Exhibit 4.15
$106,000,000
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
among
THE INTERLAKE CORPORATION,
VARIOUS BANKS,
THE CHASE MANHATTAN BANK,
as ADMINISTRATIVE AGENT
and
THE FIRST NATIONAL
BANK OF CHICAGO,
as DOCUMENTATION AGENT
__________________________________
Dated as of September 27, 1989
and
Amended and Restated as of
December 22, 1997
__________________________________
TABLE OF CONTENTS
Page
Section 1. Amount and Terms of Credit.1
1.01 The Commitments.1
1.02 Minimum Amount of Each Borrowing.1
1.03 Notice of Borrowing.1
1.04 Disbursement of Funds.2
1.05 Notes.2
1.06 Conversions.3
1.07 Pro Rata Borrowings.3
1.08 Interest.3
1.09 Interest Periods.4
1.10 Increased Costs, Illegality, etc..5
1.11 Compensation.7
Section 2. Letters of Credit.7
2.01 Letters of Credit.7
2.02 Minimum Stated Amount.8
2.03 Letter of Credit Requests.8
2.04 Letter of Credit Participations.8
2.05 Agreement to Repay Letter of Credit Drawings.11
2.06 Increased Costs.12
Section 3. Fees; Commitment; Reductions of Commitments.12
3.01 Fees.12
3.02 Voluntary Reduction of Commitments.13
3.03 Mandatory Reduction of Commitments.13
Section 4. Prepayments; Payments.13
4.01 Voluntary Prepayments.13
4.02 Mandatory Prepayments.14
4.03 Method and Place of Payment.15
4.04 Net Payments.15
Section 5. Conditions Precedent.17
5.01 Conditions Precedent to the Second
Restatement Effective Date.17
5.02 Conditions to All Credit Events.19
5.03 Special Condition to Certain Loans.19
Section 6. Representations, Warranties and Agreements.20
6.01 Organizational Status.20
6.02 Power and Authority.20
6.03 No Violation.20
6.04 Governmental Approvals.21
6.05 Pledge Agreements.21
6.06 Other Security Documents.21
6.07 Financial Statements; Financial Condition;
Undisclosed Liabilities, etc..21
6.08 Litigation.22
6.09 True and Complete Disclosure.23
6.10 Use of Proceeds; Margin Regulations.23
6.11 Tax Returns and Payments.23
6.12 Compliance with ERISA.23
6.13 Capitalization.24
6.14 Subsidiaries.25
6.15 Compliance with Statutes, etc..25
6.16 Investment Company Act.26
6.17 Public Utility Holding Company Act.26
6.18 Patents, Licenses, Franchises and Formulas.26
6.19 Restrictions on Subsidiaries.26
6.20 Properties.27
6.21 Existing and Continued Security Interests.27
Section 7. Affirmative Covenants.27
7.01 Information Covenants.27
7.02 Books, Records and Inspections.29
7.03 Maintenance of Property, Insurance.30
7.04 Corporate Franchises.30
7.05 Compliance with Statutes, etc..30
7.06 ERISA.30
7.07 End of Fiscal Years; Fiscal Quarters.31
7.08 Performance of Obligations.31
7.09 Permitted Acquisitions.31
7.10 Inactive Subsidiaries.32
7.11 Cash Management.32
Section 8. Negative Covenants.32
8.01 Liens.32
8.02 Consolidation, Merger, Sale of Assets, etc..33
8.03 Distributions.35
8.04 Leases.36
8.05 Indebtedness.36
8.06 Advances, Investments and Loans.37
8.07 Transactions with Affiliates.39
8.08 Capital Expenditures.39
8.09 Minimum Consolidated Net Worth.39
8.10 Minimum Consolidated EBITDA.39
8.11 Limitation on Voluntary Payments and
Modifications of Indebtedness;
Modifications of Certificate of Incorporation,
By-Laws and Certain Other Agreements, etc..40
8.12 Limitation on Restrictions on Subsidiary
Dividends, Other Distributions and on
Granting of Liens.40
8.13 Limitation on Issuances of Capital Stock by
Subsidiaries.41
8.14 Business.41
Section 9. Events of Default.41
9.01 Payments.41
9.02 Representations, etc..41
9.03 Covenants.41
9.04 Default Under Other Agreements.41
9.05 Bankruptcy, etc..42
9.06 ERISA.42
9.07 Pledge Agreements.43
9.08 Other Security Documents.43
9.09 Guaranty.43
9.10 Judgments.43
9.11 Change in Control.43
9.12 Environmental Liabilities.44
Section 10. Definitions and Accounting Terms.44
10.01 Defined Terms.44
Section 11. The Administrative Agent.60
11.01 Appointment.60
11.02 Nature of Duties.60
11.03 Lack of Reliance on the Administrative Agent.60
11.04 Certain Rights of the Administrative Agent.61
11.05 Reliance.61
11.06 Indemnification.61
11.07 The Administrative Agent in its Individual Capacity.61
11.08 Holders.62
11.09 Resignation by the Administrative Agent.62
Section 12. Miscellaneous.62
12.01 Payment of Expenses, etc..62
12.02 Right of Setoff.63
12.03 Notices.64
12.04 Successors and Assigns.64
12.05 No Waiver; Remedies Cumulative.67
12.06 Payments Pro Rata.67
12.07 Calculations; Computations.68
12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.68
12.09 Counterparts.69
12.10 Effectiveness.69
12.11 Headings Descriptive.69
12.12 Amendment or Waiver.69
12.13 Obligation to Make Payments in Dollars.70
12.14 Survival.70
12.15 Domicile of Loans.70
12.16 Confidentiality.70
12.17 Amendment and Restatement; ESOP Loans.71
12.18 Conversion of Original Loans of Continuing Banks;
