative Agent.
10.16. Fiscal Year; Fiscal Months. The U.S. Borrower shall not and
shall not permit any of its Subsidiaries (other than Banner Aerospace,
Inc. in the event it becomes a Subsidiary) to change its Fiscal Year for
accounting or tax purposes from a period consisting of the 12-month period
ending on June 30 of each calendar year or to change the ending dates for
any Fiscal Month.
ARTICLE XI
FINANCIAL COVENANTS
The U.S. Borrower covenants and agrees that so long as any
Commitments are outstanding and thereafter until payment in full of all of
the Obligations (other than indemnities not yet due):
11.01. Interest Coverage Ratio. The U.S. Borrower and its
Subsidiaries shall have, as of the end of each Fiscal Quarter, an Interest
Coverage Ratio of no less than 4.0 to 1.0.
11.02. Fixed Charge Coverage Ratio. The U.S. Borrower and its
Subsidiaries shall have, as of the end of each Fiscal Quarter set forth
below, a Fixed Charge Coverage Ratio of no less than 1.0 to 1.0.
11.03. Capital Expenditures. The U.S. Borrower and its Subsidiaries
shall not make Capital Expenditures in any Fiscal Year, commencing with
the Fiscal Year ending June 30, 1997, in excess of $12,000,000.
11.04. Minimum Net Worth. The U.S. Borrower and its Subsidiaries
shall have, as of the end of each Fiscal Quarter, a net worth of no less
than $150,000,000.
For purposes of calculating EBITDA in determining compliance with Sections
11.01 and 11.02, EBITDA for the Fiscal Year ending June 30, 1996 shall be
deemed to equal $14,000,000 and EBITDA for each fiscal quarter of the
Fiscal Year ending June 30, 1996 shall be deemed to equal one-fourth (1/4)
of $14,000,000, in each case, until the date on which the report of the
U.S. Borrower's independent certified public accountants described in
Section 8.01(c) for such Fiscal Year is delivered to the Administrative
Agent and for each such fiscal quarter shall equal one-fourth (1/4) of the
EBITDA calculated based on such report thereafter.
ARTICLE XII
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
12.01. Events of Default. Each of the following occurrences shall
constitute an Event of Default under this Agreement:
(a) Failure to Make Payments When Due. Either Borrower shall fail to
pay (i) when due any principal of any Loan or any Reimbursement Obligation
for which it is obligated hereunder or (ii) within one (1) Business Day
after the due date therefor, any other Obligation for which it is
obligated.
(b) Breach of Certain Covenants. The U.S. Borrower shall fail duly
and punctually to perform or observe any agreement, covenant or obligation
under Sections 9.01, 9.02, 9.03, 9.04, 9.06, 9.10, 9.13 or 9.15, Article X
or Article XI.
(c) Breach of Representation or Warranty. Any representation or
warranty made or deemed made by the Borrowers to the Administrative Agent,
European Agent, European Administrator, any Lender or any Issuing Bank
herein or by either Borrower or any Subsidiary of a Borrower in any of
the other Loan Documents or in any statement or certificate at any time
given by any such Person pursuant to any of the Loan Documents shall be
false or misleading in any material respect on the date as of which made
(or deemed made).
(d) Other Defaults. Either Borrower shall default in the
performance of or compliance with any term contained in this Agreement
(other than as identified in clauses (a), (b) or (c) of this Section
12.01) applicable thereto or any default or event of default shall occur
under any of the other Loan Documents, and such default or event of
default shall continue for fifteen (15) days after the occurrence thereof.
(e) Default as to Other Indebtedness. The U.S. Borrower or any of
its Subsidiaries shall fail to make any payment when due (whether by
scheduled maturity, required prepayment, acceleration, demand or
otherwise) with respect to any other Indebtedness (other than an
Obligation) of the Borrowers and their Subsidiaries aggregating $1,000,000
or more; or any breach, default or event of default shall occur, or any
other condition shall exist under any instrument, agreement or indenture
pertaining to any such Indebtedness, if the effect thereof is to cause an
acceleration, mandatory redemption or other required repurchase of such
Indebtedness, or permit the holder(s) of such Indebtedness to accelerate
the maturity of any such Indebtedness or require a redemption or other
repurchase of such Indebtedness; or any such Indebtedness shall be
otherwise declared to be due and payable (by acceleration or otherwise) or
required to be prepaid, redeemed or otherwise repurchased by a Borrower or
any of its Subsidiaries (other than by a regularly scheduled required
prepayment) prior to the stated maturity thereof.
(f) Involuntary Bankruptcy; Appointment of Receiver, Etc. (i) An
involuntary case shall be commenced against either Borrower, any
Subsidiary of a Borrower, TFC or RHI and the petition shall not be (A)
controverted within ten (10) days after the filing thereof and (B)
dismissed, stayed, bonded or discharged 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 either Borrower,
any Subsidiary of a Borrower, TFC or RHI in an involuntary case, under any
applicable bankruptcy, insolvency or other similar law now or hereinafter
in effect; or any other similar relief shall be granted under any
applicable federal, state, local or foreign law.
(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 either
Borrower, any Subsidiary of a Borrower, TFC or RHI or over all or a
substantial part of the Property of any such Person shall be entered; or
an interim receiver, trustee or other custodian of a Borrower, any
Subsidiary of a Borrower, TFC, or RHI or of all or a substantial part of
the Property of any such Person shall be appointed or a warrant of
attachment, execution or similar process against any substantial part of
the Property of a Borrower, any Subsidiary of a Borrower, TFC or RHI shall
be issued and any such event shall not be stayed, dismissed, bonded or
discharged within thirty (30) days after entry, appointment or issuance.
(g) Voluntary Bankruptcy; Appointment of Receiver, Etc. Either
Borrower, any Subsidiary of a Borrower, TFC or RHI shall 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; or any such
Person 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 (or equivalent) of any
such Person (or any committee thereof) adopts any resolution or otherwise
authorizes any action to approve any of the foregoing.
(h) Dissolution. Any order, judgment or decree shall be entered
against either Borrower, any Subsidiary of a Borrower, TFC, or RHI
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 any such Person shall otherwise dissolve, be dissolved, or cease
to exist except as specifically permitted by this Agreement.
(i) Loan Documents; Failure of Security. At any time, for any
reason, (i) any Loan Document ceases to be in full force and effect or
either Borrower or any of its Subsidiaries party thereto seeks to
repudiate its obligations thereunder or the Liens intended to be created
thereby are, or a Borrower or any such Subsidiary seeks to render such
Liens, invalid or unperfected, or (ii) Liens in favor of the
Administrative Agent for the benefit of the Holders contemplated by the
Loan Documents shall, at any time, for any reason, be invalidated or
otherwise cease to be in full force and effect, or such Liens shall be
subordinated or shall not have the priority contemplated by this Agreement
or the Loan Documents.
(j) Judgments and Attachments. Any money judgment (other than a
money judgment covered by insurance as to which the insurance company has
acknowledged coverage), writ or warrant of attachment, or similar process
against either Borrower or any of its Subsidiaries or any of their
respective assets involving in any case an amount in excess of $500,000 is
entered and shall remain undischarged, unvacated, unbonded or unstayed for
a period of thirty (30) days or in any event later than five (5) days
prior to the date of any proposed sale thereunder; provided, however, if
any such judgment, writ or warrant of attachment or similar process is in
excess of $7,500,000, the entry thereof shall immediately constitute an
Event of Default hereunder.
(k) Termination Event. Any Termination Event occurs which could
reasonably be expected to subject either Borrower or any ERISA Affiliate
to liability in excess of $2,000,000, for which adequate reserves are not
maintained.
(l) Waiver Application. The plan administrator of any Benefit Plan
applies under Section 412(d) of the Code for a waiver of the minimum
funding standards of Section 412(a) of the Internal Revenue Code and the
Administrative Agent believes that the substantial business hardship upon
which the application for the waiver is based could subject either
Borrower or any ERISA Affiliate to liability in excess of $2,000,000, for
which adequate reserves are not maintained.
(m) Change in Control. A Change of Control shall occur.
(n) Material Adverse Effect. An event shall occur which results in
a Material Adverse Effect.
(o) TFC/RHI Liquidity. The TFC/RHI Liquidity shall be less than
$15,000,000 at any time.
(p) Public Debt Cross-Default. TFC shall fail to make any payment
when due on any Indebtedness of TFC owing with respect to its (i) 12%
Intermediate Subordinated Debentures due 2001, (ii) 13 1/8% Subordinated
Debentures due 2006, or (iii) 13% Junior Subordinated Debentures due 2007;
or RHI shall fail to make any payment when due on any Indebtedness of RHI
with respect to the 11 7/8% Senior Subordinated Debentures due 1999; or
any breach, default or event of default shall occur under any instrument,
agreement or indenture pertaining to any Indebtedness of TFC or RHI
described above, if the effect thereof (with or without the giving of
notice or lapse of time or both) is to accelerate (as distinguished from
imposing a requirement to offer to purchase), or permit the holder(s) of
such Indebtedness to accelerate (as distinguished from imposing a
requirement to offer to purchase), the maturity of any such Indebtedness.
(q) TFC. TFC shall (i) pay dividends on or redeem any of its shares
of common stock or any Indebtedness prior to its stated maturity at any
time when the TFC/RHI Liquidity is less than $20,000,000 or after giving
effect to such dividend or redemption the TFC/RHI Liquidity would be less
than $20,000,000 or (ii) permit any of its Subsidiaries (other than RHI
and any of its Subsidiaries) to, directly or indirectly, make or own any
Investment in any Person, or redeem or pay prior to the scheduled maturity
thereof any of the Indebtedness of TFC referenced in clause (p) above,
except:
(A) Investments of TFC or any such Subsidiary in Cash Equivalents;
(B) Investments of TFC or any such Subsidiary which represent defaulted
or extended obligations previously contracted in the ordinary course of
business thereof 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 TFC and all of its Subsidiaries (other
than RHI and any of its Subsidiaries) $20,000,000; provided that the
amount of such Investments by TFC in any one obligor shall not exceed
$10,000,000 in the aggregate at any one time outstanding;
(C) Investments of TFC or any such Subsidiary arising from Indebtedness
between TFC and its Subsidiaries;
(D) Investments of TFC in the form of notes or other Securities taken by
TFC in connection with sales of assets of TFC;
(E) Investments in the Capital Stock or Indebtedness of RHI and other
Persons identified on Schedule 12.01-Q;
(F) Investments in an aggregate amount not to exceed $500,000 at any
time, or $2,000,000 in the aggregate during the term of this Agreement,
consisting of capital contributions made by TFC or its Subsidiaries to
Wholly-Owned Subsidiaries of TFC formed after the Closing Date;
(G) Investments made by virtue of the repurchase of any Indebtedness
described in clause (p) above;
(H) other Investments in an aggregate amount not to exceed $10,000,000
during the term of this Agreement; provided, however, that in the event
any Investment described in clauses (A), (D), (E), or (F) is sold, the
$10,000,000 limitation set forth hereinabove shall be increased by the
amount of such proceeds of sale up to a maximum increase to $15,000,000.
