Exhibit 10 (cl)
EXECUTION COUNTERPART
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HAMILTON BEACH/PROCTOR-SILEX, INC.
PROCTOR-SILEX CANADA INC.
as Borrowers
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AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of October 11, 1990
Amended and Restated as of May 10, 1994
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THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
as U.S. Agent
THE CHASE MANHATTAN BANK OF CANADA
as Canadian Agent
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TABLE OF CONTENTS
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . .
Section 1. DEFINITIONS AND ACCOUNTING AND COMPUTATIONAL
MATTERS. . . . . . . . . . . . . . . . . . . .
1.01 Certain Defined Terms . . . . . . . . . . . . . .
1.02 Accounting Terms and Determinations . . . . . . .
1.03 Certain Computations . . . . . . . . . . . . . . .
Section 2. COMMITMENTS . . . . . . . . . . . . . . . . . . .
2.01 Extensions of Credit . . . . . . . . . . . . . . .
2.02 Borrowings . . . . . . . . . . . . . . . . . . . .
2.03 Changes of Commitments . . . . . . . . . . . . . .
2.04 Fees . . . . . . . . . . . . . . . . . . . . . . .
2.05 Lending Offices . . . . . . . . . . . . . . . . .
2.06 Several Obligations; Remedies Independent . . . .
2.07 Notes . . . . . . . . . . . . . . . . . . . . . .
2.08 Conversion or Continuation of Loans . . . . . . .
2.09 Extension of Revolving Credit Termination Date . .
Section 3. REPAYMENT OF PRINCIPAL; INTEREST; PREPAYMENT . .
3.01 Repayment of Loans . . . . . . . . . . . . . . . .
3.02 Interest . . . . . . . . . . . . . . . . . . . . .
3.03 Prepayments . . . . . . . . . . . . . . . . . . .
Section 4. PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS;
ETC. . . . . . . . . . . . . . . . . . . . . .
4.01 Payments . . . . . . . . . . . . . . . . . . . . .
4.02 Pro Rata Treatment . . . . . . . . . . . . . . . .
4.03 Computations . . . . . . . . . . . . . . . . . . .
4.04 Minimum Amounts . . . . . . . . . . . . . . . . .
4.05 Certain Notices . . . . . . . . . . . . . . . . .
4.06 Non-Receipt of Funds by the Agents . . . . . . . .
4.07 Sharing of Payments; Etc. . . . . . . . . . . . .
Section 5. YIELD PROTECTION; ILLEGALITY; FOREIGN TAXES . . .
5.01 Additional Costs . . . . . . . . . . . . . . . . .
5.02 Limitation on Types of Loans . . . . . . . . . . .
5.03 Illegality . . . . . . . . . . . . . . . . . . . .
5.04 Certain Conversions Pursuant to Sections 5.01
and 5.03 . . . . . . . . . . . . . . . . . . . .
5.05 Compensation . . . . . . . . . . . . . . . . . ..
5.06 Taxes . . . . . . . . . . . . . . . . . . . . . .
Section 6. GUARANTEES . . . . . . . . . . . . . . . . . . .
6.01 Unconditional Guarantees . . . . . . . . . . . . .
6.02 Validity . . . . . . . . . . . . . . . . . . . . .
6.03 Waivers . . . . . . . . . . . . . . . . . . . . .
6.04 Subrogation . . . . . . . . . . . . . . . . . . .
6.05 Acceleration . . . . . . . . . . . . . . . . . . .
6.06 Reinstatement . . . . . . . . . . . . . . . . . .
6.07 Joint and Several Obligations, Etc. . . . . . . .
6.08 Severability . . . . . . . . . . . . . . . . . . .
Section 7. CONDITIONS PRECEDENT . . . . . . . . . . . . . .
7.01 Amendment Effective Date . . . . . . . . . . . . .
7.02 Additional Conditions to Effectiveness . . . . . .
7.03 Initial and All Subsequent Extensions of Credit .
Section 8. REPRESENTATIONS AND WARRANTIES. . . . . . . . . .
8.01 Corporate and Legal Existence and Structure . . .
8.02 Information . . . . . . . . . . . . . . . . . . .
8.03 Litigation . . . . . . . . . . . . . . . . . . . .
8.04 No Breach . . . . . . . . . . . . . . . . . . . .
8.05 Corporate Action . . . . . . . . . . . . . . . . .
8.06 Use of Proceeds . . . . . . . . . . . . . . . . .
8.07 Approvals . . . . . . . . . . . . . . . . . . . .
8.08 ERISA . . . . . . . . . . . . . . . . . . . . . .
8.09 Taxes . . . . . . . . . . . . . . . . . . . . . .
8.10 Certain Agreements . . . . . . . . . . . . . . . .
8.11 Subsidiaries, Etc. . . . . . . . . . . . . . . . .
8.12 Legal Form . . . . . . . . . . . . . . . . . . . .
8.13 Assets. . . . . . . . . . . . . . . . . . . . . .
8.14 Margin Stock . . . . . . . . . . . . . . . . . . .
8.15 Public Utility Holding Company Act; Investment
Company Act . . . . . . . . . . . . . . . . . .
8.16 Hazardous Materials . . . . . . . . . . . . . . .
8.17 Product Recall Liability . . . . . . . . . . . . .
Section 9. COVENANTS. . . . . . . . . . . . . . . . . . . .
9.01 Financial Statements and Other Information . . . .
9.02 Litigation, Etc. . . . . . . . . . . . . . . . . .
9.03 Corporate Existence, Etc. . . . . . . . . . . . .
9.04 Use of Proceeds . . . . . . . . . . . . . . . . .
9.05 [Intentionally omitted . . . . . . . . . . . . . .
9.06 [Intentionally omitted . . . . . . . . . . . . . .
9.07 Interest Coverage Ratio . . . . . . . . . . . . .
9.08 Leverage Ratio . . . . . . . . . . . . . . . . . .
9.09 Net Worth . . . . . . . . . . . . . . . . . . . .
9.10 Independent Obligations of PSC . . . . . . . . . .
9.11 [Intentionally omitted . . . . . . . . . . . . . .
9.12 Restricted Payments . . . . . . . . . . . . . . .
9.13 Limitation on Consolidation, Merger,
Acquisitions and Dispositions . . . . . . . . .
9.14 Liens . . . . . . . . . . . . . . . . . . . . . .
9.15 Transactions with Affiliates . . . . . . . . . . .
9.16 Majority Interest Debt and Minority Interest
Debt . . . . . . . . . . . . . . . . . . . . . .
9.17 Investments . . . . . . . . . . . . . . . . . . .
9.18 Indebtedness . . . . . . . . . . . . . . . . . . .
9.19 [Intentionally omitted . . . . . . . . . . . . . .
9.20 Type of Business . . . . . . . . . . . . . . . . .
9.21 Hedging Arrangements . . . . . . . . . . . . . . .
9.22 Insurance . . . . . . . . . . . . . . . . . . . .
9.23 Additional Collateral . . . . . . . . . . . . . .
9.24 Certain Amendments . . . . . . . . . . . . . . . .
9.25 [Intentionally omitted . . . . . . . . . . . . . .
9.26 Subsidiary Dividend Payments . . . . . . . . . . .
9.27 Material Subsidiaries . . . . . . . . . . . . . .
9.28 [Intentionally omitted . . . . . . . . . . . . . .
Section 10. EVENTS OF DEFAULT. . . . . . . . . . . . . . . .
Section 11. THE AGENTS. . . . . . . . . . . . . . . . . . .
11.01 Appointment, Powers and Immunities . . . . . . .
11.02 Reliance by Agents . . . . . . . . . . . . . . .
11.03 Defaults . . . . . . . . . . . . . . . . . . . .
11.04 Rights as a Bank . . . . . . . . . . . . . . . .
11.05 Indemnification . . . . . . . . . . . . . . . . .
11.06 Non-Reliance on Agents and other Banks . . . . .
11.07 Failure to Act . . . . . . . . . . . . . . . . .
11.08 Resignation or Removal of Agents . . . . . . . .
Section 12. MISCELLANEOUS. . . . . . . . . . . . . . . . . .
12.01 No Waiver . . . . . . . . . . . . . . . . . . . .
12.02 Notices . . . . . . . . . . . . . . . . . . . . .
12.03 Expenses; Etc . . . . . . . . . . . . . . . . . .
12.04 Amendments; Etc . . . . . . . . . . . . . . . . .
12.05 Successors and Assigns . . . . . . . . . . . . .
12.06 Assignments and Participations . . . . . . . . .
12.07 Survival . . . . . . . . . . . . . . . . . . . .
12.08 Captions . . . . . . . . . . . . . . . . . . . .
12.09 Counterparts . . . . . . . . . . . . . . . . . .
12.10 GOVERNING LAW . . . . . . . . . . . . . . . . . .
12.11 Jurisdiction and Service of Process . . . . . . .
12.12 Waiver of Sovereign Immunity . . . . . . . . . .
12.13 Judgment Currency . . . . . . . . . . . . . . . .
12.14 Acknowledgment of Legal Existence . . . . . . . .
12.15 Confidentiality . . . . . . . . . . . . . . . . .
12.16 WAIVER OF TRIAL BY JURY . . . . . . . . . . . . .
SCHEDULES AND EXHIBITS
Schedule I - List of Commitments and Applicable Lending
Offices
Schedule II - List of Subsidiaries
Schedule III - List of Certain Agreements
Schedule IV - List of Existing Liens
Schedule V - List of Inventory
Schedule VI - Litigation
Schedule VII - [Intentionally omitted]
Schedule VIII - List of Product Recall Events
Schedule IX - [Intentionally omitted]
Schedule X - Hazardous Materials
Schedule XI - Consents
EXHIBIT A-1 - [Intentionally omitted]
EXHIBIT A-2 - Form of Series A R/C Note
EXHIBIT A-3 - Form of Series B R/C Note
EXHIBIT A-4 - Form of Letter of Credit Note
EXHIBIT B-1 - Forms of Pledge Agreements
EXHIBIT B-2 - Form of U.S. Security Agreement
EXHIBIT B-3 - Form of U.S. Patents Assignment
EXHIBIT B-4 - Form of Government Contract Assignment
EXHIBIT B-5 - Form of Mortgage/Leasehold Mortgage
EXHIBIT B-6 - Form of Mortgage Amendment
EXHIBIT C-1 - Form of Section 178 Assignment
EXHIBIT C-2 - Form of General Security Agreement
EXHIBIT C-3 - Form of Renewal Agreement
[Quebec]
EXHIBIT C-4 - Form of General Assignment of Book Debts
[British Columbia]
EXHIBIT C-5 - Form of Undertaking Re: Location of Accounts
Receivable
EXHIBIT D-1 - Form of NACCO Supplemental Agreement
EXHIBIT D-2 - Form of Housewares Supplemental Agreement
EXHIBIT D-3 - Form of Glen Dimplex Supplemental Agreement
EXHIBIT D-4 - Form of Glen Electric Supplemental Agreement
EXHIBIT D-5 - Form of Precis Supplemental Agreement
EXHIBIT D-6 - Form of Holdings Supplemental Agreement
EXHIBIT D-7 - Forms of Affiliate Supplemental Agreements
EXHIBIT D-8 - Form of Housewares Pledge Agreement
EXHIBIT D-9 - Form of Precis Pledge Agreement
EXHIBIT D-10 - Form of Holdings Pledge Agreement
EXHIBIT D-11 - Form of Precis Override Agreement
EXHIBIT D-12 - Form of Override Agreement
EXHIBIT E - Form of Process Agent Letter
EXHIBIT F - Form of Acknowledgement Letter
EXHIBIT G - Form of Compliance Certificate
EXHIBIT H - [Intentionally omitted]
EXHIBIT I-1 - [Intentionally omitted]
EXHIBIT I-2 - [Intentionally omitted]
EXHIBIT I-3 - [Intentionally omitted]
EXHIBIT I-4 - [Intentionally omitted]
EXHIBIT I-5 - Form of Opinion of Counsel to the Company
EXHIBIT I-6 - Form of Opinion of Counsel to PSC
EXHIBIT I-7 - [Intentionally omitted]
EXHIBIT I-8 - Form of Opinion of Local Counsel to the Company
EXHIBIT I-9 - Form of Opinion of General Counsel of the
Company
EXHIBIT J - Form of Opinion of Special Canadian Counsel to
the Banks
EXHIBIT K - Form of Opinion of Special New York Counsel to
the Banks and the Agents
EXHIBIT L - Form of Reconciliation Statement
EXHIBIT M - Form of Parent Advance Statement
EXHIBIT N - Form of Confirmation Agreement
AMENDED AND RESTATED CREDIT AGREEMENT dated as of
October 11, 1990, amended and restated as of May 10, 1994 among:
HAMILTON BEACH/PROCTOR-SILEX, INC. (the "Company"), a corporation
duly organized and validly existing under the laws of the State
of Delaware; PROCTOR-SILEX CANADA INC. ("PSC"), a corporation
duly organized and validly existing under the laws of the
Province of Ontario, Canada, and a Wholly-Owned Subsidiary (as
hereinafter defined) of the Company; PROCTOR-SILEX S.A. DE C.V.
("PSM"), a corporation duly organized and validly existing under
the laws of Mexico and a 99.2%-owned Subsidiary (as hereinafter
defined) of the Company; each of the banks or other financial
institutions that is a signatory hereto (individually, a "Bank"
and, collectively, the "Banks"); THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION), as United States agent for the Banks
(such agent in such capacity, together with its successors in
such capacity, the "U.S. Agent") and THE CHASE MANHATTAN BANK OF
CANADA, as Canadian agent for the Banks (such agent in such
capacity, together with its successors in such capacity, the
"Canadian Agent" and, together with the U.S. Agent, the
"Agents").
The Company, PSC, PSM, the Banks and the Agents are
party to a Credit Agreement dated as of October 11, 1990 (as in
effect immediately prior to the Amendment Effective Date referred
to below, the "Original Credit Agreement"). The Company, PSC and
PSM have requested that the Banks and the Agents agree to amend
and restate the Original Credit Agreement, and the Banks and the
Agents are willing to amend and restate the Original Credit
Agreement, all on the terms and conditions hereinafter set forth.
Accordingly, the parties hereto agree to amend and
restate the Original Credit Agreement so that, as amended and
restated, it reads in its entirety as provided herein.
Section 1. DEFINITIONS AND ACCOUNTING AND
COMPUTATIONAL MATTERS.
1.01 Certain Defined Terms. As used herein, the
following terms shall have the following meanings (all terms
defined in this Section 1.01 or in other provisions of this
Agreement in the singular to have the same meanings when used in
the plural and vice versa):
"Acquisition" shall mean any transaction, or any series
of related transactions, consummated after the date of this
Agreement, by which the Company and/or any of the
Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or
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division thereof, whether through purchase of assets, merger
or otherwise; (ii) directly or indirectly acquires (in one
transaction or as the most recent transaction in a series of
transactions) control of at least a majority (in number of
votes) of the securities of a corporation which have
ordinary voting power for the election of directors; or
(iii) directly or indirectly acquires control of a 5% or
more partnership or other ownership interest in any
partnership, joint venture or joint adventure.
"Acquisition Period" shall mean, with respect to each
fiscal year of the Company commencing with the fiscal year
of the Company ending December 31, 1995, the period from and
including the first day of the Restricted Payments Period
occurring in such fiscal year to but excluding the first day
of the Restricted Payment Period occurring in the fiscal
year of the Company immediately following such fiscal year.
"Additional Supplemental Agreements" shall have the
meaning assigned to that term in Section 1 of the Override
Agreement.
"Additional Supplemental Security Documents" shall have
the meaning assigned to that term in Section 1 of the
Override Agreement.
"Adjusted Cash Flow" shall mean, for any period, for
any Person and its Subsidiaries the amount equal to:
(i) Cash Flow for such period minus (ii) depreciation for
such period determined on a consolidated basis in accordance
with GAAP.
"Affiliate" shall mean, with respect to any Person, any
other Person or group of affiliated Persons directly or
indirectly controlling (including, without limitation, all
directors and officers of such Person), controlled by or
under direct or indirect common control with such Person. A
Person shall be deemed to control a corporation for purposes
of this definition if such Person possesses, directly or
indirectly, the power (i) to vote 10% or more of the
securities having ordinary voting power for the election of
directors of such corporation or (ii) to direct or cause the
direction of the management or policies of such corporation,
whether through the ownership of voting securities, by
contract or otherwise, provided that, in any event, any
Person which owns directly or indirectly 10% or more of the
securities having ordinary voting power for the election of
directors or other governing body of a corporation or 10% or
more of the partnership or other ownership interests of any
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other Person (other than as a limited partner of such other
Person) will be deemed to control such corporation or other
Person. Notwithstanding the foregoing: (a) no individual
shall be deemed to be an Affiliate of a Person solely by
reason of his or her being an officer or director of such
Person and (b) the Company and the Subsidiaries shall be
deemed not to be Affiliates of each other.
"Affiliate Supplemental Agreement" shall mean an
Agreement in substantially the form of Exhibits D-7-1 or D-
7-2 hereto, as applicable, entered into by a Subsidiary of a
Majority Interest Party or a Minority Interest Party, as at
any time amended or otherwise modified.
"Aggregate Outstanding Obligations" shall mean the sum
of (1) the aggregate principal amount of all Revolving
Credit Loans plus (2) the aggregate amount of all
Outstanding Letter of Credit Liabilities of all of the
Banks.
"Amendment Effective Date" shall mean the date on which
all of the conditions set forth in Section 7 hereof shall
have been satisfied or waived by the Banks and the Agents.
"Applicable Lending Office" shall mean, for each Bank
and for each type of Loan or participations in Letter of
Credit Liabilities, the Lending Office of such Bank
designated for such type of Loan or participations in Letter
of Credit Liabilities on Schedule I hereto or such other
office of such Bank as such Bank may from time to time
specify to the Agents and the Company as the office at which
its Loans of such type or participations in Letter of Credit
Liabilities are to be made and maintained.
"Applicable Margin" shall mean, with respect to each
type of Loan, letter of credit fees and commitment fees, for
the fiscal quarter commencing immediately following the
delivery of a Compliance Certificate pursuant to the last
sentence of Section 9.01 hereof, the percentage per annum
set forth in the schedule immediately below opposite the
Interest Coverage Ratio as at the last day of the
Computation Period of the Company covered by such Compliance
Certificate:
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I. Loans
Applicable Margin
Canadian Canadian
Interest Base Rate Floating Eurodollar Discount
Coverage Ratio Loans Rate Loans Loans Rate Loans
Level I Period .00% 0.00% 0.500% .500%
Level II Period .00% 0.00% 0.625% .625%
Level III Period .00% 0.00% 0.750% .750%
Level IV Period .00% 0.00% 1.000% 1.000%
Level V Period .25% 0.25% 1.250% 1.250%
II. Fees
Interest Letter of Commitment
Coverage Ratio Credit Fees Fees
Level I Period .375% .1875%
Level II Period .500% .2500%
Level III Period .550% .3125%
Level IV Period .625% .3750%
Level V Period .750% .5000%
provided that, prior to the second fiscal quarter in 1995,
Level I, II and III Periods will have the Applicable
Margins, Letter of Credit Fees and Commitment Fees otherwise
applicable to the Level IV Period; and provided further
that, if the Company shall fail to deliver the financial
statements and the accompanying Compliance Certificate
within the time periods specified in Section 9.01 hereof,
the Applicable Margin shall be at the numerical Level one
higher than the current Level (or, if the current Level is
Level V Period, Level V Period) for the fiscal quarter
commencing immediately following the date by which such
Compliance Certificate should have been so delivered. Prior
to the delivery of the first Compliance Certificate required
to be delivered after the Amendment Effective Date pursuant
to the last paragraph of Section 9.01 hereof, the Applicable
Margin shall be determined by reference to the Compliance
Certificate delivered pursuant to Section 7.01(e)(ii)
hereof.
"Application" shall mean, with respect to Casualty
Insurance Proceeds or Disposition Proceeds, for any
Computation Period, the application thereof by the Company
or the Subsidiary receiving such Casualty Insurance Proceeds
or Disposition Proceeds (by payment during such Computation
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Period or execution of a bona fide contract during such
Computation Period which may provide for payment in the
future) to the purchase price of an asset intended to
replace, or (in the case of Casualty Insurance Proceeds
only) to the repair of, the asset to which such Casualty
Insurance Proceeds or Disposition Proceeds relate. The verb
"Apply" shall have a correlative meaning.
"Bank Financial Accommodations" shall mean (i) Bank
Letters of Credit; (ii) Bank Line Loans; (iii) Interest Rate
Protection Arrangements between the Company and any Bank;
and (iv) Foreign Currency Hedging Arrangements between the
Company and any Bank.
"Bank Financial Accommodation Documents" shall mean
(i) Bank Letter of Credit Documents; (ii) Bank Line Loan
Documents; (iii) Interest Rate Protection Agreements between
the Company and any Bank relating to Interest Rate
Protection Arrangements; and (iv) Foreign Currency Hedging
Agreements between the Company and any Bank.
"Bank Letter of Credit Documents" shall mean, with
respect to any Bank Letter of Credit, collectively, such
Bank Letter of Credit, any amendments thereto, any documents
delivered thereunder, any application therefor and any other
agreements, instruments, guarantees and other documents
(whether general in application or applicable solely to such
Bank Letter of Credit) governing or providing for (i) the
rights and obligations of the parties concerned or at risk
or (ii) any collateral security for such obligations
permitted by Section 9.14(l) hereof.
"Bank Letter of Credit Liabilities" shall mean, at any
time, the sum (determined without duplication) of (i) the
aggregate outstanding and undrawn maximum face amount of all
Bank Letters of Credit plus (ii) Bank Letter of Credit
Reimbursement Obligations.
"Bank Letter of Credit Obligations" shall mean, at any
time, with respect to any Bank Letter of Credit, Bank Letter
of Credit Reimbursement Obligations relating thereto,
interest on such Bank Letter of Credit Reimbursement
Obligations and all other amounts payable with respect to
such Bank Letter of Credit in accordance with the related
Bank Letter of Credit Documents.
"Bank Letter of Credit Reimbursement Obligations" shall
mean, at any time, the obligations of the Company then
outstanding in respect of Bank Letters of Credit to
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reimburse the Bank or Banks that issued such Bank Letters of
Credit for the amount paid thereby in respect of a drawing
or drawings under such Bank Letters of Credit.
"Bank Letters of Credit" shall mean stand-by or
performance or trade letters of credit issued by any Bank
(other than Letters of Credit issued by the Issuing Bank),
and any acceptances created thereunder, for the account of
the Company that (i) expire or mature prior to the Revolving
Credit Commitment Termination Date; (ii) have an original
stated face amount not exceeding U.S.$3,000,000; and
(iii) shall be for the purpose of financing purchases of raw
materials, finished goods or supplies in the ordinary course
of business of the Company and the Subsidiaries or for the
purpose of supporting obligations in connection with
workmen's compensation obligations of the Company and the
Subsidiaries, obligations with respect to insurance programs
of the Company and the Subsidiaries and obligations with
respect to bid bonds, performance bonds or surety bonds of
the Company and the Subsidiaries furnished in the ordinary
course of business of the Company and the Subsidiaries. For
purposes of this Agreement, "Bank Letters of Credit" shall
(i) include any stand-by or performance or trade letter of
credit issued by a Bank (other than the Issuing Bank), and
any acceptances created thereunder outstanding on the
Closing Date and (ii) exclude any stand-by or performance or
trade letter of credit, and any acceptances created
thereunder (including, without limitation, any stand-by or
performance or trade letter of credit, and any acceptances
created thereunder, referred to in clause (i) above in this
sentence) issued by any Bank (other than the Issuing Bank)
that is the beneficiary of a Letter of Credit in respect of
such stand-by or performance or trade letter of credit, and
any acceptances created thereunder.
"Bank Line Loan Documents" shall mean, with respect to
any Bank Line Loan, collectively, the agreement governing
such Bank Line Loan, any amendments thereto, any documents
delivered thereunder, any promissory note evidencing such
Bank Line Loan and any other agreements, instruments,
guarantees and other documents (whether general in
application or applicable solely to such Bank Line Loan)
governing or providing for the rights and obligations of the
parties concerned or at risk.
"Bank Line Loans" shall mean loans by any Bank to the
Company that (i) are governed by Bank Line Loan Documents
that contain covenants and default provisions that are no
more onerous than the covenants and default provisions set
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forth in the Documents (except that such Bank Line Loans may
be payable on demand), (ii) are unsecured except pursuant to
the Security Documents and the Supplemental Security
Documents and except to the extent that bank accounts
maintained by the Company with such Bank that are subject to
set-off, counterclaim or bankers' liens or similar rights
constitute security and (iii) do not constitute Funded Debt.
"Bankers Acceptances" shall mean bankers acceptances
drawn by third parties and accepted by the Canadian
Reference Bank for terms of 30, 60, 90 or 180 days, as the
case may be.
"Base Rate" shall mean, with respect to any Base Rate
Loan, for any day, the higher of (i) the Federal Funds Rate
for such day plus 1/2 of 1% per annum or (ii) the Prime Rate
for such day. Each change in any interest rate provided for
herein based upon the Base Rate resulting from a change in
the Base Rate (or any component thereof) shall take effect
at the time of such change in the Base Rate.
"Base Rate Loans" shall mean Loans which, at the time,
pursuant to the terms of this Agreement, bear interest at
rates based upon the Base Rate.
"Basle Accord" shall mean the proposals for risk-based
capital framework described by the Basle Committee on
Banking Regulations and Supervisory Practices in its paper
entitled "International Convergence of Capital Measurement
and Capital Standards" dated July 1988, as amended, modified
or supplemented and in effect from time to time or any
replacement thereof.
"Bond Letters of Credit" shall mean any performance
letter of credit in the form customarily used by the Issuing
Bank at the time for transactions of the type involved
issued by the Issuing Bank for the account of the Company
that meets the requirements set forth in Section 2.01(II)
hereof (including, without limitation, Section 2.01(II)(a)
hereof).
"Borrowers" shall mean the Company and PSC.
"Business Day" shall mean any day on which commercial
banks are not authorized or required to close in New York,
New York and with respect to Canadian Dollar Loans, Toronto,
Ontario, Canada and, with respect to a borrowing of, a
payment or prepayment of principal of or interest on, or a
Conversion or Continuation of or into, or an Interest Period
- 8 -
for, a Eurodollar Loan, or a notice by the Company with
respect to any of the foregoing, which is also a day on
which dealings in U.S. Dollar deposits are carried out in
the London interbank market and, with respect to
determinations of the Canadian Dollar Spot Rate and the U.S.
Dollar Spot Rate, which is also a day on which dealings in
foreign currency are carried out in the London foreign
exchange market.
"Canadian Cash Collateral Account" shall have the
meaning assigned to that term in Section 2.10 of the General
Security Agreement referred to in clause (ii) of the
definition of "Canadian Security Documents" in this
Section 1.01.
"Canadian Discount Rate" shall mean, with respect to
Canadian Discount Rate Loans, the discount rate (expressed
as a percentage calculated on the basis of a year of 365
days) quoted by the Toronto office of the Canadian Reference
Bank at 10:00 a.m. (Toronto time) on the Canadian Discount
Borrowing Date as the discount rate the Canadian Reference
Bank would, in the normal course of its business, purchase
on such date Bankers Acceptances having a term comparable to
the Interest Period for such Canadian Discount Rate Loan and
having an aggregate face amount equal to CAN$1,000,000.
"Canadian Discount Rate Loans" shall mean Loans the
interest rates on which are at the time determined on the
basis of the Canadian Discount Rate.
"Canadian Discount Borrowing Date" shall mean the date
of borrowing of Canadian Discount Rate Loans designated by
the Borrower pursuant to Section 4.05 hereof.
"Canadian Dollar Banks" shall mean those Banks listed
on Schedule I hereto under the heading "Canadian Dollar
Banks" and any other Bank that may from time to time hold
Canadian Dollar Loans.
"Canadian Dollar Equivalent" shall mean, on any day,
and with respect to any amount of U.S. Dollars, the amount
of Canadian Dollars purchasable with such amount of U.S.
Dollars for delivery on such day, at the Canadian Dollar
Spot Rate in effect two Business Days before such day.
"Canadian Dollar Loans" shall have the meaning assigned
to that term in Section 2.01(I)(b)(ii).
- 9 -
"Canadian Dollar Spot Rate" shall mean, on any day, the
rate of exchange for the purchase by the London Branch of
Canadian Dollars with U.S. Dollars in the commercial bank
foreign exchange market in London for delivery two Business
Days after such day, quoted by the London Branch at
approximately 4:00 p.m. London time on such day (or the next
preceding Business Day, if such day is not a Business Day).
"Canadian Dollars" and "CAN$" shall mean lawful money
of Canada.
"Canadian Floating Rate" shall mean, with respect to
any Canadian Dollar Loan, for any day, the rate of interest
from time to time announced by Chase Canada at the Canadian
Office as its prime commercial lending rate for such day.
Each change in any interest rate provided for herein based
upon the Canadian Floating Rate shall take effect at the
time of such change in the Canadian Floating Rate.
"Canadian Floating Rate Loan" shall mean Canadian
Dollar Loans, the interest rates on which are at the time
determined on the basis of the Canadian Floating Rate.
"Canadian Office" shall mean the principal Toronto
office of the Canadian Agent and Chase Canada, presently
located at 150 King Street West, Toronto, Ontario M5H 1J9,
Canada.
"Canadian Reference Bank" shall mean Chase Canada.
"Canadian Security Documents" shall mean (i) a General
Assignment under Section 427 of the Bank Act (Canada)
(formerly Section 178(1)(a), (b), (c) or (e) of the Bank Act
(Canada)) in substantially the form of Exhibit C-1 hereto;
(ii) a General Security Agreement in substantially the form
of Exhibit C-2, hereto; (iii) a General Assignment for
Quebec; (iv) a General Assignment of Book Debts for the
Province of British Columbia in substantially the form of
Exhibit C-4 hereto; and (v) an Undertaking with respect to
the location of accounts receivable in substantially the
form of Exhibit C-5 hereto, each entered into by PSC, as
each may at any time be amended or otherwise modified.
"Capital Expenditures" shall mean expenditures for
fixed assets, plant and equipment (including renewals,
improvements and replacements, but excluding repairs) and
any such other expenditures required to be capitalized under
GAAP.
- 10 -
"Capital Lease Obligations" shall mean, as to any
Person, the obligations of such Person to pay rent or other
amounts under a lease of (or other agreement conveying the
right to use) real and/or personal property which
obligations are required to be classified and accounted for
as a capital lease on a balance sheet of such Person under
GAAP and, for purposes of this Agreement, the amount of such
obligations shall be the capitalized amount thereof,
determined in accordance with GAAP.
"Cash Collateral Account" shall have the meaning
assigned to that term in Section 4.C of the Security
Agreement.
"Cash Flow" shall mean, for any period, the sum of the
following for any Person and its Subsidiaries (if any)
determined on a consolidated basis in accordance with GAAP:
(i) income before taxes for such period minus (ii) equity
earnings of unconsolidated Subsidiaries and Affiliates for
such period (or plus equity losses of unconsolidated
Subsidiaries and Affiliates for such period, as the case may
be) plus (iii) to the extent not included in clause (vi)
below, the amount by which (x) non-cash charges in
connection with transactions involving charges to income of
$1,000,000 or more in any individual transaction and
classified as long-term deferrals in accordance with GAAP
for such period exceed (y) cash charges for such period
relating to non-cash charges of the type referred to in
clause (iii)(x) of this definition and included in the
computation of "Cash Flow" for any previous period (or minus
the amount by which the cash charges described in the
immediately preceding clause (iii)(y) exceed the non-cash
charges described in the immediately preceding clause
(iii)(x)) plus (iv) Interest Expense for such period plus
(v) depreciation and amortization for such period plus (vi)
with respect to any period that "Cash Flow" is computed by
reference to financial statements relating to any fiscal
period ending on or before December 31, 1993, the amount
specified opposite "Other, Net Items" on the financial
statements of such Person and its Subsidiaries.
"Casualty Insurance Proceeds" shall mean, with respect
to any fixed assets, plant or equipment of the Company or
any Subsidiary, casualty insurance proceeds received by the
Company or such Subsidiary in connection with damage to, or
destruction of, the same.
"CERCLA" shall have the meaning assigned to that term
in Section 8.16 hereof.
- 11 -
"CERCLIS" shall have the meaning assigned to that term
in Section 8.16 hereof.
"Chase" shall mean The Chase Manhattan Bank (National
Association).
"Chase Canada" shall mean The Chase Manhattan Bank of
Canada.
"Clean-Down Limit" shall mean, with respect to each day
of any Clean-Down Period, the excess (if any) of
(i) (a) U.S.$80,000,000 (for the Initial Clean-Down Period)
and $75,000,000 (for each subsequent Clean-Down Period) plus
(b) the amount of the Holdings Dividend over (ii) the sum of
(a) the aggregate amount of the reductions in excess of
$5,000,000 of the Revolving Credit Commitments pursuant to
Section 2.03 hereof plus (b) the aggregate amount of the
reductions of the Revolving Credit Commitments pursuant to
Section 3.03(c) hereof.
"Clean-Down Parent Advances" shall mean, with respect
to each day of any Clean-Down Period, the amount of Parent
Advances equal to (i) the amount of (a) the outstanding
principal amount of the Revolving Credit Loans on such day
plus (b) the outstanding principal amount of the Parent
Advances on such day minus (ii) the amount of the Clean-Down
Limit in effect on such day.
"Clean-Down Period" shall mean a period of 30
consecutive days commencing on any day during (i) the first
fiscal quarter in the fiscal year of the Company ending
December 31, 1995 (the "Initial Clean-Down Period") and (ii)
the first fiscal quarter in each fiscal year of the Company
thereafter, in each case as specified by the Company in
writing to the Agents and the Banks; provided that the last
day of the Clean-Down Period must occur prior to the last
Business Day of such first fiscal quarter.
"Closing Date" shall mean October 11, 1990.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Commercial Letters of Credit" shall mean any sight or
standby letter of credit in the form customarily used by the
Issuing Bank at the time for transactions of the type
involved issued by the Issuing Bank for the account of the
Company that meets the requirements set forth in
- 12 -
Section 2.01(II) hereof (including, without limitation,
Section 2.01(II)(a) hereof).
"Commitment" shall mean, as to each U.S. Dollar Bank,
its Revolving Credit Commitment.
"Compliance Certificate" shall have the meaning
assigned to that term in the last paragraph of Section 9.01
hereof.
"Computation Period" shall mean the period of four
consecutive complete fiscal quarters of the Company ending
on, or most recently ended prior to, any date of
determination.
"Confirmation Agreement" shall mean the Confirmation
Agreement dated as of the Amendment Effective Date among the
Company, Housewares, Precis, Holdings, PSC, NACCO, Glen
Dimplex, Glen Electric, the Agents and the Canadian Dollar
Banks, in substantially the form of Exhibit N hereto, as the
same may be amended, supplemented and in effect from time to
time.
"Contingent Event" shall mean that the following event
shall occur and be continuing: Net Worth of the Company
shall not exceed the level therefor established in
Section 9.09 hereof by more than U.S.$100,000 and the
Company (or NACCO) shall have obtained a ruling from the
Internal Revenue Service to the effect that (or Section 956
of the Code (or the regulations thereunder) shall be
modified with the effect that) neither PSC nor PSM will, as
a result of its agreement to undertake the obligations set
forth in Section 6.01(a) hereof (without regard to
Section 6.01(b) hereof), be considered to hold or to have
acquired any obligation of a United States person within the
meaning of Section 956(c) of the Code, until such time, if
ever, as the Net Worth of the Company shall not exceed the
level therefor established in Section 9.09 hereof by more
than U.S.$100,000.