Termination of Commitments of Non-Continuing Banks.71
SCHEDULE I Commitments
SCHEDULE II Existing Letters of Credit
SCHEDULE III Collateral Exceptions
SCHEDULE IV Undisclosed Liabilities
SCHEDULE V Subsidiaries
SCHEDULE VI Statutory, Regulatory and Environmental Matters
SCHEDULE VII Patents, Licenses, Franchises and Formulas
SCHEDULE VIII Permitted Liens
SCHEDULE IX Subsidiaries Permitted To Be Wound Up, Liquidated,
And/Or Dissolved
SCHEDULE X Existing Debt
SCHEDULE XI Designated Asset Sales
SCHEDULE XII Mortgaged Properties
SCHEDULE XIII Subsidiary Assignors/Subsidiary Guarantors/Subsidiary
Pledgors
EXHIBIT A Notice of Borrowing
EXHIBIT B Note
EXHIBIT C Letter of Credit Request
EXHIBIT D Opinion Requested from Jones, Day, Reavis & Pogue
EXHIBIT E Opinion Requested from the General Counsel of the
Borrower
EXHIBIT F Confirmation of Guaranty and Security Interests
EXHIBIT G Assignment and Acceptance
EXHIBIT H Confidentiality Letter
ANNEX A Amended and Restated Company Security Agreement
ANNEX B Amended and Restated Subsidiary U.S. Security
Agreement
SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as
of September 27, 1989, and amended and restated as of May 28, 1992 and as
of December 22, 1997, among THE INTERLAKE CORPORATION, a Delaware
corporation (the "Borrower"), THE CHASE MANHATTAN BANK (formerly Chemical
Bank) ("Chase"), THE FIRST NATIONAL BANK OF CHICAGO ("First National",
together with Chase and any future participating financial institutions
permitted under Section 12.04 as, the "Banks"), Chase, acting in the
capacity and to the extent described in Section 11 as administrative agent
(in such capacity, the "Administrative Agent") and First National, as
documentation agent (the "Documentation Agent"). All capitalized terms
used herein shall have the meanings provided in Section 10.
Section 1. Amount and Terms of Credit.
1.01 The Commitments. Subject to and upon the terms and
conditions set forth herein, each Bank severally agrees, (A) on the Second
Restatement Effective Date, to convert an amount equal to such Bank's
Percentage of all Original Loans outstanding on such date into Loans
(defined below) and (B) at any time and from time to time on and after the
Second Restatement Effective Date and prior to the Maturity Date, to make
a revolving loan or revolving loans (each a "Loan" and, collectively, the
"Loans") to the Borrower, which Loans:
(i) shall, at the option of the Borrower, be Base Rate Loans or
Eurodollar Loans, provided that all Loans comprising the same
Borrowing shall at all times be of the same Type;
(ii) may be repaid and reborrowed in accordance with the
provisions hereof;
(iii) shall not exceed for any Bank at any time outstanding that
aggregate principal amount which equals the Commitment of such Bank at
such time;
(iv) shall not exceed for the Banks at any time outstanding that
aggregate principal amount which, when added to the aggregate
principal amount of Loans outstanding, equals the amount by which the
Acquisition Basket Amount is reduced pursuant to clause (ii) of the
definition thereof; and
(v) shall not exceed for the Banks at any time outstanding that
aggregate principal amount which, when added to the aggregate
principal amount of all Loans then outstanding plus all Letter of
Credit Outstandings, equals the Total Commitment less the Acquisition
Basket Amount at such time.
1.02 Minimum Amount of Each Borrowing. The aggregate principal
amount of each Borrowing of Loans shall be not less than $5,000,000,
provided that Borrowings of Loans constituting Base Rate Loans may be made
in amounts not less than $1,000,000 (or, if less, the amount of the Total
Unutilized Commitment) but at no time shall there be outstanding more than
ten Eurodollar Loans.
1.03 Notice of Borrowing. Whenever the Borrower desires to incur
Loans hereunder on and after the Second Restatement Effective Date, the
Borrower shall give the Administrative Agent at its Notice Office at least
one Business Day's prior notice of each incurrence of Base Rate Loans and
at least three Business Days' prior notice of each incurrence of Eurodollar
Loans, provided that any such notice shall be deemed to have been given on
a certain day only if given before 12:00 Noon (New York time) on such day.
Each such notice (each a "Notice of Borrowing") shall be in the form of Ex-
hibit A, appropriately completed to specify the aggregate principal amount
of the Loans to be incurred pursuant to each such Borrowing being
requested, the date of such incurrence (which shall be a Business Day),
whether the Loans being made pursuant to each requested Borrowing are to be
initially maintained as Base Rate Loans or Eurodollar Loans and, if
Eurodollar Loans, the initial Interest Period to be applicable thereto.