An Event of Default shall be deemed "continuing" until cured or
waived in writing in accordance with Section 15.07.
12.02. Rights and Remedies.
(a) Acceleration and Termination. Upon the occurrence of any Event
of Default described in Sections 12.01(f) or 12.01(g), the Lenders'
respective obligations to make Loans under the Commitments shall
automatically and immediately terminate and the unpaid principal amount
of, and any and all accrued interest on, the Obligations and all accrued
fees shall automatically become immediately due and payable, without
presentment, demand, or protest or other requirements of any kind
(including, without limitation, valuation and appraisement, diligence,
presentment, notice of intent to demand or accelerate and of accel-
eration), all of which are hereby expressly waived by the Borrowers; and
upon the occurrence and during the continuance of any other Event of
Default, the Administrative Agent shall at the request, or may with the
consent, of the Requisite Lenders, by written notice to the U.S. Borrower,
(i) declare that the Lenders' respective obligations to make Loans under
the Commitments are terminated, whereupon such obligation of each such
Lender to make any Loan hereunder and of each such Lender or Issuing Bank
to issue or participate in any Letter of Credit not then issued shall
immediately terminate, and/or (ii) declare the unpaid principal amount of
and any and all accrued and unpaid interest on the Obligations to be, and
the same shall thereupon be, immediately due and payable, without
presentment, demand, or protest or other requirements of any kind
(including, without limitation, valuation and appraisement, diligence,
presentment, notice of intent to demand or accelerate and of
acceleration), all of which are hereby expressly waived by the Borrowers.
(b) Deposit for Letters of Credit. In addition, after the
occurrence and during the continuance of an Event of Default, the U.S.
Borrower shall, promptly upon demand by the Administrative Agent, deliver
to the Administrative Agent, Cash Collateral in such form as requested by
the Administrative Agent for deposit in the Cash Collateral Account,
together with such endorsements, and execution and delivery of such
documents and instruments, as the Administrative Agent may request in
order to perfect or protect the Administrative Agent's Lien with respect
thereto, in an aggregate principal amount equal to the then outstanding
Letter of Credit Obligations.
(c) Rescission. If at any time after termination of the Lenders'
obligations to make Loans under the Commitments and/or acceleration of the
maturity of the Loans, the Borrowers shall pay all arrears of interest and
all payments on account of principal of the Loans and Reimbursement
Obligations which shall have become due 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
15.07, then upon the written consent of the Requisite Lenders and written
notice to the U.S. Borrower, the termination of the Lenders' respective
obligations to make Loans under the Commitments and the respective
Lenders' and Issuing Banks' obligations to participate in or issue Letters
of Credit and/or the aforesaid acceleration and its consequences may be
rescinded and annulled; 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 Lenders and the Issuing Banks to a decision
which may be made at the election of the Requisite Lenders; they are not
intended to benefit the Borrowers and do not give the Borrowers the right
to require the Lenders to rescind or annul any termination of the
aforesaid obligations of the Lenders or Issuing Banks or any acceleration
hereunder, even if the conditions set forth herein are met.
(d) Enforcement. The Borrowers each acknowledge that in the event
either Borrower or any of its Subsidiaries fails to perform, observe or
discharge any of their respective obligations or liabilities under this
Agreement or any other Loan Document, any remedy of law may prove to be
inadequate relief to the Administrative Agent, the European Agent, the
Issuing Banks and the Lenders; therefore, the Borrowers each agree that
the Administrative Agent, the European Agent, the Issuing Banks and the
Lenders shall be entitled to temporary and permanent injunctive relief in
any such case without the necessity of proving actual damages.
ARTICLE XIII
THE ADMINISTRATIVE AGENT AND EUROPEAN AGENT
13.01. Appointment. (a) Each Lender and each Issuing Bank hereby
designates and appoints Citicorp as the Administrative Agent of such
Lender or such Issuing Bank under this Agreement and each U.K. Lender
hereby designates and appoints Citibank London as the European Agent of
such U.K. Lender, and each Lender and each Issuing Bank hereby irrevocably
authorizes the Administrative Agent, and each U.K. Lender hereby
irrevocably authorizes the European Agent, to take such action on its
behalf under the provisions of this Agreement and the 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 and the European Agent hereby agree to act in the aforesaid
capacities on the express conditions contained in this Article XIII.
(b) The provisions of this Article XIII are solely for the benefit
of the Administrative Agent, the European Agent, the Lenders and Issuing
Banks, and neither Borrower and no Subsidiary of a Borrower shall have any
rights to rely on or enforce any of the provisions hereof (other than as
expressly set forth in Section 13.07). In performing its functions and
duties under this Agreement, the Administrative Agent shall act solely as
Administrative Agent of the Lenders and the Issuing Banks and the European
Agent shall act solely as European Agent of the U.K. Lenders and neither
assumes nor shall be deemed to have assumed any obligation or relationship
of agency, trustee or fiduciary with or for either Borrower or any
Affiliate of either Borrower. The Administrative Agent and the European
Agent may perform any of their respective duties hereunder, or under the
other Loan Documents, by or through their respective agents or employees.
13.02. Nature of Duties. Neither the Administrative Agent nor the
European Agent shall have any duties or responsibilities other than those
expressly set forth in this Agreement or in the Loan Documents. The
duties of the Administrative Agent and European Agent shall be mechanical
and administrative in nature. Neither the Administrative Agent nor the
European Agent shall have by reason of this Agreement any fiduciary
relationship in respect of any Holder. Nothing in this Agreement or any
of the Loan Documents, expressed or implied, is intended to or shall be
construed to impose upon the Administrative Agent or the European Agent
any obligations in respect of this Agreement or any of the other Loan
Documents other than as expressly set forth herein or therein. Each
Lender and each Issuing Bank shall make its own independent investigation
of the financial condition and affairs of the Borrowers and their
Affiliates 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 Borrowers and Guarantors
initially and on a continuing basis, and neither the Administrative Agent
nor the European Agent shall have any duty or responsibility, either
initially or on a continuing basis, to provide any Holder with any credit
or other information with respect thereto (except for reports required to
be delivered by the Administrative Agent under the terms of this
Agreement). If the Administrative Agent or the European Agent seeks the
consent or approval of the Lenders to the taking or refraining from taking
of any action hereunder, the Administrative Agent shall send notice
thereof to each Lender. The Administrative Agent shall promptly notify
each Lender at any time that the Lenders so required hereunder have
instructed the Administrative Agent or European Agent to act or refrain
from acting pursuant hereto. As to any matters not expressly provided for
by this Agreement (including, without limitation, enforcement or
collection of the Notes or any amount payable under any provision of
Article IV or Article V when due) or the other Loan Documents, neither the
Administrative Agent nor the European Agent shall be required to exercise
any discretion or take any action. Notwithstanding the foregoing, the
Administrative Agent and the European Agent shall be required to act or
refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Requisite Lenders
(unless the instructions or consent of all of the Lenders is required
hereunder or thereunder) and such instructions shall be binding upon all
Lenders, Issuing Banks and Holders; provided, however, neither the
Administrative Agent nor the European Agent shall be required to take any
action which (i) the Administrative Agent or European Agent reasonably
believes will expose it to personal liability unless the Administrative
Agent or European Agent, as applicable, receives an indemnification
satisfactory to it from the Lenders with respect to such action or (ii) is
contrary to this Agreement, the other Loan Documents or applicable law.
13.03. Rights, Exculpation, Etc. (a) Liabilities;
Responsibilities. None of the Administrative Agent, the European Agent,
any Affiliate of the Administrative Agent or European Agent, or any of
their respective officers, directors, employees or agents shall be liable
to any Holder for any action taken or omitted by them hereunder or under
any of the Loan Documents, or in connection therewith, except that no
Person shall be relieved of any liability imposed by law for gross
negligence or willful misconduct. Neither the Administrative Agent nor
the European Agent shall be liable for any apportionment or distribution
of payments made by it in good faith pursuant to Section 4.02(b), and, if
any such apportionment or distribution is subsequently determined to have
been made in error, the sole recourse of any Holder to whom payment was
due, but not made, shall be to recover from other Holders any payment in
excess of the amount to which they are determined to have been entitled.
Neither the Administrative Agent nor the European Agent shall be
responsible to any Holder for any recitals, statements, representations or
warranties herein or for the execution, effectiveness, genuineness, valid-
ity, legality, enforceability, collectibility, or sufficiency of this
Agreement or any of the other Loan Documents or the transactions
contemplated thereby, or for the financial condition of either Borrower or
any of its Affiliates or the Guarantors. Neither the Administrative Agent
nor the European Agent shall be required to make any inquiry concerning
either the performance or observance of any of the terms, provisions or
conditions of this Agreement or any of the other Loan Documents, or the
financial condition of either Borrower or any of its Affiliates or the
Guarantors, or the existence or possible existence of any Potential Event
of Default or Event of Default.
(b) Right to Request Instructions. The Administrative Agent and the
European Agent may at any time request instructions from the Lenders with
respect to any actions or approvals which by the terms of any of the Loan
Documents the Administrative Agent or European Agent is permitted or
required to take or to grant, and 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 it shall
have received such instructions from those Lenders from whom the
Administrative Agent or European Agent is required to obtain such
instructions for the pertinent matter in accordance with the Loan
Documents. Without limiting the generality of the foregoing, no Holder
shall have any right of action whatsoever against either the
Administrative Agent or the European Agent as a result of the its acting
or refraining from acting under the Loan Documents in accordance with the
instructions of the Requisite Lenders or, where required by the express
terms of this Agreement, a greater proportion of the Lenders.