"Continue", "Continuation" and "Continued" shall refer
to the continuation of a Eurodollar Loan or Canadian
Discount Rate Loan from one Interest Period to the next
Interest Period.
"Convert", "Conversion" and "Converted" shall refer to
a conversion pursuant to Section 2.08 hereof of Loans of one
type into Loans of another type, which may be accompanied by
the transfer by a Bank (in its sole discretion) of the
- 13 -
booking location of a Loan from one Applicable Lending
Office to another.
"Corporation" shall mean (i) any Obligor and any
Subsidiary of any Obligor and (ii) NACCO.
"CPSC" shall mean the United States Consumer Product
Safety Commission or any successor thereto.
"date of this Agreement" and "date hereof" shall mean
October 11, 1990.
"Debt Service" shall mean, for any period, the sum of
(i) all Interest Expense of the Company for such period plus
(ii) all payments of principal of Funded Debt (including,
without limitation, the Loans) required to be made during
such period (determined on a consolidated basis for the
Company and the Subsidiaries in accordance with GAAP) and
which cannot be reborrowed (as Loans of the same type or
Series in the case of Loans) under the governing instruments
with respect to such Indebtedness (including, without
limitation, imputed principal payments on Capital Lease
Obligations determined in accordance with GAAP and
prepayments required to be made in conjunction with a
regularly scheduled reduction in a creditor's commitment to
lend).
"Default" shall mean an Event of Default or an event
which with notice or lapse of time or both would become an
Event of Default.
"Disposition Proceeds" shall mean, with respect to any
asset Disposed of by the Company or any Subsidiary (other
than Dispositions permitted by Section 9.13(c) hereof), cash
proceeds received by the Company or such Subsidiary (net of
expenses and taxes directly attributable to such Disposition
borne by the Company or such Subsidiary).
"Dispositions" shall mean any sale, assignment, lease,
transfer or other disposition of any asset of the Company or
a Subsidiary (other than Inventory in the ordinary course of
business). The verb "Dispose" shall have a correlative
meaning.
"Documents" shall mean, collectively, this Agreement,
the Notes, the Security Documents, the Letter of Credit
Documents, the Holdings Documents, the Majority Interest
Documents, the Minority Interest Documents and each of the
- 14 -
other agreements, instruments or documents contemplated by
or referred to in this Agreement.
"Environmental Law" means any and all federal, state,
provincial, local and foreign statutes, laws, regulations,
ordinances, rules, judgments, orders, guidelines, decrees,
permits, concessions, grants, franchises, licenses,
agreements or other governmental restrictions relating to
the environment or the release of any materials into the
environment.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time.
"ERISA Affiliate" shall mean, with respect to any
Person, any corporation or trade or business which is a
member of the same controlled group of corporations (within
the meaning of Section 414(b) of the Code) as such Person or
is under common control (within the meaning of
Section 414(c) of the Code) with such Person. Unless the
context otherwise requires, references in this Agreement to
an "ERISA Affiliate" shall be deemed to be references to an
ERISA Affiliate of the Company.
"Eurodollar Loans" shall mean Loans the interest rates
on which are at the time determined on the basis of the
Fixed Base Rate.
"Event of Default" shall have the meaning assigned to
that term in Section 10 hereof.
"Existing Alcoa Stock Purchase Agreement" shall mean
the Stock Purchase Agreement dated as of September 27, 1982
between Aluminum Corporation of America and Wesray Products,
Inc. (a predecessor of the Company as successor to Proctor-
Silex), together with all schedules, exhibits, annexes and
supplements thereto, as at any time amended or otherwise
modified.
"Existing Altoona Purchase and Sale Agreement" shall
mean the Contract for the Purchase and Sale of Real Estate
executed as of the 26th day of June, 1990 between the
Company (as successor to Proctor-Silex) and Northern Chatham
Bedding Company, Inc., together with all schedules,
exhibits, annexes and supplements thereto, as at any time
amended or otherwise modified.
"Existing Hamilton Beach Acquisition Documents" shall
mean the Stock Purchase Agreement dated October 7, 1986
- 15 -
between the Company (as successor to HB Holdings
Corporation) and Scovill, Inc., together with all schedules,
exhibits, annexes and supplements thereto, as at any time
amended or otherwise modified.
"Existing Proctor-Silex Acquisition Documents" shall
mean the Agreement of Merger among NACCO, Housewares and the
Company (as successor to Proctor-Silex), together with all
schedules, exhibits, annexes and supplements thereto, as at
any time amended or otherwise modified.
"Existing WearEver Purchase and Sale Agreement" shall
mean the Agreement of Purchase and Sale dated as of January
30, 1989 by and between the Company (as successor to
Proctor-Silex) and Anchor Hocking Corporation, together with
all schedules, exhibits, annexes and supplements thereto, as
at any time amended or otherwise modified.
"FAS 109" shall mean Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes, issued
February 1992.
"Federal Bankruptcy Code" shall mean the Bankruptcy
Reform Act of 1978, as amended, as the same may be further
amended, and any other applicable law with respect to
bankruptcy, insolvency or reorganization that is successor
thereto.
"Federal Funds Rate" shall mean, for any day, the rate
per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) equal to the weighted average of the rates on
overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on
such day, as published by the Federal Reserve Bank of New
York on the Business Day next succeeding such day, provided
that (i) if the day for which such rate is to be determined
is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next
preceding Business Day as so published on the next
succeeding Business Day, and (ii) if such rate is not so
published for any day, the Federal Funds Rate for such day
shall be the average rate charged to Chase on such day on
such transactions as determined by the U.S. Agent.
"Fee Mortgage" shall mean an Indenture of Mortgage,
Deed of Trust, Assignment of Rents, Security Agreement and
Fixture Filing in substantially the form of Exhibit B-5
hereto (or otherwise satisfactory to the U.S. Agent),
entered into by the Company covering, among other things,
- 16 -
real property of the Company located in Collierville,
Tennessee, as amended by Amendment No. 1 thereto in
substantially the form of Exhibit B-6 hereto, as at any time
further amended, extended or otherwise modified or replaced.
"Fixed Base Rate" shall mean, with respect to an
Interest Period for a Eurodollar Loan, the arithmetic mean,
as determined by the U.S. Agent, of the rates per annum
(rounded upwards, if necessary, to the nearest 1/16 of 1%)
quoted by each of the Reference Banks and notified to the
U.S. Agent at approximately 11:00 a.m. London time (or as
soon thereafter as practicable) on the date two Business
Days prior to the first day of such Interest Period for the
offering by such Reference Bank to leading banks in the
London interbank market of U.S. Dollars for deposit for a
term comparable to such Interest Period and in an amount
comparable to the aggregate principal amount of the
Eurodollar Loans to be held by such Reference Bank for such
Interest Period. If any Reference Bank does not timely
furnish such information for determination of any Fixed Base
Rate, the U.S. Agent shall determine such Fixed Base Rate on
the basis of information timely furnished by the remaining
Reference Banks.
"Fixed Charges" shall mean, for any period, the sum
(computed without duplication) of (i) Net Capital
Expenditures made by the Company and its Subsidiaries during
such period plus (ii) Debt Service for such period plus
(iii) the provision for Federal, state and foreign income
taxes ("Subject Income Taxes") provided for on the financial
statements of the Company and its Subsidiaries for such
period minus (iv) provision for Subject Income Taxes
(benefit) provided for on the financial statements of the
Company and its Subsidiaries for such period.
"Fixed Rate" shall mean, for any Eurodollar Loan, for
any Interest Period therefor, a rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%)
determined by the U.S. Agent to be equal to the Fixed Base
Rate for such Loan for such Interest Period divided by (1
minus the Reserve Requirement) for such Loan for such
Interest Period.
"Fixed Rate Loans" shall mean Eurodollar Loans and
Canadian Discount Rate Loans.
"Foreign Currency Hedging Agreements" shall mean, with
respect to any Foreign Currency Hedging Arrangement,
collectively, the agreement governing such Foreign Currency
- 17 -
Hedging Arrangement, any amendments thereto, any documents
delivered thereunder and any other instruments, guarantees
and other documents (whether general in application or
applicable solely to such Foreign Currency Hedging
Arrangement) governing or providing for the rights and
obligations of the parties concerned or at risk.
"Foreign Currency Hedging Arrangements" shall mean a
forward currency purchase agreement or other similar
arrangement for the transfer or mitigation of currency
fluctuation risk.
"Funded Debt" shall mean all Indebtedness of the
Company or any of its Subsidiaries (other than Indebtedness
owing to the Company or any of its Subsidiaries) that
(a) matures more than one year from the date of its creation
or matures within one year of the date of its creation but
is renewable or extendable, at the option of the Company or
any of its Subsidiaries, to a date more than one year from
the date of its creation or (b) arises under a revolving
credit or similar agreement that obligates (or, that upon
the exercise of an option by the Company or any of its
Subsidiaries, would obligate) the lender or lenders
thereunder to extend credit during a period of more than one
year from the date of its creation.
"GAAP" shall mean, except where otherwise expressly
noted, generally accepted accounting principles in the
United States.
"General Assignment for Quebec" shall mean the General
Assignment of Book Debts for the Province of Quebec dated
October 11, 1990 as amended by the Renewal Agreement.
"Glen Dimplex" shall mean Glen Dimplex, an unlimited
corporation organized under the laws of the Republic of
Ireland.
"Glen Dimplex Supplemental Agreement" shall mean an
Agreement in substantially the form of Exhibit D-3 hereto
entered into by Glen Dimplex, as at any time amended or
otherwise modified.
"Glen Electric" shall mean Glen Electric, Ltd., a
corporation organized under the laws of Northern Ireland.
"Glen Electric Supplemental Agreement" shall mean an
Agreement in substantially the form of Exhibit D-4 hereto
- 18 -
entered into by Glen Electric, as at any time amended or
otherwise modified.
"Government Contract" shall mean a contract between the
Company or a Subsidiary and a government, or an agency or
instrumentality or political subdivision thereof, providing
for the sale of Inventory or performance of services in the
ordinary course of business of the Company or such
Subsidiary.
"Government Contract Assignment" shall mean an
Assignment of Government Contracts in substantially the form
of Exhibit B-4 hereto entered into by the Company, as at any
time amended or otherwise modified.
"Guarantee" by any Person shall mean any obligation,
contingent or otherwise, of such Person directly or
indirectly guaranteeing any Indebtedness of the type
described in clauses (i) through (iv) (inclusive) of the
definition of "Indebtedness" in this Section 1.01 of any
other Person or in any manner providing for the payment of
any such Indebtedness of any other Person or otherwise
protecting the holder of such Indebtedness against loss
(whether by agreement to keep-well, to purchase assets,
goods, securities, Indebtedness or services, or to
take-or-pay or otherwise), provided that the term
"Guarantee" shall not include endorsements for collection or
deposit in the ordinary course of business. The term
"Guarantee" used as a verb shall have a correlative meaning.
"Guaranteed Obligations" shall mean (i) with respect to
the Company in its capacity as a Guarantor, the principal
of, and interest on, each Canadian Dollar Loan and all other
amounts (including, without limitation, amounts payable
under Sections 5.06 and 12.03 hereof but excluding amounts
payable under Section 6 hereof) whatsoever payable by PSC,
PSM or any other Guarantor (other than the Company) under
this Agreement, any Security Document or the Series B R/C
Notes; (ii) with respect to PSC, the principal of, and
interest on, each U.S. Dollar Loan and each Letter of Credit
Obligation and all other amounts (including, without
limitation, amounts payable under Section 5.06 and 12.03
hereof but excluding amounts payable under Section 6 hereof)
whatsoever payable by the Company or any other Guarantor
that is a corporate Subsidiary of PSC under this Agreement,
any Security Document, any Letter of Credit Document, any
Bank Financial Accommodation Document or the Series A R/C
Notes or the Letter of Credit Note; (iii) with respect to
PSM, the principal of, and interest on, each Loan and each
- 19 -
Letter of Credit Obligation and all amounts (including,
without limitation, amounts payable under Sections 5.06 and
12.03 hereof) whatsoever payable by the Company or any
Guarantor (other than PSM) under this Agreement, any
Security Document, any Letter of Credit Document, any Bank
Financial Accommodation Document or any Note; and (iv) with
respect to any Guarantor (other than the Company, PSC or
PSM), the principal of, and interest on, each Loan and each
Letter of Credit Obligation and all other amounts
(including, without limitation, amounts payable under
Sections 5.06 and 12.03 hereof) whatsoever payable by the
Company or any Guarantor (other than such Guarantor) under
this Agreement, any Security Document, any Letter of Credit
Document, any Bank Financial Accommodation Document or any
Note.
"Guarantors" shall mean (i) the Company; (ii) PSC (upon
the occurrence of a Contingent Event); (iii) PSM (upon the
occurrence of a Contingent Event); and (iv) any Material
Subsidiary that becomes a "Guarantor" by operation of
Section 9.27(b) hereof.
"Hamilton Beach" shall mean Hamilton Beach Inc., a
Delaware corporation and the predecessor of the Company.
"Hazardous Materials" shall have the meaning assigned
to that term in Section 8.16 hereof.
"Holdings" shall mean HB-PS Holding Company, Inc., a
Delaware corporation and the holder of 100% of the common
stock of the Company.
"Holdings Dividend" shall mean the dividend in cash
made by the Company to Holdings no later than 90 days after
the Amendment Effective Date in an amount up to but not
exceeding $15,000,000.
"Holdings Documents" shall mean the Holdings Pledge
Agreement and the Holdings Supplemental Agreement.
"Holdings Pledge Agreement" shall mean the Pledge
Agreement in substantially the form of Exhibit D-10 hereto
entered into by Holdings, as at any time amended or
otherwise modified.
"Holdings Supplemental Agreement" shall mean an
Agreement in substantially the form of Exhibit D-6 hereto
entered into by Holdings, as at any time amended or
otherwise modified.
- 20 -
"Housewares" shall mean Housewares Holding Company, a
Delaware corporation and a Wholly-Owned Subsidiary of NACCO.
"Housewares Pledge Agreement" shall mean the Pledge
Agreement in substantially the form of Exhibit D-8 hereto
entered into by Housewares, as at any time amended or
otherwise modified.
"Housewares Supplemental Agreement" shall mean an
Agreement in substantially the form of Exhibit D-2 hereto
entered into by Housewares, as at any time amended or
otherwise modified.
"Indebtedness" shall mean, as to any Person: (i) all
obligations of such Person for borrowed money (including,
without limitation, Intercompany Advances and Parent
Advances to such Person) or evidenced by bonds, debentures,
notes or similar instruments; (ii) all obligations of such
Person for the deferred purchase price of property or
services, except trade accounts payable arising in the
ordinary course of business which are not overdue for more
than 90 days; (iii) all Capital Lease Obligations of such
Person; (iv) all obligations of such Person, contingent or
otherwise, in respect of any letters of credit, bankers'
acceptances or surety bonds, bid bonds or performance bonds;
and (v) all Indebtedness of the type described in clauses
(i) through (iv) (inclusive) above of others secured by a
Lien on any asset of such Person or Guaranteed by such
Person. As used herein, the term "Indebtedness" shall
exclude obligations of the Company with respect to the
Interest Rate Protection Arrangements and Foreign Currency
Hedging Arrangements.
"Indemnity Agreement" shall mean the Indemnity
Agreement dated as of October 11, 1990 by and among Hamilton
Beach, Glen Dimplex, Precis and Glen Electric, as at any
time amended or otherwise modified.
"Individual Outstanding Obligations" shall mean, with
respect to any U.S. Dollar Bank, the sum of (1) the
outstanding principal amount of the Series A R/C Loans owing
to such Bank at such time plus (2) the outstanding principal
amount of the Series B R/C Loans owing to the Affiliate of
such Bank that is a Canadian Dollar Bank plus (3) such
Bank's Outstanding Letter of Credit Liabilities.
"Initial Clean-Down Period" shall have the meaning
assigned to such term in the definition of the term Clean-
Down Period.
- 21 -
"Intercompany Advances" shall mean (i) advances made to
a Subsidiary by the Company and (ii) advances to the Company
by a Subsidiary.
"Intercompany Receivables" shall mean (i) Receivables
payable by the Company to a Subsidiary or (ii) Receivables
payable by a Subsidiary to the Company.
"Interest Coverage Ratio" shall mean, at any time, for
the Company and its Subsidiaries, the ratio of (i) Adjusted
Cash Flow for the current Computation Period to (ii)
Interest Expense for the current Computation Period.
"Interest Expense" shall mean, for any period, for any
Person and its Subsidiaries (if any) determined on a
consolidated basis in accordance with GAAP, the sum of
(i) all interest accrued during such period on Indebtedness
of such Person and its Subsidiaries (whether or not paid
during such period) plus (ii) the net amounts payable by the
Company and the Subsidiaries (or minus the net amounts
receivable by the Company and the Subsidiaries) under
Interest Rate Protection Agreements (whether or not actually
paid or received during such period); provided that
"Interest Expense" shall exclude to the extent included
accrued commitment fees payable under Section 2.04(a) hereof
and accrued letter of credit fees payable under
Section 2.01(II)(a)(4) hereof, in each case for the period
of determination.
"Interest Period" shall mean:
(a) With respect to any Eurodollar Loan, each period
commencing on the date such Loan is made or is Converted
from a Loan of another type or the last day of the next
preceding Interest Period for such Loan, and ending on the
numerically corresponding day in the first, second, third or
sixth month thereafter, as the Company may select as
provided in Section 4.05 hereof, except that (1) on the
Amendment Effective Date the Company may select, in
accordance with Section 4.05 hereof, an Interest Period
commencing on the date three Business Days after the
Amendment Effective Date and ending on the numerically
corresponding day twenty-one days thereafter and (2) each
Interest Period which commences on the last Business Day of
a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent
calendar month) shall end on the last Business Day of the
appropriate subsequent calendar month.
- 22 -
(b) With respect to any Canadian Discount Rate Loan,
each period commencing on the date such Loan is made or is
Converted from a Loan of another type or the last day of the
next preceding Interest Period for such Loan, and ending on
the Business Day 30, 60, 90 or 180 days thereafter, as the
Company may select as provided in Section 4.05 hereof.
Notwithstanding the foregoing: (i) if any Interest Period
would otherwise commence before and end after the Revolving
Credit Termination Date, such Interest Period shall end on
the Revolving Credit Termination Date; (ii) each Interest
Period that would otherwise end on a day which is not a
Business Day shall end on the next succeeding Business Day;
(provided that, if such next succeeding Business Day falls
in the next succeeding calendar month, such Interest Period
shall end on the next preceding Business Day); and (iii) the
Company shall select the duration of Interest Periods in
such a way so that, notwithstanding clauses (i) and (ii)
above, no Interest Period in respect of Eurodollar Loans
shall have a duration of less than one month (except as
provided in clause (1) of paragraph (a) above) and no
Interest Period in respect of Canadian Discount Rate Loans
shall have a duration of less than 30 days (and, if any
Eurodollar Loans or Canadian Discount Rate Loans would
otherwise have an Interest Period of a shorter duration,
they shall be Base Rate Loans or Canadian Floating Rate
Loans, as the case may be, for the relevant period).
"Interest Rate Protection Agreements" shall mean, with
respect to any Interest Rate Protection Arrangement,
collectively, the agreement governing such Interest Rate
Protection Arrangement, any amendments thereto, any
documents delivered thereunder and any other instruments,
guarantees and other documents (whether general in
application or applicable solely to such Interest Rate
Protection Arrangement) governing or providing for the
rights and obligations of the parties concerned or at risk.
"Interest Rate Protection Arrangements" shall mean an
interest rate swap, cap or collar agreement or similar
arrangement providing for the transfer or mitigation of
interest risks either generally or under specific
contingencies.
"Inventory" shall mean, with respect to any Person, all
inventory (as defined in the Uniform Commercial Code of the
State of New York) of such Person, wherever located, now or
hereafter existing (including, but not limited to, (i) any
specific items or types of inventory set forth on Schedule V
- 23 -
hereto; (ii) raw materials and finished goods (but not work
in process); (iii) goods in which such Person has an
interest in mass or a joint or other interest or right of
any kind; and (iv) goods which are returned to or
repossessed by such Person) and all accessions thereto and
products thereof.
"Investment" by the Company or any of the Subsidiaries
shall mean:
(i) the amount paid or committed to be paid, or
the value of property or services contributed or
committed to be contributed, by the Company or such
Subsidiary for or in connection with any stock, bonds,
notes, debentures, partnership or other ownership
interests or other securities of any Person; and
(ii) the amount of any advance, loan or extension
of credit to any Person by the Company or such
Subsidiary (including, without limitation, Intercompany
Advances and Intercompany Receivables) but excluding
(a) any such advance, loan or extension of credit
having a term not exceeding one year made by the
Company or such Subsidiary to trade customers of the
Company or such Subsidiary (excluding Affiliates of the
Company or such Subsidiary in respect of transactions
permitted by Section 9.15 hereof) in the ordinary
course of the Company's or such Subsidiary's business
and (b) advances to employees of the Company or such
Subsidiary in the ordinary course of business for the
purpose of defraying travel, relocation and business
expenses and (without duplication) any such amount
committed to be advanced, loaned or extended to any
such employee by the Company or such Subsidiary.
"Issuance" shall mean (a) any issuance or sale by the
Company or any of its Subsidiaries after the Amendment
Effective Date of (i) any capital stock, (ii) any warrants
or options exercisable in respect of capital stock (other
than any warrants or options issued to directors, officers
or employees of the Company or any of its Subsidiaries
pursuant to employee benefit plans established in the
ordinary course of business and any capital stock of the
Company issued upon the exercise of such warrants or
options), (iii) any other security or instrument
representing an equity interest (or the right to obtain any
equity interest) in the Company or any of its Subsidiaries,
(iv) any Funded Debt or (b) the receipt by the Company or
any of its Subsidiaries after the Amendment Effective Date
- 24 -
of any capital contribution (whether or not evidenced by any
equity security issued by the recipient of such
contribution); provided that Issuance shall not include
(x) any such issuance or sale by any Subsidiary of the
Company to the Company or any Wholly Owned Subsidiary of the
Company, (y) any capital contribution by the Company or any
Wholly Owned Subsidiary of the Company to any Subsidiary of
the Company or (z) any Parent Advances.
"Issuing Bank" shall mean Chase or a Bank serving as
Chase's successor in Chase's capacity as issuer of Letters
of Credit under Section 2.01(II) hereof.
"Leasehold Mortgages" shall mean, an Indenture of
Leasehold Mortgage, Deed of Trust, Assignment of Rents,
Security Agreement and Fixture Filing for each of the below
listed properties, each in substantially the form of Exhibit
B-5 hereto (or otherwise satisfactory to the U.S. Agent),
entered into by the Company covering, among other things,
leasehold interests of the Company in property located in
Glen Allen, Virginia and Washington, North Carolina, each as
amended by Amendment No. 1 thereto in substantially the form
of Exhibit B-6 hereto, as at any time further amended,
extended or otherwise modified or replaced.
"Letters of Credit" shall mean Commercial Letters of
Credit, Bond Letters of Credit and Letters of Indemnity.
"Letter of Credit Documents" shall mean, with respect
to any Letter of Credit, collectively, such Letter of
Credit, any amendments thereto, any documents delivered
thereunder, any application therefor and any other
agreements, instruments, guarantees or other documents
(whether general in application or applicable solely to such
Letter of Credit) governing or providing for (i) the rights
and obligations of the parties concerned or at risk or
(ii) any collateral security for such obligations.
"Letter of Credit Liabilities" shall mean, at any time,
the sum (determined without duplication) of (i) the
aggregate outstanding and undrawn maximum face amount of all
Letters of Credit plus (ii) Reimbursement Obligations.
"Letter of Credit Note" shall have the meaning assigned
to that term in Section 2.07(c) hereof.
"Letter of Credit Obligations" shall have the meaning
assigned to that term in Section 2.01(II)(d) hereof.
- 25 -
"Letter of Credit Percentage" shall mean, with respect
to any U.S. Dollar Bank for any Letter of Credit, the
quotient (expressed as a percentage) equal to (A) the unused
amount of such Bank's Revolving Credit Commitment at the
time of the issuance of such Letter of Credit divided by (B)
the aggregate amount of the unused Revolving Credit
Commitments of all U.S. Dollar Banks at the time of the
issuance of such Letter of Credit.
"Letter of Credit Sublimit" shall mean U.S.$15,000,000.
"Letter of Indemnity" shall mean any letter of
indemnity in the form customarily used by the Issuing Bank
at the time for transactions of the type involved issued by
the Issuing Bank for the account of the Company in
connection with a transaction under which a Commercial
Letter of Credit has been issued.
"Level" shall mean any of Level I Period, Level II
Period, Level III Period, Level IV Period or Level V Period,
as the case may be.
"Level I Period" shall mean any period during which the
Interest Coverage Ratio is greater than or equal to 3.50 to
1.
"Level II Period" shall mean any period during which
the Interest Coverage Ratio is less than 3.50 to 1 but
greater than or equal to 3.0 to 1.
"Level III Period" shall mean any period during which
the Interest Coverage Ratio is less than 3.0 to 1 but
greater than or equal to 2.75 to 1.
"Level IV Period" shall mean any period during which
the Interest Coverage Ratio is less than 2.75 to 1 but
greater than or equal to 2.50 to 1.
"Level V Period" shall mean any period during which the
Interest Coverage Ratio is less than 2.50 to 1.
"Leverage Ratio" shall mean, on any day, the ratio of
(a) Total Debt of the Company and the Subsidiaries as of
such day determined on a consolidated basis in accordance
with GAAP to (b) the sum of (i) Net Worth of the Company
plus (ii) Total Debt.
"Lien" shall mean, with respect to any asset, any
mortgage, hypothec, deed of trust, lien, pledge, charge,
- 26 -
security interest or encumbrance of any kind in respect of
such asset (including any agreement to give any of the
foregoing), any conditional sale or other title retention
agreement, any lease or charter in the nature thereof, and
the filing of or agreement to give any financing statement
under the Uniform Commercial Code (or filing of like
intendment under applicable law) of any jurisdiction.
"Loans" shall mean Revolving Credit Loans.
"London Branch" shall mean the principal London Branch
of Chase.
"Majority Banks" shall mean, at any time, (i) except as
expressly set forth in clause (ii) below, U.S. Dollar Banks
having at least 51% of the Commitments (whether or not
utilized) and (ii) for purposes of the last paragraph of
Section 10 hereof and at all times after any action
specified in said last paragraph of Section 10 has been
taken or has occurred, if at the time of application of said
paragraph Loans are outstanding, U.S. Dollar Banks holding
at least 51% of the aggregate outstanding principal amount
of the Loans (solely for which purpose, Loans held by a
Canadian Dollar Bank shall be deemed to be held by the U.S.
Dollar Bank of which such Canadian Dollar Bank is an
Affiliate).
"Majority Interest Debt" shall mean NACCO Debt (as
defined in the NACCO Supplemental Agreement), Housewares
Debt (as defined in the Housewares Supplemental Agreement)
and Subsidiary Debt (as defined in any Affiliate
Supplemental Agreement to which an Affiliate of NACCO is a
party).
"Majority Interest Documents" shall mean each
Supplemental Agreement to which a Majority Interest Party is
a party and each Supplemental Security Document to which a
Majority Interest Party is a party.
"Majority Interest Party" shall mean NACCO, Housewares,
each Affiliate of NACCO party to an Affiliate Supplemental
Agreement and each holder from time to time of Majority
Interest Debt.
"Management Fee" shall mean a fee to any Affiliate of
the Company with respect to administrative and other
managerial services performed by such Person for the Company
and the Subsidiaries. As used herein, the term "Management
Fee" shall exclude reimbursement of out-of-pocket costs and
- 27 -
expenses incurred by an Affiliate of the Company on behalf
of the Company and the Subsidiaries.
"Management Financial Forecasts" shall mean the
financial forecasts prepared by the Company and furnished to
the Banks prior to the Amendment Effective Date.
"Material Subsidiary" shall mean, with respect to the
Company, PSC, PSM and each other Subsidiary of the Company
(i) having at any time Net Worth in excess of U.S.$1,000,000
(or a U.S. Dollar Equivalent) or (ii) acquired in accordance
with Section 9.13(b) hereof for consideration in excess of
U.S.$l,000,000 (or a U.S. Dollar Equivalent).
"Mexico" shall mean the United Mexican States.
"Minority Interest Debt" shall mean (i) Glen Dimplex
Debt (as defined in the Glen Dimplex Supplemental
Agreement); (ii) Precis Debt (as defined in the Precis
Supplemental Agreement); (iii) Glen Electric Debt (as
defined in the Glen Electric Supplemental Agreement);
(iv) Subsidiary Debt (as defined in any Affiliate
Supplemental Agreement to which an Affiliate of Glen Dimplex
is a party); and (v) with respect to any Minority Interest
Party (other than Glen Dimplex, Precis, Glen Electric or any
Affiliate of Glen Dimplex party to an Affiliate Supplemental
Agreement) all Indebtedness (whether principal or interest)
and other obligations from time to time owing by the Company
or any of the Subsidiaries to such Minority Interest Party,
whether in respect of Parent Advances of such Minority
Interest Party or otherwise but shall not include
obligations of the Company or any of the Subsidiaries to
such Minority Interest Party or any of its Subsidiaries in
respect of reimbursement of out-of-pocket costs and expenses
incurred on behalf of the Company or any of the Subsidiaries
and which do not constitute Indebtedness.
"Minority Interest Disposition" shall mean a sale or
other transfer by a Minority Interest Party of shares of
capital stock of the Company, Holdings or Precis
contemplated by, and consummated in accordance with the
terms and conditions of, Section 2.01 of the Override
Agreement.
"Minority Interest Documents" shall mean each
Supplemental Agreement to which a Minority Interest Party is
a party and each Supplemental Security Document to which a
Minority Interest Party is a party.
- 28 -
"Minority Interest Party" shall mean (i) prior to the
consummation of a Minority Interest Disposition, Glen
Dimplex, Glen Electric, Precis, each Affiliate of Glen
Dimplex party to an Affiliate Supplemental Agreement and
each holder (other than a Majority Interest Party) from time
to time of Minority Interest Debt and (ii) after giving
effect to a Minority Interest Disposition, such of the
Persons described in clause (i) above that continue to be
party to a Minority Interest Document and each Successor
Minority Interest Party.
"Mortgage Amendment" shall mean Amendment No. 1 to each
of the Mortgages, dated as of the Amendment Effective Date,
in substantially the form of Exhibit B-6 hereto.
"Mortgages" shall mean the Fee Mortgage and the
Leasehold Mortgages.
"Multiemployer Plan" shall mean with respect to any
Person a Plan defined as such in Section 3(37) of ERISA to
which contributions have been made by such Person or any
ERISA Affiliate of such Person and which is covered by Title
IV of ERISA. Unless the context otherwise requires,
references in this Agreement to a "Multiemployer Plan" shall
be deemed to be to a Multiemployer Plan of the Company.
"NACCO" shall mean NACCO Industries, Inc., a Delaware
corporation.
"NACCO Supplemental Agreement" shall mean an Agreement
in substantially the form of Exhibit D-1 hereto entered into
by NACCO, as at any time amended or otherwise modified.
"Net Capital Expenditures" shall mean, for any period,
the sum of (i) Capital Expenditures of the Company and the
Subsidiaries during such period minus (ii) expenditures from
Disposition Proceeds and Casualty Insurance Proceeds by the
Company and the Subsidiaries during such period to the
extent included in Capital Expenditures.
"Net Casualty Insurance Proceeds" shall mean, as of the
last day of any Computation Period, the portion of Casualty
Insurance Proceeds received during the first fiscal quarter
of the Company occurring during such Computation Period and
not Applied in such Computation Period.
"Net Disposition Proceeds" shall mean, as of the last
day of any Computation Period, the portion of Disposition
Proceeds received during the first fiscal quarter of the
- 29 -
Company occurring during such Computation Period and not
Applied in such Computation Period.
"Net Worth" shall mean, on any date of determination,
the sum of the following for any Person and its Subsidiaries
(if any) determined on a consolidated basis in accordance
with GAAP at the last day of the fiscal quarter ending on,
or nearest to, such date of determination: (i) the amount
of share capital (less cost of treasury shares) plus
(ii) the amount of surplus and retained earnings (or, in the
case of a surplus or retained earnings deficit minus the
amount of such deficit) minus (iii) any increase (without
giving effect to any amortization) from and after the
Amendment Effective Date in the sum of the following
(without duplication of deductions in respect of items
already deducted in arriving at surplus and retained
earnings): the book value of all assets which would be
treated as intangibles under GAAP, including, without
limitation, good-will, trademarks, trade-names, copyrights,
patents and unamortized debt discount and expense; minority
interests in Subsidiaries; share capital discount and
expense; any excess of cost over market value of
investments; and any write-up in book value of assets
resulting from a revaluation thereof subsequent to the
Amendment Effective Date.
"Non-Consensual Liens" shall have the meaning assigned
to that term in Section 10(e) hereof.
"Notes" shall mean the promissory notes provided for by
Section 2.07 hereof and all promissory notes delivered in
substitution or exchange therefor, in each case as the same
shall be modified and supplemented and in effect from time
to time.
"Obligors" shall mean the Borrowers, PSM and each other
Material Subsidiary that becomes a Guarantor by operation of
Section 9.27(b) hereof.
"Officer's Certificate" shall mean, with respect to any
Person, a certificate executed and delivered on behalf of
such Person by a Responsible Officer of such Person.
"Original Notes" shall mean the promissory notes of the
Company delivered to each Bank under the Original Credit
Agreement on the Closing Date.
"Outstanding Letter of Credit Liabilities" shall mean,
with respect to any U.S. Dollar Bank, the sum of (1) the
- 30 -
participation of such Bank in Letter of Credit Liabilities
outstanding (and that will arise with respect to Letters of
Credit in respect of which a notice of issuance has been
delivered to the U.S. Agent in accordance with Section 4.05
hereof) at such time (other than such Bank's participation
in Reimbursement Obligations in respect of which a notice of
borrowing for a borrowing of Revolving Credit Loans at such
time to refinance such Reimbursement Obligations has been
delivered to the U.S. Agent in accordance with Section 4.05
hereof) plus (2) the Revolving Credit Commitment Percentage
of such Bank of Bank Letter of Credit Liabilities
outstanding (or that will arise in connection with Bank
Letters of Credit for which there has been a request by the
Company for issuance) at such time (other than Bank Letter
of Credit Reimbursement Obligations in respect of which a
notice of borrowing for a borrowing of Revolving Credit
Loans at such time to refinance such Bank Letter of Credit
Reimbursement Obligations has been delivered to the U.S.
Agent in accordance with Section 4.05 hereof) as then in
effect.
"Override Agreement" shall mean an agreement in
substantially the form of Exhibit D-12 hereto entered into
by NACCO, Housewares, Glen Dimplex, Glen Electric and
Precis, as at any time amended or otherwise modified.
"Parent Advances" shall mean those advances by a
Majority Interest Party or a Minority Interest Party to the
Company in accordance with, and subject to the terms of, the
relevant Supplemental Agreement, evidenced by a promissory
note in substantially the form of Exhibit A to the relevant
Supplemental Agreement, duly executed and completed.
"Patents Assignment" shall mean a Collateral Assignment
of Patents and Trademarks and Security Agreement in
substantially the form of Exhibit B-3 hereto entered into by
the Company, as at any time amended or otherwise modified.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation or any entity succeeding to any or all of its
functions under ERISA.