The Administrative Agent shall promptly give each Bank notice of such
proposed incurrence, of such Bank's proportionate share thereof, if any,
and of the other matters required by the immediately preceding sentence to
be specified in the Notice of Borrowing.
1.04 Disbursement of Funds. No later than 12:00 Noon (New York
time) on the date specified in each Notice of Borrowing, each Bank will
make available its pro rata portion of each Borrowing requested to be made
on such date to the Administrative Agent, in Dollars and in immediately
available funds at the Payment Office, and the Administrative Agent will
make available to the Borrower at the Payment Office the aggregate of the
amounts so made available by the Banks. Unless the Administrative Agent
shall have been notified by any Bank prior to the date of any such
Borrowing that such Bank does not intend to make available to the
Administrative Agent such Bank's portion of any such Borrowing to be made
on such date, the Administrative Agent may assume that such Bank has made
such amount available to the Administrative Agent on such date of such
Borrowing and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Administrative
Agent by such Bank, the Administrative Agent shall be entitled to recover
such corresponding amount on demand from such Bank. If such Bank does not
pay such corresponding amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent shall promptly notify the
Borrower and the Borrower shall immediately pay such corresponding amount
to the Administrative Agent. The Administrative Agent shall also be
entitled to recover on demand from such Bank or the Borrower, as the case
may be, (i) interest on such corresponding amount in respect of each day
from the date such corresponding amount was made available by the
Administrative Agent to the Borrower until the date such corresponding
amount is recovered by the Administrative Agent, at a rate per annum equal
to (x) if recovered from such Bank, the overnight Federal Funds Rate for
the first two days and the Alternate Base Rate thereafter and (y) if
recovered from the Borrower, the then applicable rate for Base Rate Loans
or Eurodollar Loans, as the case may be, as determined in accordance with
Section 1.08 plus (ii) in any case, an amount equal to any losses incurred
by the Administrative Agent or any Bank (other than the Bank which failed
to make its funds available) under any Hedging Agreement or otherwise as a
result of the failure of such Bank to provide such amount as required in
this Agreement. Nothing in this Section 1.04 shall be deemed to relieve
any Bank from its obligation to fulfill its Commitment hereunder or to
prejudice any rights which the Borrower may have against any Bank as a
result of any default by any Bank hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the principal
of, and interest on, the Loans made by each Bank to the Borrower shall be
evidenced by a promissory note duly executed and delivered to such Bank by
the Borrower substantially in the form of Exhibit B hereto (each a "Note"
and collectively the "Notes").
(b) The Note issued to each Bank shall (i) be payable to the
order of such Bank and be dated the Second Restatement Effective Date, (ii)
be in a stated principal amount equal to the Commitment of such Bank and be
payable in the outstanding principal amount of the Loans evidenced thereby
from time to time, (iii) mature on the Maturity Date, (iv) bear interest as
provided in Section 1.08 in respect of the Base Rate Loans or Eurodollar
Loans, as the case may be, evidenced thereby and (v) be entitled to the
benefits of this Agreement and all other Credit Documents.
(c) Each Bank will note on its internal records the amount of
each Loan made by it and each payment and conversion in respect thereof and
will prior to any transfer of any of its Notes endorse on the reverse side
thereof the outstanding principal amount of Loans evidenced thereby.
Failure to make any such notation shall not affect the Borrower's
obligations in respect of such Loans.
1.06 Conversions. The Borrower shall have the option to convert
on any Business Day, all or a portion equal to not less than $5,000,000 of
the outstanding principal amount of Loans of one Type made to the Borrower
pursuant to one or more Borrowings into a Borrowing of the other Type,
provided that (i) except as otherwise provided in Section 1.10(b), Euro-
dollar Loans may be converted into Base Rate Loans only on the last day of
an Interest Period applicable thereto and no such partial conversion of
Eurodollar Loans shall reduce the outstanding principal amount of
Eurodollar Loans made pursuant to any single Borrowing to less than
$5,000,000, (ii) Base Rate Loans may only be converted into Eurodollar
Loans if no Default or Event of Default is in existence on the date of
conversion and (iii) no conversion pursuant to this Section 1.06 shall
result in a greater number of Borrowings of Eurodollar Loans than is
permitted under Section 1.02. Each such conversion shall be effected by the
Borrower giving the Administrative Agent at its Notice Office prior to
12:00 Noon (New York time) at least three Business Days' in the case of
conversions into Eurodollar Loans, or one Business Day's in the case of
conversions into Base Rate Loans, prior notice (each a "Notice of
Conversion") specifying the Loans to be so converted and, if to be
converted into Eurodollar Loans, the Interest Period to be initially
applicable thereto. The Administrative Agent shall give each Bank prompt
notice of any such proposed conversion affecting any of its Loans.
1.07 Pro Rata Borrowings. All Loans under this Agreement shall
be incurred on and after the Second Restatement Effective Date from the
Banks pro rata on the basis of their respective Commitments. It is
understood that no Bank shall be responsible for the default by any other
Bank of its obligation to make Loans hereunder and that each Bank shall be
obligated to make the Loans provided to be made by it hereunder regardless
of the failure of any other Bank to fulfill its Commitment hereunder.