13.04. Reliance. The Administrative Agent and the European Agent
shall be entitled to rely upon any written notices, statements,
certificates, orders or other documents or any telephone message believed
by it 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 or any of the Loan Documents and its duties
hereunder or thereunder, upon advice of legal counsel (including counsel
for the Borrowers), independent public accountants and other experts
selected by it.
13.05. Indemnification. To the extent that the Administrative Agent
or European Agent is required to be reimbursed and indemnified by a
Borrower but is not reimbursed and indemnified by such Borrower, the
Lenders will reimburse and indemnify the Administrative Agent or European
Agent, as applicable, 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 it in any way relating to or
arising out of the Loan Documents or any action taken or omitted by the
Administrative Agent or European Agent under the Loan Documents, in
proportion to each Lender's Pro Rata Share. The obligations of the
Lenders under this Section 13.05 shall survive the payment in full of the
Loans, the Reimbursement Obligations and all other Obligations and the
termination of this Agreement.
13.06. Citicorp Individually. With respect to its Pro Rata Share
and U.K. Loan Pro Rata Share of the Commitments hereunder, if any, and the
Loans made by it, if any, Citicorp shall have and may exercise the same
rights and powers hereunder and is subject to the same obligations and
liabilities as and to the extent set forth herein for any other Lender.
The terms "Lenders" or "Requisite Lenders" or any similar terms shall,
unless the context clearly otherwise indicates, include Citicorp in its
individual capacity as a Lender or one of the Requisite Lenders. Citicorp
and its Affiliates may accept deposits from, lend money to, and generally
engage in any kind of banking, trust or other business with the Borrowers
or any of their Affiliates as if it were not acting as the Administrative
Agent pursuant hereto and as if Citibank London were not acting as the
European Agent pursuant hereto.
13.07. Successor Administrative and European Agents. (a)
Resignation. The Administrative Agent and the European Agent may resign
from the performance of all its respective functions and duties hereunder
at any time by giving at least thirty (30) Business Days' prior written
notice to the U.S. Borrower and the Lenders. Such resignation shall take
effect upon the acceptance by a successor Administrative Agent or European
Agent, as applicable, of appointment pursuant to this Section 13.07.
(b) Appointment by Requisite Lenders. Upon any such notice of
resignation, the Requisite Lenders shall have the right to appoint a
successor Administrative Agent or European Agent, as applicable, selected
from among the Lenders which appointment shall be subject to the prior
written approval of the U.S. Borrower (which may not be unreasonably
withheld, and shall not be required upon the occurrence and during the
continuance of an Event of Default).
(c) Appointment by Retiring Administrative Agent or European Agent.
If a successor Administrative Agent or European Agent shall not have been
appointed within the thirty (30) Business Day period provided in clause
(a) of this Section 13.07, the retiring Administrative Agent or European
Agent, as applicable, with the consent of the U.S. Borrower (which may not
be unreasonably withheld, and shall not be required upon the occurrence
and during the continuance of an Event of Default), shall then appoint a
successor Administrative Agent or European Agent who shall serve as such
until such time, if any, as the Requisite Lenders appoint a successor
Administrative Agent or successor European Agent as provided above.
(d) Rights of the Successor and Retiring Administrative Agents and
Successor and Retiring European Agents. Upon the acceptance of any
appointment as (i) Administrative Agent hereunder by a successor
Administrative Agent or (ii) European Agent hereunder by a successor
European Agent, such successor Administrative Agent or European Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent or European
Agent, and the retiring Administrative Agent or European Agent shall be
discharged from its duties and obligations under this Agreement. After
any retiring Administrative Agent's resignation hereunder as
Administrative Agent or any retiring European Agent's resignation
hereunder as European Agent, the provisions of this Article XIII shall
inure to its benefit as to any actions taken or omitted to be taken by it
while it was the Administrative Agent or European Agent under this
Agreement.
13.08. Relations Among Lenders. Each Lender and each Issuing Bank
agrees (except as provided in Section 15.05) that it will not take any
legal action, nor institute any actions or proceedings, against either
Borrower or any other obligor hereunder or under the other Loan Documents
with respect to any Collateral, without the prior written consent of the
Requisite Lenders. Without limiting the generality of the foregoing, no
Lender may accelerate or otherwise enforce its portion of the Obligations,
or unilaterally terminate its Commitments except in accordance with
Section 12.02(a).
13.09. Concerning the Collateral and the Loan Documents. (a)
Protective Advances. The Administrative Agent may from time to time,
before or after the occurrence of an Event of Default, make such
disbursements and advances pursuant to the Loan Documents which the
Administrative Agent, in its sole discretion, deems necessary or desirable
to preserve or protect the Collateral or any portion thereof or to enhance
the likelihood or maximize the amount of repayment of the Loans and other
Obligations ("Protective Advances"). The Administrative Agent shall
notify the U.S. Borrower and each Lender in writing of each such
Protective Advance, which notice shall include a description of the
purpose of such Protective Advance. The U.S. Borrower agrees to pay the
Administrative Agent, upon demand, the principal amount of all outstanding
Protective Advances, together with interest thereon at the rate from time
to time applicable to Base Rate Loans from the date of such Protective
Advance until the outstanding principal balance thereof is paid in full.
If the U.S. Borrower fails to make payment in respect of any Protective
Advance within one (1) Business Day after the date the U.S. Borrower
receives written demand therefor from the Administrative Agent, the
Administrative Agent shall promptly notify each Lender and each Lender
agrees that it shall thereupon make available to the Administrative Agent,
in Dollars in immediately available funds, the amount equal to such
Lender's Pro Rata Share of such Protective Advance. If such funds are not
made available to the Administrative Agent by such Lender within one (1)
Business Day after the Administrative Agent's demand therefor, the
Administrative Agent will be entitled to recover any such amount from such
Lender together with interest thereon at the Federal Funds Rate for each
day during the period commencing on the date of such demand and ending on
the date such amount is received. The failure of any Lender to make
available to the Administrative Agent its Pro Rata Share of any such
Protective Advance shall neither relieve any other Lender of its
obligation hereunder to make available to the Administrative Agent such
other Lender's Pro Rata Share of such Protective Advance on the date such
payment is to be made nor increase the obligation of any other Lender to
make such payment to the Administrative Agent. All outstanding principal
of, and interest on, Protective Advances shall constitute Obligations
secured by the Collateral until paid in full by the U.S. Borrower.
(b) Authority. Each Lender and each Issuing Bank authorizes and
directs the Administrative Agent to enter into the Loan Documents relating
to the Collateral for the benefit of the Lenders and the Issuing Banks.
Each Lender and each Issuing Bank agrees that any action taken by the
Administrative Agent, the European Agent, or the Requisite Lenders (or,
where required by the express terms of this Agreement, a greater
proportion of the Lenders) in accordance with the provisions of this
Agreement or the other Loan Documents, and the exercise by the
Administrative Agent, the European Agent, or the Requisite Lenders (or,
where so required, such greater proportion) 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 Lenders and
Issuing Banks. Without limiting the generality of the foregoing, the
Administrative Agent shall have the sole and exclusive right and authority
to (i) act as the disbursing and collecting agent for the Lenders and the
Issuing Banks with respect to all payments and collections of the
Obligations of the U.S. Borrower arising in connection with this Agreement
and the Loan Documents or relating to the Collateral and act, through the
European Agent if the Administrative Agent elects to do so, as the
disbursing and collecting agent for the U.K. Lenders with respect to all
payments and collections of the Obligations of the U.K. Borrower arising
in connection with this Agreement and the Loan Documents or relating to
the Collateral; (ii) execute and deliver each Loan Document relating to
the Collateral and accept delivery of each such agreement delivered by a
Borrower, any Subsidiary of a Borrower, or any Guarantor a party thereto;
(iii) act as collateral agent for the Lenders and the Issuing Banks for
purposes of the perfection of all security interests and Liens created by
such agreements and all other purposes stated therein; provided, however,
the Administrative Agent hereby appoints, authorizes and directs the
Lenders and the Issuing Banks to act as collateral sub-agent for the
Administrative Agent, the Lenders and the Issuing Banks for purposes of
the perfection of all security interests and Liens with respect to the
Property at any time in the possession of such Lender or such Issuing
Bank, including, without limitation, Deposit Accounts maintained with, and
cash and Cash Equivalents held by, such Lender or such Issuing Bank; (iv)
manage, supervise and otherwise deal with the Collateral; (v) take such
action as is necessary or desirable to maintain the perfection and
priority of the security interests and liens created or purported to be
created by the Loan Documents; and (vi) except as may be otherwise
specifically restricted by the terms of this Agreement or any other Loan
Document, exercise all remedies given to the Administrative Agent, the
Lenders or the Issuing Banks with respect to the Collateral under the Loan
Documents relating thereto, applicable law or otherwise.
(c) Release of Collateral. (i) Each Lender and each Issuing Bank
hereby directs, in accordance with the terms of this Agreement, the
Administrative Agent to release any Lien held by the Administrative Agent
for the benefit of the Holders:
(A) against all of the Collateral, upon final and indefeasible
payment in full of the Obligations and termination of this Agreement;
(B) against any part of the Collateral sold or disposed of by a
Borrower or any of its Subsidiaries, if such sale or disposition is per-
mitted by Section 10.02 or is otherwise consented to by the Requisite
Lenders, as certified to the Administrative Agent by the U.S. Borrower in
an Officer's Certificate; and/or
(C) against any part of the Collateral consisting of a promissory
note, upon final and indefeasible payment in full of the Indebtedness
evidenced thereby.
(ii) Each Lender and each Issuing Bank hereby directs the
Administrative Agent to execute and deliver or file such termination and
partial release statements and do such other things as are necessary to
release Liens to be released pursuant to this Section 13.09(c) promptly
upon the effectiveness of any such release.
13.10. Documentation Agent. The Documentation Agent, as such, shall
have no duties or obligations whatsoever under this Agreement or any Loan
Document or any other document or any matter related hereto or thereto,
but shall nevertheless be entitled to all of the indemnities and other
protection afforded to the Administrative Agent under this Article XIII.