"Peril" shall mean, collectively or individually, fire,
lightning, flood, windstorm, hail, explosion, riot and civil
commotion, vandalism and malicious mischief, damage from
aircraft, vehicles and smoke and all other perils covered by
the "all-risk" endorsement then in use in the state,
province or country in which the facilities owned, leased or
used by the Company and the Subsidiaries are located.
- 31 -
"Permitted Parent Liens" shall mean (i) with respect to
Holdings' capital stock, Liens under the Supplemental
Security Documents or Liens under Article 8 of the
Reorganization Agreement or Liens under Articles 2 and 5 of
the Shareholders Agreement to the extent that the same
constitute "encumbrances" as that term is used in the
definition of "Lien" in this Section 1.01; and (ii) with
respect to the Company's capital stock, Liens under the
Supplemental Security Documents or Liens under Articles 2
and 5 of the Shareholders Agreement to the extent that the
same constitute "encumbrances" as that term is used in the
definition of "Lien" in this Section 1.01.
"Person" shall mean any individual, corporation,
partnership, trust, joint venture, unincorporated
association or other enterprise or any government or any
agency, instrumentality or political subdivision thereof.
"Plan" shall mean, with respect to any Person, an
employee benefit or other plan established or maintained by
such Person or any ERISA Affiliate of such Person and which
is covered by Title IV of ERISA, other than a Multiemployer
Plan. Unless the context otherwise requires, references in
this Agreement to a "Plan" shall be deemed to be references
to a Plan of the Company.
"Pledge Agreements" shall mean (i) a Pledge Agreement
in substantially the form of Exhibit B-1-A hereto entered
into by the Company; (ii) a Pledge Agreement in
substantially the form of Exhibit B-1-B hereto entered into
by the Company; (iii) a Pledge Agreement in substantially
the form of Exhibit B-1-C hereto entered into by the
Company; and (iv) a Pledge Agreement in substantially the
form of Exhibit B-1-D hereto entered into by the Company, as
any thereof may at any time be amended or otherwise
modified.
"Post-Default Rate" shall mean, in respect of any
principal of any Loan or any other amount whatsoever payable
by any Borrower under this Agreement or any Note which is
not paid when due (whether at stated maturity, by
acceleration or otherwise), a rate per annum during the
period commencing on and including the due date of such
amount to but not including the date such amount is paid in
full equal to 2% per annum above the Base Rate (or in the
case of Canadian Dollar Loans, the Canadian Dollar Floating
Rate) from time to time plus the Applicable Margin for Base
Rate Loans (provided that, if the amount so in default is
principal of a Eurodollar Loan or a Canadian Discount Rate
- 32 -
Loan and the due date therefor is a day other than the last
day of an Interest Period therefor, the "Post-Default Rate"
for such principal shall be, for the period commencing on
and including the due date to but not including the last day
of the then current Interest Period therefor, 2% per annum
above the interest rate for such Loan as provided in
Section 3.02(a) hereof and, thereafter, the rate provided
for above in this definition).
"Precis" shall mean Precis [521] Ltd., a corporation
organized under the laws of England and a Wholly-Owned
Subsidiary of Glen Electric.
"Precis Override Agreement" shall mean the Override
Agreement in substantially the form of Exhibit D-11 hereto
entered into by Precis, as at any time amended or otherwise
modified.
"Precis Pledge Agreement" shall mean the Pledge
Agreement in substantially the form of Exhibit D-9 hereto
entered into by Precis, as at any time amended or otherwise
modified.
"Precis Supplemental Agreement" shall mean an Agreement
in substantially the form of Exhibit D-5 hereto entered into
by Precis, as at any time amended or otherwise modified.
"Preferred Stock" shall mean the Class A Preferred
Stock of the Company.
"Prime Rate" shall mean the rate of interest from time
to time announced by Chase at the Principal Office as its
prime commercial lending rate.
"Principal Office" shall mean the principal office of
the Agent and Chase, presently located at 1 Chase Manhattan
Plaza, New York, New York, U.S.A. 10081.
"Proctor-Silex" shall mean Proctor-Silex, Inc., a
Delaware corporation and the predecessor of the Company.
"Proctor-Silex Tax Sharing Advances" shall mean
advances by NACCO to the Company under, and pursuant to, the
Proctor-Silex Tax Sharing Agreement and relating to the
period prior to the Closing Date.
"Proctor-Silex Tax Sharing Agreement" shall mean the
Tax Sharing Agreement dated as of December 31, 1985, as
amended by the First Amendment to Tax Sharing Agreement
- 33 -
dated as of September 12, 1986, among NACCO and certain
Subsidiaries of NACCO (including Housewares and Proctor-
Silex), as at any time otherwise amended or otherwise
modified.
"Product Recall Event" shall mean, with respect to any
Person (i) written notice to such Person or any of its
Subsidiaries from CPSC to the effect that a product produced
and sold by any Person or any of its Subsidiaries
(a "Product") presents a substantial product hazard and,
therefore, should be voluntarily recalled; (ii) any
voluntary recall of a Product (whether or not in response to
a notice of the type described in clause (i) above); or
(iii) any recall of a Product mandated by the CPSC.
"Product Recall Liability" shall mean, with respect to
any Product Recall Event, the estimated potential real and
contingent liability imposed on or incurred by such Person
or any of its Subsidiaries with respect to such Product
Recall (assuming, if applicable, in connection with such
estimation that the Product Recall Event referred to in
clause (i) of the definition of "Product Recall Event" in
this Section 1.01 resulted in a recall of all Products
specified in the notice referred to in such clause).
"Property" shall mean any right or interest in or to
property of any kind whatsoever, whether real, personal or
mixed and whether tangible or intangible.
"Quarterly Date" shall mean the last Business Day of
each June, September, December and March.
"Receivables" shall mean, as to the Company or any of
the Subsidiaries, all accounts (as defined in the Uniform
Commercial Code) (including, without limitation accounts
receivable) whether billed or unbilled, arising out of the
sale of Inventory or performance of services in the ordinary
course of business.
"Reconciliation Statement" shall have the meaning
assigned thereto in the last paragraph of Section 9.01
hereof.
"Reference Banks" shall mean Chase, The Bank of Nova
Scotia and The First National Bank of Chicago (or their
Applicable Lending Offices, as the case may be).
"Refinanced Indebtedness" shall mean the Indebtedness
of the Company and the Subsidiaries to be prepaid in full on
- 34 -
the Amendment Effective Date with the proceeds of Loans and
listed beneath the heading "Refinanced Indebtedness" on
Schedule III hereto.
"Regulation D", "Regulation G", "Regulation T",
"Regulation U" and "Regulation X" shall mean Regulation D,
Regulation G, Regulation T, Regulation U and Regulation X of
the Board of Governors of the Federal Reserve System (or any
successor to all or a portion thereof establishing reserve
requirements or relating to margin stock, as the case may
be), as the same may be amended, modified or supplemented
and in effect from time to time.
"Regulatory Change" shall mean, with respect to any
Bank, any change after the date of this Agreement in United
States Federal, state or foreign law or regulations
(including Regulation D) or the adoption or making after
such date of any interpretation, directive or request
applying to a class of banks including such Bank of or under
any United States Federal, state or foreign law or
regulations (whether or not having the force of law) by any
court or governmental or monetary authority charged with the
interpretation or administration thereof.
"Reimbursement Obligations" shall mean, at any time,
collectively, the obligations of the Company then
outstanding under Section 2.01(II) hereof in respect of
Letters of Credit to reimburse the Issuing Bank for the
amount paid by the Issuing Bank in respect of any drawing
under a Letter of Credit.
"Release" shall have the meaning assigned to that term
in Section 8.16 hereof. The term "Release" used as a verb
shall have a correlative meaning.
"Renewal Agreement" shall mean the Renewal Agreement
dated as of the Amendment Effective Date by PSC in favor of
the Canadian Agent, in substantially the form of Exhibit C-3
hereto.
"Reorganization Agreement" shall mean the
Reorganization and Merger Agreement dated as of October 11,
1990 by and among Housewares, Holdings, Proctor-Silex,
Precis, Glen Electric and Hamilton Beach, together with all
schedules, exhibits, annexes and supplements thereto, as at
any time amended or otherwise modified.
- 35 -
"Reorganization Documents" shall mean the
Reorganization Agreement, the Shareholders Agreement and the
Indemnity Agreement.
"Reserve Requirement" shall mean, for any Eurodollar
Loan for any Interest Period therefor, the average maximum
rate at which reserves (including any marginal, supplemental
or emergency reserves) are required to be maintained during
such Interest Period under Regulation D by member banks of
the Federal Reserve System in New York City with deposits
exceeding one billion U.S. Dollars against "Eurodollar
liabilities" (as such term is used in Regulation D).
Without limiting the effect of the foregoing, the Reserve
Requirement shall reflect any other reserves required to be
maintained by such member banks by reason of any Regulatory
Change against (i) any category of liabilities which
includes deposits by reference to which the Fixed Base Rate
for Eurodollar Loans is to be determined as provided in the
definition of "Fixed Base Rate" in this Section 1.01 or
(ii) any category of extensions of credit or other assets
which include Eurodollar Loans.
"Responsible Officer" shall mean, with respect to any
Person, its chairman (in the case of Glen Dimplex, Glen
Electric or Precis), its directors, its president, any vice
president who is a corporate officer, its treasurer or any
assistant treasurer, its secretary or any assistant
secretary, with respect to ERISA-related matters, its
benefits manager and with respect to insurance-related
matters, its insurance manager.
"Restricted Payments" shall mean (a) dividends of the
Company (in cash, property or obligations) on, or other
payments or distributions on account of (whether made by the
Company or any of the Subsidiaries), or the setting apart of
money for a sinking or other analogous fund (whether made by
the Company or any of the Subsidiaries) for, or the
purchase, redemption, retirement or other acquisition of,
any shares of any class of stock of the Company or any
Subordinated Indebtedness of the Company and (b) payment of
Subordinated Indebtedness or Management Fees by the Company.
"Restricted Payments Period" shall mean (i) any Clean-
Down Period and the 45 days thereafter and (ii) any other
period approved by the Majority Banks.
"Revolving Credit Commitment" shall mean, as to each
U.S. Dollar Bank, the obligation of such Bank to make
Revolving Credit Loans up to an aggregate principal amount
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at any one time outstanding equal to the amount set forth
for such Bank on Schedule I hereto opposite the heading
"Revolving Credit Commitment" (as the same may be reduced
pursuant to Section 2.03 or 3.03(c) hereof). The initial
aggregate amount of the Revolving Credit Commitments of the
U.S. Dollar Banks is U.S.$135,000,000.
"Revolving Credit Commitment Percentage" shall mean,
with respect to any U.S. Dollar Bank, the quotient
(expressed as a percentage) equal to (i) the Revolving
Credit Commitment of such Bank divided by (ii) the aggregate
amount of Revolving Credit Commitments of all of the U.S.
Dollar Banks.
"Revolving Credit Loans" shall mean, collectively,
Series A R/C Loans and Series B R/C Loans.
"Revolving Credit Termination Date" shall mean the
third anniversary of the Amendment Effective Date, as the
same may be extended pursuant to Section 2.09 hereof;
provided that, if such date is not a Business Day, the
Revolving Credit Termination Date shall be the next
preceding Business Day.
"SEC" shall mean the Securities and Exchange Commission
or any successor thereto.
"Security Agreement" shall mean a Security Agreement in
substantially the form of Exhibit B-2 hereto entered into by
the Company, as at any time amended or otherwise modified.
"Security Documents" shall mean (i) the Pledge
Agreements; (ii) the Security Agreement; (iii) the Patents
Assignment; (iv) as and when executed and delivered by the
Company, the Government Contract Assignments; (v) as and
when executed and delivered by the Company, the Mortgages;
(vi) the Canadian Security Documents; (vii) the Confirmation
Agreement; and (viii) as and when executed and delivered by
the relevant Obligor, each other mortgage, security
agreement or other document contemplated by Section 9.23(b),
9.23(c) or 9.27 hereof, as any thereof are at any time
amended or otherwise modified, in each case as and when
executed and delivered by the intended parties thereto.
"Series" shall mean, with respect to any Loan, a Series
A R/C Loan or a Series B R/C Loan.
"Series A R/C Commitments" shall mean the Revolving
Credit Commitments of the Banks.
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"Series A R/C Loans" shall mean the Loans provided for
in Section 2.01(I)(b)(i) hereof.
"Series A R/C Notes" shall have the meaning assigned to
such term in Section 2.07(b) hereof.
"Series B R/C Loans" shall have the meaning assigned to
such term in Section 2.01(I)(b)(ii) hereof.
"Series B R/C Notes" shall have the meaning assigned to
such term in Section 2.07(b) hereof.
"Series B Sublimit" shall mean U.S.$10,000,000.
"Series B Sublimit Amount" shall mean, as to each U.S.
Dollar Bank that has an Affiliate that is a Canadian Dollar
Bank, the amount set forth on Schedule I hereto opposite the
heading "Series B Sublimit" under the name of such Canadian
Dollar Bank.
"Shareholders Agreement" shall mean the Shareholders
Agreement dated as of October 11, 1990 by and among
Housewares, Holdings, Hamilton Beach and Precis, as at any
time amended or otherwise modified.
"Subject Prepayment" shall have the meaning assigned to
such term in Section 3.03(c) hereof.
"Subordinated Indebtedness" shall mean Indebtedness of
the Company that is subordinate in right of payment to the
prior payment of the obligations of the Company in respect
of the Loans other than Majority Interest Debt and Minority
Interest Debt.
"Subsidiary" shall mean, with respect to any Person,
any corporation, partnership, joint venture or joint
adventure whether now existing or hereafter organized or
acquired: (i) in the case of a corporation, of which a
majority of the outstanding stock having by the terms
thereof ordinary voting power for the election of directors
(irrespective of whether or not at the time stock of any
other class or classes of such corporation shall have or
might have voting power by reason of the happening of any
contingency) is at the time owned (directly or beneficially)
by such Person and/or one or more Subsidiaries of such
Person or (ii) in the case of a partnership, joint venture
or joint adventure, in which such Person is at the time the
sole general partner or joint venturer or joint adventurer
or of which a majority of the partnership or other ownership
- 38 -
interests are at the time owned by such Person and/or one or
more Subsidiaries of such Person. Unless the context
otherwise requires, references in this Agreement to a
"Subsidiary" shall be deemed to be references to a
Subsidiary of the Company.
"Subsidiary Dividend Payments" shall mean dividends of
a Subsidiary of the Company (in cash, property or
obligations) on, or other payments or distributions on
account of, any share of any class of stock of such
Subsidiary owned by the Company.
"Successor Minority Interest Party" shall mean the
Person or Persons (other than a Majority Interest Party) who
shall acquire capital stock of Holdings (except as otherwise
provided in Section 2.02 of the Override Agreement), capital
stock of Precis (in the event that at such time Precis holds
capital stock of the Company or Holdings) as part of a
Minority Interest Disposition or the other transactions
contemplated by Section 2.01 of the Override Agreement.
"Supplemental Agreements" shall mean (i) the NACCO
Supplemental Agreement; (ii) the Housewares Supplemental
Agreement; (iii) the Holdings Supplemental Agreement;
(iv) the Glen Dimplex Supplemental Agreement; (v) the Glen
Electric Supplemental Agreement; (vi) the Precis
Supplemental Agreement; (vii) the Override Agreement;
(viii) the Precis Override Agreement; (ix) as and when
executed and delivered, each Affiliate Supplemental
Agreement; and (x) as and when executed and delivered, each
Additional Supplemental Agreement, as each such Supplemental
Agreement has been modified and supplemented by the
Confirmation Agreement.
"Supplemental Security Documents" shall mean (i) the
Housewares Pledge Agreement; (ii) the Precis Pledge
Agreement; (iii) the Holdings Pledge Agreement; and (iv) as
and when executed and delivered, each Additional
Supplemental Security Document.
"Taxes" shall have the meaning assigned to that term in
Section 5.06 hereof.
"Tax Sharing Advances" shall mean advances by NACCO to
the Company under, and pursuant to, the Tax Sharing
Agreement referred to in clause (i) of the definition of
"Tax Sharing Agreement" in this Section 1.01.
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"Tax Sharing Agreement" shall mean (i) during any
period that NACCO is permitted or required to include the
Company as a consolidated Subsidiary of NACCO for Federal
income tax purposes, the Tax Sharing Agreement dated as of
October 11, 1990 among NACCO and certain Subsidiaries of
NACCO (including Housewares and the Company), as at any time
amended or otherwise modified and (ii) during any period
that NACCO is not permitted or required to include the
Company as a consolidated Subsidiary of NACCO for Federal
income tax purposes, as and when executed and delivered, a
Tax Sharing Agreement between Holdings and the Company in
substantially the form appended to the certificate referred
to in Section 7.01(c)(viii) of the Original Credit
Agreement, as at any time amended or otherwise modified.
"Total Debt" shall mean, as to any Person, Indebtedness
that, in accordance with GAAP, is required to be reflected
as a liability on a balance sheet of such Person.
"type" shall mean, with respect to any Loan, a Canadian
Dollar Loan or a U.S. Dollar Loan or with respect to U.S.
Dollar Loans, a Eurodollar Loan or a Base Rate Loan or with
respect to Canadian Dollar Loans, a Canadian Floating Rate
Loan or a Canadian Discount Rate Loan.
"United States" and "U.S.A." shall mean the United
States of America.
"U.S. Dollar Banks" shall mean those Banks listed on
Schedule I hereto under the heading "U.S. Dollar Banks" and
any other Banks that may from time to time have Revolving
Credit Commitments or hold U.S. Dollar Loans.
"U.S. Dollar Equivalent" shall mean, on any day, and
with respect to any amount of any other currency, the amount
of U.S. Dollars purchasable with such amount of other
currency for delivery on such day at the U.S. Dollar Spot
Rate in effect two Business Days before such day.
"U.S. Dollar Loan" shall mean any Loan other than a
Canadian Dollar Loan.
"U.S. Dollar Spot Rate" shall mean, on any day, the
rate of exchange for the purchase by the London Branch with
a currency other than U.S. Dollars of U.S. Dollars in the
commercial bank foreign exchange market in London for
delivery two Business Days after such day, quoted by the
London Branch at approximately 4:00 p.m. London time on such
- 40 -
day (or the next preceding Business Day, if such day is not
a Business Day).
"U.S. Dollars" and "U.S.$" shall mean lawful money of
the United States.
"Wholly-Owned Subsidiary" shall mean, with respect to
any Person, any Subsidiary of such Person all of the shares
of capital stock or other ownership interests (and all
rights and options to purchase such shares or other
ownership interests) of which, other than, in the case of a
corporate Subsidiary, directors' qualifying shares, are
owned, beneficially and of record, by such Person or another
Wholly-Owned Subsidiary of such Person.
1.02 Accounting Terms and Determinations.
(a) Accounting Terms. All accounting terms used
herein shall (except as otherwise expressly provided herein)
be interpreted, and all financial statements and
certificates and reports as to financial matters required to
be delivered to the Agents or the Banks hereunder shall be
prepared in accordance with GAAP applied on a basis
consistent with those used in the preparation of the latest
financial statements furnished to the Agents and the Banks
hereunder after the date hereof. All calculations made for
the purposes of determining compliance with the terms of
Sections 9.07, 9.08 and 9.09 hereof (together with ancillary
definitions), computing the Applicable Margin and
determining whether a Contingent Event has occurred shall
(except as otherwise expressly provided herein) be made by
application of GAAP applied on a basis consistent with those
used in the preparation of the annual or quarterly financial
statements of the Company and the Subsidiaries most recently
furnished to the Banks pursuant to Section 9.01(a) or
9.01(b) hereof unless (i) the Company shall have objected to
determining such compliance on such basis at the time of
delivery of such financial statements or (ii) the Majority
Banks shall so object in writing within 30 days after
delivery of such financial statements, in either of which
events such calculations shall be made on a basis consistent
with those used in the preparation of the latest financial
statements of the Company and the Subsidiaries as to which
such objection shall not have been made (which, if objection
is made in respect of the first annual or quarterly
financial statements of the Company and the Subsidiaries
delivered under Section 9.01(a) or 9.01(b) hereof, shall
mean the financial statements of the Company and its
Subsidiaries as at December 31, 1993 referred to in
- 41 -
Section 8.02(b)(ii) hereof); provided that, in any event
such calculation shall be made by adjusting such financial
statements to ignore the requirements of FAS 109, as
reflected in the Reconciliation Statement.
(b) Statements of Variation. The Company shall
deliver to each Bank and the Agents at the same time as the
delivery of any annual or quarterly financial statement
under Section 9.01 hereof a description in reasonable detail
of any material variation between the application of
accounting principles employed in the preparation of such
statement and the application of accounting principles
employed in the preparation of the next preceding annual or
quarterly financial statements and reasonable estimates of
the difference between such statements arising as a
consequence thereof.
(c) Fiscal Periods. The Company and the Subsidiaries
shall maintain their accounts on the basis of a fiscal year
ending December 31 of each year (with fiscal quarters ending
March 31, June 30, September 30 and December 31).
1.03 Certain Computations. Unless otherwise expressly
provided herein, for all purposes of this Agreement the
equivalent of an amount in any currency (other than U.S. Dollars)
shall be the U.S. Dollar Equivalent of such amount as of the date
of determination. For purposes of this Agreement, except as
otherwise expressly specified herein, all calculations
(including, without limitation, calculations of "Commitment",
"Revolving Credit Commitment", the outstanding principal amount
of "Loans" or "Revolving Credit Loans", "Net Worth" and "Majority
Banks") shall be computed in, or determined by reference to, U.S.
Dollars.
Section 2. COMMITMENTS.
2.01 Extensions of Credit.
I. Loans.
(a) [Intentionally omitted]
(b) Revolving Credit Loans. (i) Each U.S. Dollar
Bank severally agrees, on and subject to the terms and conditions
of this Agreement, to make loans in U.S. Dollars to the Company
(such Loans hereinafter referred to as "Series A R/C Loans"),
from time to time on any Business Day during the period from and
including the Amendment Effective Date to but excluding the
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Revolving Credit Termination Date in an aggregate principal
amount at any one time outstanding up to but not exceeding the
amount of such Bank's Revolving Credit Commitment as in effect
from time to time; provided that in no event shall (A) the
Individual Outstanding Obligations of such Bank exceed the
Revolving Credit Commitment of such Bank as in effect from time
to time; (B) the Aggregate Outstanding Obligations of all of the
U.S. Dollar Banks exceed the Revolving Credit Commitments of all
of the U.S. Dollar Banks as in effect from time to time; or (C)
the sum of the aggregate amount of the Revolving Credit Loans of
all of the Banks plus the aggregate principal amount of the Bank
Line Loans of all of the Banks exceed the Clean-Down Limit during
a Clean-Down Period. For purposes of the immediately preceding
clause (B), the Revolving Credit Loans made by any Canadian
Dollar Bank shall be deemed to be Revolving Credit Loans of the
U.S. Dollar Bank of which such Canadian Dollar Bank is an
Affiliate.
(ii) Subject to the terms and conditions of this
Agreement, each U.S. Dollar Bank that has an Affiliate that is a
Canadian Dollar Bank hereby severally agrees that its Revolving
Credit Commitment may be utilized, upon the request of PSC, in
addition to the Series A R/C Loans provided for by clause (i) of
Section 2.01(I)(b) hereof, for loans in Canadian Dollars, which
loans may be made to PSC by such Canadian Dollar Bank at its sole
discretion (such loans hereinafter referred to as "Series B R/C
Loans" or "Canadian Dollar Loans"), from time to time on any
Business Day during the period from and including the Amendment
Effective Date to but excluding the Revolving Credit Termination
Date in an aggregate principal amount at any one time outstanding
up to but not exceeding the Series B Sublimit Amount of such
Canadian Dollar Bank as in effect from time to time; provided
that the outstanding principal amount of the Series B R/C Loans
made by any Canadian Dollar Bank shall constitute a utilization
of the Revolving Credit Commitment of the U.S. Dollar Bank of
which such Canadian Dollar Bank is an Affiliate in an amount
equal to the U.S. Dollar Equivalent of such Loans; and provided
further that in no event shall (A) the aggregate outstanding
principal amount of the Series B R/C Loans exceed the aggregate
amount of the Series B Sublimit; (B) the Individual Outstanding
Obligations of the U.S. Dollar Bank that is an Affiliate of such
Canadian Dollar Bank exceed the Revolving Credit Commitment of
such U.S. Dollar Bank as in effect from time to time; (C) the
Aggregate Outstanding Obligations of all of the U.S. Dollar Banks
exceed the Revolving Credit Commitments of all of the U.S. Dollar
Banks as in effect from time to time; or (D) the sum of the
aggregate amount of the Revolving Credit Loans of all of the
Banks plus the aggregate principal amount of the Bank Line Loans
of all of the Banks exceed the Clean-Down Limit during a Clean-
- 43 -
Down Period. For purposes of the immediately preceding clause
(C), the Revolving Credit Loans made by any Canadian Dollar Bank
shall be deemed to be Revolving Credit Loans of the U.S. Dollar
Bank of which such Canadian Dollar Bank is an Affiliate.
Subject to the terms of this Agreement, during such period the
Company or PSC, as the case may be, may borrow, prepay (as
provided in Section 3.03 hereof) and reborrow Revolving Credit
Loans of each Series (but, in the case of borrowings or
reborrowings, provided that the aggregate amount of all Revolving
Credit Loans of all the Banks shall not exceed the Clean-Down
Limit during a Clean-Down Period after giving effect to such
borrowing or reborrowing). Revolving Credit Loans that are U.S.
Dollar Loans may be borrowed or reborrowed as Base Rate Loans or
Eurodollar Loans and the Company may Convert such Revolving
Credit Loans, which are, as the case may be, Base Rate Loans or
Eurodollar Loans, into Revolving Credit Loans of the other type
(as provided in Section 2.08 hereof); provided that no more than
[eight] Revolving Credit Loans that are Eurodollar Loans may be
outstanding at any one time. Revolving Credit Loans that are
Canadian Dollar Loans may be borrowed or reborrowed as Canadian
Floating Rate Loans or Canadian Discount Rate Loans and the
Company may Convert such Revolving Credit Loans which are, as the
case may be, Canadian Floating Rate Loans or Canadian Discount
Rate Loans, into Revolving Credit Loans of the other type (as
provided in Section 2.08 hereof); provided that no more than six
Revolving Credit Loans that are Canadian Discount Rate Loans may
be outstanding at any one time. Revolving Credit Loans that are
Canadian Dollar Loans may be borrowed or reborrowed only as
Canadian Dollar Loans and may not be Converted into U.S. Dollar
Loans of any type.
II. Letters of Credit. Subject to the terms and
conditions hereof, the Revolving Credit Commitments may be
utilized, upon the request of the Company, in addition to the
Revolving Credit Loans provided for by Section 2.01(I)(b) hereof,
by the Issuing Bank of Letters of Credit for account of the
Company denominated in U.S. Dollars during the period from and
including the Closing Date to but not including the Revolving
Credit Termination Date in an amount up to but not exceeding the
Letter of Credit Sublimit, provided that (A) the Aggregate
Outstanding Obligations of all of the U.S. Dollar Banks shall in
no event exceed the Revolving Credit Commitments of all of the
U.S. Dollar Banks as in effect from time to time; and (B) all
Letters of Credit shall expire or mature on or prior to the
Revolving Credit Termination Date.
- 44 -
(a) Issuance Procedures. The following provisions
shall apply to the issuance of Letters of Credit:
(1) Conditions to Issuance. The issuance by the
Issuing Bank of each Letter of Credit shall,
in addition to the conditions set forth in
Section 7 hereof, be subject to the condition
precedent that the Company shall have
executed and delivered such other
applications, instruments and agreements re-
lating to such Letter of Credit as the
Issuing Bank shall have reasonably requested
consistent with such Issuing Bank's then
current practices and procedures with respect
to letters of credit of the same type. The
Issuing Bank shall promptly notify each Bank
(through the U.S. Agent) of the issuance of
each Letter of Credit.
(2) Duration. No Letter of Credit shall (i) be
issued or extended by the Issuing Bank after
the close of business on the day immediately
preceding the Revolving Credit Termination
Date, (ii) have an expiry date later than 360
days after the date of issuance (exclusive of
all periods of extension) or (iii) have an
expiry date (by extension or otherwise) later
than the Revolving Credit Termination Date.
(3) Type and Purpose. Each Letter of Credit
shall be issued for account of the Company in
the ordinary course of the business of the
Company, subject to the following: (i) each
Commercial Letter of Credit shall be for the
purpose of financing purchases of raw
materials, finished goods or supplies in the
ordinary course of business of the Company
and the Subsidiaries; and (ii) each Bond
Letter of Credit shall be for the purpose of
supporting the following obligations:
workmen's compensation obligations of the
Company and the Subsidiaries, obligations
with respect to insurance programs of the
Company and the Subsidiaries and obligations
with respect to bid bonds, performance bonds
or surety bonds of the Company and the
Subsidiaries or with respect to letters of
credit issued for the account of the Company
for purposes consistent with clause (i) above
- 45 -
and this clause (ii), in each case furnished
in the ordinary course of business of the
Company and the Subsidiaries.
All Commercial Letters of Credit shall pro-
vide for payment by the Issuing Bank against
presentation of sight drafts and documents
specified by such Commercial Letters of
Credit (or, in the case of standby letters of
credit, sight drafts and drawing certificates
specified by such standby letters of credit).
All Bond Letters of Credit shall provide for
payment by the Issuing Bank against
presentation of documentation (satisfactory
to the Issuing Bank) demonstrating the
Company's failure to meet obligations subject
of such Letter of Credit.
(4) Fees. The Company shall pay to the Issuing
Bank (through the U.S. Agent) in respect of
each Letter of Credit a letter of credit fee
for the period from and including the date of
issuance of such Letter of Credit to and
including the date such Letter of Credit is
drawn in full, expires or is terminated a
letter of credit fee at a rate per annum
during each fiscal quarter of the Company
that such Letter of Credit is outstanding on
the daily undrawn face amount of such Letter
of Credit equal to the Applicable Margin for
Letters of Credit. Accrued letter of credit
fees shall be payable quarterly in arrears on
each Quarterly Date. The foregoing letter of
credit fees shall be non-refundable. The
U.S. Agent, on behalf of the Issuing Bank,
agrees to pay to each Bank, on the date 10
Business Days after each Quarterly Date, but
only to the extent received by the U.S. Agent
from the Company, an amount equal to such
Bank's Letter of Credit Percentage of all
letter of credit fees described in the
preceding sentence received by the Issuing
Bank during the period commencing on (and
including) the Quarterly Date immediately
preceding the most recently ended Quarterly
Date through (but not including) the most
recently ended Quarterly Date. In addition
to the fees described above, the Company
agrees to pay to the Issuing Bank for its own
- 46 -
account (through the U.S. Agent) (i) a
fronting fee at a rate per annum equal to 1/4
of 1% on the daily undrawn face amount of
each Letter of Credit, payable quarterly in
arrears on each Quarterly Date and (ii) all
commissions, charges, costs and expenses
customarily charged by such Issuing Bank in
like circumstances for like customers with
respect to the issuance, amendment or
extension of each Letter of Credit.
(b) Reimbursement under Letters of Credit. Upon
receipt from the beneficiary of any Letter of
Credit of any demand for payment under such Letter
of Credit, the Issuing Bank shall promptly notify
the Company and the U.S. Agent of the amount to be
paid by the Issuing Bank as a result of such
demand and the date on which payment is to be made
to such beneficiary in respect of such demand,
specifying the time, prior to such payment to the
beneficiary (provided that the failure to give
such notice prior to such payment shall not affect
the Company's obligations under this
Section 2.01(II)(b)), by which the Company is to
reimburse the Issuing Bank therefor. The Company
shall immediately reimburse the Issuing Bank
(through the U.S. Agent) for any amounts paid by
the Issuing Bank pursuant to any drawing under any
Letter of Credit issued by it, and pay when due
all other amounts owing to the Issuing Bank
hereunder and under the terms of the related
Letter of Credit Documents at or prior to the time
of each such drawing, without presentment, demand,
protest or other formalities of any kind, together
with interest thereon in accordance with
Section 3.02 hereof. The obligations of the
Company to make such payments to the Issuing Bank
(through the U.S. Agent), and the U.S. Agent's
right to receive the same for the account of the
Issuing Bank, shall be absolute and unconditional
and shall not be affected by any circumstance
whatsoever. Forthwith upon its receipt of the
notice specified in the first sentence of this
Section 2.01(II)(b), the U.S. Agent shall give
each Bank prompt notice of the amount of the
liability of the Company for failure to reimburse
the Issuing Bank for payment under a Letter of
Credit when such reimbursement was due, specifying
- 47 -
such Bank's Letter of Credit Percentage of the
amount of such liability.
(c) Letter of Credit Payments. Each Bank shall pay to
the U.S. Agent for account of the Issuing Bank at
account number NYA0-D1-900-9-000002 maintained by
the U.S. Agent with Chase at the Principal Office
in U.S. Dollars and in immediately available
funds, the amount of such Bank's Letter of Credit
Percentage of any Reimbursement Obligation upon
notice by the Issuing Bank (through the U.S.
Agent) to such Bank requesting such payment and
specifying such amount. Each Bank's obligation to
make such payments to the U.S. Agent for the
account of the Issuing Bank under this
Section 2.01(II)(c), and the U.S. Agent's right to
receive the same for the account of the Issuing
Bank, shall be absolute and unconditional and
shall not be affected by any circumstance
whatsoever, including, without limiting the effect
of the foregoing, the failure of any other Bank to
make its payment under this Section 2.01(II)(c).
Each such payment to the U.S. Agent for the
account of the Issuing Bank shall be made without
any offset, abatement, withholding or reduction
whatsoever.
(d) Participations in Letter of Credit Obligations.
Each U.S. Dollar Bank agrees that it shall
automatically acquire a participation in the
Issuing Bank's liability under each Letter of
Credit issued hereunder in an amount equal to such
Bank's Letter of Credit Percentage for such Letter
of Credit of such liability, and each U.S. Dollar
Bank thereby shall absolutely, unconditionally and
irrevocably assume, as primary obligor and not as
surety, and shall be unconditionally obligated to
the Issuing Bank to pay to the U.S. Agent for the
account of the Issuing Bank and discharge when due
pursuant to Section 2.01 (II)(c) hereof, its
Letter of Credit Percentage for such Letter of
Credit of the Issuing Bank's liability under such
Letter of Credit. Simultaneously with the making
of each payment by a Bank to the U.S. Agent for
the account of the Issuing Bank pursuant to
Section 2.01(II)(c) hereof in respect of any
Letter of Credit, such Bank shall, automatically
and without any further action on the part of the
U.S. Agent, the Issuing Bank or such Bank, acquire
- 48 -
(i) a participation in an amount equal to such
payment in the Reimbursement Obligation owing by
the Company to the U.S. Agent for the account of
the Issuing Bank pursuant to the Letter of Credit
Documents relating to such Letter of Credit; and
(ii) a participation in a percentage equal to such
Bank's Letter of Credit Percentage for such Letter
of Credit in any interest or other amounts payable
by the Company under this Section 2.01(II) and
under such Letter of Credit Documents (other than
the fees referred to in the last sentence of
Section 2.01(II)(a)(4) hereof) (such Reimbursement
Obligations, interest and other amounts being
herein called the "Letter of Credit Obligations").