1.08 Interest. (a) The Borrower agrees to pay interest in
respect of the unpaid principal amount of each Base Rate Loan made to the
Borrower from the Second Restatement Effective Date or if later the date of
the Borrowing thereof until maturity thereof (whether by acceleration or
otherwise) at a rate per annum which shall be the Applicable Margin plus
the Alternate Base Rate in effect from time to time.
(b) The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Eurodollar Loan made to the Borrower from the
Second Restatement Effective Date or if later the date of the Borrowing
thereof until maturity thereof (whether by acceleration or otherwise) at a
rate per annum which shall, during each Interest Period applicable thereto,
be the Applicable Margin plus the Adjusted LIBOR Rate for such Interest
Period.
(c) Overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan shall bear interest at a rate per
annum equal to the greater of (i) the rate which is 2% in excess of the
rate then borne by such Borrowings or (ii) the rate which is 2% plus the
Applicable Margin plus the Base Rate. Interest which accrues under this
Section 1.08(c) shall be payable on demand.
(d) Accrued (and theretofore unpaid) interest shall be payable
(i) in respect of each Base Rate Loan, quarterly in arrears on the last
Business Day of each March, June, September and December, (ii) in respect
of each Eurodollar Loan, on the last day of each Interest Period applicable
thereto and, in the case of an Interest Period in excess of three months,
on the date occurring three months after the first day of such Interest
Period and (iii) in respect of each Loan, on any prepayment or conversion
(on the amount prepaid or converted), at maturity (whether by acceleration
or otherwise) and, after such maturity, on demand.
(e) The Administrative Agent shall determine the interest rate
applicable to Eurodollar Loans for each Interest Period and shall promptly
notify the Borrower and the Banks thereof. Each such determination shall,
absent manifest error, be final and conclusive and binding on all parties
hereto.
1.09 Interest Periods. At the time it gives any Notice of
Borrowing or Notice of Conversion in respect of the making of, or
conversion into, a Borrowing of Eurodollar Loans (in the case of the
initial Interest Period applicable thereto) or on the third Business Day
prior to the expiration of an Interest Period applicable to such a
Borrowing (in the case of subsequent Interest Periods), the Borrower shall
have the right to elect, by giving the Administrative Agent notice thereof,
the interest period (each an "Interest Period") applicable to such
Borrowing, which Interest Period shall, at the option of the Borrower, be
either a one, two, three or six month period, provided that: (i) all Loans
comprising a Borrowing shall have the same Interest Period; (ii) the
initial Interest Period for any Borrowing of Eurodollar Loans shall
commence on the date of such Borrowing (including the date of any
conversion from a Borrowing of Base Rate Loans) and each Interest Period
occurring thereafter in respect of such Borrowing shall commence on the day
on which the next preceding Interest Period expires; (iii) if any Interest
Period begins on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period, such Interest
Period shall end on the last Business Day of such calendar month; (iv) if
any Interest Period would otherwise expire on a day which is not a Business
Day, such Interest Period shall expire on the next succeeding Business Day;
provided, however, that if any Interest Period would otherwise expire on a
day which is not a Business Day but is a day of the month after which no
further Business Day occurs in such month, such Interest Period shall
expire on the next preceding Business Day; (v) no Interest Period in
respect of a Borrowing of Loans shall extend beyond the Maturity Date; and
(vi) no Interest Period for Eurodollar Loans may be selected at any time
that a Default or Event of Default then exists. If prior to the expiration
of any Interest Period, the Borrower has failed to elect or is prohibited
from electing a new Interest Period to be applicable to such Borrowing as
provided above, if such Borrowing is a Borrowing of Eurodollar Loans, the
Borrower shall be deemed to have elected to convert such Borrowing into a
Borrowing of Base Rate Loans effective as of the expiration date of such
current Interest Period.