ARTICLE XIV
YIELD PROTECTION
14.01. Taxes. (a) Payment of Taxes. Any and all payments by
either Borrower hereunder or under any Note or other document evidencing
any Obligations shall be made, in accordance with Section 4.02, free and
clear of and without reduction for any and all present or future taxes,
levies, imposts, deductions, charges, withholdings, and all stamp or docu-
mentary taxes, excise taxes, ad valorem taxes and other taxes imposed on
the value of the Property, charges or levies which arise from the
execution, delivery or registration, or from payment or performance under,
or otherwise with respect to, any of the Loan Documents or the Commitments
and all other liabilities with respect thereto excluding, in the case of
each Lender, each Issuing Bank and the Administrative Agent, taxes imposed
on or measured by net income or overall gross receipts and capital and
franchise taxes imposed on it by (i) the United States, the United Kingdom
or The Republic of Ireland, (ii) the Governmental Authority of the juris-
diction in which such Lender's Applicable Lending Office is located or any
political subdivision thereof or (iii) the Governmental Authority in which
such Person is organized, managed and controlled or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deduc-
tions, charges and withholdings being hereinafter referred to as "Taxes").
If either Borrower shall be required by law to withhold or deduct any
Taxes from or in respect of any sum payable hereunder or under any such
Note or document to any Lender, any Issuing Bank or the Administrative
Agent, (x) the sum payable to such Lender, Issuing Bank, or the
Administrative Agent shall be increased as may be necessary so that after
making all required withholding or deductions (including withholding or
deductions applicable to additional sums payable under this Section 14.01)
such Lender, such Issuing Bank or the Administrative Agent (as the case
may be) receives an amount equal to the sum it would have received had no
such withholding or deductions been made, (y) such Borrower shall make
such withholding or deductions, and (z) such Borrower shall pay the full
amount withheld or deducted to the relevant taxation authority or other
authority in accordance with applicable law. In addition, each Borrower
agrees to pay any present and future stamp and documentary taxes and any
other excise and property taxes, charges and similar levies which arise
from any payment made hereunder or under the Notes or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement
or the Notes ("Other Taxes").
(b) Indemnification. The U.S. Borrower will indemnify each Lender,
each Issuing Bank and the Administrative Agent against, and reimburse each
on demand for, the full amount of all Taxes and Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any Governmental
Authority on amounts payable under this Section 14.01 and any additional
income or franchise taxes resulting therefrom) incurred or paid by such
Lender, such Issuing Bank or the Administrative Agent (as the case may be)
or any of their respective Affiliates and any liability (including
penalties, interest, and out-of-pocket expenses paid to third parties)
arising therefrom or with respect thereto, whether or not such Taxes or
Other Taxes were lawfully payable. A certificate as to any additional
amount payable to any Person under this Section 14.01 submitted by it to
the U.S. Borrower shall, absent manifest error, be final, conclusive and
binding upon all parties hereto. Each Lender and each Issuing Bank
agrees, within a reasonable time after receiving a written request from
the U.S. Borrower, to provide the U.S. Borrower and the Administrative
Agent with such certificates as are reasonably required, and take such
other actions as are reasonably necessary to claim such exemptions as such
Lender or such Issuing Bank may be entitled to claim in respect of all or
a portion of any Taxes which are otherwise required to be paid or deducted
or withheld pursuant to this Section 14.01 in respect of any payments
under this Agreement or under the Notes.
(c) Receipts. Within thirty (30) days after the date of any payment
of Taxes or Other Taxes by the U.S. Borrower, it will furnish to the
Administrative Agent, at its address referred to in Section 15.08, the
original or a certified copy of a receipt evidencing payment thereof.
(d) Foreign Bank Certifications. (i) Each Lender that is not
created or organized under the laws of the United States or a political
subdivision thereof shall deliver to the U.S. Borrower and the
Administrative Agent on the Closing Date or the date on which such Lender
becomes a Lender pursuant to Section 15.01 hereof a true and accurate
certificate executed in duplicate by a duly authorized officer of such
Lender to the effect that such Lender is eligible to receive payments
hereunder and under the Notes without deduction or withholding of United
States federal income tax (I) under the provisions of an applicable tax
treaty concluded by the United States (in which case the certificate shall
be accompanied by two duly completed copies of IRS Form 1001 (or any
successor or substitute form or forms)), (II) under Sections 1442(c)(1)
and 1442(a) of the Internal Revenue Code (in which case the certificate
shall be accompanied by two duly completed copies of IRS Form 4224 (or any
successor or substitute form or forms)), or (III) due to such Lender's not
being a "bank" as such term is used in Section 881(c)(3)(A) of the
Internal Revenue Code (in which case, the certificate shall be accompanied
by two accurate and complete original signed copies of IRS Form W-8 (or
any successor or substitute form or forms)).
(ii) Each Lender further agrees to deliver to the U.S. Borrower and
the Administrative Agent from time to time, a true and accurate
certificate executed in duplicate by a duly authorized officer of such
Lender before or promptly upon the occurrence of any event requiring a
change in the most recent certificate previously delivered by it to the
U.S. Borrower and the Administrative Agent pursuant to this
Section 14.01(d). Each certificate required to be delivered pursuant to
this Section 14.01(d)(ii) shall certify as to one of the following:
(A) that such Lender can continue to receive payments hereunder and
under the Notes without deduction or withholding of United States federal
income tax;
(B) that such Lender cannot continue to receive payments hereunder
and under the Notes without deduction or withholding of United States
federal income tax as specified therein but does not require additional
payments pursuant to Section 14.01(a) because it is entitled to recover
the full amount of any such deduction or withholding from a source other
than the U.S. Borrower; or
(C) that such Lender is no longer capable of receiving payments
hereunder and under the Notes without deduction or withholding of United
States federal income tax as specified therein and that it is not capable
of recovering the full amount of the same from a source other than the
U.S. Borrower.
Each Lender agrees to deliver to the U.S. Borrower and the Administrative
Agent further duly completed copies of the above-mentioned IRS forms on or
before the earlier of (x) the date that any such form expires or becomes
obsolete or otherwise is required to be resubmitted as a condition to
obtaining an exemption from withholding from United States federal income
tax and (y) fifteen (15) days after the occurrence of any event requiring
a change in the most recent form previously delivered by such Lender to
the U.S. Borrower and Administrative Agent, unless any change in treaty,
law, regulation, or official interpretation thereof which would render
such form inapplicable or which would prevent the Lender from duly
completing and delivering such form has occurred prior to the date on
which any such delivery would otherwise be required and the Lender
promptly advises the U.S. Borrower that it is not capable of receiving
payments hereunder and under the Notes without any deduction or
withholding of United States federal income tax.
14.02. Increased Capital. If after the date hereof any Lender or
Issuing Bank determines that (i) the adoption or implementation of or any
change in or in the interpretation or administration of any law or
regulation or any guideline or request from any central bank or other
Governmental Authority or quasi-governmental authority exercising
jurisdiction, power or control over any Lender, Issuing Bank or banks or
financial institutions generally (whether or not having the force of law),
compliance with which affects or would affect the amount of capital
required or expected to be maintained by such Lender or Issuing Bank or
any Person controlling such Lender or Issuing Bank and (ii) the amount of
such capital is increased by or based upon (A) the making or maintenance
by any Lender of its Loans, any Lender's participation in or obligation to
participate in the Loans, Letters of Credit or other advances made
hereunder or the existence of any Lender's obligation to make Loans or (B)
the issuance or maintenance by any Issuing Bank of, or the existence of
any Issuing Bank's obligation to issue, Letters of Credit, then, in any
such case, upon written demand by such Lender or Issuing Bank (with a copy
of such demand to the Administrative Agent), the U.S. Borrower shall
immediately pay to the Administrative Agent for the account of such Lender
or Issuing Bank, from time to time as specified by such Lender or Issuing
Bank, additional amounts sufficient to compensate such Lender or Issuing
Bank or such Person therefor. Such demand shall be accompanied by a
statement as to the amount of such compensation and include a brief
summary of the basis for such demand. Such statement shall be conclusive
and binding for all purposes, absent manifest error.
14.03. Changes; Legal Restrictions. If after the date hereof any
Lender or Issuing Bank determines that the adoption or implementation of
or any change in or in the interpretation or administration of any law or
regulation or any guideline or request from any central bank or other
Governmental Authority or quasi-governmental authority exercising
jurisdiction, power or control over any Lender, Issuing Bank or over banks
or financial institutions generally (whether or not having the force of
law), compliance with which:
(a) does or will subject a Lender or an Issuing Bank (or its
Applicable Lending Office or Eurocurrency Affiliate) to charges (other
than taxes) of any kind which such Lender or Issuing Bank reasonably
determines to be applicable to the Commitments of the Lenders and/or the
Issuing Banks to make Eurocurrency Rate Loans or issue and/or participate
in Letters of Credit or change the basis of taxation of payments to that
Lender or Issuing Bank of principal, fees, interest, or any other amount
payable hereunder with respect to Eurocurrency Rate Loans or Letters of
Credit; or
(b) does or will impose, modify, or hold applicable, in the
determination of a Lender or an Issuing Bank, any reserve (other than
reserves taken into account in calculating the Eurocurrency Rate), special
deposit, compulsory loan, FDIC insurance 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 made, or other credit extended by, or any other
acquisition of funds by, a Lender or an Issuing Bank or any Applicable
Lending Office or Eurocurrency Affiliate of that Lender or Issuing Bank;
and the result of any of the foregoing is to increase the cost to that
Lender or Issuing Bank of making, renewing or maintaining the Loans or its
Commitments with respect to, or issuing or participating in, the Letters
of Credit or to reduce any amount receivable thereunder; then, in any such
case, upon written demand by such Lender or Issuing Bank (with a copy of
such demand to the Administrative Agent), the U.S. Borrower shall
immediately pay to the Administrative Agent for the account of such Lender
or Issuing Bank, from time to time as specified by such Lender or Issuing
Bank, such amount or amounts as may be necessary to compensate such Lender
or Issuing Bank or its Eurocurrency Affiliate for any such additional cost
incurred or reduced amount received. Such demand shall be accompanied by
a statement as to the amount of such compensation and include a brief
summary of the basis for such demand. Such statement shall be conclusive
and binding for all purposes, absent manifest error.
14.04. Illegality. (i) If at any time any Lender determines (which
determination shall, absent manifest error, be final and conclusive and
binding upon all parties) that the making or continuation of or conversion
into any Eurocurrency Rate Loan has become unlawful or impermissible by
compliance by that Lender with any law, governmental rule, regulation or
order of any Governmental Authority (whether or not having the force of
law and whether or not failure to comply therewith would be unlawful or
would result in costs or penalties), then, and in any such event, such
Lender may give notice of that determination, in writing, to the U.S.