Each payment received by the U.S. Agent for the
account of the Issuing Bank in respect of any
Letter of Credit Obligation with respect to any
Letter of Credit (including by way of set-off or
application of proceeds of any collateral security
for such Letter of Credit Obligations) shall be
promptly paid by the U.S. Agent on behalf of the
Issuing Bank to the Banks entitled thereto (in the
case of letter of credit fees, in accordance with
Section 2.01(II)(a)(4) hereof), pro rata in
accordance with the respective Letter of Credit
Percentages of the Banks for such Letter of
Credit. In the event any payment received by the
U.S. Agent for the account of the Issuing Bank and
so paid to the Banks under this Section
2.01(II)(d) is rescinded or must otherwise be
returned by the U.S. Agent on behalf of the
Issuing Bank each Bank shall, upon the request of
the Issuing Bank (through the U.S. Agent), repay
to the U.S. Agent for the account of the Issuing
Bank the amount of such payment paid to such Bank,
with interest at the rate specified in
Section 2.01(II)(e) hereof.
(e) Interest. To the extent that any Bank fails to
pay any amount to the U.S. Agent for the account
of the Issuing Bank required to be paid under this
Section 2.01(II) on the due date therefor, such
Bank shall pay interest to the U.S. Agent for the
account of the Issuing Bank on such amount from
and including such due date to but excluding the
date such payment is made (i) during the period
from and including such due date to but excluding
the date two Business Days thereafter, at a rate
per annum equal to the Federal Funds Rate (as in
- 49 -
effect from time to time) and (ii) thereafter, at
a rate per annum equal to the Base Rate (as in
effect from time to time) plus 2%.
(f) Indemnification. The Company hereby indemnifies
and holds harmless the Issuing Bank, each Bank and
the U.S. Agent from and against any and all claims
and damages, losses, liabilities, costs or
expenses that the Issuing Bank, such Bank or the
U.S. Agent may incur (or which may be claimed
against the Issuing Bank, such Bank or the U.S.
Agent by any Person whatsoever) by reason of, or
in connection with, the execution and delivery or
transfer of or payment or failure to pay under any
Letter of Credit; provided that the Company shall
not be required to indemnify the Issuing Bank for
any claims, damages, losses, liabilities, costs or
expenses to the extent, but only to the extent,
caused by (i) the willful misconduct or gross
negligence of the Issuing Bank in determining
whether drafts and other documents presented under
any Letter of Credit complied with the terms of
such Letter of Credit or (ii) the Issuing Bank's
failure to pay under any Letter of Credit after
the presentation to it of a request strictly
complying with the terms and conditions of such
Letter of Credit. Nothing in this
Section 2.01(II) is intended to limit the other
obligations of the Company under this Agreement.
2.02 Borrowings.
(a) Borrowings of U.S. Dollar Loans. The Company
shall give the U.S. Agent (which shall promptly notify the
Banks) notice of each borrowing hereunder as provided in
Section 4.05 hereof. Not later than noon New York time on
the date specified for each borrowing hereunder, each U.S.
Dollar Bank shall make available to the U.S. Agent the
amount of the Loan to be made by it on such date, at account
number NYAO-DI-900-9-000002 maintained by the U.S. Agent
with Chase at the Principal Office, in immediately available
funds, for account of the Company. The amount so received
by the U.S. Agent shall, subject to the terms and conditions
of this Agreement, be made available to the Company by
depositing the same, in immediately available funds, in an
account of the Company maintained with Chase at the
Principal Office designated by the Company (or in such other
manner as may be specified by the Company and is reasonably
acceptable to the U.S. Agent).
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(b) Borrowings of Canadian Dollar Loans. PSC shall
give the Canadian Agent (which shall promptly notify each
U.S. Dollar Bank that has an Affiliate that is a Canadian
Dollar Bank) notice of each borrowing hereunder as provided
in Section 4.05 hereof. Not later than 11:00 a.m. Toronto
time on the date specified for each borrowing hereunder,
each such U.S. Dollar Bank shall make (unless its affiliated
Canadian Dollar Bank shall have made) available to the
Canadian Agent the amount of the Series B R/C Loan to be
made by it on such date, at The Royal Bank of Canada,
Correspondent Banking Division, Main Branch, Toronto,
Ontario, Canada, for credit to the account of The Chase
Manhattan Bank of Canada, account number 219-247-4 in
immediately available funds, for further credit to the
account of PSC. The amount so received by the Canadian
Agent shall, subject to the terms and conditions of this
Agreement, be made available to PSC by depositing the same,
in immediately available funds, in an account of PSC
maintained with Chase Canada at the Canadian Office
designated by PSC (or in such other manner as may be
specified by PSC and is reasonably acceptable to the
Canadian Agent).
(c) Issuance of Letters of Credit. The Company shall
give the Issuing Bank (through the U.S. Agent) notice of
each issuance of a Letter of Credit as provided in
Section 4.05 hereof (and the U.S. Agent shall promptly
notify each Bank). Each Letter of Credit shall be made
available to the Company in a manner (consistent with the
Issuing Bank's customary procedures) to be agreed upon by
the Company and the Issuing Bank at the time of issuance.
2.03 Changes of Commitments. The relevant Borrower
shall have the right to terminate or reduce the unused amount of
the Revolving Credit Commitments (through reduction of the
amounts thereof apportioned to either Series of Loans) available
to it at any time or from time to time, provided that (i) such
Borrower shall give notice of each such termination or reduction
as provided in Section 4.05 hereof; and (ii) each partial
reduction of the Revolving Credit Commitments shall be in an
aggregate amount at least equal to U.S.$5,000,000.
2.04 Fees.
(a) Commitment Fees. (i) The Company shall pay to
the U.S. Agent for the account of each U.S. Dollar Bank a
commitment fee (in U.S. Dollars) on the daily average unused
amount of each such U.S. Dollar Bank's Revolving Credit
Commitment (for which purpose the outstanding principal amount of
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the Series B R/C Loans owing to the Canadian Dollar Bank that is
an Affiliate of such U.S. Dollar Bank shall be deemed to be a
utilization of such U.S. Dollar Bank's Revolving Credit
Commitments) for the period from and including the Amendment
Effective Date to but excluding the earlier of the date the
Revolving Credit Commitment is terminated and the Revolving
Credit Termination Date, at a rate per annum during each fiscal
quarter of the Company equal to the Applicable Margin for
commitment fees. Accrued commitment fees shall be payable in
arrears on each Quarterly Date (commencing June 30, 1994) and on
the dates referred to in the preceding sentence.
(ii) [Intentionally omitted]
(b) Other Fees. The Company shall pay to the U.S.
Agent the fees provided for in the letter agreement dated March
7, 1994 between the Company and Chase on the dates and in the
amounts specified therein.
2.05 Lending Offices. The Loans of each type made by
each Bank and such Bank's participation in Letter of Credit
Liabilities shall be made and maintained at such Bank's
Applicable Lending Office for Loans of such type and such
participation.
2.06 Several Obligations; Remedies Independent. The
failure of any Bank to make any Loan to be made by it on the date
specified therefor or to make any payment required to be made by
it in accordance with Section 2.01(II) hereof shall not relieve
any other Bank of its obligation to make its Loan, or to make any
such payment, on such date, and neither any Bank nor either Agent
shall be responsible for the failure of any other Bank to make a
Loan, or to make any such payment, to be made by such other Bank.
The amounts payable by either Borrower at any time hereunder and
under the Notes of said Borrower to each Bank or the Issuing Bank
shall be a separate and independent debt of said Borrower and
each Bank or the Issuing Bank shall be entitled to protect and
enforce its rights arising out of this Agreement and its Notes,
and it shall not be necessary for any other Bank, the Issuing
Bank or either Agent to consent to, or be joined as an additional
party in, any proceedings for such purposes.
2.07 Notes.
(a) [Intentionally omitted]
(b) Revolving Credit Loan Notes. The Series A R/C
Loans made by each U.S. Dollar Bank shall be evidenced by a
single promissory note of the Company (each a "Series A R/C
- 52 -
Note") in substantially the form of Exhibit A-2 hereto,
dated the Closing Date, payable to the order of such U.S.
Dollar Bank in a principal amount equal to the amount of
such U.S. Dollar Bank's Revolving Credit Commitment as in
effect on the Amendment Effective Date and otherwise duly
completed. The Series B R/C Loans made by each Canadian
Dollar Bank shall be evidenced by a single promissory note
of PSC (each a "Series B R/C Note") in substantially the
form of Exhibit A-3 hereto, dated the Closing Date, payable
to the order of such Canadian Dollar Bank in a principal
amount effectively equal to such Canadian Dollar Bank's
Series B Sublimit Amount as in effect on the Amendment
Effective Date and otherwise duly completed. PSC hereby
agrees to furnish to any Canadian Dollar Bank a duly
executed and delivered replacement Series B R/C Note upon
the request of such Canadian Dollar Bank if at the time of
such request the stated principal amount of such Canadian
Dollar Bank's Series B R/C Note is less than such Canadian
Dollar Bank's Series B Sublimit Amount.
(c) Letter of Credit Note. The Letter of Credit
Obligations of the Company payable to the Issuing Bank shall
be evidenced by a promissory note of the Company (a "Letter
of Credit Note") in substantially the form of Exhibit A-4
hereto, dated the Closing Date, payable to the order of the
Issuing Bank in a principal amount equal to the amount of
the Letter of Credit Sublimit and otherwise duly completed.
(d) Loan Records. Each Loan made by each Bank (or, in
the case of the Letter of Credit Note, each Reimbursement
Obligation arising upon a drawing under a Letter of Credit),
all payments and prepayments made on account of the
principal thereof, and, if applicable, all Conversions of
any Loans shall be recorded by such Bank (or, in the case of
the Letter of Credit Note, the Issuing Bank) on its books
and, prior to any transfer of the Note held by it, endorsed
by such Bank (or, in the case of the Letter of Credit Note,
the Issuing Bank) on the schedule attached to such Note or
any continuation thereof; provided that any failure by such
Bank (or, in the case of the Letter of Credit Note, the
Issuing Bank) to make any such endorsement (or any error in
such endorsement) shall not affect the obligations of the
relevant Borrower hereunder or under such Note in respect of
such Loans (or, in the case of the Letter of Credit Note,
such Reimbursement Obligations).
(e) Subdivision of Notes. No Bank shall be entitled
to have its Notes subdivided, by exchange for promissory
notes of lesser denominations or otherwise, except in
- 53 -
connection with a permitted assignment of all or any portion
of such Bank's Commitment, Loans and Notes pursuant to
Section 12.06 hereof. The Letter of Credit Note may not be
subdivided.
2.08 Conversion or Continuation of Loans. Subject to
Sections 4 and 5 hereof, the Company shall have the right to
Convert Loans of one type into Loans of another type or Continue
Loans of one type as Loans of the same type, at any time or from
time to time, provided that (a) the Company shall give the U.S.
Agent (which shall notify the Canadian Agent in the case of
Canadian Dollar Loans) notice of each such Conversion or
Continuation as provided in Section 4.05 hereof, (b) Fixed Rate
Loans may be Converted only on the last day of an Interest Period
for such Loans; and (c) the Company may not Convert Base Rate
Loans or Canadian Floating Rate Loans into, or Continue Fixed
Rate Loans as, Fixed Rate Loans if an Event of Default has
occurred and is continuing.
2.09 Extension of Revolving Credit Termination Date.
(a) The Company may, by notice to the U.S. Agent
(which shall promptly deliver a copy to each of the U.S. Dollar
Banks) during the Extension Request Period (as defined below),
request that the Banks extend the Revolving Credit Termination
Date then in effect (the "Existing Termination Date") for the
Additional Period from the Existing Termination Date. Each U.S.
Dollar Bank, acting in its sole discretion, shall, by notice to
the Company and the U.S. Agent given on or before the Consent
Date, advise the Company whether or not the U.S. Dollar Bank
agrees to such extension; provided that each Bank that determines
not to extend the Existing Termination Date (a "Non-extending
Bank") shall notify the U.S. Agent (which shall notify the
Company) of such fact promptly after such determination (but in
any event no later than the Consent Date) and any U.S. Dollar
Bank that does not advise the Company on or before the Consent
Date shall be deemed to be a Non-extending Bank. The election of
any U.S. Dollar Bank to agree to such extension shall not
obligate any other U.S. Dollar Bank to agree.
(b) If (and only if) U.S. Dollar Banks holding
Revolving Credit Commitments that aggregate at least 66 2/3% of
the aggregate amount of the Revolving Credit Commitments shall
have agreed by the Consent Date to extend the Existing
Termination Date, then the Company shall have the right on or
before the Extension Date to replace each Non-extending Bank
with, and otherwise add to this Agreement, one or more other
banks (which may include any Bank, each prior to the Extension
Date an "Additional Commitment Bank") with the approval of the
- 54 -
Agents (which approval shall not be unreasonably withheld), each
of which Additional Commitment Banks shall have entered into an
agreement in form and substance satisfactory to the Company and
the Agents pursuant to which such Additional Commitment Bank
shall, effective as of the Extension Date, undertake a Revolving
Credit Commitment (if any such Additional Commitment Bank is a
Bank, its Revolving Credit Commitment shall be in addition to
such Bank's Revolving Credit Commitment hereunder on such date).
For the purposes hereof, if a Non-extending Bank has an Affiliate
that is a Canadian Dollar Bank, the Company shall replace such
Non-extending Bank with an Additional Commitment Bank that has a
Canadian Affiliate.
(c) If (and only if) U.S. Dollar Banks holding
Revolving Credit Commitments that, together with the additional
Revolving Credit Commitments of the Additional Commitment Banks
that will become effective on the Extension Date, aggregate 100%
of the aggregate amount of the Revolving Credit Commitments (not
including the additional Commitments of the Additional Commitment
Banks) on the Consent Date shall have agreed on or before the
Extension Date to extend the Existing Termination Date, then,
effective as of the Extension Date, the Existing Termination Date
shall be extended for the Additional Period after the Existing
Termination Date (provided, if such date is not a Business Day,
then such Termination Date as so extended shall be the next
preceding Business Day) and on the Extension Date each Additional
Commitment Bank shall thereupon become a "Bank" for all purposes
of this Agreement. Notwithstanding the foregoing, the extension
of the Existing Termination Date shall not be effective with
respect to any Bank unless:
(i) no Default shall have occurred and be continuing
on the Extension Date;
(ii) each of the representations and warranties of the
Company in Section 8 hereof shall be true and correct on and
as of the Extension Date with the same force and effect as
if made on and as of each such date (or, if any such
representation and warranty is expressly stated to have been
made as of a specific date, as of such specific date); and
(iii) with respect to the initial extension pursuant to
this Section 2.09, PSC shall have executed and delivered to
the Canadian Agent for registration in all jurisdictions
where the Canadian Security Documents are registered
appropriate renewals with respect to all of the Canadian
Security Documents (if required) to extend the expiration
dates thereof 10 years beyond the Existing Termination Date.
- 55 -
For purposes of this Section 2.09, the following terms shall have
the following meanings:
"Additional Period" shall mean one year; provided that
the first time that an extension is requested by the Company
pursuant to clause (a) of this Section 2.09 that is not
agreed to by all of the U.S. Dollar Banks on the Consent
Date but is agreed to by all of the U.S. Dollar Banks
(including the Additional Commitment Banks) on the Extension
Date, the Additional Period shall be one year and 45 days,
but thereafter shall be one year.
"Consent Date" shall mean April 30 in each year
commencing with April 30, 1995; provided that, if any such
date is not a Business Day, the relevant Consent Date shall
be the next succeeding Business Day.
"Extension Request Period" shall mean the period from
March 1 to and including March 31 in each year.
"Extension Date" shall mean, collectively, July 30 in
each year commencing with July 30, 1995; provided that, if
any such date is not a Business Day, the relevant Extension
Date shall be the next succeeding Business Day.
Section 3. REPAYMENT OF PRINCIPAL; INTEREST;
PREPAYMENT.
3.01 Repayment of Loans.
(a) [Intentionally omitted]
(b) Revolving Credit Loans. The Company or PSC, as
applicable, shall pay to the relevant Agent in the
appropriate currency for account of each U.S. Dollar Bank
and each Canadian Dollar Bank, as the case may be, in full
the aggregate outstanding principal amount of such Bank's
Revolving Credit Loans on, and each Revolving Credit Loan
shall mature on, the Revolving Credit Termination Date.
3.02 Interest.
(a) Regular Interest on Loans. The Company or PSC, as
applicable, shall pay to the relevant Agent in the
appropriate currency for account of each U.S. Dollar Bank
and each Canadian Dollar Bank, as the case may be, interest
on the unpaid principal amount of each Loan of such Bank to
such Borrower for the period commencing on and including the
- 56 -
date of such Loan to but excluding the date such Loan is
paid in full, at the following rates per annum:
(i) with respect to any U.S. Dollar Loan, during
any period while such Loan is a Base Rate Loan, the
Base Rate (as in effect from time to time) plus the
Applicable Margin (if any) therefor;
(ii) with respect to any U.S. Dollar Loan, during
any period while such Loan is a Eurodollar Loan, for
each Interest Period relating thereto, the Fixed Rate
for such Loan for such Interest Period plus the
Applicable Margin therefor;
(iii) with respect to any Canadian Dollar Loan,
during any period while such Loan is a Canadian
Floating Rate Loan, the Canadian Floating Rate (as in
effect from time to time) plus the Applicable Margin
(if any) therefor; and
(iv) with respect to any Canadian Dollar Loan,
during any period while such Loan is a Canadian
Discount Rate Loan, the Canadian Discount Rate (as in
effect from time to time) plus the Applicable Margin
therefor.
(b) Post-Default Interest. Notwithstanding the
provisions of clause (a) above, the Company or PSC, as
applicable, shall pay to the relevant Agent in the
appropriate currency for account of each Bank interest at
the applicable Post-Default Rate (to the fullest extent
permitted by law) on any principal of any Loan of such Bank
to such Borrower, on any Reimbursement Obligation and (to
the fullest extent permitted by law) on any interest or
other amount payable by such Borrower hereunder or under any
Note held by such Bank, which is not paid in full when due
(whether at stated maturity, by acceleration or otherwise),
for the period commencing on and including the due date
thereof to but excluding the date the same is paid in full.
(c) Payment of Interest. Accrued interest on each
Loan shall be payable (i) in the case of a Base Rate Loan or
a Canadian Floating Rate Loan, on each Quarterly Date in
each year, (ii) in the case of a Fixed Rate Loan, on the
last day of each Interest Period therefor, and, if such
Interest Period is longer than three months (in the case of
Eurodollar Loans) or 90 days (in the case of Canadian
Discount Rate Loans), at three-month or 90 day intervals, as
the case may be, respectively, following the first day of
- 57 -
such Interest Period, and (iii) in the case of any Loan,
upon the payment or prepayment thereof or the Conversion of
such Loan to a Loan of the other type (but only on the
principal amount so paid, prepaid or Converted); provided
that interest payable at the Post-Default Rate shall be
payable from time to time on demand of the relevant Agent
(and on the date that the underlying obligation is paid in
full) and interest on any Fixed Rate Loan that is Converted
into a Base Rate Loan or a Canadian Floating Rate Loan, as
the case may be (pursuant to Section 5.04 hereof), shall be
payable on the date of Conversion (but only to the extent so
Converted).
(d) Notice of Interest Rate. Promptly after the
determination of any interest rate provided for herein or
any change therein, the U.S. Agent shall notify the U.S.
Dollar Banks and the Company thereof with respect to
affected U.S. Dollar Loans and the Canadian Agent shall
notify the Canadian Dollar Banks and PSC (with a copy to the
Company) thereof with respect to Canadian Dollar Loans.
3.03 Prepayments.
(a) [Intentionally omitted]
(b) Optional Prepayment of Revolving Credit Loans.
Each Borrower shall have the right to prepay the Revolving
Credit Loans made to such Borrower in whole or in part,
subject to giving the relevant Agent prior notice in
accordance with the provisions of Section 4.05 hereof;
provided that (i) each such prepayment shall be in the
aggregate principal amount of not less than the applicable
minimum amount specified in Section 4.04 hereof; and (ii) in
the case of Fixed Rate Loans, such prepayment may be made
only on the last day of the Interest Period therefor.
(c) Mandatory Prepayments. The relevant Borrower
shall make the following mandatory prepayments (and as to
application of such mandatory prepayments, in accordance
with the last paragraph of this Section 3.03(c)):
(i) Issuance. Upon any Issuance, the Company shall
prepay the Revolving Credit Loans in an aggregate principal
amount, and the Revolving Credit Commitments shall be
subject to automatic reduction in an aggregate amount, equal
to 100% of the aggregate amount of all cash received by the
Company and its Subsidiaries in respect of such Issuance net
of reasonable expenses incurred by the Company and its
Subsidiaries in connection therewith.
- 58 -
(ii) [Intentionally omitted]
(iii) Dispositions.
(A) If at any time during any Computation Period,
Net Disposition Proceeds exceed U.S.$5,000,000 (or a
U.S. Dollar Equivalent) the relevant Borrower shall on
the last day of such Computation Period prepay the
Revolving Credit Loans in an aggregate principal
amount, and the Revolving Credit Commitments shall be
subject to automatic reduction in an aggregate amount,
equal to such excess (less amounts
theretofore prepaid pursuant to this Section 3.03(c)(iii)(A)
during such Computation Period) (rounded upwards in
each case to the nearest U.S.$1,000).
(B) [Intentionally omitted]
(iv) Casualty Insurance Proceeds. On the last day of
each fiscal quarter of the Company, the relevant Borrower
shall prepay the Revolving Credit Loans in an aggregate
principal amount, and the Revolving Credit Commitments shall
be subject to automatic reduction in an aggregate amount,
equal to the amount by which the Net Casualty Insurance
Proceeds for the Computation Period ending on or most
recently ended prior to such date (less amounts theretofore
prepaid pursuant to this Section 3.03(c)(iv) during such
Computation Period) exceeds U.S.$5,000,000 (or a U.S. Dollar
Equivalent) (rounded upwards to the nearest U.S.$1,000).
(v) [Intentionally omitted]
(vi) Clean-Down Limit. If on any day during a Clean-
Down Period the aggregate outstanding principal amount of
the Revolving Credit Loans shall exceed the Clean-Down Limit
for such Clean-Down Period, the relevant Borrower shall
forthwith prepay Revolving Credit Loans in an amount
(rounded upwards to the nearest U.S.$1,000) such that after
giving effect to such prepayment the aggregate outstanding
principal amount of Revolving Credit Loans is equal to or
less than such Clean-Down Limit.
Prepayments pursuant to this Section 3.03(c) shall
be applied to the Revolving Credit Loans (first to Series A
R/C Loans, then to Series B R/C Loans and, if applicable, as
within Series A R/C Loans, first to Base Rate Loans and then
to Eurodollar Loans and within Series B R/C Loans, first to
Canadian Floating Rate Loans and then to Canadian Discount
Rate Loans); provided that, in the case of prepayments
- 59 -
pursuant to Section 3.03(c)(i), 3.03(c)(iii) or 3.03(c)(iv)
hereof made as a consequence of proceeds of: (1) an
Issuance by PSC, Net Disposition Proceeds of PSC or Net
Casualty Insurance Proceeds of PSC, as applicable, PSC shall
prepay Series B R/C Loans (notwithstanding the first
parenthetical phrase of this paragraph) (but without
affecting the obligation of the Company to make prepayments
in accordance with such application priorities to the extent
that such prepayment by PSC is less than the full amount of
the required prepayment); and (2) an Issuance by the
Company, Net Disposition Proceeds of the Company or Net
Casualty Insurance Proceeds of the Company, required
prepayments of Series B R/C Loans may be made by PSC. Each
prepayment shall, in accordance with Section 3.02(c) hereof,
be accompanied by interest on the principal amount prepaid
through the date of prepayment, together with amounts, if
any, payable pursuant to Section 5.05 hereof (subject to
clause (ii) of the next succeeding sentence). Anything in
the foregoing to the contrary notwithstanding, (i) in the
event that as a result of any prepayment required to be made
pursuant to this Section 3.03(c) the Revolving Credit Loans
(other than the Series B R/C Loans) would be prepaid in
full, prior to applying the remaining portion of the amount
to be prepaid to Series B R/C Loans, the amount to be
prepaid shall first be applied to cash collateralize
outstanding Letter of Credit Liabilities through a deposit
in the Cash Collateral Account in an amount not exceeding
such outstanding Letter of Credit Liabilities, (ii) in the
event that all or a portion of any prepayment (a "Subject
Prepayment") required to be made pursuant to this
Section 3.03(c) would result in amounts becoming payable
under Section 5.05 hereof, the Company may, upon written
notice to the relevant Agent (which may be included in the
notice otherwise required by Section 4.05 hereof in
conjunction with the Subject Prepayment) deposit in the Cash
Collateral Account or the Canadian Cash Collateral Account,
as the case may be, an amount equal to the amount of the
Subject Prepayment for application to the relevant Fixed
Rate Loans on the last day of the then current Interest
Period(s) therefor and (iii) except to the extent that the
provisions of Section 6 hereof are applicable and without
affecting any obligations of either Borrower with respect to
its Loans, (a) except for Series B R/C Loans, PSC shall not
be obligated to make any payments under this Section 3.03(c)
on the Series A R/C Loans or in respect of clause (i) of
this sentence and (b) the Company shall not be obligated to
make any payments under this Section 3.03(c) on the Series B
R/C Loans.
- 60 -
Section 4. PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS;
ETC.
4.01 Payments.
(a) Except with respect to Canadian Dollar Loans,
amounts payable to Canadian Banks pursuant to Section 5
hereof and to the extent otherwise expressly provided
herein, all payments of principal, interest and other
amounts to be made by any Obligor under this Agreement and
the Notes (other than the Series B R/C Notes) (and all
payments by any other Obligor in respect of such principal,
interest or other amounts) shall be made in U.S. Dollars, in
immediately available funds, to the U.S. Agent at account
number NYAO-DI-900-9-000002 maintained by the U.S. Agent at
the Principal Office, not later than 11:00 a.m. New York
time on the date on which such payment shall become due
(each such payment made after such time on such due date to
be deemed to have been made on the next succeeding Business
Day). All payments of principal, interest and other amounts
to be made by PSC under this Agreement (including, without
limitation, amounts payable to Canadian Banks pursuant to
Section 5 hereof and amounts payable under the Series B R/C
Notes (and all payments by any other Obligor in respect of
such principal, interest or other amounts)) shall, except as
otherwise expressly provided herein, be made in Canadian
Dollars, in immediately available funds, to The Royal Bank
of Canada, Correspondent Banking Division, Main Branch,
Toronto, Ontario, Canada for credit to the account of The
Chase Manhattan Bank of Canada, account number 219-247-4 not
later than 11:00 a.m. Toronto time on the date on which such
payment shall become due (each such payment made after such
time on such due date to be deemed to have been made on the
next succeeding Business Day).
(b) Each Obligor shall, at the time of making each
payment under this Agreement or any Note, specify to the
relevant Agent the Loans or other amounts payable by such
Obligor hereunder to which such payment is to be applied
(and in the event that it fails to so specify, or if an
Event of Default has occurred and is continuing, (i) in the
case of any U.S. Dollar payment, the U.S. Agent may
distribute such payment to the U.S. Dollar Banks and the
Issuing Bank in such manner as it or the Majority Banks may
determine to be appropriate, subject to Section 4.02 hereof
or (ii) in the case of any Canadian Dollar payment, the
Canadian Agent may distribute such payment to the Canadian
Dollar Banks in such manner as it or the Canadian Dollar
- 61 -
Banks may determine to be appropriate, subject to
Section 4.02 hereof.
(c) Each payment received by either Agent under this
Agreement or any Note for account of a Bank or the Issuing
Bank shall be paid promptly to such Bank or the Issuing
Bank, in immediately available funds in the appropriate
currency (following conversion from one currency to the
appropriate currency (if necessary) in accordance with
customary bank practice and procedures), for account of such
Bank's Applicable Lending Office for the Loan or
participation in Letter of Credit Liabilities in respect of
which such payment is made or the Issuing Bank, as the case
may be.
(d) If the due date of any payment under this
Agreement or any Note would otherwise fall on a day which is
not a Business Day such date shall (unless otherwise
expressly provided herein) be extended to the next
succeeding Business Day and interest shall be payable for
any principal so extended for the period of such extension.
4.02 Pro Rata Treatment. Except to the extent
otherwise expressly provided herein:
(a) each borrowing of U.S. Dollar Loans hereunder
shall be made from the U.S. Dollar Banks pro rata according
to the then unused amounts of their respective Commitments
(for which purpose (x) the outstanding principal amount of
any Canadian Dollar Loans owing to the Canadian Dollar Bank
that is an Affiliate of such U.S. Dollar Bank shall
constitute a utilization of the Commitment of such U.S.
Dollar Bank (in the U.S. Dollar Equivalent of such Loans)
and (y) the Outstanding Letter of Credit Liabilities of any
U.S. Dollar Bank shall constitute a utilization of the
Commitment of such U.S. Dollar Bank), each borrowing of
Canadian Dollar Loans shall be made from the Canadian Dollar
Banks pro rata according to the then unused amounts of the
respective Series B Sublimit Amounts of the U.S. Dollar
Banks that are Affiliates of such Canadian Dollar Banks;
each payment of fees under Section 2.04(a)(i) hereof shall
be made for account of the U.S. Dollar Banks pro rata
according to the then unused amounts of their respective
Revolving Credit Commitments; and each termination or
reduction of the amount of the Revolving Credit Commitments
shall be applied to such Commitments of the U.S. Dollar
Banks pro rata according to the amounts of their respective
Revolving Credit Commitments;
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(b) the making, Conversion and Continuation of Loans
of a particular type (except as otherwise provided in
Section 5) shall be pro rata among the (x) U.S. Dollar Banks
according to the amounts of their respective Revolving
Credit Commitments or (y) Canadian Dollar Banks according to
the amounts of their respective Series B Sublimit Amounts;
and
(c) each payment and prepayment by the Company of
principal of or interest on Revolving Credit Loans of a
particular type shall be made to the relevant Agent for
account of the Banks holding Loans of such type pro rata in
accordance with the respective unpaid principal amounts
thereof.
4.03 Computations. Interest on Eurodollar Loans and
letter of credit fees under Section 2.02(II)(a)(4) hereof shall
be computed on a per annum basis and on the basis of a year of
360 days and actual days elapsed (including the first day but
excluding the last day) occurring in the period for which payable
and interest on Base Rate, Canadian Discount Rate Loans and
Canadian Floating Rate Loans, interest referred to in Sections
2.01(II)(e) and 4.06 hereof and commitment fees shall be computed
on a per annum basis and on the basis of a year of 365 or 366
days, as the case may be, and actual days elapsed (including the
first day but excluding the last day) occurring in the period for
which payable.
4.04 Minimum Amounts. Except for Conversions or
prepayments made pursuant to Section 5.04 hereof, each borrowing,
optional prepayment or Conversion of Base Rate Loans shall be in
an amount of U.S.$1,000,000 or an integral multiple of
U.S.$1,000,000 in excess thereof, each borrowing, Conversion or
Continuation of Eurodollar Loans shall be in an amount of
U.S.$1,000,000 or an integral multiple of U.S.$1,000,000 in
excess thereof, each borrowing and optional prepayment of
Canadian Floating Rate Loans shall be in an amount of CAN$250,000
or an integral multiple of CAN$250,000 and each borrowing,
Conversion or Continuation of Canadian Discount Rate Loans shall
be in an amount of CAN$500,000 or an integral multiple of
CAN$500,000 (borrowings, optional prepayments, Conversions or
Continuations of or into Loans of different types or, in the case
of Fixed Rate Loans, having different Interest Periods at the
same time hereunder to be deemed separate borrowings or
Conversions for purposes of the foregoing, one for each type or
Interest Period). Anything in this Agreement to the contrary
notwithstanding, the aggregate principal amount of (x) Eurodollar
Loans having the same Interest Period shall be at least
U.S.$1,000,000 and (y) Canadian Discount Rate Loans having the
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same Interest Period shall be at least CAN$500,000, and, if any
Eurodollar Loans or Canadian Discount Rate Loans would otherwise
be in a lesser principal amount for any period, such Loans shall
be Base Rate Loans or Canadian Floating Rate Loans, as the case
may be, during such period.
4.05 Certain Notices. Notices by either Borrower to
the relevant Agent of terminations or reductions of Commitments,
of borrowings, Conversions, Continuations and prepayments of
Loans, of type of Loans, of the duration of Interest Periods and
of issuances of Letters of Credit shall be irrevocable and shall
be effective only if received by the relevant Agent not later
than 11:00 a.m. New York time or 11:00 a.m. Toronto time, as
applicable, on the number of Business Days prior to the date of
the relevant termination, reduction, borrowing, Conversion,
Continuation, prepayment or issuance or the first day of such
Interest Period specified below:
Number of
Business
Notice Days Prior
Termination or
reduction of Commitments 3
Borrowing or prepayment of,
or Conversion into,
Base Rate Loans Same Day
Borrowing or prepayment of,
Conversion into, Continuation as,
or duration of Interest Period
for, Eurodollar Loans 3
Borrowing or prepayment of,
Canadian Floating Rate Loans Same Day
Borrowing or prepayment of,
Conversion into, Continuation as,
or duration of Interest Period
for, Canadian Discount Rate
Loans 1
Issuance of Letters of Credit 1
Each such notice of termination or reduction shall specify the
aggregate amount of the Commitments to be terminated or reduced.
Each such notice of borrowing, Conversion, Continuation or
prepayment shall specify the type of Loans to be borrowed,
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Converted, Continued or prepaid and the amount (subject to
Section 4.04 hereof) and type and Series of the Loans to be
borrowed, Converted, Continued or prepaid (and, in the case of a
Conversion, the type of Loans to result from such Conversion) and
the date of borrowing, Conversion, Continuation or prepayment
(which shall be a Business Day). Each such notice of the
duration of an Interest Period shall specify the Loans to which
such Interest Period is to relate. Each such notice of the
issuance of a Letter of Credit shall specify the type of Letter
of Credit, the amount thereof, the expiry date thereof, the name
of the beneficiary thereof and the drawing conditions therefor.
The relevant Agent shall promptly notify the Banks and the other
Agent of the contents of each such notice. In the event that
such Borrower fails to select the type of Loan, or the duration
of any Interest Period, for any Fixed Rate Loan within the time
period and otherwise as provided in this Section 4.05, such Loan
(if outstanding as a Fixed Rate Loan) will be automatically
Converted into a Base Rate Loan or Canadian Floating Rate Loan,
as the case may be, on the last day of the then current Interest
Period for such Loan or (if outstanding as a Base Rate Loan or a
Canadian Floating Rate Loan) will remain as, or (if not then
outstanding) will be made as, a Base Rate Loan or a Canadian
Floating Rate Loan, as the case may be. In addition, the Company
shall submit a copy of any notice delivered to an Agent pursuant
to this Section 4.05 to the other Agent, conspicuously marked at
the top to read "For information only".
4.06 Non-Receipt of Funds by the Agents. Unless the
relevant Agent shall have been notified by a Bank or the relevant
Borrower prior to the date on which it is scheduled to make
payment to such Agent of (in the case of a Bank) the proceeds of
a Loan to be made by it hereunder or (in the case of such
Borrower) a payment to such Agent for account of one or more of
the Banks hereunder (such payment being herein called the
"Required Payment"), which notice shall be effective upon receipt
by such Agent, that it does not intend to make the Required
Payment to such Agent, such Agent may assume that the Required
Payment has been made and may, in reliance upon such assumption
(but shall not be required to), make the amount thereof available
to the intended recipient(s) on such date and, if such Bank or
such Borrower has not in fact made the Required Payment to such
Agent, the recipient(s) of such payment shall, on demand, repay
to such Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on
and including the date such amount was so made available by such
Agent until the date such Agent recovers such amount at a rate
per annum equal to the Federal Funds Rate in the case of U.S.