1.10. Increased Costs, Illegality, etc. (a) In the event
that any Bank shall have determined (which determination shall, absent
manifest error, be final and conclusive and binding upon all parties hereto
but, with respect to clause (i) below, may be made only by the
Administrative Agent):
(i) on any date for the determination of an Adjusted LIBOR Rate
that, by reason of any changes arising after the Initial Borrowing
Date affecting the London interbank market, adequate and fair means do
not exist for ascertaining the applicable interest rate on the basis
provided for in the definition of Adjusted LIBOR Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder (A) with
respect to any Eurodollar Loan because of (x) any change (excluding
any change in gross or net income taxes imposed by any jurisdiction or
political subdivision or taxing authority having authority over such
Bank) since the Initial Borrowing Date in any applicable law or
governmental rule, regulation, guideline, order or request (whether or
not having the force of law) (or in the interpretation or administra-
tion thereof and including the introduction of any new law or
governmental rule, regulation, guideline or order) such as, for
example, but not limited to, a change in official reserve
requirements, but, in all events, excluding reserves required under
Regulation D to the extent included in the computation of the Adjusted
LIBOR Rate, as the case may be, and/or (y) other circumstances affect-
ing the London interbank market or such Bank's position therein,
without duplication; or
(iii) at any time, that the making or continuance of any
Eurodollar Loan has become unlawful by compliance by such Bank with
any law, governmental rule, regulation, guideline or order, or has
become impracticable as a result of a contingency occurring after the
date of this Agreement which materially and adversely affects the
London interbank market or the position of such Bank in such market;
then, and in any such event, such Bank (or the Administrative Agent) shall
on such date give notice (by telephone confirmed in writing) to the
Borrower, except in the case of clause (i) above, to the Administrative
Agent, of such determination (which notice the Administrative Agent shall
promptly transmit to each Bank). Thereafter (x) in the case of clause (i)
above as such clause relates to Eurodollar Loans, Eurodollar Loans shall no
longer be available until such time as the Administrative Agent notifies
the Borrower and the Banks that the circumstances giving rise to such
notice by the Administrative Agent no longer exist, and any Notice of
Borrowing or Notice of Conversion given by the Borrower with respect to
Eurodollar Loans which have not yet been incurred (including by way of
conversion) shall be deemed rescinded by the Borrower, (y) in the case of
clause (ii) above, the Borrower shall pay to such Bank, within 10 days of
receipt of the notice referred to below, such additional amounts (in the
form of an increased rate of, or a different method of calculating,
interest or otherwise as the Bank in its sole discretion shall determine)
as shall be required to compensate such Bank for such increased costs or
reductions in amounts received or receivable hereunder (a written notice as
to the additional amounts owed to such Bank, setting forth the basis for
the calculation thereof, submitted to the Borrower by such Bank shall,
absent manifest error, be final and conclusive and binding upon all parties
hereto) and (z) in the case of clause (iii) above, the Borrower shall take
one of the actions specified in Section 1.10(b) as promptly as possible
and, in any event, within the time period required by law.
(b) At any time that any Loan is affected by the circumstances
described in Section 1.10(a)(ii) or (iii), the Borrower may (and in the
case of a Loan affected pursuant to Section 1.10(a)(iii) shall) either
(x) if the affected Loan is then being made pursuant to a Borrowing or a
conversion, either cancel said Borrowing or conversion or, if the notice
therefor relates solely to Eurodollar Loans, convert the Notice of
Borrowing or Notice of Conversion therefor into a Notice of Borrowing or
Notice of Conversion, as the case may be, for Base Rate Loans, in either
case by giving the Administrative Agent telephonic notice (confirmed in
writing) thereof on the same date that the Borrower was notified by the
Bank or the Administrative Agent pursuant to Section 1.10(a)(ii) or (iii)
or (y) if the affected Loan is then outstanding, upon at least three
Business Days' written notice to the Administrative Agent, prepay in full
each Borrowing pursuant to which an affected Loan is outstanding or, if the
notice relates solely to Eurodollar Loans, require the affected Bank to
convert such Loan into a Base Rate Loan; provided that, if more than one
Bank is similarly affected at any time, then the Banks must be treated the
same pursuant to this Section 1.10(b).
(c) If any Bank determines at any time that any change in or
effectiveness of any applicable law or governmental rule, regulation,
guideline or order concerning capital adequacy (including without
limitation those announced or published prior to the Initial Borrowing
Date), or any change in interpretation or administration thereof by any
governmental authority, central bank or comparable agency, will have the
effect of increasing the amount of capital required or expected to be
maintained by such Bank or any corporation controlling such Bank or reduce
the rate of return on such capital based on the existence of such Bank's
Commitment hereunder, its obligations and commitments in respect of Letters
of Credit or its obligations hereunder, then the Borrower agrees to pay to
such Bank, within 10 days of the receipt of the notice referred to below,
such additional amounts as shall be required to compensate such Bank or
such controlling corporation for the increased cost or reduced rate of
return on capital as a result of such increase of capital or reduction, as
the case may be. In determining such additional amounts, each Bank will
act reasonably and in good faith and will use averaging and attribution
methods which are reasonable, provided that such Bank's determination of
compensation owing under this Section 1.10(c) shall, absent manifest error,
be final and conclusive and binding on all the parties hereto. Each Bank,
upon determining that any additional amounts will be payable pursuant to
this Section 1.10(c), will give prompt written notice thereof to the
Borrower, which notice shall show the basis for calculation of such
additional amounts, although the failure to give any such notice shall not
release or diminish the Borrower's obligations to pay additional amounts
pursuant to this Section 1.10(c) within 10 days of receipt of notice.
1.11. Compensation. The Borrower shall compensate each Bank,
upon its written request (which request shall set forth the basis for
requesting such compensation), for all reasonable losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other
funds required by such Bank to fund its Eurodollar Loans) which such Bank
may sustain: (i) if for any reason (other than a default by such Bank or
the Administrative Agent) a Borrowing of, or conversion from or into,
Eurodollar Loans does not occur on a date specified therefor in a Notice of
Borrowing or Notice of Conversion (whether or not withdrawn by the Borrower
or deemed withdrawn pursuant to Section 1.10(b)); (ii) if any repayment or
conversion of any of its Eurodollar Loans occurs on a date which is not the
last day of an Interest Period with respect thereto whether or not such
prepayment occurs by reason of the exercise of rights or remedies held by
or on behalf of such Bank pursuant to Section 9; (iii) if any prepayment of
any of its Eurodollar Loans is not made on any date specified in a notice
of prepayment given by the Borrower; or (iv) as a consequence of (x) any
other default by the Borrower to repay its Loans when required by the terms
of this Agreement or the Notes of such Bank or (y) any election made
pursuant to Section 1.10(b).