Borrower and the Administrative Agent, and the Administrative Agent shall
promptly transmit the notice to each other Lender.
(ii) When notice is given by a Lender under Section 14.04(i),
(A) the Borrowers' right to request from such Lender and such Lender's
obligation, if any, to make Eurocurrency Rate Loans shall be immediately
suspended, and such Lender shall make a Base Rate Loan as part of any
requested Borrowing of Eurocurrency Rate Loans and (B) if the affected
Eurocurrency Rate Loan or Loans are then outstanding, the U.S. Borrower
shall immediately, or if permitted by applicable law, no later than the
date permitted thereby, upon at least one (1) Business Day's prior written
notice to the Administrative Agent and the affected Lender, convert each
such Loan into a Base Rate Loan.
(iii) If at any time after a Lender gives notice under Section
14.04(i) such Lender determines that it may lawfully make Eurocurrency
Rate Loans, such Lender shall promptly give notice of that determination,
in writing, to the U.S. Borrower and the Administrative Agent, and the
Administrative Agent shall promptly transmit the notice to each other
Lender. The Borrowers' right to request, and such Lender's obligation, if
any, to make Eurocurrency Rate Loans shall thereupon be restored.
14.05. Compensation. In addition to all amounts required to be paid
by the Borrower pursuant to Section 5.01, the U.S. Borrower shall
compensate each Lender, upon demand, 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 Lender to fund or maintain such Lender's Eurocurrency
Rate Loans to the Borrowers but excluding any loss of Applicable
Eurocurrency Rate Margin on the relevant Loans) which that Lender may
sustain (i) if for any reason a Borrowing, conversion into or continuation
of Eurocurrency Rate Loans does not occur on a date specified therefor in
a Notice of Borrowing or a Notice of Conversion/Continuation given by the
U.S. Borrower or in a telephonic request by it for borrowing or
conversion/continuation or a successive Eurocurrency Interest Period does
not commence after notice therefor is given pursuant to Section 5.01(c),
including, without limitation, pursuant to Section 5.02(e), (ii) if for
any reason any Eurocurrency Rate Loan is prepaid (including, without
limitation, mandatorily pursuant to Section 4.01) on a date which is not
the last day of the applicable Eurocurrency Interest Period, (iii) as a
consequence of a required conversion of a Eurocurrency Rate Loan to a Base
Rate Loan as a result of any of the events indicated in Section 5.02(e),
or (iv) as a consequence of any failure by the applicable Borrower to
repay Eurocurrency Rate Loans made to it when required by the terms of
this Agreement. The Lender making demand for such compensation shall
deliver to the U.S. Borrower concurrently with such demand a written
statement in reasonable detail as to such losses, expenses and
liabilities, and this statement shall be conclusive as to the amount of
compensation due to that Lender, absent manifest error.
14.06. Limitation on Additional Amounts Payable by the U.S.
Borrower. Notwithstanding the provisions of Section 14.01(a), the U.S.
Borrower shall not be required to pay any additional amounts hereunder to
a Lender or Issuing Bank if (a) the obligation to pay such additional
amounts would not have arisen but for a failure by the Lender or Issuing
Bank to comply with the requirements described in Section 14.01 or (b) the
Lender or Issuing Bank shall not have furnished the U.S. Borrower with
such forms or shall not have taken such other action as reasonably may be
available to it under applicable tax laws and any applicable tax treaty to
obtain an exemption from, or reduction (to the lowest applicable rate) of
withholding of such United States federal income tax; provided, however,
the U.S. Borrower's obligation to pay such additional amounts shall be
reinstated upon receipt of such forms or evidence that action with respect
to obtaining such exemption or reduction has been taken.
14.07. Change in Lending Office. Any Lender claiming any additional
amounts payable pursuant to Section 14.01 shall use reasonable efforts
(consistent with its internal policy and legal and regulatory
restrictions) to change the Domestic Lending Office designated by it for
purposes of this Agreement to a Domestic Lending Office in another
jurisdiction, if the making of such a change would avoid the need for, or
reduce the amount of, any such additional amounts which may thereafter
accrue and would not, in the judgment of such Lender, be otherwise
disadvantageous to such Lender.
14.08. Judgment Currency. If for the purposes of obtaining judgment
in any court it is necessary to convert a sum due under this agreement or
any Note in any currency (the "first currency") into another currency (the
"second currency"), the parties hereto agree, to the fullest extent
permitted by law, that the Exchange Rate used shall be that determined on
the Business Day preceding that on which final judgment is given. To the
fullest extent permitted by applicable law, the Obligation in respect of
any sum due in a first currency shall, notwithstanding any judgment in a
second currency, be discharged only to the extent that on the Business Day
following receipt by any of the Administrative Agent, the European Agent,
the European Administrative, any Lender or any Issuing Bank of any sum
adjudged to be so due in the second currency, such Person may purchase the
first currency with the second currency at the Exchange Rate determined on
the date of such purchase; if the amount of the first currency so
purchased is less than the sum originally due to such Person in the first
currency, each Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify such Person against such
loss, and if the amount of the first currency so purchases exceeds the sum
originally due to such Person in the first currency, such Person agrees to
remit to the relevant Borrower such excess.
ARTICLE XV
MISCELLANEOUS
15.01. Assignments and Participations. (a) Assignments. No
assignments or participations of any Lender's rights or obligations under
this Agreement shall be made except in accordance with this Section 15.01.
Each Lender may assign to one or more Eligible Assignees all or a portion
of its rights and obligations under this Agreement (including all of its
rights and obligations with respect to the Loans and the Letters of
Credit) in accordance with the provisions of this Section 15.01.
(b) Limitations on Assignments. Each assignment shall be subject to
the following conditions: (i) each such assignment may be on a non-pro-
rata basis, but shall be of a constant, and not a varying, ratable
percentage of all of the assigning Lender's rights and obligations under
this Agreement which are subject to such assignment and, in the case of a
partial assignment to a Person which is not a Lender, shall be in a
minimum principal amount aggregating $5,000,000, (ii) each such assignment
shall be to an Eligible Assignee consented to by the Issuing Banks, which
consent shall not be unreasonably withheld or delayed, (iii) the U.S.
Borrower shall have the right to approve each such Eligible Assignee which
is not an Affiliate of a Lender, which approval shall not be unreasonably
withheld or delayed and (iv) the parties to each such assignment shall
execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance. Upon such
execution, delivery, acceptance and recording in the Register, from and
after the effective date specified in each Assignment and Acceptance and
agreed to by the Administrative Agent, (A) the assignee thereunder shall,
in addition to any rights and obligations hereunder held by it immediately
prior to such effective date, if any, have the rights and obligations
hereunder that have been assigned to it pursuant to such Assignment and
Acceptance and shall, to the fullest extent permitted by law, have the
same rights and benefits hereunder as if it were an original Lender
hereunder, (B) the assigning Lender shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment
and Acceptance, relinquish its rights and be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance
covering all or the remaining portion of such assigning Lender's rights
and obligations under this Agreement, the assigning Lender shall cease to
be a party hereto), and (C) the applicable Borrower shall execute and
deliver to the assignee thereunder one or more Notes, as applicable,
evidencing its obligations to such assignee with respect to the Loans.
(c) The Register. The Administrative Agent shall maintain at its
address referred to in Section 15.08 a copy of each Assignment and
Acceptance delivered to and accepted by it and a register (the "Register")
for the recordation of the names and addresses of the Lenders and their
respective Commitments, and the principal amount of the Loans owing to,
each Lender from time to time and whether such Lender is an original
Lender or the assignee of another Lender pursuant to an Assignment and
Acceptance. The entries in the Register shall be conclusive and binding
for all purposes, absent manifest error, and the Borrowers and each of
their Subsidiaries, the Administrative Agent, the European Agent, and the
Lenders may treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. The Register shall
be available for inspection by the U.S. Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(d) Fee. Upon its receipt of an Assignment and Acceptance executed
by the assigning Lender and an Eligible Assignee and a processing and
recordation fee of $3,000 (payable by the assigning Lender or the
assignee, as shall be agreed between them), the Administrative Agent
shall, if such Assignment and Acceptance has been completed and is in
compliance with this Agreement and in substantially the form of Exhibit A,
(i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to
the U.S. Borrower and the other Lenders.
(e) Participations. Each Lender may sell participations to one or
more other financial institutions in or to all or a portion of its rights
and obligations under and in respect of any and all facilities under this
Agreement (including, without limitation, all or a portion of any or all
of its Commitments hereunder and the Loans owing to it and its undivided
interest in the Letters of Credit); provided, however, that (i) such
Lender's obligations under this Agreement (including, without limitation,
its Commitments hereunder) shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance
of such obligations, (iii) the Borrowers, the Administrative Agent, the
European Agent, and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and (iv) such participant's rights to
agree or to restrict such Lender's ability to agree to the modification,
waiver or release of any of the terms of the Loan Documents or to the
release of any Collateral covered by the Loan Documents, to consent to any
action or failure to act by any party to any of the Loan Documents or any
of their respective Affiliates, or to exercise or refrain from exercising
any powers or rights which any Lender may have under or in respect of the
Loan Documents or any Collateral, shall be limited to the right to consent
to (A) increase in the Commitment of the Lender from whom such participant
purchased a participation, (B) reduction of the principal of, or rate or
amount of interest on the Loans(s) subject to such participation (other
than by the payment or prepayment thereof), (C) postponement of any date
fixed for any payment of principal of, or interest on, the Loan(s) subject
to such participation and (D) release of any Guarantor or all or a
substantial portion of the Collateral except as provided in Section
13.09(c).
(f) Payment to Participants. Anything in this Agreement to the
contrary notwithstanding, in the case of any participation, all amounts
payable by the Borrowers under the Loan Documents shall be calculated and
made in the manner and to the parties required hereby as if no such
participation had been sold; provided, however, that each participant
shall be the beneficiary of the provisions of Article XIV to the extent
amounts payable thereunder do not exceed the amounts payable thereunder to
the Lender from which such participation has been purchased.