Dollar Loans, and, in the case of Canadian Dollar Loans, 2% in
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excess of the Canadian Floating Rate (to the fullest extent
permitted by law), for such day.
4.07 Sharing of Payments; Etc.
(a) Each Obligor agrees that, in addition to (and
without limitation of) any right of set-off, bankers' lien
or counterclaim a Bank or the Issuing Bank may otherwise
have, each Bank and the Issuing Bank shall be entitled, at
its option, to setoff and apply balances held by it for
account of such Obligor, at any of its offices, in U.S.
Dollars or in any other currency, against any principal of
or interest on any of such Bank's Loans to such Obligor (or,
in the case of the Issuing Bank, Reimbursement Obligations
and interest thereon), such Obligor's obligations under
Section 6.01 hereof, or any other amount payable by such
Obligor to such Bank or the Issuing Bank hereunder, which is
not paid when due (regardless of whether such balances are
then due to such Obligor), in which case it shall promptly
notify such Obligor and each Agent thereof, provided that
such Bank's or Issuing Bank's failure to give such notice
shall not affect the validity thereof.
(b) If any Bank shall obtain payment of any principal
of or interest on any Loan made by it to any Obligor through
the exercise of any right of set-off, bankers' lien or
counterclaim or similar right or otherwise, and, as a result
of such payment, such Bank shall have received a greater
percentage of the principal or interest then due hereunder
by such Obligor to such Bank than the percentage received by
any other Banks, it shall promptly purchase from such other
Banks participations in (or, if and to the extent specified
by such Bank, direct interests in) the Loans (to the extent
practicable, of similar type) made by such other Banks (or
in interest due thereon, as the case may be) in such
amounts, and make such other adjustments from time to time
as shall be equitable, to the end that all the Banks shall
share the benefit of such excess payment (net of any
expenses which may be incurred by such Bank in obtaining or
preserving such excess payment) pro rata in accordance with
the unpaid principal and/or interest on the Loans held by
each of the Banks. If a U.S. Dollar Bank acquires a
participation in (or direct interest in) a Canadian Dollar
Loan, such U.S. Dollar Bank shall be a Canadian Dollar Bank
to the extent of such participation (or direct interest) and
if a Canadian Dollar Bank acquires a participation in (or
direct interest in) a U.S. Dollar Loan, such Canadian Dollar
Bank shall be a U.S. Dollar Bank to the extent of such
participation (or direct interest). To such end all the
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Banks shall make appropriate adjustments among themselves
(by the resale of participations sold or otherwise) if such
payment is rescinded or must otherwise be restored. The
Obligors agree that any Bank so purchasing a participation
(or direct interest) in the Loans made by other Banks (or in
interest due thereon, as the case may be) may exercise any
and all rights of set-off, bankers' lien, counterclaim or
similar rights with respect to such participation as fully
as if such Bank were a direct holder of Loans in the amount
of such participation.
(c) Except as expressly set forth in the next
succeeding sentence, nothing in this Agreement shall require
any Bank or the Issuing Bank to exercise any such right or
shall affect the right of any Bank or the Issuing Bank to
exercise, and retain the benefits of exercising, any such
right with respect to any other indebtedness or obligation
of each and any Obligor. Each Bank that is party to Bank
Financial Accommodation Documents hereby agrees that, to the
extent that such Bank chooses to exercise any right of set-
off, bankers' lien or counterclaim (including the right
accorded to such Bank under this Section 4.07) with respect
to obligations of the Obligors under this Agreement or under
such Bank's Bank Financial Accommodation Documents, such
Bank shall exercise such right first against, and apply the
benefits of such exercise first to, the Loans and Letter of
Credit Liabilities (or interests of such Bank therein) of
the relevant Obligor hereunder (and interests therein) and
only after such application (and after giving effect to the
provisions of this Section 4.07) shall such Bank exercise
such right against, and apply the benefits of such exercise
to, obligations of such Obligor under such Bank's Bank
Financial Accommodation Documents. If under any applicable
bankruptcy, insolvency or other similar law, any Bank or the
Issuing Bank receives a secured claim in lieu of a set-off
to which this Section 4.07 applies, such Bank shall, to the
extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the
Banks entitled under this Section 4.07 (or, in the case of a
secured claim received by the Issuing Bank, Section 2.01(II)
hereof) to share in the benefits of any recovery on such
secured claim.
Section 5. YIELD PROTECTION; ILLEGALITY; FOREIGN
TAXES.
5.01 Additional Costs. The following provisions shall
apply to all Banks, and, for the purposes of determining amounts
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payable or the circumstances that would permit a Bank to request
compensation or other action, the term "Bank" shall be deemed to
include any corporation controlling a Bank.
(a) The relevant Borrower shall pay to the relevant
Agent for account of each relevant Bank from time to time
such amounts as such Bank may determine to be necessary to
compensate it for any costs which such Bank determines are
attributable to its making or maintaining of any Fixed Rate
Loans or its obligation to make any such Loan hereunder, or
any reduction in any amount receivable by such Bank
hereunder in respect of any of such Loans or such obligation
(such increases in costs and reductions in amounts
receivable being herein called "Additional Costs"),
resulting from any Regulatory Change which:
(i) changes the basis of taxation of any amounts
payable to such Bank under this Agreement or its Notes in
respect of any of such Loans (other than taxes imposed on
the overall net income or net worth of such Bank or of its
Applicable Lending Office for any of such Loans by the
jurisdiction in which such Bank has its principal office or
such Applicable Lending Office); or
(ii) imposes, modifies or deems applicable any reserve,
special deposit, minimum capital, capital ratio or similar
requirements (other than, in the case of U.S. Dollar Banks,
the Reserve Requirement utilized in the determination of the
Fixed Rate for such Eurodollar Loan) relating to any
extensions of credit or other assets of, or any deposits
with or other liabilities of, such Bank (including any of
such Loans or any deposits referred to in the definition of
"Fixed Base Rate" in Section 1.01 hereof, or any Canadian
Discount Rate Loan), or any Commitment of such Bank; or
(iii) imposes any other condition affecting this
Agreement or its Notes (or any of such extensions of credit
or liabilities) or any Commitment of such Bank.
Each Bank will notify the relevant Borrower of any event
occurring after the date of this Agreement which will
entitle such Bank to compensation for Additional Costs
pursuant to this Section 5.01(a) as promptly as practicable
after it obtains knowledge thereof and determines to request
such compensation, and will designate a different Applicable
Lending Office for the Loans of such Bank affected by such
event if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the sole
opinion of such Bank, be disadvantageous to such Bank,
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provided that such Bank shall have no obligation to so
designate an Applicable Lending Office located in the United
States. Each Bank will furnish the relevant Borrower with a
certificate setting forth the basis and amount of each
request by such Bank for compensation for Additional Costs
under this Section 5.01(a). If any Bank requests
compensation for Additional Costs from the relevant Borrower
under this Section 5.01(a), the Company may, by notice to
such Bank (with a copy to the relevant Agent), require that
such Bank's Loans of the type with respect to which such
compensation is requested be Converted into Base Rate Loans
or Canadian Floating Rate Loans, as the case may be, in
accordance with Section 5.04 hereof.
(b) Without limiting the effect of the provisions of
Section 5.01(a) hereof, in the event that, by reason of any
Regulatory Change, any Bank either (i) incurs Additional
Costs based on or measured by the excess above a specified
level of the amount of a category of deposits or other
liabilities of such Bank which includes, in the case of U.S.
Dollar Banks, deposits by reference to which the interest
rate on Eurodollar Loans is determined or, in the case of
Canadian Dollar Banks, Bankers Acceptances by reference to
which the interest rate on Canadian Discount Rate Loans is
determined, as provided in this Agreement or a category of
extensions of credit or other assets of such U.S. Dollar
Bank which includes Eurodollar Loans or (ii) becomes subject
to restrictions on the amount of such a category of
liabilities or assets which it may hold, then, if such Bank
so elects by notice to the relevant Borrower (with a copy to
the relevant Agent), the obligation of such Bank to make and
to Continue, and to Convert Loans into, Fixed Rate Loans
hereunder shall be suspended until such Regulatory Change
ceases to be in effect (and all Eurodollar Loans of such
type held by such U.S. Dollar Bank shall be Converted into
Base Rate Loans and all Canadian Discount Rate Loans of such
type held by such Canadian Dollar Bank shall be Converted
into Canadian Floating Rate Loans) in accordance with
Section 5.04 hereof).
(c) Without limiting the effect of the foregoing
provisions of this Section 5.01 (but without duplication),
the relevant Borrower shall pay directly to each Bank and
the Issuing Bank from time to time on request such amounts
as such Bank or the Issuing Bank may determine to be
necessary to compensate such Bank or the Issuing Bank for
any costs which it determines are attributable to the
maintenance by such Bank (or any Applicable Lending Office)
or the Issuing Bank, pursuant to any law or regulation or
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any interpretation, directive or request (whether or not
having the force of law) of any court or governmental or
monetary authority (i) following any Regulatory Change or
(ii) implementing any risk-based capital guideline or
requirement (whether or not having the force of law and
whether or not the failure to comply therewith would be
unlawful) hereafter issued by any government or governmental
or supervisory authority implementing at the national level
the Basle Accord (including, without limitation, the Final
Risk-Based Capital Guidelines of the Board of Governors of
the Federal Reserve System (12 CFR Part 208, Appendix A; 12
CFR Part 225, Appendix A) and the Final Risk-Based Capital
Guidelines of the Office of the Comptroller of the Currency
(12 CFR Part 3, Appendix A)), of capital in respect of its
Commitment, Loans or Letters of Credit (or interests
therein) (such compensation to include, without limitation,
an amount equal to any reduction of the rate of return on
assets or equity of such Bank (or any Applicable Lending
Office) or the Issuing Bank to a level below that which such
Bank (or any Applicable Lending Office) or the Issuing Bank
could have achieved but for such law, regulation,
interpretation, directive or request).
(d) Without limiting the effect of the foregoing
provisions of this Section 5.01 (but without duplication),
if as a result of any Regulatory Change there shall be
imposed, modified or deemed applicable any tax, reserve,
special deposit, minimum capital, capital ratio or similar
requirement against or with respect to or measured by
reference to Letters of Credit issued or to be issued
hereunder (or interests therein) and the result shall be to
increase the cost to any Bank or the Issuing Bank of issuing
or maintaining its obligation hereunder to issue or
participate in any Letter of Credit or reduce any amount
receivable by any Bank or the Issuing Bank hereunder in
respect of any Letter of Credit (which increases in cost, or
reduction in amount receivable, shall be the result of such
Bank's or the Issuing Bank's reasonable allocation of the
aggregate of such increases or reductions resulting from
such event), then, upon demand by such Bank or the Issuing
Bank, the Company shall pay directly to such Bank or the
Issuing Bank, from time to time as specified by such Bank or
the Issuing Bank, such additional amounts as shall be
sufficient to compensate such Bank or the Issuing Bank for
such increased costs or reductions in amount.
(e) Determinations and allocations by any Bank or the
Issuing Bank for purposes of this Section 5.01 of the effect
of any Regulatory Change pursuant to Section 5.01(a), (b) or
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(d) hereof, or of the effect of capital maintained pursuant
to Section 5.01(c) hereof, on its costs or rate of return of
maintaining Loans or Letters of Credit (or interests
therein) or its obligation to make Loans or to issue Letters
of Credit (or to acquire interests therein), or on amounts
receivable by it in respect of Loans, and of the amounts
required to compensate such Bank or the Issuing Bank under
this Section 5.01, shall be conclusive, provided that such
determinations and allocations are made on a reasonable
basis.
5.02 Limitation on Types of Loans. Anything herein to
the contrary notwithstanding, if, on or prior to the
determination of any Fixed Base Rate or Canadian Discount Rate
for any Interest Period:
(a) (i) with respect to U.S. Dollar Loans, the U.S.
Agent determines (which determination shall be conclusive)
that quotations of interest rates for the relevant deposits
referred to in the definition of "Fixed Base Rate" in
Section 1.01 hereof are not being provided in the relevant
amounts or for the relevant maturities for purposes of
determining rates of interest for Eurodollar Loans as
provided herein; or (ii) with respect to Canadian Dollar
Loans, the Canadian Agent determines (which determination
shall be conclusive) that quotations of discount rates for
Bankers Acceptances referred to in the definition of
"Canadian Discount Rate" in Section 1.01 hereof are not
being provided in the relevant amounts or for the relevant
maturities for purposes of determining rates of interest for
Canadian Discount Rate Loans as provided herein; or
(b) the Majority Banks or the Canadian Dollar Banks,
as the case may be, determine (which determination shall be
conclusive) and notify the relevant Agent that the relevant
rates of interest referred to in the definition of "Fixed
Base Rate" or "Canadian Discount Rate" in Section 1.01
hereof upon the basis of which the rate of interest for
Eurodollar Loans and Canadian Discount Rate Loans,
respectively, for such Interest Period is to be determined
are not likely adequately to cover the cost to such Banks of
making or maintaining such Loans for such Interest Period,
then the relevant Agent shall give the relevant Borrower and each
Bank prompt notice thereof, and so long as such condition remains
in effect, the U.S. Dollar Banks shall be under no obligation to
make additional Fixed Rate Loans, to Continue Fixed Rate Loans,
or to Convert Base Rate Loans into Eurodollar Loans or Canadian
Floating Rate Loans into Canadian Discount Rate Loans, as the
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case may be, and the relevant Borrower shall, on the last day(s)
of the then current Interest Period(s) for the outstanding Fixed
Rate Loans, either prepay such Loans or Convert such Loans into
Base Rate Loans or Canadian Floating Rate Loans, as the case may
be, in accordance with Section 2.08 hereof.
5.03 Illegality. Notwithstanding any other provision
of this Agreement, in the event that it becomes unlawful for any
U.S. Dollar Bank or its Applicable Lending Office to honor its
obligation to make or maintain Fixed Rate Loans hereunder, then
such U.S. Dollar Bank shall promptly notify the relevant Borrower
thereof (with a copy to the relevant Agent) and such U.S. Dollar
Bank's obligation to make or Continue Fixed Rate Loans, or
Convert, as the case may be, Base Rate Loans into Eurodollar
Loans or Canadian Floating Rate Loans into Canadian Discount Rate
Loans, shall be suspended until such time as such Bank may again
make and maintain Fixed Rate Loans and such Bank's outstanding
Fixed Rate Loans shall be Converted into Base Rate Loans or
Canadian Floating Rate Loans, as the case may be, in accordance
with Section 5.04 hereof.
5.04 Certain Conversions Pursuant to Sections 5.01 and
5.03. If the Eurodollar Loans of any U.S. Dollar Bank or the
Canadian Discount Rate Loans of any Canadian Dollar Bank (Loans
of such type being herein called "Affected Loans" and such type
being herein called the "Affected Type") are to be Converted
pursuant to Section 5.01 or 5.03 hereof, such Bank's Affected
Loans shall be automatically Converted into Base Rate Loans (in
the case of U.S. Dollar Banks) or Canadian Floating Rate Loans
(in the case of Canadian Dollar Banks) on the last day(s) of the
then current Interest Period(s) for the Affected Loans (or, in
the case of a Conversion required by Section 5.01(b) or 5.03
hereof, on such earlier date as such Bank may specify to the
Company with a copy to the relevant Agent) and, unless and until
such Bank gives notice as provided below that the circumstances
specified in Section 5.01 or 5.03 hereof which gave rise to such
Conversion no longer exist:
(a) to the extent that such Bank's Affected Loans have
been so Converted, all payments and prepayments of principal
which would otherwise be applied to such Bank's Affected
Loans shall be applied instead to its Base Rate Loans or
Canadian Floating Rate Loans, as the case may be; and
(b) all Loans which would otherwise be made or
Continued by such Bank as Loans of the Affected Type shall
be made or Continued instead as Base Rate Loans or Canadian
Floating Rate Loans, as the case may be, and all Loans of
such Bank which would otherwise be Converted into Loans of
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the Affected Type shall be Converted instead into (or shall
remain as) Base Rate Loans or Canadian Floating Rate Loans,
as the case may be.
If such Bank gives notice to the relevant Borrower (with a copy
to the relevant Agent) that the circumstances specified in
Section 5.01 or 5.03 hereof which gave rise to the Conversion or
non-Continuation of such Bank's Affected Loans pursuant to this
Section 5.04 no longer exist (which such Bank agrees to do
promptly upon such circumstances ceasing to exist) at a time when
Loans of the Affected Type are outstanding, such Bank's Base Rate
Loans or Canadian Floating Rate Loans, as the case may be, shall
be automatically Converted, on the first day(s) of the next
succeeding Interest Period(s) for such outstanding Loans of the
Affected Type, to the extent necessary so that, after giving
effect thereto, all Loans held by the Banks holding Loans of the
Affected Type and by such Bank are held pro rata (as to principal
amounts, types and Interest Periods) in accordance with their
respective Commitments.
5.05 Compensation. The relevant Borrower shall pay to
the relevant Agent for account of each Bank, upon the request of
such Bank through such Agent, such amount or amounts as shall be
sufficient (in the reasonable opinion of such Bank) to compensate
such Bank (or any corporation controlling such Bank) for any
loss, cost or expense which such Bank determines are attributable
to:
(a) any payment (subject to clause (ii) of the last
sentence of Section 3.03(c) hereof to the extent
applicable), prepayment or Conversion of a Eurodollar Loan
made by such U.S. Dollar Bank or a Canadian Discount Rate
Loan made by such Canadian Dollar Bank for any reason
(including, without limitation, the acceleration of the
Loans pursuant to Section 10 hereof) on a date other than
the last day of an Interest Period for such Loan; or
(b) any failure by the relevant Borrower for any
reason (including, without limitation, the failure of any of
the conditions precedent specified in Section 7 hereof to be
satisfied but excluding any such failure by the relevant
Borrower caused solely by operation of Section 5.03 hereof)
to borrow a Eurodollar Loan from such U.S. Dollar Bank or a
Canadian Discount Rate Loan from such Canadian Dollar Bank
on the date for such borrowing specified in the relevant
notice of borrowing given pursuant to Section 4.05 hereof.
Without limiting the effect of the preceding sentence, such
compensation shall include an amount equal to the excess, if any,
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of (i) the amount of interest (excluding Applicable Margin if the
event described in clause (a) or (b) requiring such compensation
did not relate to an outstanding Fixed Rate Loan) which otherwise
would have accrued on the principal amount so paid, prepaid or
Converted or not borrowed for the period from the date of such
payment, prepayment, Conversion or failure to borrow to the last
day of the then current Interest Period for such Loan (or, in the
case of a failure to borrow, the Interest Period for such Loan
which would have commenced on the date specified for such
borrowing) at the applicable rate of interest for such Loan
provided for herein over (ii) (A) with respect to any such
Eurodollar Loan, the interest component of the amount such U.S.
Dollar Bank (or any corporation controlling such U.S. Dollar
Bank) would have bid in the London interbank market for U.S.
Dollar deposits of leading banks in amounts comparable to such
principal amount and with maturities comparable to such period
(as reasonably determined by such U.S. Dollar Bank) or (B) with
respect to any such Canadian Discount Rate Loan, the discount
rate on Bankers Acceptances having an aggregate face amount of
CAN$1,000,000 and with maturities comparable to such period that
such Canadian Dollar Bank (or any corporation controlling such
Canadian Dollar Bank) would have purchased in the normal course
of its business (as reasonably determined by such Canadian Dollar
Bank).
5.06 Taxes.
(a) Tax Payments. Each relevant Obligor (which shall
mean for purposes of this Section 5.06 in the case of Taxes
imposed by the United States or any state or political
subdivision thereof, the Company; in the case of Taxes
imposed by Canada or any province or political subdivision
thereof, PSC; in the case of Taxes imposed by Mexico or any
state or political subdivision thereof, PSM; and, in the
case of Taxes imposed by the country in which it is
organized or any state or political subdivision thereof, any
other Guarantor) will pay when due, for its own account, all
present and future income, stamp, recording, documentary and
other taxes and levies, imposts, deductions, charges,
compulsory loans and withholdings whatsoever imposed,
assessed, levied or collected by any jurisdiction, together
with interest thereon and penalties with respect thereto, if
any, on or in respect of this Agreement (including, without
limitation, in respect of payments under Section 6 hereof),
any Loan, any Letter of Credit (or interest therein), any
Security Document, any Letter of Credit Document or any
Note, the registration, recording, notarization or other
formalization of any thereof, and any payments of principal,
interest, charges, fees or other amounts made on, under or
- 74 -
in respect of any thereof including the enforcement thereof
(excluding taxes imposed on the overall net income or
overall net worth of the Issuing Bank or any Bank or its
Applicable Lending Office(s) by the jurisdiction in which
the Issuing Bank or such Bank has its principal office or
such Applicable Lending Office(s)) (hereinafter called
"Taxes").
(b) Indemnification. Each relevant Obligor will
indemnify any Bank and the Issuing Bank against, and
reimburse any Bank and the Issuing Bank upon demand through
the relevant Agent for, any Taxes and any loss, liability,
claim or expense, including interest, penalties, fines,
surcharges and legal fees, which such Bank or the Issuing
Bank may incur at any time arising out of or in connection
with any failure of such Obligor to make any payment of
Taxes when due.
(c) Payments Free and Clear. All payments on account
of the principal of and interest on the Loans and the Notes
and all other amounts payable by any Obligor to any Bank or
the Issuing Bank hereunder or under any Security Document or
any Letter of Credit Document (including, without
limitation, amounts payable under clause (b) hereof) shall
be made free and clear of and without reduction by reason of
any Taxes, all of which will be for the account of and paid
in full when due by such Obligor. In the event that any
Obligor is required by applicable law, decree or regulation
to deduct or withhold Taxes from any amounts payable on,
under or in respect of this Agreement, the Loans, any Letter
of Credit (or interest therein), any Security Document, any
Letter of Credit Document or any Notes, such Obligor shall
make the required deduction or withholding, promptly pay the
amount of such Taxes to the appropriate taxing authorities
and pay to the relevant Agent such additional amounts as may
be required, after the deduction or withholding of Taxes, to
enable each Bank and the Issuing Bank to receive from such
Obligor, on the due date thereof, an amount equal to the
full amount stated to be payable to such Bank and the
Issuing Bank under this Agreement, any Security Document,
any Letter of Credit Document or any Note payable to the
order of such Bank or the Issuing Bank.
(d) Evidence of Tax Payments. Without in any way
affecting any Obligor's obligations under the preceding
provisions of this Section 5.06, such Obligor agrees to
furnish to each Agent (together with a copy for each Bank)
the originals or certified copies of all tax receipts in
respect of each payment, deduction or withholding of Taxes
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required to be made by applicable laws or regulations,
within 45 days after the date each payment under or in
respect of this Agreement, any Security Document, any Letter
of Credit Document or any Note subject to Taxes is made, and
such Obligor shall, at the request of any Bank or the
Issuing Bank, promptly furnish to such Bank or the Issuing
Bank any other information, documents and receipts that such
Bank or the Issuing Bank may reasonably require (and that
such Obligor can obtain with reasonable efforts) to
establish to its satisfaction that full and timely payment
has been made of all Taxes required to be paid hereunder.
(e) Survival. The covenants and agreements of each
Obligor under this Section 5.06 shall survive the repayment
of the Loans, the termination or expiration of the
Commitments and the cancellation of the Notes.
Section 6. GUARANTEES.
6.01 Unconditional Guarantees.
(a) Guarantees. For valuable consideration, receipt
whereof is hereby acknowledged, and to induce the Banks to
enter into this Agreement, each Guarantor (subject, in the
case of PSC and PSM, to the provisions of clause (b) below)
hereby unconditionally guarantees to each Bank, each Agent
and the Issuing Bank that its Guaranteed Obligations shall
be promptly paid in full when due (whether at stated
maturity, by acceleration or otherwise) in accordance with
the terms hereof and thereof, and, in the case of any
extension of time of payment, in whole or in part, that all
such amounts shall be promptly paid when due (whether at
stated maturity, by acceleration or otherwise) in accordance
with the terms of such extension. In addition, any
Guarantor (subject, in the case of PSC or PSM, to the
provisions of clause (b) below) hereby unconditionally
agrees that upon default in the payment when due (whether at
stated maturity, by acceleration or otherwise) of any of
such Guaranteed Obligations, such Guarantor shall forthwith
pay the same.
(b) Contingent Nature of Obligations of PSM and PSC.
Anything in the foregoing Section 6.01(a) to the contrary
notwithstanding, the following provisions shall apply to PSM
and PSC (but to no other Guarantor):
Unless and until a Contingent Event shall occur and be
continuing and the Majority Banks (through the U.S. Agent)
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shall notify PSC and/or PSM (through the Company) in writing
of the same, PSC and PSM shall have no obligation whatsoever
under Section 6.01(a) hereof with respect to its Guaranteed
Obligations. In the event that a Contingent Event shall
have occurred and be continuing, from and after (but not
before) the date of the notice referred to in the preceding
sentence, PSC and/or PSM (as specified in such notice) shall
automatically be and become a Guarantor for all purposes
under Section 6.01(a) hereof with respect to its Guaranteed
Obligations.
6.02 Validity. The obligations of each Guarantor
under this Section 6 (subject in the case of PSC and PSM to the
provisions of Section 6.01(b) hereof) shall be unconditional
irrespective of the value, genuineness, legality, validity,
regularity or enforceability of the obligations of any other
Obligor under this Agreement, the Notes, any of the Security
Documents, any of the Letter of Credit Documents, any of the Bank
Financial Accommodation Documents or, to the fullest extent
permitted by applicable law, any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge
or defense of a surety or guarantor. Without limiting the
generality of the foregoing, each Guarantor agrees that its
obligations hereunder shall not be affected by any time, by any
amendment, modification or supplement to, or waiver of any
provision of, any Document or by any other indulgence granted to
any Obligor. Accordingly, PSM hereby irrevocably and expressly
waives its rights under and the benefits of Articles 2846 and
2847 of the Civil Code for the Federal District of Mexico, and
the corresponding articles of the other states of Mexico, which
Articles and corresponding articles are not reproduced herein by
express declaration that the contents of such articles are known
to PSM.
6.03 Waivers. Each Guarantor hereby expressly waives
diligence, presentment and protest and any requirement that any
right or power be exhausted or any action be taken against any
other Obligor or any other Person and all notices and demands
whatsoever. For purposes of the aforesaid waiver by PSM of any
requirement that any right be exhausted or any action be taken
against any other Obligor or any other Person prior to action by
either Agent or any Bank or the Issuing Bank against PSM, PSM
also hereby irrevocably expressly waives (i) the benefits of
"orden y excusion" and of prior judgment, levy, execution and
other rights provided for in Articles 2814, 2815, 2817, 2818,
2820, 2821, 2823, 2836, 2839 and 2840 of the Civil Code for the
Federal District of Mexico, and the corresponding articles of the
other states of Mexico and (ii) any requirement of judicial
demand for payment, whether under Article 2848 or 2849 of the
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Civil Code for the Federal District of Mexico or otherwise which
Articles and corresponding articles are not reproduced herein by
express declaration that the contents of said articles are known
to PSM.
6.04 Subrogation. Each Guarantor hereby waives, to
the fullest extent permitted by applicable law, all rights of
subrogation or contribution, whether arising by contract or
operation of law (including, without limitation, any such right
arising under the Federal Bankruptcy Code) or otherwise by reason
of any payment by it pursuant to the provisions of this Section 6
and further agrees with each other Obligor for the benefit of
each of such Obligor's creditors (including, without limitation,
each Bank, the Issuing Bank and either Agent) that any such
payment by it shall constitute a contribution of capital by such
Guarantor to such Obligor to the extent it relates to a
Guaranteed Obligation of such Obligor.
6.05 Acceleration. Each Guarantor agrees that, as
between it and the other Guarantors on the one hand, and any
Bank, the Issuing Bank and either Agent, on the other hand, to
the fullest extent permitted by applicable law, the obligations
of either Borrower (other than itself) guaranteed under this
Section 6 may be declared to be forthwith due and payable, or may
be deemed automatically to have been accelerated, as provided in
Section 10 hereof for purposes of this Section 6 notwithstanding
any stay, injunction or other prohibition (whether in a
bankruptcy proceeding (including, without limitation, in the case
of PSC, any application under the Companies' Creditors
Arrangement Act, as amended from time to time, or the Bankruptcy
and Insolvency Act (Canada) or, with respect to reorganization or
relief of debts, under the Business Corporations Act (Ontario),
as amended from time to time) affecting such Borrower or
otherwise) preventing such declaration as against such Borrower
and that, in the event of such declaration or automatic
acceleration, such obligations (whether or not due and payable by
such Borrower) shall forthwith become due and payable by each
Guarantor for purposes of this Section 6 (subject to, in the case
of PSC and PSM, the provisions of Section 6.01(b) hereof).
6.06 Reinstatement. Each Guarantor's obligations
under this Section 6 shall be reinstated if at any time any
payment received by any Bank, the Issuing Bank or either Agent
from either Borrower hereunder or under any Note is rescinded or
required to be repaid by such Bank, the Issuing Bank or such
Agent.
6.07 Joint and Several Obligations, Etc. It is
expressly understood and agreed that the obligations of each
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Guarantor under this Section 6 shall be joint and several and
shall not be affected, modified or impaired by the compromise,
settlement, waiver, change, modification, amendment (whether
material or otherwise) or termination of any or all of the
obligations, duties, covenants or agreements by any other
Guarantor under this Section 6 or by the taking of, or the
failure to take, or any delay on the part of either Agent, the
Issuing Bank or any Bank in taking any action against any such
other Guarantor to enforce, assert or exercise any right, power
or remedy conferred on either Agent, the Issuing Bank or any Bank
hereunder or in connection with any of the transactions
contemplated hereby. Each Guarantor hereby acknowledges the
provisions of Section 6.01(b) hereof.
6.08 Severability. With respect to any Guarantor, the
provisions of this Section 6 are severable, and in any action or
proceeding involving any corporate law applicable to such
Guarantor, or any bankruptcy, insolvency, reorganization or other
law affecting the rights of creditors generally applicable to
such Guarantor or its obligations under this Section 6, if the
obligations of such Guarantor under this Section 6 would
otherwise be held or determined to be void, invalid or
unenforceable on account of the amount of its liability under
this Section 6, then, notwithstanding any other provision of this
Agreement (including, without limitation, this Section 6) to the
contrary, the amount of such liability shall, without any further
action by such Guarantor, any of the Banks, the Issuing Bank,
either Agent or any other Person, be automatically limited and
reduced to the highest amount which is valid and enforceable as
determined in such action or proceeding.
Section 7. CONDITIONS PRECEDENT.
7.01 Amendment Effective Date. The effectiveness of
the amendment and restatement of the Original Credit Agreement
provided for hereby is subject to the condition precedent that
the Agents shall have received the following, each of which shall
be in form and substance satisfactory to each Agent:
(a) Principal Documents.
(i) Notes. The Notes, duly executed and completed by
the Company and PSC, as applicable, dated the Closing Date
in exchange for the Original Notes.
(ii) Confirmation Agreement. The Company shall have
executed and delivered to the U.S. Agent the Confirmation
Agreement, executed by the President (or, in the case of
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Precis, Glen Dimplex and Glen Electric, a director) of each
of Housewares, Precis, Holdings, NACCO, Glen Dimplex and
Glen Electric and the authorized persons of each of the
other parties thereto.
(iii) Mortgages, Title Insurance and Survey. Amendments
to each of the Mortgages substantially in the form of
Exhibit B-6 hereto, duly executed and delivered by the
Company in recordable form (in such number of copies as the
U.S. Agent shall have requested), together with endorsements
to policies of title insurance containing such coverages as
the U.S. Agent deems necessary, with all survey exceptions
deleted, on forms of, and issued by, one or more title
companies satisfactory to the U.S. Agent (the "Title
Companies"), insuring the priority of the Liens created
under each such Mortgage, as so amended, for an amount
satisfactory to the U.S. Agent, subject only to such
exceptions as are satisfactory to the U.S. Agent. In
connection therewith, a redated ALTA as-built survey (the
"Survey") for each of the properties covered by each such
Mortgage, as so amended, certified to the Title Companies
and the U.S. Agent, and, to the extent necessary under
applicable law, Uniform Commercial Code (or equivalent)
financing statements covering fixtures, in each case
appropriately completed and duly executed, for filing in the
appropriate county land office. The Company shall have paid
to (A) the Title Companies all expenses and premiums of the
Title Companies in connection with the issuance of such
policies and in addition shall have paid to the Title
Companies an amount equal to the recording and stamp taxes
payable in connection with recording each Amendment to
Mortgage referred to in this clause (iii) in the appropriate
county land office and (B) the surveyors all costs and
expenses in connection with the redated surveys.
(b) Corporate Documents. An Officer's Certificate of
(1) each Obligor (i) stating that there has been
no amendment or other document affecting its articles or
certificate of incorporation or by-laws (or, in the case of
PSM, the Estatutos) since the Closing Date; (ii) stating
that the certification made in the Officer's Certificate
dated October 11, 1990 regarding incumbency of the officers
of each such Obligor is true and correct on and as of the
Amendment Effective Date; (iii) attaching thereto board of
directors resolutions of each Obligor approving (A) in the
case of the Obligors, this Agreement and (B) in the case of
the Company and PSC, the Notes and the borrowings hereunder;
and
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(2) each of Housewares, Precis, Holdings, NACCO,
Glen Dimplex and Glen Electric (each a "Party") (i)
regarding the incumbency of the President of such Party; and
(ii) stating that the execution, delivery and performance of
the Confirmation Agreement by such Party has been authorized
by all necessary corporate action on its part.
(c) Refinanced Indebtedness. The Borrowers shall have
paid the principal of and interest on, and all other amounts
payable, with respect to, Refinanced Indebtedness.
(d) (Intentionally omitted).
(e) Certain Certificates.
(i) Certificate as to Absence of Default and
Accuracy of Representations. An Officer's Certificate
of the Company to the effect set forth in the first
sentence of Section 7.03 hereof.
(ii) Compliance Certificate. An Officer's
Certificate of the Company substantially in the form of
a Compliance Certificate as of March 31, 1994.
(f) Opinions of Counsel.
(i) Counsel to the Company. An opinion of Jones,
Day, Reavis & Pogue, counsel to the Company, dated the
Amendment Effective Date, substantially in the form of
Exhibit I-5 hereto.
(ii) Counsel to PSC. An opinion of Miller
Thomson, Canadian counsel to PSC, dated the Amendment
Effective Date, substantially in the form of Exhibit I-
6 hereto.
(iii) General Counsel of the Company. An opinion
of Ronald C. Eksten, Esq., general counsel of the
Company, dated the Amendment Effective Date,
substantially in the form of Exhibit I-9 hereto.
(iv) Local Counsel to the Company. An opinion of
Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan,
North Carolina counsel to the Company; Heiskell,
Donelson, Bearman, Adams, Williams & Kirsch, Tennessee
counsel to the Company; and Jones, Day, Reavis & Pogue,
Virginia counsel to the Company, each dated the
Amendment Effective Date and each substantially in the
form of Exhibit I-8 hereto (with such variations to
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reflect local law considerations as are acceptable to
the U.S. Agent).
(v) Special Canadian Counsel to the Banks. An
opinion of Stikeman, Elliott, special Canadian counsel
to the Banks, dated the Amendment Effective Date,
substantially in the form of Exhibit J hereto.
(vi) Special New York Counsel to the Banks and the
Agents. An opinion of Milbank, Tweed, Hadley & McCloy,
special New York counsel to the Banks and the Agents,
dated the Amendment Effective Date, substantially in
the form of Exhibit K hereto.