Section 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms and
conditions herein set forth, the Borrower may request (x) any Issuing Bank
at any time and from time to time on or after the Second Restatement
Effective Date and prior to the Maturity Date, to issue, and subject to the
terms and conditions contained herein such Issuing Bank shall issue, for
the account of the Borrower, an irrevocable standby letter of credit
denominated in Dollars and otherwise in such form as has been approved by
such Issuing Bank and the Administrative Agent (each a "Standby Letter of
Credit") in support of such obligations of the Borrower and its
Subsidiaries as are acceptable to such Issuing Bank and the Administrative
Agent and (y) any Issuing Bank at any time and from time to time on or
after the Second Restatement Effective Date and prior to the Maturity Date,
to issue, and subject to the terms and conditions contained herein such
Issuing Bank shall issue, for the account of the Borrower an irrevocable
trade letter of credit denominated in Dollars and otherwise in such form as
has been approved by such Issuing Bank and the Administrative Agent, in
support of such obligations of the Borrower and its Subsidiaries as are
acceptable to such Issuing Bank and the Administrative Agent (each a "Trade
Letter of Credit", and, together with each "Standby Letter of Credit",
individually, a "Letter of Credit"; and the "Trade Letters of Credit" and
the "Standby Letters of Credit", collectively, the "Letters of Credit").
It is hereby acknowledged and agreed that each of the Letters of Credit
described on Schedule II, which were issued by Chase as Issuing Bank under
the Original Credit Agreement and remain outstanding on the Second
Restatement Effective Date, shall constitute a "Letter of Credit" for all
purposes of this Agreement.
(b) Notwithstanding the foregoing, (i) no Letter of Credit shall
be issued the Stated Amount of which, when added to the Letter of Credit
Outstandings at such time, would exceed $20,000,000; (ii) no Letter of
Credit shall be issued the Stated Amount of which, when added to (x) all
Letter of Credit Outstandings at such time and (y) the sum of the aggregate
principal amount of all Loans then outstanding, would exceed the Total
Commitment less the Acquisition Basket Amount; and (iii) each Letter of
Credit shall by its terms terminate not later than one year after the date
of issuance thereof and in any event not later than the Maturity Date;
provided that the Issuing Bank may, with the consent of the Required Banks,
issue a Letter of Credit terminating beyond the Maturity Date so long as
the Borrower cash collateralizes such Letter of Credit thirty days prior to
the Maturity Date in a manner acceptable to the Issuing Bank and the
Required Banks.
2.02 Minimum Stated Amount. The Stated Amount of each Letter of
Credit shall not be less than an amount acceptable to the respective
Issuing Bank.
2.03 Letter of Credit Requests. (a) Whenever the Borrower
desires that a Letter of Credit be issued for its account, it shall give
the respective Issuing Bank (with copies to be sent to the Administrative
Agent and the other Bank) at least three Business Days prior written
request therefor. Each such request shall be executed by the Borrower and
shall be in the form of Exhibit C attached hereto (each a "Letter of Credit
Request").
(b) The execution and delivery of each Letter of Credit Request
shall be deemed to be a representation and warranty by the Borrower that
such Letter of Credit may be issued in accordance with, and will not
violate the requirements of, Section 2.01. Unless the respective Issuing
Bank has received notice from the Administrative Agent or the Required
Banks, which notice has not been rescinded, before it issues any Letter of
Credit that one or more of the conditions specified in Section 5 applicable
to such Credit Event is not then satisfied, or that the issuance of such
Letter of Credit would violate Section 2.01, then such Issuing Bank may
issue the requested Letter of Credit for the account of the Borrower in
accordance with such Issuing Bank's usual and customary practices. Upon
its issuance of any Letter of Credit, such Issuing Bank shall promptly
notify the Administrative Agent of such issuance, which notice to the
Administrative Agent shall be accompanied by a copy of the Letter of Credit
actually issued.
2.04 Letter of Credit Participations. (a) Immediately upon the
issuance by any Issuing Bank of any Letter of Credit (or upon the Second
Restatement Effective Date in the case of Letters of Credit existing on
such date), such Issuing Bank shall be deemed to have sold and transferred
to each Bank other than such Issuing Bank (each such other Bank in such
capacity, as "Participant"), and each such Participant shall be deemed
irrevocably and unconditionally to have purchased and received from such
Issuing Bank, without recourse or warranty, an undivided interest and
participation, to the extent of such Participant's Percentage, in such
Letter of Credit of such Issuing Bank, each substitute letter of credit,
each drawing made thereunder and the obligations of the Borrower under this
Agreement with respect thereto, and any security therefor or guaranty
pertaining thereto. Upon the request of the Administrative Agent or the
Required Banks, such Issuing Bank shall take such actions in order to
transfer such guaranties or security interests, and any documents and
instruments relating thereto, to the Administrative Agent or the Collateral
Agent but any failure to make such transfer shall not restrict or impair
the rights held pursuant to this Agreement by any Bank in such security
interests and guaranties. Upon any change in the Commitments of the
Participants pursuant to Section 12.04, it is hereby agreed that, with
respect to all outstanding Letters of Credit and Unpaid Drawings, there
shall be an automatic adjustment to the participations pursuant to this
Section 2.04 to reflect the new Percentages of the assigning and assignee
Participant.