(g) Lenders' Creation of Security Interests. Notwithstanding any
other provision set forth in this Agreement, any Lender may at any time
create a security interest in all or any portion of its rights under this
Agreement (including, without limitation, Obligations owing to it and any
Notes held by it) in favor of any Federal Reserve bank in accordance with
Regulation A of the Federal Reserve Board.
(h) Assignments by Citicorp. If Citicorp ceases to be a Lender
under this Agreement by virtue of any assignment made pursuant to this
Section 15.01, then, as of the effective date of such cessation,
Citibank's obligations to issue Letters of Credit pursuant to Section 3.01
shall terminate and Citibank shall be an Issuing Bank hereunder only with
respect to outstanding Letters of Credit issued prior to such date.
(i) Information Regarding the Borrowers. Any Lender may, in
connection with any assignment or participation or proposed assignment or
participation pursuant to this Section 15.01, disclose to the assignee or
participant or proposed assignee or participant, any information relating
to the Borrowers or their Subsidiaries furnished to such Lender by the
Administrative Agent or European Agent or by or on behalf of the
Borrowers; provided that, prior to any such disclosure, such assignee or
participant, or proposed assignee or participant, shall agree to preserve
in accordance with Section 15.20 the confidentiality of any confidential
information described therein.
15.02. Expenses.
(a) Generally. The U.S. Borrower agrees upon demand to pay, or
reimburse the Administrative Agent for, all of the Administrative Agent's,
European Agent's and European Administrator's reasonable internal and
external audit, legal, appraisal, valuation, filing, document duplication
and reproduction and investigation expenses and for all other out-of-
pocket costs and expenses of every type and nature (including, without
limitation, the reasonable fees, expenses and disbursements of Sidley &
Austin, local legal counsel, auditors, accountants, appraisers, printers,
insurance and environmental advisers, and other consultants and agents)
incurred by the Administrative Agent, European Agent and European
Administrator in connection with (i) the Administrative Agent's review and
investigation of the Borrowers and their Affiliates and the Collateral in
connection with the preparation, negotiation, and execution of the Loan
Documents and the Administrative Agent's periodic reviews and audits of
the Borrowers and Guarantors; (ii) the preparation, negotiation, execution
and interpretation of this Agreement (including, without limitation, the
satisfaction or attempted satisfaction of any of the conditions set forth
in Article VI) and the other Loan Documents and the making of the Loans
hereunder; (iii) the creation, perfection or protection of the Liens under
the Loan Documents and U.K. Loan Documents (including, without limitation,
any reasonable fees and expenses for local counsel in various jurisdic-
tions); (iv) the ongoing administration of this Agreement, the other Loan
Documents, the Loans, and the U.K. Loan Documents, including, without
limitation, consultation with attorneys in connection therewith and with
respect to the Administrative Agent's and the European Agent's rights and
responsibilities under this Agreement and the other Loan Documents and the
European Administrator's rights and responsibilities under the U.K. Loan
Documents; (v) the protection, collection or enforcement of any of the
Obligations or the enforcement of any of the Loan Documents or U.K. Loan
Documents; (vi) the commencement, defense or intervention in any court
proceeding relating in any way to the Obligations, the Property, the
Borrowers, any of their Subsidiaries, this Agreement or any of the other
Loan Documents, or any of the U.K. Loan Documents; (vii) the response to,
and preparation for, any subpoena or request for document production with
which the Administrative Agent, European Agent, or European Administrator
is served or deposition or other proceeding in which the Administrative
Agent, European Agent, or European Administrator is called to testify, in
each case, relating in any way to the Obligations, the Property, the
Borrowers, any of their Subsidiaries, this Agreement or any of the other
Loan Documents, or any of the U.K. Loan Documents; and (viii) any
amendments, consents, waivers, assignments, restatements, or supplements
to any of the Loan Documents or U.K. Loan Documents and the preparation,
negotiation, and execution of the same.
(b) After Default. The U.S. Borrower further agrees to pay or
reimburse the Administrative Agent, the European Agent, the European
Administrator, the Issuing Banks and the Lenders upon demand for all out-
of-pocket costs and expenses, including, without limitation, reasonable
attorneys' fees (including allocated costs of internal counsel and costs
of settlement) incurred by any of them after the occurrence of an Event of
Default (i) in enforcing any Loan Document or U.K. Loan Document or
Obligation or any security therefor 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 in any insolvency or bankruptcy proceeding; (iii) in commencing,
defending or intervening in any litigation or in filing a petition, com-
plaint, answer, motion or other pleadings in any legal proceeding relating
to the Obligations, the Property, the Borrowers or any of their
Subsidiaries and related to or arising out of the transactions
contemplated hereby or by any of the other Loan Documents; and (iv) in
taking any other action in or with respect to any suit or proceeding
(bankruptcy or otherwise) described in clauses (i) through (iii) above.
15.03. Indemnity. The U.S. Borrower further agrees (a) to defend,
protect, indemnify, and hold harmless the Administrative Agent, the
European Agent, the European Administrator, and each and all of the
Lenders and Issuing Banks and each of their respective officers, direc-
tors, employees, attorneys and agents (including, without limitation,
those retained in connection with the satisfaction or attempted
satisfaction of any of the conditions set forth in Article VI)
(collectively, the "Indemnitees") from and against any and all
liabilities, obligations, losses (other than loss of profits), damages,
penalties, actions, judgments, suits, claims, costs, expenses and
disbursements of any kind or nature whatsoever (excluding any taxes and
including, without limitation, the fees and disbursements of counsel for
such Indemnitees in connection with any investigative, administrative or
judicial proceeding, whether or not such Indemnitees shall be designated
a party thereto), imposed on, incurred by, or asserted against such
Indemnitees in any manner relating to or arising out of (i) this Agreement
or the other Loan Documents or U.K. Loan Documents, or any act, event or
transaction related or attendant thereto or to the transfers evidenced by
the Transfer Documents, the making of the Loans and the issuance of and
participation in Letters of Credit hereunder, the management of such Loans
or Letters of Credit, the use or intended use of the proceeds of the Loans
or Letters of Credit hereunder, or any of the other transactions
contemplated by any of the Loan Documents or U.K. Loan Documents, or (ii)
any Liabilities and Costs relating to any violation by a Borrower, its
Subsidiaries, or the Guarantors, or their respective predecessors-in-
interest of any Environmental, Health or Safety Requirements of Law, the
past, present or future operations of a Borrower, its Subsidiaries, any
Guarantor, or any of their respective predecessors in interest, or, the
past, present or future environmental, health or safety condition of any
respective past, present or future Property of a Borrower, any of its
Subsidiaries, or any Guarantor, the presence of asbestos-containing
materials at any respective past, present or future Property of a
Borrower, any of its Subsidiaries, or any Guarantor, or the Release or
threatened Release of any Contaminant into the environment by a Borrower,
its Subsidiaries, any Guarantor, or their respective predecessors-in-
interest, or the Release or threatened Release of any Contaminant into the
environment from or at any facility to which a Borrower, any of its
Subsidiaries, or any Guarantor, or their respective predecessors-in-
interest sent or directly arranged the transport of any Contaminant
(collectively, the "Indemnified Matters"); provided, however, the U.S.
Borrower shall have no obligation to an Indemnitee hereunder with respect
to Indemnified Matters caused by or resulting from the willful misconduct
or gross negligence of such Indemnitee, as determined by a court of
competent jurisdiction and (b) not to assert any claim against any of the
Indemnified Parties on any theory of liability for special, indirect,
consequential or punitive damages arising out of, or in any way in
connection with, the Commitments, the Obligations or any other matters
governed by this Agreement and/or the other Loan Documents. To the extent
that the undertaking to indemnify, pay and hold harmless set forth in the
preceding sentence may be unenforceable because it is violative of any law
or public policy, the U.S. Borrower shall contribute the maximum portion
which it is permitted to pay and satisfy under applicable law, to the
payment and satisfaction of all Indemnified Matters incurred by the
Indemnitees. The Administrative Agent, Lenders and the Issuing Banks agree
to notify the U.S. Borrower of the institution or assertion of any
Indemnified Matter, but the parties hereto hereby agree that the failure
to so notify the U.S. Borrower shall not release the U.S. Borrower from
its obligations hereunder.
15.04. Change in Accounting Principles. If any change in the
accounting principles used in the preparation of the most recent Financial
Statements referred to in Section 8.01 are hereafter required or permitted
by the rules, regulations, pronouncements and opinions of the Financial
Accounting Standards Board or the American Institute of Certified Public
Accountants (or successors thereto or agencies with similar functions) and
are adopted by the U.S. Borrower with the agreement of its independent
certified public accountants and such changes result in a change in the
method of calculation of any of the covenants, standards or terms found in
Article IX, Article X, and 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 compliance with such covenants, standards and terms by the U.S.
Borrower and its Subsidiaries shall be the same after such changes as if
such changes had not been made; provided, however, no change in GAAP that
would affect the method of calculation of any of the covenants, standards
or terms shall be given effect in such calculations until such provisions
are amended, in a manner satisfactory to the Requisite Lenders and the
Borrowers, to so reflect such change in accounting principles.
15.05. Setoff. In addition to any Liens granted under the Loan
Documents and any rights now or hereafter granted under applicable law,
upon the occurrence and during the continuance of any Event of Default,
each Lender, each Issuing Bank and any Affiliate of any Lender or Issuing
Bank is hereby authorized by each Borrower at any time or from time to
time, without notice to any Person (any such notice being hereby expressly
waived) to set off and to appropriate and to apply any and all deposits
(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 such Lender, Issuing Bank or any of their Affiliates to or for
the credit or the account of such Borrower against and on account of the
Obligations of such Borrower to such Lender, Issuing Bank or any of their
Affiliates, including, but not limited to, all Loans and Letters of Credit
and all claims of any nature or description arising out of or in con-
nection with this Agreement, irrespective of whether or not (i) such
Lender or Issuing Bank shall have made any demand hereunder or (ii) the
Administrative Agent, at the request or with the consent of the Requisite
Lenders, shall have declared the principal of and interest on the Loans
and other amounts due hereunder to be due and payable as permitted by
Article XII and even though such Obligations may be contingent or
unmatured. Each Lender and each Issuing Bank agrees that it shall not,
without the express consent of the Requisite Lenders, and that it shall,
to the extent it is lawfully entitled to do so, upon the request of the
Requisite Lenders, exercise its setoff rights hereunder against any
accounts of a Borrower, any of its Subsidiaries, or a Guarantor now or
hereafter maintained with such Lender, Issuing Bank or any Affiliate of
such Lender or Issuing Bank.