(g) Amendment Fee, Etc. The Borrowers shall have paid
to the U.S. Agent for the account of each of the Banks (i)
an amendment fee (in U.S. Dollars) in an amount equal to
.125% of the Commitments of the Banks on the Amendment
Effective Date and (ii) letter of credit fees under
Section 2.01.II(a)(4) of the Original Credit Agreement, and
the commitment fees under Section 2.04(a) of the Original
Credit Agreement, in each case accrued to the Amendment
Effective Date and unpaid.
(h) Quebec Security. PSC and the Canadian Agent shall
have executed and delivered to the Canadian Agent the
Renewal Agreement and shall have made all such registrations
and publications with respect to the renewal, amendment and
continuance under the Civil Code of Quebec and an Act
respecting the implementation of the reform of the Civil
Code (Quebec) of a General Assignment for Quebec.
(i) Consent. Each of the "Banks" under and as defined
in the Original Credit Agreement that is not a "Bank" under
and as defined in the Amended and Restated Credit Agreement
(as in effect on the Amendment Effective Date) shall have
consented to the amendment and restatement of the Original
Credit Agreement.
(j) Acknowledgement Letter. The Borrowers shall have
executed and delivered to the U.S. Agent an acknowledgement
letter substantially in the form of Exhibit F hereto.
(k) Other Documents. Such other documents as either
Agent or the Majority Banks or special New York counsel to
the Banks or special Canadian counsel to the Banks may
reasonably request.
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7.02 Additional Conditions to Effectiveness. The
effectiveness of the amendment and restatement of the Original
Credit Agreement provided for hereby is also subject to the
following conditions precedent:
(a) No Material Adverse Change. In the good faith
judgment of the Majority Banks, no significant possibility
of a material adverse change referred to in
Section 8.02(b)(v) hereof exists based upon then current
conditions and circumstances.
(b) No Litigation. No litigation or similar
proceeding shall exist (or to the best knowledge of any
Responsible Officer of the Company shall be threatened)
which in the good faith judgment of the Majority Banks is
likely to have a material adverse effect on (i) the
prospects, business, operations or financial condition of
the Company and the Subsidiaries taken as a whole, or (ii)
the timely payment of the principal of or interest on the
Loans or of the Letter of Credit Obligations or (iii) the
enforceability of this Agreement, any Security Document, any
Supplemental Security Document, any Letter of Credit
Document, any Supplemental Agreement or any Note or the
rights and remedies of either Agent, any Bank or the Issuing
Bank hereunder or thereunder.
(c) Satisfactory Review. The Banks shall have
reviewed, and shall be satisfied with:
(i) the Company's projections and pro forma
financial statements reflecting the forecasted
financial condition, income and expenses of the Company
and the Subsidiaries; and the condition (financial or
other), operations, assets, nature of assets,
liabilities and prospects of NACCO and of the Company
and the Subsidiaries; and
(ii) the value, scope and extent of the collateral
under the Security Documents.
(d) Legal Review. All matters relating to the Loans
and the Letters of Credit shall be reasonably satisfactory
to each Agent, the Majority Banks, special New York counsel
to the Banks and special Canadian counsel to the Banks from
a legal point of view.
7.03 Initial and All Subsequent Extensions of Credit.
The obligation of the U.S. Dollar Banks to make the Loans to be
made upon the occasion of each borrowing hereunder (including,
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without limitation, borrowings on the Amendment Effective Date
and borrowings of Canadian Dollar Loans), and the obligation of
the Issuing Bank to issue Letters of Credit (including, without
limitation, issuances on the Amendment Effective Date), is
subject to the further conditions precedent that, as of the date
of such Loans or such issuance of Letters of Credit, and after
giving effect thereto (a) no Default shall have occurred and be
continuing; and (b) the representations and warranties made (i)
by the Obligors in Section 8 hereof and in each Security
Document, (ii) by Holdings in any Holdings Document and (iii) by
each Majority Interest Party in each Majority Interest Document,
shall be true and correct on and as of the date of such borrowing
or issuance with the same force and effect as if made on and as
of such date. In the case of borrowings of Loans or issuances of
Letters of Credit (other than the borrowings or issuances on the
Amendment Effective Date), the related notice of borrowing or
issuance by either Borrower hereunder shall constitute a
certification by each such Borrower to the effect set forth in
the preceding sentence (both as of the date of such notice and,
unless such Borrower otherwise notifies the Agents, as of the
date of such borrowing or issuance).
Section 8. REPRESENTATIONS AND WARRANTIES. Each
Obligor represents and warrants to the Agents and the Banks (in
the case of each Obligor (other than the Company) in its capacity
as a Subsidiary of the Company and in its independent corporate
capacity) that:
8.01 Corporate and Legal Existence and Structure.
The Company and each of the Subsidiaries:
(i) is a corporation duly organized and validly
existing under the laws of the jurisdiction of its
organization;
(ii) has all requisite corporate power, and has
all material governmental licenses, authorizations,
consents and approvals necessary to own its assets and
carry on its business (other than those material
governmental licenses, authorizations, consents and
approvals the failure so to have would not have a
material adverse effect on the prospects, business,
financial condition or operations of the Company and
the Subsidiaries taken as a whole); and
(iii) is qualified to do business in all
jurisdictions in which the nature of the business
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conducted by it makes such qualification necessary and
where failure so to qualify would have a material
adverse effect on its prospects, business, operations
or financial condition.
8.02 Information.
(a) All material information heretofore furnished by
each Obligor (or its predecessors) or on its behalf to
either Agent or any Bank for purposes of or in connection
with this Agreement or any other Documents or any
transaction contemplated hereby or thereby is, and all such
information furnished by it to either Agent or any Bank will
be, true and accurate in all material respects on the date
as of which such information is stated or certified. Each
Obligor has disclosed to the Banks in writing any and all
facts which materially and adversely affect or may affect
(to the extent it can now reasonably foresee) the prospects,
business, operations or financial condition of it and its
Subsidiaries, in each case taken as a whole.
(b) Without limiting the generality of paragraph (a):
(i) [Intentionally omitted]
(ii) The consolidated balance sheet of the Company and
its Subsidiaries as at December 31, 1993 and the related
consolidated statement of income, retained earnings and
changes in cash flows of the Company and its Subsidiaries
for the fiscal year ended on December 31, 1993, with the
opinion thereon of Arthur Andersen & Co., heretofore
furnished to each of the Banks, present fairly, in all
material respects, the consolidated financial condition of
the Company and its Subsidiaries as at said date and the
consolidated results of their operations for the period
covered thereby, all in accordance with GAAP applied on a
consistent basis. Neither the Company nor any of its
Subsidiaries had on said date any material contingent
liabilities, liabilities for taxes, unusual forward or long-
term commitments or unrealized or anticipated losses from
any unfavorable commitments, except as referred to or
reflected or provided for in said balance sheet as at said
date (or the notes thereto);
(iii) [Intentionally omitted]
(iv) The balance sheet of PSC as at December 31, 1993
and the related statement of income, retained earnings and
changes in cash flows of PSC for the fiscal year ended on
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December 31, 1993, with the opinion thereon of Arthur
Andersen & Co., heretofore furnished to each of the Banks,
present fairly, in all material respects, the financial
condition of PSC as at said date and the results of its
operation for the period covered thereby, all in accordance
with generally accepted accounting principles in Canada
applied on a consistent basis. PSC did not have on said
date any material contingent liabilities, liabilities for
taxes, unusual forward or long-term commitments or
unrealized or anticipated losses from any unfavorable
commitments, except as referred to or reflected or provided
for in said balance sheet as at said date (or the notes
thereto); and]
(v) Since December 31, 1993, there has been no
material adverse change in the prospects, business,
operations or financial condition of the Company and the
Subsidiaries taken as a whole from that set forth in the
financial information set forth in the financial statements
referred to in clause (ii) above.
8.03 Litigation. Except as disclosed on Schedule VI
hereto, there are no legal or arbitral proceedings or any
proceedings by or before any governmental or regulatory authority
or agency, now pending or (to the best knowledge of any
Responsible Officer of any Obligor) threatened against any
Obligor or any of its Subsidiaries as to which there is a
reasonable possibility of an adverse determination that could
have a material adverse effect on the prospects, business,
operations or financial condition of any Obligor and its
Subsidiaries taken as a whole, or on the timely payment of the
principal of or interest on the Loans or the Letter of Credit
Obligations or on the enforceability of this Agreement, the Notes
or the Security Documents or on the rights and remedies of the
Agents, the Issuing Bank or the Banks hereunder or thereunder.
8.04 No Breach.
(a) None of the execution and delivery of this
Agreement, the Notes, the Security Documents, the
Reorganization Documents to which it is a party or any of
the other Documents, or the consummation of the transactions
herein and therein contemplated or performance or compliance
with the terms and provisions hereof or thereof will
conflict with or result in a breach of or default under, or
require any consent under or result in the creation or
imposition of any Lien upon any of the properties, assets or
revenues of any Obligor or any of its Subsidiaries pursuant
to the terms of:
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(i) the Certificate of Incorporation or By-laws (or
equivalent) of the Company or any other Obligor;
(ii) any applicable law or regulation;
(iii) any order, writ, injunction or decree of any court
or governmental authority or agency; or
(iv) except as set forth on Schedule XI hereto, any
agreement or instrument to which any Obligor or any of its
Subsidiaries is a party or by which it is bound.
(b) [Intentionally omitted]
8.05 Corporate Action. Each of the Obligors has all
necessary corporate authority to execute, deliver and perform its
obligations under this Agreement, the Notes (in the case of the
Borrowers) and the Security Documents to which such Obligor is a
party (if any) and each of the other Documents executed or to be
executed by it; the execution, delivery and performance by each
of the Obligors of this Agreement, the Notes (in the case of the
Borrowers) and the Security Documents to which such Obligor is a
party (if any) and each of the other Documents executed by it
have been duly authorized by all necessary corporate action on
its part; and this Agreement and each of the Security Documents
have been duly and validly executed and delivered by each of the
Obligors party thereto and constitutes, and each of the Notes
when executed and delivered by the Borrower that is the maker
thereof for value and each of the other Documents when executed
and delivered by the Obligor party thereto will constitute, its
legal, valid and binding obligation, enforceable in accordance
with its terms.
8.06 Use of Proceeds. The Company shall use the
proceeds of the Series A R/C Loans to prepay in full the
principal of, interest on and all other amounts owed with respect
to the Refinanced Indebtedness of the Company, to provide working
capital and fulfill other lawful corporate purposes and to pay
the Holdings Dividend permitted by Section 9.12 hereof. PSC
shall use the proceeds of the Series B R/C Loans to provide
working capital and fulfill other lawful corporate purposes.
Letters of Credit shall be issued for the account of the Company
solely for the purposes described in Section 2.01(II)(a)(3)
hereof.
8.07 Approvals. No authorizations, approvals or
consents of, and no filings or registrations with, any
governmental or regulatory authority or agency are necessary for
the execution, delivery or performance by any Obligor of this
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Agreement, each Security Document to which it is a party or (in
the case of the Borrowers), the Notes (in the case of the
Borrowers) or for the validity or enforceability thereof.
8.08 ERISA. The Company and the ERISA Affiliates have
fulfilled their respective obligations under the minimum funding
standards of ERISA and the Code with respect to each Plan and are
in compliance in all material respects with the presently
applicable provisions of ERISA and the Code (except as to matters
where non-compliance would not materially adversely affect the
prospects, business, operations or financial condition of the
Company and the Subsidiaries taken as a whole), and have not
incurred any material liability to the PBGC or any Plan or
Multiemployer Plan (other than the ongoing responsibility to make
contributions or premium payments which are not currently past
due).
8.09 Taxes. Each Obligor has filed all United States
Federal, and Canadian federal and provincial, income tax returns
and all other material tax returns which are required to be filed
by them and have paid all taxes shown to be due pursuant to such
returns or pursuant to any assessment received by any Obligor or
any of its Subsidiaries. The charges, accruals and reserves on
the books of each Obligor and each of its Subsidiaries in respect
of taxes and other governmental charges are, in the opinions of
such Obligor, adequate.
8.10 Certain Agreements. Set forth in Part A of
Schedule III hereto is a complete and correct list, as of the
Amendment Effective Date, of the Refinanced Indebtedness and each
credit agreement, loan agreement, indenture, purchase agreement,
guarantee or other arrangement providing for or otherwise
relating to any extension of credit to, or guarantee by, the
Company or any Subsidiary (other than as the same relates to
trade credit) which has an aggregate outstanding principal or
face amount in excess of U.S.$500,000 (or a U.S. Dollar
Equivalent) and the aggregate principal or face amount
outstanding or which may become outstanding under each such
arrangement is correctly described in said Part A of Schedule
III. Set forth in Part B of Schedule III hereto is a complete
and correct summary, as of the Amendment Effective Date, of the
terms and conditions of each Interest Rate Protection Arrangement
entered into by the Company or any of its Subsidiaries
(including, without limitation, a copy of each confirmation
relating to each Interest Rate Protection Arrangement).
8.11 Subsidiaries, Etc. Schedule II hereto contains a
complete and accurate list, as of the Amendment Effective Date,
of all Subsidiaries of the Obligors. Except as disclosed in
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Schedule II hereto, each Obligor owns free and clear of all Liens
(other than pursuant to the Security Documents), all of the
capital stock of the Subsidiaries set forth beneath the name of
such Obligor in said Schedule II, and all of such capital stock
is validly issued, fully paid and non-assessable. Each of the
Subsidiaries is a consolidated Subsidiary of the Company for
financial reporting purposes.
8.12 Legal Form. In the case of PSC and PSM, this
Agreement, and, in the case of PSC, the Security Documents to
which it is a party and each of its Notes are in proper legal
form (i) in the case of PSM, under the laws of Mexico for
enforcement thereof against PSM in Mexico (provided that an
official translation of this Agreement into Spanish by a
translator authorized by the Mexican courts would have to be
prepared in order to initiate any proceeding for the enforcement
thereof in the courts of Mexico) and (ii) in the case of PSC,
under the laws of Canada and the applicable province thereof for
enforcement thereof against PSC in Canada.
8.13 Assets.
(a) Each Obligor owns and has good title to (or, if
subject to lease, leasehold interests in) its properties and
assets, free and clear of all Liens or other encumbrances of
any nature other than Liens expressly permitted by
Section 9.14 hereof.
(b) Each Obligor owns, free and clear of all Liens
(except Liens in favor of either Agent for the benefit of
the Banks), all of the patents, trademarks, trade names,
copyrights or rights with respect to the foregoing, and has
obtained assignments of all leases and other rights of
whatever nature, deemed by such Obligor to be necessary for
the present and planned future conduct of its business,
without any conflict with the rights of others which might
result in a material adverse effect on the prospects,
business, operations or financial condition of the Company
and the Subsidiaries taken as a whole. Each Obligor has
received all assignments, bills of sale or other documents
necessary to establish, protect and perfect such Obligor's
right, title and interest in and to all of the property
described in the foregoing sentence. Each Obligor has duly
effected all filings, recordings and other actions necessary
to establish, protect and perfect such Obligor's right,
title and interest in and to all of the material property
described in the second preceding sentence.
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8.14 Margin Stock. The extensions of credit to the
Borrowers hereunder will not contravene the provisions of
Regulation G, Regulation T, Regulation U or Regulation X. Not
more than 25% of the value (as determined by any reasonable
method) of the assets of the Company and its Subsidiaries is
represented by "margin stock" within the meaning of Regulation U.
8.15 Public Utility Holding Company Act; Investment
Company Act. Neither the Company nor any of the Subsidiaries is
(i) a "holding company", or an "affiliate" of a "holding company"
or a "subsidiary company" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as
amended from time to time or (ii) an "investment company" within
the meaning of the Investment Company Act of 1940, as amended
from time to time.
8.16 Hazardous Materials. The Company and each of the
Subsidiaries have obtained all permits, licenses and other
authorizations which are required under all Environmental Laws,
except to the extent failure to have any such permit, license or
authorization would not have a material adverse effect on the
financial condition, operations, business or prospects of the
Company and the Subsidiaries taken as a whole. Except as set
forth on Schedule X hereto, the Company and each of the
Subsidiaries are in compliance with the terms and conditions of
all such permits, licenses and authorizations, and are also in
compliance with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and
timetables contained in any applicable Environmental Law or in
any regulation, code, plan, order, decree, judgment, injunction,
notice or demand letter issued, entered, promulgated or approved
thereunder, except to the extent failure to comply would not have
a material adverse effect on the financial condition, operations,
business or prospects of the Company and the Subsidiaries taken
as a whole.
In addition, except as set forth in Schedule X hereto:
(a) No notice, notification, demand, request for
information, citation, summons or order has been issued, no
complaint has been filed, no penalty has been assessed and
no investigation or review is pending or, to the best
knowledge of the Company, threatened by any governmental
entity with respect to any alleged failure by the Company or
any of the Subsidiaries to have any permit, license or
authorization required in connection with the conduct of the
business of the Company or any of the Subsidiaries or with
respect to any generation, treatment, storage, recycling,
transportation, release or disposal, or any release as
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defined in 42 U.S.C. Sec. 9601(22) or any foreign Environmental
Law of general application ("Release"), of any substance
regulated under Environmental Laws ("Hazardous Materials")
generated by the Company or any of the Subsidiaries.
(b) Neither the Company nor any of the Subsidiaries
has handled any Hazardous Waste (as defined in 40 CFR Sec. 261)
or any Subject Waste (as defined in Regulation 347 under the
Environmental Protection Act (Ontario) except as allowed by
permit or regulation on any property now or previously owned
or leased by the Company or any of the Subsidiaries to an
extent that it has, or may reasonably be expected to have, a
material adverse effect on the financial condition,
operations, business or prospects of the Company and the
Subsidiaries taken as a whole; and
(i) no polychlorinated biphenyls are, or have
been, present at any property now or previously owned
or leased by the Company or any of the Subsidiaries;
(ii) no asbestos is, or has been, present at any
property now or previously owned or leased by the
Company or any of the Subsidiaries;
(iii) there are no underground storage tanks for
Hazardous Materials, active or abandoned, at any
property now or previously owned or leased by the
Company or any of the Subsidiaries;
(iv) no Hazardous Materials have been Released, in
a reportable quantity, where such a quantity has been
established by a statute, ordinance, rule, regulation
or order, at, on or under any property now or
previously owned or leased by the Company or any of the
Subsidiaries; and
(v) no Hazardous Materials have been otherwise
Released at, on or under any property now or previously
owned or leased by the Company or any of the
Subsidiaries;
in the case of each of the circumstances described in
clauses (i) through (v) inclusive above, to an extent that
such circumstance has, or may reasonably be expected to
have, a material adverse effect on the financial condition,
operations, business or prospects of the Company and the
Subsidiaries taken as a whole.
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(c) To the best knowledge of the Company, after due
inquiry, neither the Company nor any of the Subsidiaries has
transported or arranged for the transportation of any
Hazardous Material to any location which is listed on the
National Priorities List under the Comprehensive
Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA"), listed for possible inclusion
on the National Priorities List by the Environmental
Protection Agency, on the Comprehensive Environmental
Response Compensation and Liability and Information System
("CERCLIS") or on any similar state or foreign list or which
is the subject of federal, state, provincial or local
enforcement actions or other investigations which may
reasonably be expected to lead to claims against the Company
or any of the Subsidiaries for clean-up costs, remedial
work, damages to natural resources or for personal injury
claims, including, but not limited to, claims under CERCLA,
to an extent that such circumstance has, or may reasonably
be expected to have, a material adverse effect on the
financial condition, operations, business or prospects of
the Company and the Subsidiaries taken as a whole.
(d) To the best knowledge of the Company, after due
inquiry, no Hazardous Material generated by the Company or
any of the Subsidiaries has been recycled, treated, stored,
disposed of or Released by the Company or any of the
Subsidiaries at any location other than those listed on
Schedule X hereto.
(e) No oral or written notification of a Release of a
Hazardous Material has been filed by or on behalf of the
Company or any of the Subsidiaries and no property now or
previously owned or leased by the Company or any of the
Subsidiaries is listed or proposed for listing on the
National Priority list promulgated pursuant to CERCLA, on
CERCLIS or on any similar state or foreign list of sites
requiring investigation or clean-up.
(f) There are no Liens arising under or pursuant to
any Environmental Laws on any of the real property or
properties owned or leased by the Company or any of the
Subsidiaries, and no government actions have been taken or
are in process which could subject any of such properties to
such Liens and neither the Company nor any of the
Subsidiaries would be required to place any notice or
restriction relating to the presence of Hazardous Materials
at any property owned by it in any deed to such property.
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(g) To the best knowledge of the Company, after due
inquiry, there have been no environmental investigations,
studies, audits, tests, reviews or other analyses conducted
by or which are in the possession of the Company or any of
the Subsidiaries in relation to any property or facility now
or previously owned or leased by the Company or any of the
Subsidiaries which have not been superseded and which have
not been made available to the Banks upon request (subject
to Section 12.15 hereof).
8.17 Product Recall Liability. Set forth on Schedule
VIII hereto is a complete and correct list, as of the Amendment
Effective Date of all active Product Recall Events of the Company
and the Subsidiaries and the Product Recall Liability relating
thereto. Aggregate Product Recall Liability with respect to all
Product Recall Events of the Company and the Subsidiaries will
not result in a material adverse change in the prospects,
business, operations or financial condition of the Company and
the Subsidiaries taken as a whole, and no significant possibility
of aggregate Product Recall Liability resulting in such a
material adverse change exists based upon then current conditions
and circumstances.
Section 9. COVENANTS. So long as any of the
Commitments are in effect and until payment in full of the
principal of and interest on all Loans hereunder and all other
amounts payable by each Obligor hereunder and the expiration or
termination of all Letters of Credit:
9.01 Financial Statements and Other Information. The
Company shall deliver to each of the Banks and the U.S. Agent:
(a) (i) [Intentionally omitted]
(ii) as soon as available and in any event within 45
days after the end of each of the first three fiscal
quarterly periods of each fiscal year of the Company,
consolidated statements of income, retained earnings and
changes in cash flows of the Company and the Subsidiaries
for such period and for the period from the beginning of the
respective fiscal year to the end of such period, and the
related consolidated balance sheet as at the end of such
period, setting forth in each case for the fiscal quarter of
the Company ending December 31, 1991 and thereafter in
comparative form the corresponding figures for the
corresponding period in the preceding fiscal year,
accompanied by a certificate of the senior financial officer
of the Company, which certificate shall state that said
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financial statements present fairly, in all material
respects, the consolidated financial condition and results
of operations of the Company and the Subsidiaries in
accordance with GAAP consistently applied, as at the end of,
and for, such period (subject to normal year-end audit
adjustments);
(b) as soon as available and in any event within 90
days after the end of each fiscal year of the Company,
consolidated statements of income, retained earnings and
changes in cash flows of the Company and the Subsidiaries
for such year and the related consolidated balance sheet as
at the end of such year, setting forth in each case for the
fiscal year of the Company ending December 31, 1992 and
thereafter in comparative form the corresponding figures for
the preceding fiscal year, and accompanied by an opinion
thereon of an independent certified public accountant of
recognized national standing acceptable to the Majority
Banks, which opinion shall state that said financial
statements present fairly, in all material respects, the
consolidated financial condition and results of operations
of the Company and the Subsidiaries as at the end of, and
for, such fiscal year, and a certificate of such accountants
stating that, in making the examination necessary for their
opinion, nothing came to their attention, except as
specifically stated, that caused them to believe that the
Company had failed to comply with Sections 9.07, 9.08, 9.09
or 9.12 hereof, or any other provision hereof, insofar as
they relate to accounting matters;
(c) [Intentionally omitted]
(d) promptly upon their becoming available, copies of
all registration statements and annual, periodic or other
regular reports, if any, which the Company and/or any
Subsidiary shall have filed with the SEC (or any
governmental agency substituted therefor) or any national
securities exchange (except for those filed on a
confidential basis);
(e) as soon as possible, and in any event by March 31,
of each year, monthly projections substantially similar in
form and scope to the Management Financial Forecasts for
each month of such year;
(f) [Intentionally omitted]
(g) as soon as possible, and in any event within ten
days after a Responsible Officer of the Company knows or has
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reason to know that any of the events or conditions
specified below with respect to any Plan or Multiemployer
Plan have occurred or exist, a statement signed by the
senior financial officer of the Company setting forth
details respecting such event or condition and the action,
if any, which the Company or its ERISA Affiliate proposes to
take with respect thereto (and a copy of any report or
notice required to be filed with or given to PBGC by the
Company or an ERISA Affiliate with respect to such event or
condition):
(i) any reportable event, as defined in
Section 4043(b) of ERISA and the regulations issued
thereunder, with respect to a Plan, as to which PBGC
has not by regulation waived the requirement of
Section 4043(a) of ERISA that it be notified within 30
days of the occurrence of such event (provided that a
failure to meet the minimum funding standard of
Section 412 of the Code or Section 302 of ERISA shall
be a reportable event regardless of the issuance of any
waivers in accordance with Section 412(d) of the Code;
(ii) the filing under Section 4041 of ERISA of a
notice of intent to terminate any Plan or the
termination of any Plan;
(iii) the institution by PBGC of proceedings
under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Plan,
or the receipt by the Company or any ERISA Affiliate of
a notice from a Multiemployer Plan that such action has
been taken by PBGC with respect to such Multiemployer
Plan;
(iv) the complete or partial withdrawal by the
Company or any ERISA Affiliate under Section 4201 or
4204 of ERISA from a Multiemployer Plan, or the receipt
by the Company or any ERISA Affiliate of notice from a
Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA or
that it intends to terminate or has terminated under
Section 4041A of ERISA; and
(v) the institution of a proceeding by a
fiduciary of any Multiemployer Plan against the
Guarantor or any ERISA Affiliate to enforce Section 515
of ERISA, which proceeding is not dismissed within 30
days;
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(h) promptly after any Responsible Officer of any
Obligor knows or has reason to know that any Default has
occurred, a notice of such Default, describing the same in
reasonable detail;
(i) promptly after any Responsible Officer of any
Obligor knows or has reason to know that any mandatory
prepayment event as set forth in Section 3.03(c) hereof has
occurred, a notice of such event, describing the same in
reasonable detail;
(j) as soon as possible, and in any event within ten
days after any Responsible Officer of the Company knows or
has reason to know that any Obligor has received notice from
any governmental authority to the effect that such Obligor
is not in compliance with the Environmental Laws or the
permits, licenses or authorizations referred to in
Section 8.16 hereof, a notice of such circumstance
describing the same in reasonable detail;
(k) promptly after any Responsible Officer of any
Obligor knows or has reason to know that any Product Recall
Event has occurred, a notice of such Product Recall Event,
describing the same in reasonable detail (and appending any
notice from the CPSC or proposed product recall plan and
other documents relating thereto); and
(l) from time to time such other information regarding
the business, affairs or financial condition of the Company
or any of the Subsidiaries (including, without limitation,
(i) any Plan or Multiemployer Plan and any reports or other
information required to be filed under ERISA and
(ii) unaudited consolidating financial statements for the
Company and the Subsidiaries) as any Bank or either Agent
may reasonably request.
The Company will furnish to each Bank and the U.S. Agent, (1) at
the time it furnishes each set of financial statements pursuant
to paragraph (a)(ii) or (b) above, (A) a Certificate (a
"Compliance Certificate") substantially in the form of Exhibit G
hereto signed by the senior financial officer of the Company (i)
to the effect that no Default has occurred and is continuing (or,
if any Default has occurred and is continuing, describing the
same in reasonable detail and describing the steps being taken to
remedy the same), (ii) setting forth in reasonable detail the
computations necessary to determine whether the Company is in
compliance with Sections 9.07, 9.08 and 9.09 hereof (based upon
the financial statements adjusted to eliminate the effects of FAS
109, as reflected in the Reconciliation Statement), as of the end
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of the respective fiscal quarter or fiscal year and, in the case
of the certificate accompanying financial statements delivered
pursuant to paragraph (b) above, setting forth in reasonable
detail the computations necessary to determine the Clean-Down
Limit for the related fiscal year of the Company and (iii)
setting forth the amount of Casualty Insurance Proceeds and
Disposition Proceeds received during such fiscal quarter or
fiscal year); and (B) a statement (a "Reconciliation Statement")
substantially in the form of Exhibit L hereto signed by the
senior financial officer of the Company that displays, on a line-
by-line basis, the difference between the financial statements
provided pursuant to paragraph (a)(ii) or (b) above (as the case
may be) and such financial statements if the same were not
adjusted for FAS 109; (2) on the first Business Day following the
end of each Clean-Down Period, a statement (a "Parent Advance
Statement") substantially in the form of Exhibit M hereto, signed
by a senior financial officer of the Company that sets forth (i)
the daily outstanding principal amount of the Revolving Credit
Loans and Bank Line Loans during such Clean-Down Period, (ii) the
daily outstanding principal amount of the Parent Advances during
such Clean-Down Period and (iii) the daily outstanding principal
amount of the Clean-Down Parent Advances for such Clean-Down
Period; and (3) on the date on which the Company pays the
Holdings Dividend, a certificate of the chief financial officer
of the Company stating that the Holdings Dividend is paid and
after giving effect thereto (i) the aggregate value of all
Properties of the Company and its Subsidiaries at their present
fair saleable value (i.e., the amount that may be realized within
a reasonable time, considered to be six months to one year,
either through collection or sale at the regular market value,
conceiving the latter as the amount that could be obtained for
the Property in question within such period by a capable and
diligent businessman from an interested buyer who is willing to
purchase under ordinary selling conditions), exceed the amount of
all the debts and liabilities (including contingent,
subordinated, unmatured and unliquidated liabilities) of the
Company and its Subsidiaries, (ii) the Company and its
Subsidiaries will not, on a consolidated basis, have an
unreasonably small capital with which to conduct their business
operations as heretofore conducted and (iii) the Company and its
Subsidiaries will have, on a consolidated basis, sufficient cash
flow to enable them to pay their debts as they mature.
9.02 Litigation, Etc. The Company shall:
(a) promptly after making the judgment described
below, give notice to each Bank and the U.S. Agent of any
legal or arbitral proceedings, and of all proceedings by or
before any governmental or regulatory authority or agency,
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affecting any Obligor or any of its Subsidiaries which, if
adversely determined, in the reasonable judgment of the
Company would have a material adverse effect on the
prospects, business, operations or financial condition of
the Company and the Subsidiaries taken as a whole; and
(b) promptly after a Responsible Officer of the
Company knows or has reason to know of the same, give notice
to each Bank and the U.S. Agent of the issuance by any
United States Federal or state court or any United States
Federal or state regulatory authority of any injunction,
order or other restraint prohibiting, or having the effect
of prohibiting or delaying, the making of Loans or the
issuance of Letters of Credit, the institution of any
litigation or similar proceedings seeking any such
injunction, order or other restraint.
9.03 Corporate Existence, Etc. Each Obligor shall,
and shall cause each of its Subsidiaries to, preserve and
maintain its corporate existence and all of its material rights,
privileges and franchises; comply with the requirements of all
applicable laws, rules, regulations and orders of governmental or
regulatory authorities (including, without limitation, any
thereof referred to in Section 8.16 hereof) if failure to comply
with such requirements would materially and adversely affect the
prospects, business, operations or financial condition of such
Obligor and its Subsidiaries taken as a whole; pay and discharge
all taxes, assessments and governmental charges or levies imposed
on it or on its income or profits or on any of its property prior
to the date on which penalties attach thereto, except for any
such tax, assessment, charge or levy the payment of which is
being contested in good faith and by proper proceedings and
against which adequate reserves are being maintained; maintain
all of its properties used or useful in its business in good
working order and condition, ordinary wear and tear excepted;
permit representatives of any Bank or either Agent, during normal
business hours, to examine, copy, and make extracts from its
books and records (at such Bank's expense except during the
occurrence and continuance of a Default), to inspect its
properties, and to discuss its business and affairs with its
officers, all to the extent reasonably requested by such Bank or
such Agent (as the case may be); and promptly upon the request of
any Bank (which request shall be made in good faith and on a
reasonable basis in light of statutes, regulations, directives
and interpretations applicable to such Bank, whether or not
having the force of law) the Company shall authorize the U.S.
Agent to obtain (at the expense of the Company), and shall
cooperate in order to permit the U.S. Agent to obtain, appraisals
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in form and substance satisfactory to the U.S. Agent and the
Majority Banks on any property subject to any Mortgage.
9.04 Use of Proceeds. Each Borrower shall use the
proceeds of the Loans hereunder solely as provided in
Section 8.06 hereof in compliance with all applicable legal and
regulatory requirements, including, without limitation,
Regulation G, Regulation T, Regulation U or Regulation X and the
Securities Act of 1933, as amended and the Securities Exchange
Act of 1934, as amended and the regulations thereunder.
9.05 [Intentionally omitted]
9.06 [Intentionally omitted]
9.07 Interest Coverage Ratio. The Company shall not
permit the Interest Coverage Ratio to be less than 2.25 to 1.00.
9.08 Leverage Ratio. The Company shall not, at any
time during any period set forth below, permit the Leverage Ratio
to exceed the ratio set forth opposite such period:
Period Leverage Ratio
During the first and second
fiscal quarter of each
fiscal year of the Company .51 to 1
During the third and fourth
fiscal quarter of each
fiscal year of the Company .54 to 1
9.09 Net Worth. The Company shall not, at any time
permit its Net Worth to be less than $130,000,000 less the amount
of the Holdings Dividend.
9.10 Independent Obligations of PSC. PSC hereby
acknowledges and confirms that each of the obligations set forth
in this Section 9 that refer to PSC in its capacity as a
Subsidiary of the Company shall be observed by PSC in its
independent corporate capacity.
9.11 [Intentionally omitted]
9.12 Restricted Payments. Except for the Holdings
Dividend, the Company shall not, and shall not permit any of the
Subsidiaries to, declare or make any Restricted Payments;
provided that the Company may during any Restricted Payments
Period make Restricted Payments, subject to the satisfaction of
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the following conditions on the date of such Restricted Payment
and after giving effect thereto:
(a) no Default has occurred or is continuing; and
(b) the aggregate amount of Restricted Payments made in
any Restricted Payments Period shall not exceed the lesser
of (A) the quotient of the sum of (i) Cash Flow of the
Company and its Subsidiaries for the Computation Period
ending December 31 of the immediately preceding fiscal year
of the Company minus (ii) Fixed Charges of the Company and
its Subsidiaries for such Computation Period divided by 1.05
and (B) the amount of the net income of the Company and its
Subsidiaries for such Computation Period; provided that the
Company shall be permitted to make Restricted Payments in
such Restricted Payments Period in excess of the limit set
forth in this paragraph (b) so long as (x) the Leverage
Ratio as at the last day of such Computation Period
(computed by deducting from the Net Worth of the Company the
proposed Restricted Payment to be made pursuant to this
Section 9.12) is less than or equal to .35 to 1 and (y) the
Interest Coverage Ratio for such Computation Period is equal
to or greater than 4.0 to 1.