(b) In determining whether to pay under any Letter of Credit,
the respective Issuing Bank shall not have any obligation relative to the
Participants other than to confirm that any documents required to be
delivered under such Letter of Credit appear to have been delivered and
that they appear to comply on their face with the requirements of such
Letter of Credit. In taking any actions with respect to any security
interest or guaranty relating to any Letter of Credit issued by it, the
respective Issuing Bank shall be entitled to the protections and
indemnities afforded the Collateral Agent hereunder and under the Security
Documents, and shall only be obligated to take any actions in accordance
with the obligations of the Collateral Agent, provided that the such
Issuing Bank shall only foreclose on such security interest and enforce
such guaranty if instructed to do so by the Administrative Agent or the
Required Banks. Notwithstanding the proviso contained in the immediately
preceding sentence, nothing in such proviso shall restrict or impair any
Issuing Bank's right to take such actions as such Issuing Bank may
reasonably determine to be required to preserve and protect property
subject to any such security interest and, in the event such Issuing Bank
reasonably determines that: (i) property subject to any such security
interest is perishable or threatens to speedily and materially decline in
value and (ii) there then exists an event which, in the reasonable
determination of the Issuing Bank, but for the failure of the
Administrative Agent or the Required Banks to issue such instruction, would
entitle the Issuing Bank to foreclose upon such property, then the Issuing
Bank may foreclose upon such property notwithstanding the failure of the
Administrative Agent or the Required Banks to issue such instruction,
provided that nothing in this sentence shall impose any duty on the Issuing
Bank to take the foregoing actions. Any action taken or omitted to be
taken by such Issuing Bank under or in connection with any Letter of Credit
if taken or omitted in the absence of gross negligence or willful
misconduct, shall not create for such Issuing Bank any resulting liability
to any Participant.
(c) In the event that any Issuing Bank makes any payment under
any Letter of Credit and the Borrower shall not have reimbursed such amount
in full to such Issuing Bank pursuant to Section 2.05(a), such Issuing Bank
shall promptly notify each Participant of such failure, and each
Participant shall promptly and unconditionally pay to the Administrative
Agent for the account of such Issuing Bank the amount of the Participant's
Percentage of such unreimbursed payment in Dollars and in same day funds.
If any Issuing Bank so notifies, prior to 11:00 A.M. (New York time) on any
Business Day, such Participant required to fund a payment under a Letter of
Credit, such Participant shall make available to the Administrative Agent
for the account of such Issuing Bank the Participant's Percentage of the
amount of such payment on such Business Day in same day funds. If and to
the extent such Participant shall not have so made its Percentage of the
amount of such payment available to such Issuing Bank, such Participant
agrees to pay to the Administrative Agent for the account of such Issuing
Bank, forthwith on demand such amount, together with interest thereon, for
each day from such date until the date such amount is paid to such Issuing
Bank at the overnight Federal Funds Rate. The failure of any Participant
to make available to any Issuing Bank its Percentage of any payment under
any Letter of Credit shall not relieve any other Participant of its
obligation hereunder to make available to such Issuing Bank its Percentage
of any payment under any Letter of Credit on the date required, as
specified above, but no Participant shall be responsible for the failure of
any other Participant to make available to such Issuing Bank such other
Participant's Percentage of any such payment.
(d) Whenever any Issuing Bank receives a payment of a
reimbursement obligation as to which it has received any payments from any
Participant pursuant to clause (c) above, such Issuing Bank shall pay to
the Administrative Agent for the account of such Participant, in Dollars
and in same day funds, an amount equal to the Participant's Percentage of
such payment of a reimbursement obligation.
(e) Upon the request of any Participant, each respective Issuing
Bank shall furnish to such Participant copies of any Letter of Credit
issued by it and such other documentation as may reasonably be requested by
such Participant.
(f) As between the Borrower and the respective Issuing Bank, the
Borrower assumes all risks of the acts and omissions of, or misuse of the
Letters of Credit by the respective beneficiaries of such Letters of
Credit. Further, and not in limitation of the foregoing, the respective
Issuing Bank shall not be responsible for the following:
(i) the form, validity, sufficiency, accuracy, genuineness or
legal effect of (A) any documents submitted by any party in connection
with the application for and issuance of such Letters of Credit, or
(B) any document submitted by any party in connection with any drawing
under any such Letter of Credit which purports to comply with the
requirements of such Letter of Credit, even if (in the case of (A) or
(B)) such document should in fact prove to be in any and all respects
invalid, insufficient, inaccurate, fraudulent or forged;
(ii) the validity or sufficiency of any instrument transferring
or assigning or purporting to transfer or assign any such Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any
reason;
(iii) failure of the beneficiary of any such Letter of Credit to
comply fully with conditions required in order to draw upon such
Letter of Credit;
(iv) errors, omissions, interruptions or delays in the
transmission or delivery of any messages by mail, cable, telegraph,
telecopier, telex or otherwise, whether or not they be in cipher;
(v) errors in interpretation of technical terms;
(vi) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any such Letter of
Credit or the proceeds thereof;
(vii) the misapplication by the beneficiary of any such Letter of
Credit of the proceeds of any drawing of any such Letter of Credit;
and
(viii) any consequences arising from causes beyond the control of
such Issuing Bank, including without limitation any acts of
governments.