15.06. Ratable Sharing. (a) Pre-Default. The Lenders agree among
themselves that (i) with respect to all amounts received by them which are
applicable to the payment of the Obligations (excluding the fees described
in Section 5.03 and Article XIV), equitable adjustment will be made so
that, in effect, all such amounts will be shared among them ratably in
accordance with their U.S. Loan Pro Rata Shares or U.K. Loan Pro Rata
Shares, as applicable, whether received by voluntary payment, by the
exercise of the right of setoff or banker's lien, by counterclaim or
cross-action or by the enforcement of any or all of the Obligations
(excluding the fees described in Section 5.03 and Article XIV) or the
Collateral, (ii) if any of them shall by voluntary payment or by the
exercise of any right of counterclaim, setoff, banker's lien or otherwise,
receive payment of a proportion of the aggregate amount of the Obligations
held by it, which is greater than the amount which such Lender is entitled
to receive hereunder, the Lender receiving such excess 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 such Obligations owed to the others so
that all such recoveries with respect to such Obligations shall be applied
ratably in accordance with their U.S. Loan Pro Rata Shares or U.K. Loan
Pro Rata Shares, as applicable; provided, however, that if all or part of
such excess 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 such 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. Each Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this
Section 15.06 may, to the fullest extent permitted by law, exercise all
its rights of payment (including, subject to Section 15.05, the right of
setoff) with respect to such participation as fully as if such Lender were
the direct creditor of such Borrower in the amount of such participation.
(b) Post-Default. The Lenders agree among themselves that, after
the occurrence of an Event of Default and termination of the Commitments
as provided in Section 12.02(a), if any Loans or Letters of Credit
Obligations are then outstanding, the Lenders shall purchase and sell, as
the case may be, without recourse or warranty, such undivided interests
and participations (which shall be deemed to have been done simultaneously
with the termination of the Commitments as provided in Section 12.02(a)
and promptly evidenced by an Assignment and Acceptance) in the Loans and
Letter of Credit Obligations then outstanding so that the principal
portion of the Loans and Letter of Credit Obligations, and interest and
fees related thereto, shall be allocated ratably among the Lenders based
on the amounts of their respective Commitments.
15.07. Amendments and Waivers. (a) General Provisions. Unless
otherwise provided for or required in this Agreement, no amendment or
modification of any provision of this Agreement or any of the other Loan
Documents shall be effective without the written agreement of the
Requisite Lenders (which the Requisite Lenders shall have the right to
grant or withhold in their sole discretion) and the Borrowers. No
termination or waiver of any provision of this Agreement or any of the
other Loan Documents, or consent to any departure by either Borrower
therefrom, shall be effective without the written concurrence of the
Requisite Lenders, which the Requisite Lenders shall have the right to
grant or withhold in their sole discretion. All amendments,
modifications, waivers and consents not specifically reserved to Lenders,
Issuing Banks, and the Administrative Agent in Section 15.07(b), Section
15.07(c) and in other provisions of this Agreement shall require only the
approval of the Requisite Lenders. 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 Borrowers in any case
shall entitle either Borrower to any other or further notice or demand in
similar or other circumstances.
(b) Amendments, Consents and Waivers by Super- Majority Lenders.
Any amendment, modification, termination, waiver or consent with respect
to any of the provisions of Section 4.01(b) of this Agreement shall be
effective only by a written agreement signed by the Super-Majority
Lenders.
(c) Amendments, Consents and Waivers by All Lenders. Any amendment,
modification, termination, waiver or consent with respect to any of the
following provisions of this Agreement shall be effective only by a
written agreement, signed by each Lender:
(i) increase in the amount of any of the Commitments of such Lender,
(ii) reduction of the principal of, rate or amount of interest on the
Loans, the Reimbursement Obligations, or any fees or other amounts payable
to the Lenders or Issuing Banks (other than by the payment or prepayment
thereof),
(iii) postponement of the Revolving Credit Termination Date or any date
fixed for any payment of principal of, or interest on, the Loans, the
Reimbursement Obligations or any fees or other amounts payable to the
Lenders or the Issuing Banks,
(iv) the orders of priority of applications set forth in Section 4.01,
(v) change in the definitions of the U.S. Loan Commitments, U.K. Loan
Commitments, or DM Subfacility,
(vi) waiver of any of the conditions specified in Sections 6.01 or 6.02
or the covenant set forth in Section 9.15,
(vii) release of any Guarantor or all or a substantial portion of the
Collateral (except as provided in Section 13.09(c)),
(viii) change in the (A) definitions of Requisite Lenders or Super-
Majority Lenders or (B) the aggregate Pro Rata Share of the Lenders which
shall be required for the Lenders or any of them to take action under this
Agreement or the other Loan Documents,
(ix) amendment of Section 15.01 or this Section 15.07,
(x) assignment of any right or interest in or under this Agreement or
any of the other Loan Documents by the Borrower, and
(xi) waiver of any Event of Default described in Sections 12.01(a), (f),
(g), (h), and (n).
(d) Administrative Agent Authority. The Administrative Agent may,
but shall have no obligation to, with the written concurrence of any
Lender, execute amendments, modifications, waivers or consents on behalf
of that Lender. Notwithstanding anything to the contrary contained in
this Section 15.07, no amendment, modification, waiver or consent shall
affect the rights or duties of the Administrative Agent under this
Agreement or the other Loan Documents, unless made in writing and signed
by the Administrative Agent in addition to the Lenders required above to
take such action; and the order of priority set forth in clauses (A)
through (C) of Section 4.02(b) may be changed only with the prior written
consent of the Administrative Agent. Notwithstanding anything herein to
the contrary, in the event that a Borrower shall have requested, in
writing, that any Lender agree to an amendment, modification, waiver or
consent with respect to any particular provision or provisions of this
Agreement or the other Loan Documents, and such 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 may
specify) within thirty (30) days after such request, then such Lender
shall be deemed to not have approved such amendment, modification, waiver
or consent and the Administrative Agent shall thereupon determine whether
the Lenders required above to take the requested action have approved the
same within the required time and communicate such determination to the
Borrowers and the Lenders.
15.08. 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, sent by facsimile
transmission or courier service or United States certified mail and shall
be deemed to have been given when delivered in person or by courier
service, upon receipt of a facsimile transmission, or four (4) Business
Days after deposit in the United States mail with postage prepaid and
properly addressed. Notices to the Administrative Agent pursuant to
Articles II, IV or XIII 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 15.08) shall be as set forth below each party's name on
the signature pages hereof or the signature page of any applicable
Assignment and Acceptance, or, as to each party, at such other address as
may be designated by such party in a written notice to all of the other
parties to this Agreement.
15.09. Survival of Warranties and Agreements. All representations
and warranties made herein and all covenants and other obligations of the
Borrowers in respect of taxes, indemnification and expense reimbursement
shall survive the execution and delivery of this Agreement and the other
Loan Documents, the making and repayment of the Loans, the issuance and
discharge of Letters of Credit hereunder and the termination of this
Agreement and shall not be limited in any way by the passage of time or
occurrence of any event and shall expressly cover time periods when the
Administrative Agent, any of the Issuing Banks or any of the Lenders may
have come into possession or control of any of either Borrower's or its
Subsidiaries' Property.
15.10. Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of the Administrative Agent, any Lender or
any Issuing Bank in the exercise of any power, right or privilege under
any of the 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 other or further exercise thereof or of any other right, power or
privilege. All rights and remedies existing under the Loan Documents are
cumulative to and not exclusive of any rights or remedies otherwise
available.
15.11. Marshalling; Payments Set Aside. None of the Administrative
Agent, European Agent, any Lender or any Issuing Bank shall be under any
obligation to marshall any assets in favor of either Borrower or any other
Person or against or in payment of any or all of the Obligations. To the
extent that a Borrower makes a payment or payments to the Administrative
Agent, the Lenders or the Issuing Banks or any of such Persons receives
payment from the proceeds of the Collateral 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
fraudulent or preferential, set aside or required to be repaid to a
trustee, receiver or any other party, then to the extent of such recovery,
the obligation or part thereof originally intended to be satisfied, and
all Liens, right 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 setoff had not occurred.
15.12. Severability. In case any provision in or obligation under
this Agreement 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.
15.13. Headings. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part
of this Agreement or be given any substantive effect.
15.14. Governing Law. THIS AGREEMENT SHALL BE INTERPRETED, AND THE
RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED, IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
15.15. Limitation of Liability. No claim may be made by either
Borrower, any Lender, any Issuing Bank, the Administrative Agent, the
European Agent or any other Person against the Administrative Agent, the
European Agent, any other Issuing Bank or any other Lender or the
Affiliates, directors, officers, employees, attorneys or agents of any of
them for any special, consequential or punitive damages in respect of any
claim for breach of contract or any other theory of liability arising out
of or related to the transactions contemplated by this Agreement, or any
act, omission or event occurring in connection therewith; and each
Borrower, each Lender, each Issuing Bank, the Administrative Agent and the
European Agent hereby waives, releases and agrees not to sue upon any such
claim for any such damages, whether or not accrued and whether or not
known or suspected to exist in its favor.
15.16. Successors and Assigns. This Agreement and the other Loan
Documents shall be binding upon the parties hereto and their respective
successors and assigns and shall inure to the benefit of the parties
hereto and the successors and permitted assigns of the Lenders and the
Issuing Banks. The rights hereunder of the Borrowers, or any interest
therein, may not be assigned without the written consent of all Lenders.