9.13 Limitation on Consolidation, Merger, Acquisitions
and Dispositions. The Company shall not, and shall not permit
any of the Subsidiaries to:
(a) consolidate with or merge into any other Person or
permit any other Person to consolidate with or merge into it
except, if no Default has occurred and is continuing (or
upon giving effect to the subject transaction will occur)
(i) so long as a Wholly-Owned Subsidiary is the surviving
corporation, any Subsidiary may consolidate with or merge
into another Subsidiary or (ii) so long as the Company is
the surviving corporation, any Subsidiary or a Person
acquired in an Acquisition permitted by Section 9.13(b)
hereof may consolidate with or merge into the Company;
(b) consummate any Acquisition except the Company and
the Subsidiaries may make Acquisitions (i) with respect to
the period from and including the Amendment Effective Date
to but excluding the first day of the Restricted Payment
Period occurring in 1995, for an aggregate consideration up
to but not exceeding $3,000,000 and (ii) with respect to
each Acquisition Period of the Company, for an aggregate
consideration up to but not exceeding the sum of (A)
$3,000,000 plus (B) an amount equal to the excess of (x) the
amount of Restricted Payments permitted to be made by the
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Company pursuant to Section 9.12 hereof during such
Acquisition Period over (y) the amount of Restricted
Payments made by the Company pursuant to Section 9.12 hereof
during such Acquisition Period; or
(c) make any Disposition of (whether in one
transaction or in a series of related transactions) any of
its Property (as defined below), whether now owned or
hereafter acquired, except (i) that the Company or any of
its Subsidiaries may make a Disposition (the "Proposed
Disposition") of Property on any date if the Aggregate
Disposition Revenue (as defined below) does not exceed an
amount equal to 15% of the revenue of the Company and its
Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP) for the twelve-month
period ending on the Disposition Date (as defined below);
(ii) for sales of Inventory in the ordinary course of
business; or (iii) for sales of obsolete or worn-out
property, tools or equipment no longer used or useful in its
business.
For purposes of this Section 9.13, the following terms
shall have the following meanings:
"Aggregate Disposition Revenue" shall mean,
collectively, (i) the Revenue of all Property that has been
Disposed of since the Amendment Effective Date pursuant to
Section 9.13(c)(i) hereof and (ii) the Revenue of the
Property that is subject to the Proposed Disposition.
"Disposition Date" shall mean, for any Disposition, the
last day of the fiscal quarter ending on or most recently
ended prior to the date of such Disposition.
"Revenue" shall mean, for any Property, the amount of
revenue produced by such Property for the twelve-month
period ending on the Disposition Date of such Property.
9.14 Liens. The Company shall not, and shall not
permit any of the Subsidiaries to, create, assume, incur or
suffer to exist any Lien upon any of its assets, whether now
owned or hereafter acquired, except:
(a) Liens in existence on the Amendment Effective Date
and described in Schedule IV hereto;
(b) Liens for taxes, assessments and governmental
charges, duties or levies (including, without limitation,
under Section 412(n) of the Code) imposed upon it or upon
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its income or profits or upon any of its property, real or
personal, or any part thereof if the same shall not at such
time be due and payable or are being contested in good faith
by appropriate proceedings and for the payment of which
adequate reserves have been established;
(c) carriers', warehousemen's, mechanics',
materialmen's, repairmen's, suppliers', transporters' or
other like Liens arising in the ordinary course of business
which are not overdue for a period of more than 30 days or
which are being contested in good faith and by appropriate
proceedings;
(d) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social
security legislation;
(e) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary
course of business;
(f) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of
business and encumbrances consisting of zoning restrictions,
easements, licenses, restrictions on the use of property or
minor imperfections in title thereto which, in the
aggregate, are not material in amount, and which do not in
any case materially detract from the value of the property
subject thereto or interfere with the ordinary conduct of
the business of the Company or the Subsidiaries;
(g) judgment Liens bonded pending appeal and landlord
Liens not involving Indebtedness;
(h) purchase money security interests securing
purchase money obligations, provided that no such security
interest shall extend to property other than goods and
equipment purchased contemporaneously with or as a result of
the incurring of such purchase money obligation and
improvements and additions thereto;
(i) security interests attendant to, and
contemporaneously arising out of the incurrence of, Capital
Lease Obligations, provided that no such security interest
shall extend to property other than the property leased and
improvements and additions thereto;
- 102 -
(j) [Intentionally omitted]
(k) Liens pursuant to the Security Documents;
(l) Liens in favor of the Issuing Bank or any Bank
that is an issuer of Bank Letters of Credit on documents of
title or similar documents (and on the underlying property)
relating to the transaction subject of a Letter of Credit or
a Bank Letter of Credit (but on no other property);
(m) Liens arising out of contracts for the purchase
and sale of obligations issued by the government of the
United States referred to in Section 9.17(b) hereof on such
obligations (but on no other property); and
(n) Liens in addition to the foregoing securing
obligations other than indebtedness for borrowed money
and extending to property (other than Receivables, Inventory
or Pledged Shares (as defined in any Pledge Agreement))
having a fair market value of less than U.S.$250,000 (or a
U.S. Dollar Equivalent) in the aggregate as to all such
Liens.
9.15 Transactions with Affiliates. Except as
expressly permitted by this Agreement, the Company shall not, and
shall not permit any of the Subsidiaries to, directly or
indirectly: (a) make any Investment in an Affiliate;
(b) transfer, sell, lease, assign or otherwise dispose of any
assets to an Affiliate; (c) merge into or consolidate with or
purchase or acquire assets from an Affiliate; or (d) enter into
any other transaction directly or indirectly with or for the
benefit of any Affiliate (including, without limitation,
Guarantees and assumptions of obligations of an Affiliate);
provided that (i) payments on Parent Advances expressly permitted
by Section 9.18(b) hereof and in accordance with Section 9.16
hereof may be made, (ii) the Company may reimburse Majority
Interest Parties, Minority Interest Parties or Holdings for
out-of-pocket costs and expenses incurred by such Persons on
behalf of the Company; (iii) [Intentionally omitted]; (iv)
payments to NACCO or Holdings, as applicable, (including, without
limitation, repayments of Tax Sharing Advances) pursuant to the
Tax Sharing Agreement and payments to NACCO (including, without
limitation, repayments of Proctor-Silex Tax Sharing Advances)
pursuant to the Proctor-Silex Tax Sharing Agreement relating to
the period prior to the Closing Date; (v) subject to any
restriction or limitation set forth in, or the terms of, this
Agreement or any Supplemental Agreement, the Company and the
Subsidiaries may enter into any transaction with an Affiliate
providing for the leasing of property, the rendering or receipt
- 103 -
of services or the purchase or sale of product, Inventory and
other assets in the ordinary course of business if the monetary
or business consideration arising therefrom would be
substantially as advantageous to such corporation as the monetary
or business consideration which would obtain in a comparable
arm's length transaction with a Person not an Affiliate; (vi) any
Affiliate who is an individual may serve as a director, officer
or employee of the Company or any Subsidiary and receive
reasonable compensation for his or her services in such capacity;
(vii) subject to any restriction or limitation set forth in, or
the terms of, this Agreement or any Supplemental Agreement, the
Company may make payments (other than Restricted Payments)
expressly required to be made by the Company under the
Reorganization Documents; and (viii) in addition to the
transactions permitted in clauses (i) through (vii) above
(inclusive), subject to any other restriction or limitation set
forth in, or the terms of, this Agreement or any Supplemental
Agreement, the Company may enter into other transactions with
Affiliates in any fiscal year of the Company so long as the
aggregate amount of cash or other property received by Affiliates
from the Company in such fiscal year does not exceed
U.S.$500,000.
9.16 Majority Interest Debt and Minority Interest
Debt. The Company shall not, and shall not permit any of the
Subsidiaries to, make any payment in respect of any Majority
Interest Debt (including, without limitation, any Parent
Advances) or any Minority Interest Debt (including, without
limitation, any Parent Advances) if (i) at the time a Default has
occurred (or as a result of such payment will occur) and be
continuing, (ii) after giving effect to such payment the Company
shall have a combination of cash on hand and unutilized Revolving
Credit Commitments (to the extent available for working capital
purposes) totalling less than U.S.$10,000,000 or (iii) the
Company is not in compliance with its obligations under
Section 9.07 hereof. In addition to the foregoing, the Company
will not make any payment with respect to the principal of any
Clean-Down Parent Advances until after the last day of a Clean-
Down Period during which the Company did not have any Clean-Down
Parent Advances outstanding during such Clean-Down Period.
9.17 Investments. The Company shall not, and shall
not permit any of the Subsidiaries to, make or permit to remain
outstanding any Investment in any Person except:
(a) Investments in existence on the Amendment
Effective Date and reflected in the financial statements
referred to in Section 8.02(b)(ii) or 8.02(b)(iv) hereof;
- 104 -
(b) Investments in obligations issued by the
government of the United States (including contracts for the
purchase and sale thereof (such as repurchase or reverse
repurchase agreements) with Banks or banks having capital
and surplus of at least U.S.$500,000,000 or other financial
institutions having a net worth of at least
U.S.$500,000,000), certificates of deposit of, and other
bank accounts with, Banks or banks having their principal
office located in the United States or London having capital
and surplus of at least U.S.$500,000,000, and commercial
paper rated A-1 by Standard & Poor's Corporation or P-1 by
Moody's Investor's Service, Inc., issued by a United States
issuer rated not less than "A" by such rating agencies;
(c) in the case of PSC, obligations of the government
of Canada, bank accounts or time deposits with banks
chartered under the Canadian Bank Act, and commercial paper
rated R-1 by the Dominion Bond Rating Service or P-1 by
C.B.R.S., Inc. issued by a Canadian issuer rated not less
than "A" by the Dominion Bond Rating Service or the Canadian
Bond Rating Service;
(d) in the case of PSM, certificates of deposit issued
by, and demand and time deposits with, Mexican national
commercial banks which are among the six largest commercial
banks in Mexico;
(e) Intercompany Receivables payable to the Company by
its Subsidiaries;
(f) [Intentionally omitted]
(g) Intercompany Receivables payable to the
Subsidiaries of the Company by the Company in an aggregate
outstanding amount not to exceed at any time the excess (if
any) of (i) U.S.$25,000,000 over (ii) the aggregate
outstanding principal amount of Intercompany Advances by the
Subsidiaries of the Company to the Company at such time;
(h) [Intentionally omitted]
(i) Intercompany Advances by the Company or any
Subsidiary permitted under Section 9.18 hereof;
(j) Investments in any Person pursuant to a merger,
consolidation or Acquisition permitted under Section 9.13(a)
or 9.13(b) hereof;
- 105 -
(k) Investments consisting of capital contributions to
newly-formed Subsidiaries; and
(l) [Intentionally omitted]
9.18 Indebtedness. The Company shall not, and shall
not permit any of the Subsidiaries to, create, incur or suffer to
exist any Indebtedness except:
(a) Indebtedness incurred hereunder;
(b) Parent Advances in an aggregate outstanding
principal amount not to exceed U.S.$35,000,000;
(c) Intercompany Advances by the Company to its
Subsidiaries in an aggregate outstanding principal amount
not to exceed at any time the excess (if any) of (i)
U.S.$25,000,000 over (ii) the aggregate outstanding amount
of Intercompany Receivables payable to the Company by its
Subsidiaries at such time;
(d) [Intentionally omitted]
(e) Intercompany Advances by the Subsidiaries of the
Company to the Company;
(f) [Intentionally omitted]
(g) Capital Lease Obligations of the Company and the
Subsidiaries in an aggregate principal amount outstanding
(as to the Company and the Subsidiaries taken together) not
to exceed U.S.$10,000,000;
(h) [Intentionally omitted]
(i) [Intentionally omitted]
(j) [Intentionally omitted]
(k) lines of credit (inclusive of Bank Line Loans) and
letters of credit (inclusive of Bank Letters of Credit) in
an aggregate principal (or face) amount not to exceed
U.S.$30,000,000 so long as the outstanding principal of such
lines of credit (other than Bank Line Loans) is reduced to
zero during each Clean-Down Period;
(l) Tax Sharing Advances so long as such Tax Sharing
Advances are unsecured and are payable in accordance with
the Tax Sharing Agreement;
- 106 -
(m) Proctor-Silex Tax Sharing Advances so long as such
Proctor-Silex Tax Sharing Advances relate to the period
prior to the Closing Date, are unsecured and are payable in
accordance with the Proctor-Silex Tax Sharing Agreement;
(n) [Intentionally omitted]
(o) unsecured Indebtedness (other than letters of
credit) so long as (i) such Indebtedness has an average life
of less than three years and (ii) the outstanding principal
amount of such Indebtedness is reduced to zero during each
Clean-Down Period; and
(p) Subordinated Indebtedness of the Company so long
as (i) such Indebtedness has an average life longer than the
average life of the Loans hereunder and (ii) the terms of
such Indebtedness are no more restrictive than the terms of
this Agreement.
9.19 [Intentionally omitted]
9.20 Type of Business. The Company shall not, and
shall not permit any of the Subsidiaries to, enter into any new
lines of business which are materially different from, and
unrelated to, the lines of business conducted by the Company and
the Subsidiaries on the Amendment Effective Date which lines of
business currently include the design, manufacture and sale of
consumer electric appliances and other consumer houseware
products.
9.21 Hedging Arrangements.
(a) [Intentionally omitted]
(b) The Company shall not, and shall not permit any of
the Subsidiaries to, enter into Interest Rate Protection
Arrangements with respect to interest on an aggregate
notional principal amount at any time in excess of (i) with
respect to such arrangements that extend less than one year
from the creation thereof, U.S.$120,000,000 and (ii) with
respect to such arrangements that extend more than or equal
to one year from the creation thereof, U.S.$75,000,000.
(c) The Company shall not, and shall not permit any of
the Subsidiaries to, enter into Foreign Currency Hedging
Arrangements under which exposure (defined as the total
amount outstanding under such arrangements) of the Company
and the Subsidiaries exceeds U.S.$25,000,000 at any time.
- 107 -
9.22 Insurance. The Company shall maintain, and shall
cause each of the Subsidiaries to maintain, insurance with
responsible companies in such amounts and against such risks as
is usually carried by owners of similar businesses and properties
in the same general areas in which the Company and the
Subsidiaries operate (and with such deductibles and levels of
self-insurance as are usually maintained by owners of similar
businesses and properties in the same general areas in which the
Company and the Subsidiaries operate and as are consistent with
the Company's practices as of the date of the execution and
delivery hereof), provided that in any event the Company will
maintain:
(1) Casualty Insurance -- insurance against loss or
damage covering all of the tangible real and personal
property and improvements of the Company and the
Subsidiaries by reason of any Peril in amounts (i) in the
case of the fixed assets, plant and equipment as shall be
reasonable and customary but in no event in an amount less
than the greater of (x) the amount applicable to any such
property or improvements necessary to avoid the insured
named therein from becoming a co-insurer of any loss under
such policy or (y) U.S.$70,000,000 and (ii) in the case of
Inventory, not less than the greater of the fair market
value thereof or the amounts necessary to avoid the insured
named therein from becoming a co-insurer of any loss under
such policy.
(2) Automobile Liability Insurance for Bodily Injury
and Property Damage -- insurance in respect of all vehicles
(whether owned, hired or rented by the Company or any of the
Subsidiaries) in such amounts as are then customary for
vehicles used in connection with similar property and
businesses, but in any event to the extent required by
applicable law.
(3) Comprehensive General Liability Insurance --
insurance against claims for bodily injury, death or
property damage occurring on, in or about the facilities
owned, leased or used by the Company and the Subsidiaries
(including adjoining streets, sidewalks and waterways), in
such amounts as are then customary for property similar in
use and located in the same state or country.
(4) Workers' Compensation Insurance -- insurance
(including Employers' Liability Insurance) to the extent
required by applicable law.
- 108 -
(5) Product Liability Insurance -- insurance against
claims for bodily injury, death or property damage resulting
from the use of products sold by the Company or any of the
Subsidiaries in such amounts as are then customarily
maintained by responsible persons engaged in businesses
similar to that of the Company and the Subsidiaries.
(6) Business Interruption Insurance -- insurance
against loss of operating income (up to an aggregate amount
equal to U.S.$10,000,000) by reason of any Peril affecting
the operations of the Company or any of the Subsidiaries.
Such insurance shall be written by financially responsible
companies selected by the Company and having an A. M. Best rating
of "A" or better and being in a financial size category of VI or
larger, or by other companies acceptable to the Majority Banks,
and (other than workers' compensation insurance) shall name the
U.S. Agent or the Canadian Agent, as relevant, as loss payee (in
the case of insurance described in items (1) and (6) above) or as
an additional named insured (in the case of the insurance
described in items (2), (3), (4) and (5) above), in each case as
its interests may appear. Each policy referred to in this
Section 9.22 shall provide that it will not be canceled or
reduced except after not less than 60 days' written notice to the
U.S. Agent and the Canadian Agent and shall also provide that the
interests of the U.S. Agent and the Canadian Agent, the Issuing
Bank and the Banks shall not be invalidated by any act or
negligence of the Company, any of the Subsidiaries or any Person
having an interest in any facility owned, leased or used by the
Company and the Subsidiaries nor by occupancy or use of any
facility owned, leased or used by the Company and the
Subsidiaries for purposes more hazardous than permitted by such
policy nor by any foreclosure or other proceedings relating to
any facility owned, leased or used by the Company and the
Subsidiaries. The Company will advise the U.S. Agent and the
Canadian Agent promptly of any policy cancellation, reduction or
amendment.
Upon each April 15 in each year the Company will
deliver to the U.S. Agent and the Canadian Agent certificates of
insurance evidencing that all insurance required to be maintained
by the Company hereunder will be in effect through the April 1 of
the calendar year following the calendar year of the current
April 1, subject only to the payment of premiums as they become
due and the right of the respective insurer to cancel or reduce
the respective policy upon no less than 60 days' written notice
to the U.S. Agent and the Canadian Agent as provided in the
preceding paragraph. The Company will not obtain or carry
separate insurance concurrent in form or contributing in the
- 109 -
event of loss with that required by this Section 9.22 unless the
U.S. Agent or the Canadian Agent, as relevant, is the named
insured thereunder, with loss payable as provided herein. The
Company will immediately notify the U.S. Agent and the Canadian
Agent whenever any such separate insurance is obtained and shall
deliver to the U.S. Agent the certificates evidencing the same.
If a Default shall not have occurred and be continuing
and the insurance proceeds in question are in an amount less than
U.S.$2,000,000 or if such insurance proceeds relate to property
of PSM, all claims under insurance policies in which either Agent
is named loss payee or additional named insured ("Subject
Policies") will be adjusted solely between the relevant Obligor
and the insurer and insurance proceeds under Subject Policies
(including, without limitation, Casualty Insurance Proceeds) will
be paid to the relevant Obligor and will be used, as promptly as
practicable, to replace or repair assets lost or damaged. If a
Default has occurred and is continuing or the insurance proceeds
in question are in an amount greater than or equal to
U.S.$2,000,000, except in the case of insurance proceeds relating
to property of PSM (which shall be treated in the manner
described in the preceding sentence), all claims under Subject
Policies will be adjusted between the relevant Obligor and the
insurer, subject to approval by the relevant Agent and insurance
proceeds under Subject Policies (including, without limitation,
Casualty Insurance Proceeds) payable to the Company or PSC will
be paid, in the case of the Company, to the U.S. Agent to be held
in the Cash Collateral Account as "Collateral" under and as
defined in the Security Agreement and, in the case of PSC, to the
Canadian Agent to be held in the Canadian Cash Collateral Account
as "Collateral" under, and as defined in, the General Security
Agreement referred to in clause (ii) of the definition of
"Canadian Security Documents" in Section 1.01 hereof.
Notwithstanding anything contained in this Section 9.22
to the contrary, to the extent that compliance with the
provisions of this Section 9.22 would contravene any provisions
regarding insurance (including, without limitation, loss payee or
additional named insured requirements) contained in any lease in
existence as of the date of the execution and delivery of this
Agreement (or any renewal, any extension or replacement thereof
containing substantially similar provisions regarding insurance)
in which any of the Company or the Subsidiaries is a tenant, the
insurance provisions contained in such lease shall control, and
the Company or the Subsidiaries, as the case may be, shall not be
required to comply with the provisions of this Section 9.22, in
each case to the extent that compliance with the provisions of
this Section 9.22 would contravene the insurance provisions
contained in such lease.
- 110 -
9.23 Additional Collateral.
(a) [Intentionally omitted]
(b) If at any time the amount of Receivables payable
(or to be payable) under Government Contracts could exceed
U.S.$2,000,000 (or a U.S. Dollar Equivalent), the Company
shall, and shall cause each of the Subsidiaries to, as
promptly as practicable, execute and deliver to the Agents
assignments, security agreements or other documents of like
intendment in form and substance satisfactory to the
Majority Banks (and, in the case of each Government Contract
with the government of the United States or an agency or
instrumentality thereof, a Government Contract Assignment)
creating (to the extent not theretofore created by the
Security Documents) first priority perfected Liens in favor
of the relevant Agent for the benefit of such Agent, the
Issuing Bank and the Banks in such Government Contracts,
subject to no equal or prior Lien except Liens permitted
pursuant to Section 9.14 hereof, together with such
certificates, documents, legal opinions and evidence of
filings or recordations as either Agent or any Bank may
reasonably require to evidence the perfection and first
priority of such Liens in accordance with the terms of this
Agreement and the Security Documents.
(c) The Company shall do all things as may be
reasonably required by the Agents and the Majority Banks and
execute and deliver to the relevant Agent or, if applicable,
each Bank such documents and other instruments (including,
without limitation, mortgages, deeds of trust, supplemental
or substitute notes), in form and substance satisfactory to
the Agents and Majority Banks, as may be required in order
to create and maintain the validity and priority of the Lien
of any Mortgage.
(d) The Company shall not, and shall not permit any of
the Subsidiaries to, enter into or suffer to exist any
agreement or instrument containing a provision that would
prevent or inhibit the Company or the Subsidiaries from
creating a Lien in favor of either Agent for the benefit of
the Issuing Bank and the Banks on any property (real or
personal, tangible or intangible) of the Company or the
Subsidiaries, whether now owned or hereafter acquired,
except any agreement or instrument that would create a Lien
permitted under Section 9.14 hereof (but only with respect
to the property subject to such Lien).
- 111 -
9.24 Certain Amendments. The Company shall not be
party to or acquiesce in, or permit any of the Subsidiaries to be
a party to or acquiesce in, any amendment, supplement or
modification to, or waiver of any provisions of (a) any of the
Reorganization Documents, any of the Existing Hamilton Beach
Acquisition Documents, any of the Existing Proctor-Silex
Acquisition Documents, the Existing Altoona Purchase and Sale
Agreement, the Existing Alcoa Stock Purchase Agreement or the
Existing WearEver Purchase and Sale Agreement (other than
amendments, supplements or modifications to, or waivers of
provisions of, the Reorganization Agreement or the Shareholders
Agreement (other than Sections 7 or 8 of the Reorganization
Agreement or Sections 4.2 or 6.3.3 of the Shareholders Agreement)
as to which the Agents and the Banks have had 20 Business Days'
prior notice and that do not have any material adverse effect on
(i) the prospects, business, operations or financial condition of
the Company and the Subsidiaries taken as a whole; (ii) the
timely payment of the principal of, or interest on, the Loans or
the Letter of Credit Obligations; or (iii) the enforceability of
this Agreement, any Security Document, any Minority Interest
Document, any Majority Interest Document or any Note or the
rights of either Agent, any Bank or the Issuing Bank hereunder or
thereunder); (b) [Intentionally omitted]; (c) [Intentionally
omitted] (d) the Proctor-Silex Tax Sharing Agreement or the
applicable Tax Sharing Agreement (in the case of the Proctor-
Silex Tax Sharing Agreement and the Tax Sharing Agreement
referred to in clause (i) of the definition of "Tax Sharing
Agreement" in Section 1.01 hereof, solely as the same affects the
obligations of the Company to make payments to NACCO and the
obligations of NACCO to make payments (as Proctor-Silex Tax
Sharing Advances, Tax Sharing Advances or otherwise) to the
Company); (e) [Intentionally omitted] or (f) any promissory note
evidencing Parent Advances or other documentation governing
Majority Interest Debt or Minority Interest Debt, without the
prior written consent of the Majority Banks. The Company shall
furnish to the Agents and the Banks copies of each amendment,
modification or supplement to the Tax Sharing Agreement, the
Proctor-Silex Tax Sharing Agreement, the Reorganization Agreement
and the Shareholders Agreement promptly after the execution and
delivery thereof.
9.25 [Intentionally omitted]
9.26 Subsidiary Dividend Payments. PSM and PSC may
make Subsidiary Dividend Payments to the Company at any time or
from time to time.
- 112 -
9.27 Material Subsidiaries.
(a) The Company shall, and shall cause each of the
Subsidiaries to, promptly upon receipt, pledge with, and
grant a security interest in favor of, the U.S. Agent any
shares of capital stock of, or other ownership interests in,
any Material Subsidiary to the maximum extent possible
without imposing any adverse tax consequences on the Company
arising out of Section 956 of the Code or any other
materially adverse tax consequences on the Company.
(b) The Company shall promptly cause each Person which
becomes a Material Subsidiary after the date of the
execution and delivery of this Agreement and which is not a
Guarantor to become a Guarantor hereunder and to grant to
the U.S. Agent for the benefit of the Banks a Lien upon its
property (whether real or personal, tangible or intangible)
in each case to the maximum extent possible without imposing
any adverse tax consequences on the Company arising out of
Section 956 of the Code or any other materially adverse tax
consequences on the Company.
(c) The Company shall, and shall cause each of the
Subsidiaries to, execute and deliver such documents as shall
be in form and substance satisfactory to the Agents to
accomplish the transactions contemplated by paragraphs (a)
and (b) above (accompanied by such certificates, documents
and legal opinions as the Agents may reasonably request).
9.28 [Intentionally omitted]
Section 10. EVENTS OF DEFAULT. If one or more of the
following events (herein called "Events of Default") shall occur
and be continuing:
(a) Any Obligor shall default in the payment of any
principal of any Loan or any Reimbursement Obligation; or
any Obligor shall default in the payment of any interest on
any Loan or any other amount payable by it hereunder, under
any Security Document or under any Letter of Credit Document
and such default shall continue unremedied for 2 days after
the occurrence thereof; or
(b) (i) Any Obligor or any of its Subsidiaries shall
default in the payment when due of any principal of or
interest on any of its other Indebtedness aggregating
U.S.$500,000 or more (or a U.S. Dollar Equivalent); or
(ii) any event specified in any note, agreement, indenture
- 113 -
or other document evidencing or relating to any of its other
Indebtedness aggregating U.S.$500,000 or more (or a U.S.
Dollar Equivalent) shall occur if the effect of such event
is to cause, or (after giving effect to any applicable
notice requirements or applicable grace periods or both) to
permit the holder or holders of such Indebtedness, or a
trustee or agent on behalf of such holder or holders to
cause, such Indebtedness to become due prior to its stated
maturity; or
(c) Any representation, warranty or certification made
or deemed made (i) by any Obligor herein, in the Security
Documents or the Letter of Credit Documents, (ii) by
Holdings in any Holdings Document, (iii) by any Majority
Interest Party in any Majority Interest Document, (iv) by
any Minority Interest Party in any Minority Interest
Document, or (v) in any certificate furnished to any Bank or
either Agent by any Majority Interest Party, any Minority
Interest Party, Holdings or any Obligor pursuant to the
provisions of any Document, shall prove to have been false
or misleading as of the time made or furnished in any
material respect; or
(d) Any Lien created by any Security Document or any
Supplemental Security Document shall at any time upon or
after creation thereof cease to be a perfected Lien on and
security interest in the property purported to be covered
thereby, subject to no equal, prior or junior Lien except
(i) in the case of property other than Pledged Shares (as
defined in such Security Documents or such Supplemental
Security Documents) consisting of capital stock of Holdings
or the Company, for Liens permitted pursuant to Section 9.14
hereof and (ii) in the case of Pledged Shares consisting of
capital stock of Holdings or the Company, Permitted Parent
Liens; or any Security Document shall cease to be in full
force and effect or shall be declared null and void, or the
validity or enforceability thereof shall be contested by any
Obligor or any of its Subsidiaries; or
(e) Any Obligor shall default in the performance of
any of their respective obligations under Sections 9.01(h)
or 9.07, 9.08, 9.09, 9.12, 9.13 or 9.14 (other than with
respect to non-consensual Liens of the generic type
described in Sections 9.14(b), (c), (d), (e), (f) and (g)
hereof ("Non-Consensual Liens")), 9.15 through 9.18
(inclusive), 9.21, 9.24 or 9.27 hereof; or any Obligor shall
default in the performance of any of their respective
obligations under Section 9.14 (with respect to Non-
Consensual Liens) hereof and such default in performance
- 114 -
shall continue unremedied for a period of 10 days after the
occurrence thereof; or any Obligor shall default in the
performance of any of its other covenants or agreements in
this Agreement and such default shall continue unremedied
for a period of 30 days after the occurrence thereof; or
(f) Any Corporation shall admit in writing its
inability to, or be generally unable to, pay its debts as
such debts become due; or
(g) Any Corporation shall (i) apply for or consent to
the appointment of, or the taking of possession by, a
receiver, custodian, trustee or liquidator of itself or of
all or a substantial part of its property, (ii) make a
general assignment for the benefit of its creditors,
(iii) commence a voluntary case under the Federal Bankruptcy
Code (as now or hereafter in effect), (iv) file a petition
seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, winding-up, or
composition, relief or readjustment of debts (including,
without limitation, in the case of PSC, any proceeding under
the Bankruptcy and Insolvency Act (Canada) any application
under the Companies' Creditors Arrangement Act, as amended
from time to time or, with respect to reorganization or
relief of debts, under the Business Corporations Act, 1982
of the Province of Ontario, as amended from time to time),
(v) fail to controvert in a timely and appropriate manner,
or acquiesce in writing to, any petition filed against it in
an involuntary case under the Federal Bankruptcy Code or the
Bankruptcy and Insolvency Act (Canada), or (vi) take any
corporate action for the purpose of effecting any of the
foregoing; or
(h) A proceeding or case shall be commenced, without
the application or consent of the affected Corporation, in
any court of competent jurisdiction, seeking (i) its
liquidation, reorganization, dissolution or winding-up, or
the composition, relief or readjustment of its debts
(including, without limitation, in the case of PSC, any
proceeding under the Bankruptcy and Insolvency Act (Canada),
any application under the Companies' Creditors Arrangement
Act, as amended from time to time, or, with respect to
reorganization or relief of debt, the Business Corporations
Act, 1982 of the Province of Ontario, as amended from time
to time), (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like of such Corporation of all
or any substantial part of its assets, or (iii) similar
relief in respect of such Corporation under any law relating
to bankruptcy, insolvency, reorganization, winding-up, or
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composition or adjustment of debts, and such proceeding or
case shall continue undismissed, or an order, judgment or
decree approving or ordering any of the foregoing shall be
entered and continue unstayed and in effect, for a period of
60 days; or an order for relief against such Corporation
shall be entered in an involuntary case under the Federal
Bankruptcy Code; or
(i) A final judgment or judgments for the payment of
money in excess of U.S.$500,000 (or a U.S. Dollar
Equivalent) in the aggregate shall be rendered by a court or
courts against any Obligor or any of its Subsidiaries and
the same shall not be discharged (or provision shall not be
made for such discharge), or a stay of execution thereof
shall not be procured, within 20 days from the date of entry
thereof and such Obligor or the relevant Subsidiary shall
not, within said period of 20 days, or such longer period
during which execution of the same shall have been stayed,
appeal therefrom and cause the execution thereof to be
stayed during such appeal; or
(j) An event or condition specified in Section 9.01(g)
hereof shall occur or exist with respect to any Plan or
Multiemployer Plan and, as a result of such event or
condition, together with all other such events or
conditions, the Company or any ERISA Affiliate shall incur
or in the reasonable judgment of the Majority Banks shall be
reasonably likely to incur a liability to a Plan, a
Multiemployer Plan or PBGC (or any combination of the
foregoing) which is, in the reasonable judgment of the
Majority Banks, material in relation to the consolidated
financial position of the Company and the Subsidiaries; or
(k) At any time: (i) Holdings shall create, assume,
incur or suffer to exist any Lien upon the Company's capital
stock (other than pursuant to the Supplemental Security
Documents); or (ii) NACCO shall cease to own, directly or
indirectly through Housewares, at least 51% of the Company's
capital stock; or (iii) any Minority Interest Party or any
of its Subsidiaries shall create, assume, incur or suffer to
exist any Lien upon any capital stock of the Company (other
than Permitted Parent Liens); or
(l) Any Obligor shall default in the performance of
any of its material obligations under any Security Document
or any Letter of Credit Document or (notwithstanding
Section 10(b) hereof) any Bank Financial Accommodation
Document or any Interest Rate Protection Agreement or any
Foreign Currency Hedging Agreement; or any Obligor shall
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default in the performance of any of its other obligations
under any Security Document or any Letter of Credit Document
or (notwithstanding Section 10(b) hereof) any Bank Financial
Accommodation Document, any Interest Rate Protection
Agreement or any Foreign Currency Hedging Agreement and such
default shall continue for a period of 10 days after the
occurrence thereof; or
(m) Any Majority Interest Party shall default in the
performance of any of its material obligations under any
Majority Interest Document; or any Majority Interest Party
shall default in the performance of any of its other
obligations under any Majority Interest Document and such
default shall continue unremedied for a period of 10 days
after the occurrence thereof; or any Minority Interest Party
shall default in the performance of any of its material
obligations under any Minority Interest Document; or any
Minority Interest Party shall default in the performance of
any of its other obligations under any Minority Interest
Document and such default shall continue unremedied for a
period of 10 days after the occurrence thereof; or any
Majority Interest Document or any Minority Interest Document
shall cease to be in full force and effect (except in
accordance with the express terms thereof) or shall be
declared null and void, or the validity or enforceability
thereof shall be contested by any Majority Interest Party or
any Minority Interest Party thereto; or Holdings shall
default in the performance of any of its material
obligations under any Holdings Document; or Holdings shall
default in the performance of any of its other obligations
under any Holdings Document and such default shall continued
unremedied for a period of 10 days after the occurrence
thereof; or any Holdings Document shall cease to be in full
force and effect (except in accordance with the express
terms thereof) or shall be declared null and void, or the
validity or enforceability thereof shall be contested by
Holdings; or
(n) Any party to any Reorganization Document, any
Existing Hamilton Beach Acquisition Document, any Existing
Proctor-Silex Acquisition Document, the Existing Altoona
Purchase and Sale Agreement, the Existing Alcoa Stock
Purchase Agreement or the Existing WearEver Purchase and
Sale Agreement shall default in any material respect in any
of its obligations thereunder and such default shall have a
material adverse effect on (i) the prospects, business,
operations or financial condition of the Company and the
Subsidiaries taken as a whole, (ii) the timely payment of
the principal of, or interest on, the Loans or the Letter of
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Credit Obligations or (iii) the enforceability of this
Agreement, any Security Document, any Majority Interest
Document, any Minority Interest Document or any Note or the
rights of either Agent, any Bank or the Issuing Bank
hereunder or thereunder; or
(o) Any Obligor shall be dissolved or liquidated,
shall terminate its existence or suspend its operations or
payments (other than as referred to in clause (g) or (h) of
this Section 10), or shall lose any right, privilege or
franchise necessary to maintain its juridical existence; or
(p) All or a substantial part of the properties of any
Obligor shall be condemned, seized or otherwise appropriated
or custody or control of such property shall be assumed by
any governmental authority or court or other Person
purporting to act under the authority of the government of
any jurisdiction, such Obligor or any such Subsidiary shall
be prevented from exercising normal control over all or a
substantial part of its properties; or
(q) A moratorium shall be declared or otherwise
instituted on the payment of any Indebtedness of any
Obligor; or
(r) The Company or any of the Subsidiaries shall merge
with or into, or consolidate with, any Person, or shall
Dispose of any of its assets, whether now owned or hereafter
acquired, or shall make any Acquisition, except, in each
case, as expressly permitted under Section 9.13 hereof; or
Holdings shall merge with or into, or consolidate with, any
Person; or
(s) The Company or any of the Subsidiaries shall in
any manner create, assume, incur or suffer to exist any Lien
on any of its assets, whether now owned or hereafter
acquired, except to the extent expressly permitted under
Section 9.14 hereof (and, in the case of a Default under
this Section 10(s) predicated upon the creation, assumption,
incurrence or sufferance to exist of a Non-Consensual Lien,
such Default shall continue unremedied for a period of 10
days after the occurrence thereof); or
THEREUPON: (i) in the case of an Event of Default other than one
referred to in clause (g) or (h) of this Section 10, the Agents
(through the U.S. Agent) may, and upon request of the Majority
Banks, the Agents (through the U.S. Agent) shall, by notice to
the Borrowers, cancel the relevant Commitments and/or declare the
principal amount then outstanding of and the accrued interest on
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the Loans and all other amounts payable by the Borrowers, as the
case may be, under this Agreement and the Notes to be forthwith
due and payable, whereupon such amounts shall be immediately due
and payable without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived
by the Obligors; and (ii) in the case of the occurrence of an
Event of Default referred to in clause (g) or (h) of this
Section 10, the Commitments shall automatically be canceled and
the principal amount then outstanding of, and the accrued
interest on, the Loans and all other amounts payable by the
Obligors under this Agreement and the Notes shall become
automatically immediately due and payable without presentment,
demand, protest or other formalities of any kind, all of which
are hereby expressly waived by the Obligors. In addition, upon
the occurrence and during the continuance of any Event of Default
(other than one referred to in clause (g) or (h) of this
Section 10), the Company shall, if requested by the U.S. Agent or
the Majority Banks or the Issuing Bank (in either case, through
the U.S. Agent), and, in the case of an Event of Default referred
to in clause (g) or (h) of this Section 10 the Company shall,
forthwith without any demand or taking of any other action by the
U.S. Agent, pay to the U.S. Agent (for deposit in the Cash
Collateral Account) an amount equal to the sum of all Letter of
Credit Liabilities in respect of all Letters of Credit.
Section 11. THE AGENTS.
11.01 Appointment, Powers and Immunities. Each of the
Banks and the Issuing Bank hereby irrevocably appoints and
authorizes each of the U.S. Agent and the Canadian Agent to act
as its agent hereunder, under each Security Document, under each
Majority Interest Document, under each Minority Interest Document
and under each Holdings Document to which such Agent is a party
with such powers as are specifically delegated to such Agent by
the terms of this Agreement, together with such other powers as
are reasonably incidental thereto. No Agent (which term as used
in this sentence and in Section 11.05 hereof and the first
sentence of Section 11.06 hereof shall include reference to its
affiliates and its own and its affiliates' officers, directors,
employees and agents): (a) shall have any duties or
responsibilities except those expressly set forth in this
Agreement, the Security Documents, the Majority Interest
Documents, the Minority Interest Documents or the Holdings
Documents and shall not by reason of this Agreement, any Security
Document, any Majority Interest Document, any Minority Interest
Document or any Holdings Document, be a trustee for any Bank;
(b) shall be responsible to the Banks for (i) any recitals,
statements, representations or warranties contained in this
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Agreement or in any of the other documents or certificates or
other Documents referred to, provided for or received by any of
them under this Agreement or any such other document or
certificate or other Document, or (ii) for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this
Agreement, any Note or any such other document or certificate or
other Document, or (iii) for any failure by any Obligor or any
other Person to perform any of its obligations hereunder or
thereunder, or (iv) for the validity or effectiveness of any
assignment, mortgage, pledge, security agreement, trust
agreement, financing statement, notice of assignment, document or
instrument, or for the filing, recording, re-filing, continuing
or re-recording of any thereof; (c) shall be required to initiate
or conduct any litigation or collection proceedings hereunder;
and (d) shall be responsible for any action taken or omitted to
be taken by it hereunder or under any other Document, except for
its own gross negligence or willful misconduct. Without limiting
the generality of the foregoing, except as expressly set forth in
Section 7 hereof, no Agent shall have any responsibility to make,
or for failure to make, any determination or judgment under
Section 7 hereof. Each Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence
or misconduct of any such agents or attorneys-in-fact selected by
it in good faith. Each Agent may deem and treat the payee of any
Note as the holder thereof for all purposes hereof unless and
until a written notice of the assignment or transfer thereof
shall have been filed with such Agent.
11.02 Reliance by Agents. Each Agent shall be
entitled to rely upon any certification, notice or other
communication (including any thereof by telephone, telex,
telegram or cable) believed by it to be genuine and correct and
to have been signed or sent by or on behalf of the proper Person
or Persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by such Agent.
As to any matters not expressly provided for by this Agreement,
any Security Document, any Majority Interest Document, any
Minority Interest Document or any Holdings Document (except as
the same relate solely to the Issuing Bank and its rights and
obligations hereunder), each Agent shall in all cases be fully
protected in acting, or in refraining from acting, hereunder in
accordance with instructions signed by the Majority Banks, and as
specified hereunder whenever an Agent acts or refrains from
acting in accordance with the Majority Bank's instructions and
such instructions of the Majority Banks, and any action taken or
failure to act pursuant thereto, shall be binding on all of the
Banks. As to matters not expressly provided for by this
Agreement, any Security Document, any Majority Interest Document,
any Minority Interest Document or any Holdings Document relating
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solely to the Issuing Bank and its rights and obligations
hereunder, each Agent shall in all cases be fully protected in
acting, or in refraining from acting, hereunder in accordance
with instructions signed by the Issuing Bank, and as specified
hereunder whenever an Agent acts or refrains from acting in
accordance with the Issuing Bank's instructions and such
instructions of the Issuing Bank, and any action taken or failure
to act pursuant thereto, shall be binding on all of the Banks.
11.03 Defaults. The Agents shall not be deemed to
have knowledge of the occurrence of a Default unless notified by
a Bank, the Issuing Bank or an Obligor which notice shall specify
such Default and state that such notice is a "Notice of Default".
In the event that either Agent receives such a notice of the
occurrence of a Default, such Agent shall give prompt notice
thereof to the other Agent, the Issuing Bank and the relevant
Banks. Each Agent shall (subject to Section 11.01, 11.05 and
11.07 hereof) take such action with respect to such Default as
shall be directed by the Majority Banks, provided that, unless
and until such Agent shall have received such directions, such
Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default as
it shall deem advisable in the best interest of the Banks.
11.04 Rights as a Bank. With respect to its
Commitment and the Loans made by it and, in the case of Chase,
Letters of Credit issued by it, Chase and Chase Canada (and any
successors acting as Agents) in their capacities as Banks (or, in
the case of Chase, the Issuing Bank) hereunder shall have the
same rights and powers hereunder as any other Bank (or, in the
case of Chase, the Issuing Bank) and may exercise the same as
though they were not acting as an Agent, and the term "Bank" or
"Banks" (and, in the case of Chase, "Issuing Bank") shall, unless
the context otherwise indicates, include each Agent (or, with
respect to Letters of Credit, the U.S. Agent) in its individual
capacity. Chase and Chase Canada (and any successors acting as
Agents) and their affiliates may (without having to account
therefor to any Bank) accept deposits from, lend money to and
generally engage in any kind of banking, trust or other business
with any Obligor and any of its Subsidiaries (and any of their
respective affiliates) as if it were not acting as an Agent, and
Chase, Chase Canada and their affiliates may accept fees and
other consideration from any Obligor and any of its Subsidiaries
and their respective affiliates for services in connection with
this Agreement or otherwise without having to account for the
same to the Banks.
11.05 Indemnification. The Banks indemnify each Agent
(to the extent not reimbursed under Section 12.03 hereof, but
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without limiting the obligations of the Company under said
Section 12.03), ratably in accordance with the aggregate
principal amount of the Loans made by the Banks (or, if no Loans,
or if only U.S. Dollar Loans or Canadian Dollar Loans (but not
both) are at the time outstanding, ratably in accordance with
their respective Commitments), for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted
against such Agent in any way relating to or arising out of this
Agreement or any of the other Documents or the transactions
contemplated hereby (including, without limitation, the costs and
expenses which the Company is obligated to pay under
Section 12.03 hereof but excluding, unless a Default has occurred
and is continuing, normal administrative costs and expenses
incident to the performance of its agency duties hereunder) or
the enforcement of any of the terms hereof or of any such other
Documents, provided that no Bank shall be liable for any of the
foregoing to the extent they arise from the gross negligence or
willful misconduct of the party to be indemnified.
11.06 Non-Reliance on Agents and other Banks. Each
Bank agrees that it has, independently and without reliance on
either Agent, the Issuing Bank or any other Bank, and based on
such documents and information as it has deemed appropriate, made
its own credit analysis and evaluation of each Obligor and its
own decision to enter into this Agreement and that it will,
independently and without reliance upon either Agent, the Issuing
Bank or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to
make its own analysis and decisions in taking or not taking
action under this Agreement. Neither Agent shall be required to
keep itself informed as to the performance or observance by any
Obligor of this Agreement or any other Document or to inspect the
properties or books of any Obligor or any Subsidiary thereof or
any other Person. Except for notices, reports and other
documents and information expressly required to be furnished to
the Banks by an Agent hereunder, no Agent shall have any duty or
responsibility to provide any Bank with any credit or other
information concerning the affairs, financial condition or
business of any Obligor or any Subsidiary thereof (or any of
their respective Subsidiaries or other affiliates) which may come
into the possession of such Agent or any of its affiliates.
11.07 Failure to Act. Except for action expressly
required of the Agents hereunder each Agent shall in all cases be
fully justified in failing or refusing to act hereunder unless it
shall be indemnified to its satisfaction by the Banks against any
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and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action.
11.08 Resignation or Removal of Agents. Subject to
the appointment and acceptance of a successor Agent as provided
below, either Agent may resign at any time by giving notice
thereof to the Banks, the Issuing Bank and the Company and an
Agent may be removed at any time with or without cause by the
Majority Banks. Upon any such resignation or removal, the
Majority Banks shall have the right to appoint a successor Agent.
If no successor Agent shall have been so appointed by the
Majority Banks and shall have accepted such appointment within 30
days after the retiring Agent's giving of notice of resignation
or the Majority Banks' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Banks, appoint a successor
Agent, which in the case of the U.S. Agent shall be a bank which
has an office in New York, New York, U.S.A. with a combined
capital and surplus of at least U.S.$500,000,000 and which in the
case of the Canadian Agent shall be a federally-chartered
Canadian bank which has an office in Toronto, Ontario, Canada.
Upon the acceptance of any appointment as an Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and
duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. After any
retiring Agent's resignation or removal hereunder as an Agent,
the provisions of this Section 11 shall continue in effect for
its benefit in respect of any actions taken or omitted to be
taken by it while it was acting as an Agent.
Section 12. MISCELLANEOUS.
12.01 No Waiver. No failure on the part of either
Agent, any Bank or the Issuing Bank to exercise and no delay in
exercising, and no course of dealing with respect to, any right,
power or privilege under this Agreement, or any Security
Document, any Letter of Credit Document, any Note or any other
Document to which an Obligor is a party shall operate as a waiver
thereof, nor shall any single or partial exercise of any right,
power or privilege under this Agreement, or any Security
Document, any Letter of Credit Document, any Note or any other
Document to which an Obligor is a party preclude any other or
further exercise thereof or the exercise of any other right,
power or privilege. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.
12.02 Notices. All notices and other communications
provided for herein (including, without limitation, any waivers
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or consents under this Agreement) shall be given or made by
telecopy or otherwise in writing (each communication given by any
of such means to be deemed to be "in writing" for purposes of
this Agreement) and telecopied, mailed or delivered to the
intended recipient at the "Address for Notices" specified below
its name on the signature pages hereof, or, as to any party, at
such other address as shall be designated by such party in a
notice to each Agent and each Obligor. Except as otherwise
provided in this Agreement, all such communications shall be
deemed to have been duly given when transmitted by telecopier or
personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.
12.03 Expenses; Etc. The Company agrees (a) to pay or
reimburse each Agent on demand for the out-of-pocket costs and
expenses of such Agent (including, without limitation, the
reasonable fees and expenses of Messrs. Milbank, Tweed, Hadley &
McCloy, special New York counsel to the Banks and Messrs.
Stikeman, Elliott, special Canadian counsel to the Banks), in
connection with (A) the negotiation, preparation, execution and
delivery of this Agreement, the Security Documents, the Holdings
Documents, the Majority Interest Documents, the Minority Interest
Documents, the Letter of Credit Documents and the Notes and any
related agreements, instruments or documents, the making of the
Loans hereunder and the issuance of Letters of Credit hereunder
and (B) any amendment, modification or waiver of any of the terms
of this Agreement, any Security Document, any Holdings Document,
any Majority Interest Document, any Minority Interest Document,
any Letter of Credit Document, any of the Notes or such other
agreements, instruments or documents and (b) to pay or reimburse
each Agent and each Bank on demand for (i) all reasonable costs
and expenses of such Agent and such Bank (including reasonable
counsels' fees and expenses) in connection with the enforcement
of this Agreement, any Security Document, any Holdings Document,
any Majority Interest Document, any Minority Interest Document,
any Letter of Credit Document or any of the Notes and (ii) all
transfer, stamp, documentary, recording or other similar taxes,
assessments, fees or charges levied by any governmental or
revenue authority in respect of this Agreement, any Security
Document, any Holdings Document, any Majority Interest Document,
any Minority Interest Document, any Letter of Credit Document,
any of the Notes or any other document referred to herein. The
Company hereby indemnifies each Agent, the Issuing Bank and each
Bank and their respective directors, officers, employees, agents
and affiliates from, and agrees to hold each of them harmless
against, any and all losses, claims, damages, liabilities (or
actions or other proceedings commenced or threatened in respect
thereof) and reasonable expenses that arise out of or in any way
relate to or result from the making of Loans or issuance of
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Letters of Credit hereunder, or the other transactions
contemplated hereby or thereby or by any other Document,
including, without limitation, any investigation or litigation or
other proceedings (whether or not such indemnified person is a
party to any action or proceeding out of which any of the
foregoing arise), other than any of the foregoing to the extent
incurred by reason of the gross negligence or willful misconduct
of the Person to be indemnified. Neither Agent nor any Bank
shall be responsible or liable to any Obligor or any other Person
for any consequential damages which may be alleged as a result of
this Agreement, any Security Document, any Holdings Document, any
Majority Interest Document, any Minority Interest Document or any
Letter of Credit Document.
12.04 Amendments; Etc. Except as otherwise expressly
provided in this Agreement, any provision of this Agreement may
be amended or waived only by an instrument in writing signed by
each Obligor, the Agents and the Majority Banks (and, if its
rights or obligations are affected thereby, the Issuing Bank), or
by the Company and the Agents acting with the consent of the
Majority Banks (and, if its rights or obligations are affected
thereby, the Issuing Bank) and any such amendment, waiver or
consent shall be effective only in the specific instance and for
the specific purpose for which given; provided, however, that any
amendment, modification or waiver shall not, unless by an
instrument signed by all of the Banks or by the Agents acting
with the consent of all of the Banks: (i) increase or extend the
term of the Revolving Credit Commitments (including, without
limitation, the Series B Sublimit Amount or the Letter of Credit
Sublimit Amount), (ii) extend the date fixed for the payment of
principal of or interest on any Loan or for the payment of any
Letter of Credit Obligation, (iii) reduce the amount of any
payment of principal of any Loan or any Reimbursement Obligation
or the rate at which interest is payable thereon or any fee
payable hereunder, (iv) alter the terms of this Section 12.04,
(v) release (in whole or in part) any Obligor or impair the
continuing effectiveness of any guarantee of any Guarantor or
(vi) amend the definition of the term "Majority Banks" and
provided, further, that any amendment of Section 11 hereof shall
require the consent of both Agents. Each Agent agrees not to
amend or waive the provisions of any Security Document, any
Holdings Document, any Minority Interest Document or any Majority
Interest Document without the consent of Majority Banks; provided
that any release or substitution of collateral under any Security
Document or Supplemental Security Document, or termination of any
Supplemental Security Document or Supplemental Agreement, (other
than, in each case, in conjunction with a transaction permitted
by Section 9.13 hereof, Section 3.06 of the Holdings Supplemental
Agreement or the Override Agreement) and which requires the
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consent of such Agent or the Banks pursuant to the terms of such
Security Document or Supplemental Security Document shall require
the consent of each Bank; and provided further that no Agent
shall agree to any amendment or waiver of the definitions of
"Security" (as defined in the Pledge Agreement), "Collateral" (as
defined in the Security Agreement) or definitions having similar
purpose in any other Security Document or any Supplemental
Security Document (except in conjunction with, and to the extent
required by, a release or substitution of collateral that does
not require Bank consent in accordance with the preceding
proviso) without the consent of each Bank.
12.05 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns.
12.06 Assignments and Participations.
(a) No Obligor may assign its rights or obligations
hereunder or under its Notes without the prior consent of
all of the Banks, the Issuing Bank and the Agents.
(b) [Intentionally omitted]
(c) A Bank may not assign any of its Loans, its
Notes, its participation in Letter of Credit Liabilities or
(in the case of a U.S. Dollar Bank) its Commitment without
the prior consent of the Company and the U.S. Agent and, if
the assignee Bank or the assignor Bank is a Canadian Dollar
Bank, the Canadian Agent, such consent not to be
unreasonably withheld; provided that (i) any Bank may assign
to another Bank all or (subject to clause (ii) below) any
portion of its Loans, its Notes, its participation in Letter
of Credit Liabilities or (in the case of a U.S. Dollar Bank)
its Commitment; (ii) any partial assignment of Loans, Notes,
participations in Letter of Credit Liabilities or (in the
case of a U.S. Dollar Bank) Commitment (other than to any
affiliate or majority-owned subsidiary of the assigning
Bank) shall be in the case of the partial assignment of only
Loans, Notes, participations in Letter of Credit Liabilities
or (in the case of a U.S. Dollar Bank) Commitment, in an
amount equal to U.S.$5,000,000 or multiples of
U.S.$1,000,000 in excess thereof (unless the Company and the
U.S. Agent and, if the assignee Bank or the assignor Bank is
a Canadian Dollar Bank, the Canadian Agent, otherwise
consent to a lesser amount of such partial assignment); and
(iii) contemporaneously with any assignment of Commitment
such assigning U.S. Dollar Bank shall also transfer to such
assignee bank the same proportion of each of its Loans then
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outstanding (together with the same proportion of the Notes
then outstanding) and its participation in Letter of Credit
Liabilities then outstanding. Upon notice to the Company
and the U.S. Agent and, if the assignee Bank or the assignor
Bank is a Canadian Dollar Bank, the Canadian Agent of an
assignment permitted above (which notice shall identify the
assignee and the amount of the assignor's Commitment (in the
case of a U.S. Dollar Bank), participations in Letter of
Credit Liabilities, Notes and Loans assigned in detail
reasonably satisfactory to the U.S. Agent) and upon the
effectiveness of any assignment consented to by the Company
as required above, the assignee shall have, to the extent of
such assignment (unless otherwise provided in such
assignment with the consent of the Company and the U.S.
Agent and, if the assignee Bank or the assignor Bank is a
Canadian Dollar Bank, the Canadian Agent), the obligations,
rights and benefits of a Bank hereunder holding the
Commitment, Notes, participations in Letter of Credit
Liabilities and Loans (or portions thereof) assigned to it
(in addition to the Commitment, Notes, participations in
Letter of Credit Liabilities and Loans, if any, theretofore
held by such assignee). Upon each such assignment the
assignor Bank or the assignee Bank shall pay to the U.S.
Agent an assignment fee of $3,500.
(d) [Intentionally omitted]
(e) A Bank may sell to one or more other Persons a
participation in all or any part of any Loans held by it,
its participation in Letter of Credit Liabilities or its
Commitments, in which event each such participant shall be
entitled to the rights and benefits of the provisions of
Section 9.01(l) hereof with respect to its participation in
such Loan, but shall not have any other rights or benefits
under this Agreement or any Note (the participant's rights
against such Bank in respect of such participation to be
those set forth in the agreement (the "Participation
Agreement") executed by such Bank in favor of the
participant). All amounts payable by any Obligor to any
Bank under Section 5 hereof shall be determined as if such
Bank had not sold any participations. In no event shall a
Bank that sells a participation be obligated to the
participant under the Participation Agreement to take or
refrain from taking any action hereunder or under such
Bank's Notes except that such Bank may agree in the
Participation Agreement that it will not, without the
consent of the participant, agree to (i) the extension of
any date fixed for the payment of principal of or interest
on the related Loan or Loans or for the payment of any
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related Letter of Credit Obligation; (ii) the reduction of
any payment of principal of any related Loan or any related
Reimbursement Obligation; (iii) the release (in whole or in
part) of any Obligor or the impairment of the continuing
effectiveness of any guarantee of any Guarantor; (iv) the
release or substitution of substantially all of the
collateral under the Security Documents and the Supplemental
Security Document, or the termination of any Supplemental
Security Document or any Supplemental Agreement which
requires the consent of such Bank; or (v) the reduction of
the rate at which either interest is payable on any related
Loan or any related Reimbursement Obligation or (if the
participant is entitled to any part thereof) commitment fees
or letter of credit fees are payable hereunder to a level
below the rate at which the participant is entitled to
receive interest or commitment fees or letter of credit fees
in respect of such participation.
(f) A Bank may furnish any information concerning any
Majority Interest Party, any Minority Interest Party,
Holdings, any Obligor or any of the Subsidiaries of any
thereof, in the possession of such Bank from time to time to
assignees and participants (including prospective assignees
and participants), provided that such Bank shall require
that each such Person has agreed in writing to maintain the
confidentiality of any such information which is non-public
to the same extent such Bank is required to maintain such
confidentiality in accordance with Section 12.15 hereof and
the confidentiality agreement of such Bank referred to in
the last sentence of said Section.
12.07 Survival. The obligations of the Obligors under
Sections 2.01(II)(f), 5.01, 5.05, 5.06 and 12.03 hereof shall
survive the repayment of the Loans, the termination or expiration
of the Commitments and the expiration or termination of all
Letters of Credit.
12.08 Captions. Captions, section headings and the
table of contents appearing herein are included solely for
convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
12.09 Counterparts. This Agreement may be executed in
any number of counterparts, all of which taken together shall
constitute one and the same instrument and any of the parties
hereto may execute this Agreement by signing any such
counterpart.
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12.10 GOVERNING LAW. THIS AGREEMENT AND THE NOTES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF NEW YORK.
12.11 Jurisdiction and Service of Process. Any suit,
action or proceeding against any Obligor with respect to this
Agreement, any Loan, any Note, any Letter of Credit, any Letter
of Credit Document or any Security Document or on any judgment
entered by any court in respect of any thereof may be brought in
the Supreme Court of the State of New York, County of New York,
in the United States District Court for the Southern District of
New York, or in the courts sitting in Toronto, Ontario, Canada or
in the courts sitting in the Federal District of Mexico, or in
the courts sitting in any jurisdiction where property covered by
any Mortgage may be situated, as the U.S. Agent may elect in its
sole discretion and each Obligor hereby submits to the
non-exclusive jurisdiction of such courts for the purpose of any
such suit, action or proceeding (and waives for such purpose any
other preferential jurisdiction by reason of its present or
future domicile or otherwise). Each of PSC and PSM hereby agrees
that service of all writs, process and summonses in any such
suit, action or proceeding brought in the State of New York may
be made upon CT Corporation System (the "Process Agent"),
presently located at 1633 Broadway, New York, New York 10019, and
each of PSC and PSM hereby irrevocably appoints the Process Agent
its true and lawful attorney-in-fact in its name, place and stead
to accept such service of any and all such writs, process and
summonses, and agrees that the failure of the Process Agent to
give any notice of any such service of process to it shall not
impair or affect the validity of such service or of any judgment
based thereon. Each Obligor hereby further irrevocably consents
to the service of process in any suit, action or proceeding in
said courts by the mailing thereof by either Agent by registered
or certified mail, postage prepaid, to such Obligor. Nothing
herein shall in any way be deemed to limit the ability of either
Agent to serve any such writs, process or summonses in any other
manner permitted by applicable law or to obtain jurisdiction over
any Obligor in such other jurisdictions, and in such manner, as
may be permitted by applicable law. Each Obligor hereby
irrevocably waives any objection which it may now or hereafter
have to the laying of the venue of any such suit, action or
proceeding brought in the Supreme Court of the State of New York,
County of New York, or the United States District Court for the
Southern District of New York, and hereby further irrevocably
waives any claim that any such suit, action or proceeding brought
in any such court has been brought in an inconvenient forum.
12.12 Waiver of Sovereign Immunity. To the extent
that any Obligor may now or hereafter be entitled, in any
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jurisdiction in which judicial proceedings may at any time be
commenced with respect to this Agreement, the Loans, the Notes,
the Letters of Credit, the Letter of Credit Documents or the
Security Documents to claim for itself or its revenues or assets
any immunity from suit, court jurisdiction, attachment prior to
judgment, attachment in aid of execution of a judgment, execution
of a judgment or any other legal process or remedy with respect
to its respective obligations hereunder or thereunder, and to the
extent that in any such jurisdiction there may be attributed to
such Obligor such an immunity (whether or not claimed), such
Obligor hereby irrevocably agrees not to claim and hereby
irrevocably waives such immunity.
12.13 Judgment Currency. This is an international
loan transaction in which (a) in the case of U.S. Dollar Loans
and Letter of Credit Obligations, the specification of U.S.
Dollars and payment in New York, New York, U.S.A. is of the
essence, and, with respect to such U.S. Dollar Loans and Letter
of Credit Obligations, U.S. Dollars shall be the currency of
account in all events and (b) in the case of Canadian Dollar
Loans, the specification of Canadian Dollars and payment in
Toronto, Ontario, Canada is of the essence, and with respect to
such Canadian Dollar Loans, Canadian Dollars shall be the
currency of account in all events. The payment obligations of
the Obligors with respect to any Loans or Letter of Credit
Obligations under this Agreement or amounts payable under the
Security Documents and the Notes shall not be discharged by an
amount paid in a currency other than U.S. Dollars, in the case of
U.S. Dollar obligations, or Canadian Dollars, in the case of
Canadian Dollar obligations (each such currency with respect to
each such obligation, the "Required Currency"), or in a place
other than New York, New York, U.S.A. in the case of U.S. Dollar
obligations or Toronto, Ontario, Canada in the case of Canadian
Dollar obligations (each such place with respect to each
obligation, the "Required Place"), whether pursuant to such
judgment or otherwise to the extent that the amount so paid on
conversion to the Required Currency and transfer to the Required
Place under normal banking procedures does not yield the amount
of the Required Currency in the Required Place due hereunder.
12.14 Acknowledgment of Legal Existence. Each Obligor
hereby expressly acknowledges the legal existence of each Agent,
the Issuing Bank and each Bank, as well as its legal capacity to
enter into this Agreement, each Security Document to which it is
a party and each other Document to which it is a party, and
hereby also expressly acknowledges the authority of the person
who signs this Agreement, each Security Document to which it is a
party and each other Document to which it is a party on behalf of
- 130 -
such Agent or such Bank, such person's name appearing on the
signature pages hereof or thereof.
12.15 Confidentiality. Each Bank and each Agent
agrees (on behalf of itself and each of its affiliates,
directors, officers, employees and representatives) to use
reasonable precautions to keep confidential, in accordance with
customary procedures for handling confidential information of
this nature and in accordance with safe and sound banking
practices, any non-public information supplied to it by the
Company pursuant to this Agreement which is identified by the
Company as being confidential at the time the same is delivered
to the Banks or either Agent, provided that nothing herein shall
limit the disclosure of any such information (i) to the extent
required by statute, rule, regulation or judicial process;
(ii) to counsel for any of the Banks or the Agent; (iii) to bank
examiners, auditors or accountants; (iv) to either Agent or any
other Bank; (v) in connection with any litigation to which any
one or more of the Banks or either Agent is a party; or (vi) to
any assignee or participant (or prospective assignee or
participant) so long as such assignee or participant (or
prospective assignee or participant) first executes and delivers
to the respective Bank a confidentiality agreement having
substantially the same scope as this Section 12.15 and, with
respect to confidential information covered thereby, the
confidentiality agreement referred to in the last sentence of
this Section 12.15; and provided finally that in no event shall
any Bank or either Agent be obligated or required to return any
materials furnished by the Company. The obligations of each Bank
whose name appears on the signature pages hereof under this
Section 12.15 shall supplement (and shall not supersede and
replace) the obligations of such Bank under the confidentiality
letter entitled "Hamilton Beach Confidentiality Agreement" in
respect of this financing signed and delivered by such Bank to
Chase prior to the date hereof (and, in the case of Chase, the
confidentiality letter in respect of this financing signed and
delivered by Chase to NACCO on August 22, 1990) with respect to
the confidential information covered thereby.
12.16 WAIVER OF TRIAL BY JURY. TO THE EXTENT
PERMITTED BY APPLICABLE LAW, EACH OBLIGOR, EACH AGENT, THE
ISSUING BANK AND THE BANKS HEREBY IRREVOCABLY WAIVE ALL RIGHT OF
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER DOCUMENT
TO WHICH IT IS A PARTY OR ANY MATTER ARISING HEREUNDER OR
THEREUNDER.
- 131 -
The parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
OBLIGORS
HAMILTON BEACH/PROCTOR-SILEX, INC.
By George C. Nebel
Title: President and Chief Executive Officer
Hamilton Beach/Proctor-Silex, Inc.
4421 Waterfront Drive
Glen Allen, Virginia 23060
Telecopier No.: (804) 527-7357
Telephone No.: (804) 527-7190
Attention: James H. Taylor
Vice President
and Treasurer
With a copy to:
NACCO Industries, Inc.
12800 Shaker Boulevard
Cleveland, Ohio 44120
Telex No.: 810-421-8569
Telecopier No.: (216) 449-9561
Telephone No.: (216) 449-9690
Attention: Charles A. Bittenbender
Vice President,
General Counsel
and Secretary
Telecopier No.: (216) 449-9607
Telephone No.: (216) 449-9660
Attention: R. Robertson Hilton
Vice President and
Treasurer
- 132 -
PROCTOR-SILEX CANADA INC.
By: John R. Wright
Title: Controller
PROCTOR-SILEX CANADA INC.
10 Milner Business Court
Suite 600
Scarborough, Ontario
Canada MIB 3C6
Telecopier No.: (416) 292-8361
Telephone No.: (416) 292-7699
Attention: John R. Wright
Controller
With a copy to:
Hamilton Beach/Proctor-Silex, Inc.
4421 Waterfront Drive
Glen Allen, Virginia 23060
Telecopier No.: (804) 527-7357
Telephone No.: (804) 527-7190
Attention: James H. Taylor
Vice President and
Treasurer
- 133 -
PROCTOR-SILEX S.A. DE C.V.
By: George C. Nebel
Title: Sole Administrator
Proctor-Silex, S.A. de C.V.
c/o Hamilton Beach/Proctor-Silex, Inc.
12035-G Rojas Drive
El Paso, Texas 79936
Telecopier No.: (915) 778-0263
Telephone No.: (915) 774-7501
Attention: Joseph Lacambra
General Manager
With a copy to:
Hamilton Beach/Proctor-Silex, Inc.
4421 Waterfront Drive
Glen Allen, Virginia 23060
Telecopier No.: (804) 527-7357
Telephone No.: (804) 527-7190
Attention: James H. Taylor
Vice President and
Treasurer
- 134 -
BANKS
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By: Gregory M. Stover
Title:
Address for Notices:
The Chase Manhattan Bank
(National Association)
1 Chase Manhattan Plaza
New York, New York 10081
Telecopier No.: (212) 552-1457
Telephone No.: (212) 552-6111
Attention: Gregory M. Stover
- 135 -
THE CHASE MANHATTAN BANK OF CANADA
By: Timothy R. Wilson
Title: Vice President
Address for Notices:
The Chase Manhattan Bank
of Canada
150 King Street West
16th Floor
Toronto, Ontario M5H 1J9 Canada
Telecopier No.: (416) 585-3370
Telephone No.: (416) 585-3367
Attention: Timothy R. Wilson
- 136 -
THE FIRST NATIONAL BANK OF CHICAGO
By: Marguerite C. Canestraro
Title: Vice President
Address for Notices:
The First National Bank of Chicago
One First National Plaza
Suite 0634
Chicago, Illinois 60670
Telecopier No.: (312) 732-4840
Telephone No.: (312) 732-7659
Attention: Ernest M. Misiora
with a copy to
First Chicago Bank
1301 E. 9th Street
Suite 2150
Cleveland, Ohio 44114
Telecopier No.: (216) 574-9278
Telephone No.: (216) 574-9845
Attention: Marguerite C. Canestraro
- 137 -
THE BANK OF NOVA SCOTIA
By: F. C. H. Ashby
Title: Senior Manager of Loan Operations
Address for Notices:
The Bank of Nova Scotia
Suite 2400
600 Peachtree Street, NE
Atlanta, Georgia 30308
Telecopier No.: (404) 888-8998
Telephone No.: (404) 877-1562
Attention: Joe Legisto
with a copy to:
The Bank of Nova Scotia
181 West Madison Street
Suite 3700
Chicago, Illinois 60602
Telecopier No.: (312) 201-4108
Telephone No.: (312) 201-4179
Attention: Keith Neibrugge
- 138 -
CONTINENTAL BANK N.A.
By: Carl Jordan
Title:
Address for Notices:
Continental Bank N.A.
231 South LaSalle Street
Chicago, Illinois 60697
Telecopier No.: (312) 987-0303
Telephone No.: (312) 828-6560
Attention: Carl Jordan
Peter Thursby
- 139 -
CAISSE NATIONALE DE CREDIT AGRICOLE
By: Dean Balice
Title: Senior Vice President
Address for Notices:
Caisse Nationale de Credit Agricole
55 E. Monroe Street
Suite 4700
Chicago, Illinois 60603
Telecopier No.: (312) 372-3724
Telephone No.: (312) 917-7570
Attention: Karen Coons
- 140 -
CRESTAR BANK
By: Timothy J. Cecil
Title: Vice President
Address for Notices:
Crestar Bank
919 East Main Street
Richmond, Virginia 23219
Telecopier No.: (804) 782-7324
Telephone No.: (804) 782-5998
Attention: Timothy J. Cecil
- 141 -
SOCIETY NATIONAL BANK
By: J. Roderick MacDonald
Title: Vice President
Address for Notices:
Society National Bank
127 Public Square, 6th Floor
Cleveland, Ohio 44114-1306
Telecopier No.: (216) 689-4981
Telephone No.: (216) 689-4445
Attention: J. Roderick MacDonald
- 142 -
AGENTS
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as U.S. Agent
By: Gregory M. Stover
Title:
Address for Notices to
Chase as Agent:
New York Agency Office
The Chase Manhattan Bank
(National Association)
4 Chase Metrotech Center
13th Floor
Brooklyn, New York 11245
Telecopier No.: (718) 242-6900 or
6911
Telephone No.: (718) 242-7969
Attention: Debbie Murnin
- 143 -
THE CHASE MANHATTAN BANK
OF CANADA, as Canadian Agent
By: Timothy R. Wilson
Title: Vice President
Address for Notices to
Chase Canada as Agent:
Canadian Agency
The Chase Manhattan Bank
of Canada
150 King Street West
16th Floor
Toronto, Ontario M5H 1J9, Canada
Telecopier No.: (416) 585-3370
Telephone No.: (416) 585-3367
Attention: Timothy R. Wilson