15.17. Certain Consents and Waivers of the Borrowers.
(a) Personal Jurisdiction. (i) EACH OF THE ADMINISTRATIVE AGENT, THE
EUROPEAN AGENT, THE LENDERS, THE ISSUING BANKS, THE U.S. BORROWER AND THE
U.K. BORROWER IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS
PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY NEW YORK STATE COURT OR
FEDERAL COURT SITTING IN NEW YORK, NEW YORK, AND ANY COURT HAVING
JURISDICTION OVER APPEALS OF MATTERS HEARD IN SUCH COURTS, IN ANY ACTION
OR PROCEEDING ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO
THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT, WHETHER ARISING IN CONTRACT, TORT, EQUITY OR
OTHERWISE, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF
THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS
IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN
SUCH STATE COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL
COURT. EACH BORROWER IRREVOCABLY DESIGNATES AND APPOINTS TFC, 110 EAST
59TH STREET, 30TH FLOOR, NEW YORK, NEW YORK 10022, AS ITS AGENT (THE
"PROCESS AGENT") FOR SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY
SUCH COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED TO BE EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT. EACH OF THE ADMINISTRATIVE AGENT, THE
EUROPEAN AGENT, THE LENDERS, THE ISSUING BANKS, THE U.S. BORROWER AND THE
U.K. BORROWER AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS
BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. EACH
BORROWER WAIVES IN ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE
LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(ii) EACH BORROWER AGREES THAT THE ADMINISTRATIVE AGENT SHALL HAVE
THE RIGHT TO PROCEED AGAINST IT OR ITS PROPERTY IN A COURT IN ANY LOCATION
TO ENABLE THE ADMINISTRATIVE AGENT, THE EUROPEAN AGENT, THE ISSUING BANKS
AND THE LENDERS TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN
FAVOR OF THE ADMINISTRATIVE AGENT, THE EUROPEAN AGENT, ANY ISSUING BANK OR
ANY LENDER. EACH BORROWER AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE
COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY THE ADMINISTRATIVE AGENT, THE
EUROPEAN AGENT, ANY LENDER OR ANY ISSUING BANK TO REALIZE ON THE
COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE ADMINISTRATIVE AGENT, ANY
LENDER OR ANY ISSUING BANK. EACH BORROWER WAIVES ANY OBJECTION THAT IT
MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE ADMINISTRATIVE AGENT,
THE EUROPEAN AGENT, ANY ISSUING BANK OR ANY LENDER MAY COMMENCE A
PROCEEDING DESCRIBED IN THIS SECTION.
(b) Service of Process. EACH 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 THE PROCESS AGENT OR SUCH BORROWER'S NOTICE
ADDRESS SPECIFIED BELOW, SUCH SERVICE TO BECOME EFFECTIVE FIVE (5) DAYS
AFTER SUCH MAILING. EACH BORROWER IRREVOCABLY WAIVES 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 WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY JURISDICTION
SET FORTH ABOVE. 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 TO BRING PROCEEDINGS AGAINST EITHER BORROWER IN THE
COURTS OF ANY OTHER JURISDICTION.
(c) Waiver of Jury Trial. EACH OF THE ADMINISTRATIVE AGENT, EUROPEAN
AGENT, LENDERS, ISSUING BANKS, AND THE BORROWERS IRREVOCABLY WAIVES TRIAL
BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT. ANY OF THE U.S. BORROWER, THE U.K. BORROWER, THE
ADMINISTRATIVE AGENT, LENDERS, OR ISSUING BANKS MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE
OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL
BY JURY.
15.18. Counterparts; Effectiveness; Inconsistencies. This Agreement
and any amendments, waivers, consents, or supplements hereto 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 shall become
effective against the Borrowers, each Lender, each Issuing Bank, the
European Agent, and the Administrative Agent on the Effective Date,
whereupon the terms and provisions of the Original Credit Agreement 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. This Agreement and each of 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 other Loan
Document, this Agreement shall govern.
15.19. Limitation on Agreements. All agreements between the
Borrowers, the Administrative Agent, the European Agent, each Lender and
each Issuing Bank in the Loan Documents are hereby expressly limited so
that in no event shall any of the Loans or other amounts payable by the
Borrowers under any of the Loan Documents be directly or indirectly
secured (within the meaning of Regulation U) by Margin Stock.
15.20. Confidentiality. Subject to Section 15.01(f), the Lenders
and the Issuing Banks shall hold all nonpublic information obtained pur-
suant to the requirements of this Agreement and identified as such by the
U.S. Borrower in accordance with such Lender's or such Issuing Bank's cus-
tomary procedures for handling confidential information of this nature and
in accordance with safe and sound banking practices and in any event may
make disclosure (a) to its Affiliates or (b) as is reasonably required by
a bona fide offeree, transferee or participant in connection with the
contemplated transfer or participation or as required or requested by any
Governmental Authority or representative thereof or pursuant to legal
process and shall require any such offeree, transferee or participant to
agree (and require any of its offerees, transferees or participants to
agree) to comply with this Section 15.20. In no event shall any Lender or
any Issuing Bank be obligated or required to return any materials
furnished by the Borrowers; provided, however, each offeree shall be
required to agree that if it does not become a transferee or participant
it shall return all materials furnished to it by the Borrowers in
connection with this Agreement. Any and all confidentiality agreements
entered into between any Lender or any Issuing Bank and the Borrowers
shall survive the execution of this Agreement.
15.21. Entire Agreement. This Agreement, taken together with all of
the other Loan Documents, embodies the entire agreement and understanding
among the parties hereto and supersedes all prior agreements and under-
standings, written and oral, relating to the subject matter hereof.
15.22. Advice of Counsel. Each Borrower and each Lender and Issuing
Bank understand that the Administrative Agent's counsel represents only
the Administrative Agent's and its Affiliates' interests and that the
Borrowers, other Lenders and other Issuing Banks are advised to obtain
their own counsel. Each Borrower represents and warrants to the
Administrative Agent, the European Agent, and the other Holders that it
has discussed this Agreement with its counsel.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first above written.
BORROWERS: FAIRCHILD HOLDING CORP.
By: Karen L. Schneckenburger
Vice President and Treasurer
KAYSEL
By: Karen L. Schneckenburger
Attorney
Notice Address:
300 West Service Road
Chantilly, Virginia 20151
Attn: Michael T. Alcox
Telecopier No. (703) 478-5915 and
Donald E. Miller
Telecopier No. (703) 478-5775
with a copy to:
Cahill Gordon & Reindel
Eighty Pine Street
New York, New York 10005-1702
Attn: James J. Clark
Telecopier No. (212) 269-5420
ADMINISTRATIVE AGENT: CITICORP USA, INC., as Administrative Agent
By: Marjorie Futornick
Title: Vice President
Notice Address:
Citicorp USA, Inc.
c/o Citicorp Securities, Inc.
200 South Wacker Drive
31st Floor
Chicago, Illinois 60606
Attn: Colin M. Cohen
Telecopier No. (312) 993-1050
with a copy to:
Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
Attn: DeVerille A. Huston
Telecopier No. (312) 853-7036
ISSUING BANK: CITIBANK, N.A.
By: Marjorie Futornick
Vice President
Notice Address:
Citibank, N.A.
399 Park Avenue
10th Floor, Zone 3
New York, New York 10043
Attn: Gail Rodriguez
Telecopier No. (212) 793-4806
LENDERS: CITICORP USA, INC.
By: Marjorie Futornick
Title: Vice President
Notice Address:
Citicorp USA, Inc.
c/o Citicorp Securities, Inc.
200 South Wacker Drive
31st Floor
Chicago, Illinois 60606
Attn: Colin M. Cohen
Telecopier No. (312) 993-1050
Domestic Lending Office and Eurodollar
Lending Office or Eurodollar Affiliate:
Citicorp USA, Inc.
c/o Citibank, N.A.
399 Park Avenue
10th Floor, Zone 3
New York, New York 10043
Attn: Gail Rodriguez
Telecopier No. (212) 793-4806
Pro Rata Share: 50.00%
U.K. Loan Pro Rata Share: 0%
U.K. Loan Commitment: $0
U.S. Loan Pro Rata Share: 50.00%
U.S. Loan Commitment: $26,000,000
NATIONSBANK, N.A.
By: Michael R. Williams
Title: Senior Vice President
Notice Address
and Domestic and Eurodollar
Lending Office:
NationsBank, N.A.
6610 Rockledge Drive
1st Floor
Bethesda, Maryland 20817-1876
Attn: John Mindnich
Telecopier No. (301) 571-0719
Pro Rata Share: 50.00%
U.K. Loan Pro Rata Share: 0%
U.K. Loan Commitment: $0
U.S. Loan Pro Rata Share: 50.00%
U.S. Loan Commitment: $26,000,000
EXHIBITS
Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Borrowing Base Certificate
Exhibit C -- Form of Collection Account Agreement (U.S.)
Exhibit D -- Form of Collection Account Agreement (U.K.)
Exhibit E -- Form of Notes
Exhibit F -- Form of Notice of Borrowing
Exhibit G -- Form of Notice of Conversion/Continuation
Exhibit H -- Pro Forma Financial Statements
Exhibit I -- Projections
Exhibit J -- List of Closing Documents
Exhibit J-1 - List of Supplemental Closing Documents for U.K.
Borrower Loans
Exhibit K -- Form of Officer's Certificate to Accompany Reports
Exhibit L -- Form of TFC/RHI Liquidity Calculation
SCHEDULES
Schedule 1.01.1 -- Appraisals
Schedule 1.01.2 -- Domestic Subsidiaries
Schedule 1.01.3 -- Eligible Inventory Locations
Schedule 1.01.4 -- Receivables Which Are Not Eligible U.K. Receivables
Schedule 1.01.5 -- Receivables Which Are Not Eligible U.S. Receivables
Schedule 1.01.6 -- European Subsidiary Borrowers
Schedule 1.01.7 -- Fiscal Month End Dates
Schedule 1.01.8 -- Guarantors
Schedule 1.01.9 -- Permitted Dispositions
Schedule 1.01.10 -- Permitted Equity Securities Options
Schedule 1.01.11 -- Permitted Existing Accommodation
Obligations
Schedule 1.01.12 -- Permitted Existing Indebtedness
Schedule 1.01.13 -- Permitted Existing Investments
Schedule 1.01.14 -- Permitted Existing Liens
Schedule 3.02 -- Existing Letters of Credit
Schedule 7.01-A -- Organizational Documents
Schedule 7.01-C -- Organizational Structure
Schedule 7.01-E -- Governmental Consents
Schedule 7.01-K -- Pending Actions
Schedule 7.01-R -- Environmental Matters
Schedule 7.01-S -- ERISA Matters
Schedule 7.01-U -- Labor Contracts
Schedule 7.01-X -- Patent, Trademark & Permit Claims Pending
Schedule 7.01-Z -- Insurance Policies
Schedule 10.15 -- Collection Accounts
Schedule 12.01-Q -- TFC Permitted Existing Investments