(g) The obligations of the Participants to make payments to any
Issuing Bank with respect to Letters of Credit shall be irrevocable and not
subject to any qualification or exception whatsoever and shall be made in
accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement or
any of the Credit Documents;
(ii) the existence of any claim, setoff, defense or other right
which the Borrower may have at any time against a beneficiary named in
a Letter of Credit, any transferee of any Letter of Credit (or any
Person for whom any such transferee may be acting), the Administrative
Agent, the Documentation Agent, any Issuing Bank, any Bank, any
Participant or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein
or any unrelated transactions;
(iii) any draft, certificate or any other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default.
2.05 Agreement to Repay Letter of Credit Drawings. (a) The
Borrower hereby agrees to reimburse the respective Issuing Bank, by making
payment to the Administrative Agent for the account of such Issuing Bank in
immediately available funds at the Payment Office, for any payment made by
such Issuing Bank under any Letter of Credit (each such amount so paid
until reimbursed, an "Unpaid Drawing") immediately after, and in any event
by no later than 2:00 p.m. (New York time) on the Business Day immediately
succeeding the date of such payment, with interest on the amount so paid by
such Issuing Bank, to the extent not reimbursed prior to 1:00 p.m.
(New York time) on the date of such payment, from and including the date
paid to but excluding the date reimbursement is made as provided above, at
a rate per annum which shall be the Applicable Margin for Base Rate Loans
(plus 2% if not reimbursed by 1:00 p.m. on the second Business Day
following notice to the Borrower of such payment) plus the Alternate Base
Rate in effect from time to time, such interest to be payable on demand.
(b) The obligations of the Borrower under this Section 2.05 to
reimburse any Issuing Bank with respect to Unpaid Drawings (including, in
each case, interest thereon) shall be absolute and unconditional under any
and all circumstances and irrespective of any setoff, counterclaim or de-
fense to payment which the Borrower or any other Credit Party may have or
have had against the Administrative Agent, the Documentation Agent, any
Issuing Bank, any Participant or any Bank, including, without limitation,
any defense based upon the failure of any drawing under a Letter of Credit
(each a "Drawing") to conform to the terms of the Letter of Credit or any
non-application or misapplication by the beneficiary of the proceeds of
such Drawing; provided, however, that the Borrower shall not be obligated
to reimburse any Issuing Bank for any wrongful payment made by such Issuing
Bank under a Letter of Credit as a result of acts or omissions constituting
willful misconduct or gross negligence on the part of such Issuing Bank.
2.06 Increased Costs. If at any time the introduction or
effectiveness of or any change in any applicable law, rule or regulation
(including without limitation those announced or published prior to the
date of this Agreement), or in the interpretation or administration thereof
by any governmental authority, central bank or comparable authority charged
with the interpretation or administration thereof, or compliance by any
Issuing Bank or any Participant with any request or directive by any such
authority (whether or not having the force of law) shall either (i) impose,
modify or make applicable any reserve, deposit, capital adequacy or similar
requirement against letters of credit issued, or participated in, by any
Issuing Bank or any Participant, or (ii) impose on any Issuing Bank or any
Participant any other conditions affecting this Agreement or any Letter of
Credit; and the result of any of the foregoing is to increase the cost to
the Issuing Bank or the Participant of issuing, maintaining or
participating in any Letter of Credit, or reduce the amount of any sum
received or receivable by any Issuing Bank or Participant hereunder with
respect to Letters of Credit, then, within 10 days of the receipt of the
certificate referred to below (which certificate shall be given by the
respective Issuing Bank or Participant promptly after it determines such
increased cost or reduction is applicable to Letters of Credit or its
participation therein) to the Borrower by the respective Issuing Bank or
Participant (a copy of which certificate shall be sent by such Issuing Bank
or Participant to the Administrative Agent), the Borrower shall pay to such
Issuing Bank or Participant such additional amount or amounts as will
compensate such Issuing Bank or Participant for such increased cost or
reduction. A certificate submitted to the Borrower by such Issuing Bank or
Participant (a copy of which certificate shall be sent by such Issuing Bank
or Participant to the Administrative Agent), setting forth the basis for
the calculation of such additional amount or amounts necessary to
compensate such Issuing Bank or Participant as aforesaid shall be
conclusive and binding on the Borrower absent manifest error.
Section 3. Fees; Commitment; Reductions of Commitments.
3.01 Fees. (a) The Borrower agrees to pay to the Administrative
Agent for distribution to each Bank a commitment commission (the
"Commitment Commission") for the period from the Second Restatement
Effective Date until and including the Maturity Date (or such earlier date
upon which the Total Commitment shall have been terminated), computed at a
rate equal to 1/2 of 1% per annum on the daily average Unutilized
Commitment of such Bank. Accrued Commitment Commissions shall be due and
payable quarterly in arrears on last Business Day of each March, June,
September and December of each year and on the Maturity Date (or such
earlier date upon which the Total Commitment shall have been terminated).
(b) The Borrower agrees to pay the Administrative Agent on the
earlier of (x) the date of the repayment of the ESOP Loans pursuant to
Section 12.17(b)(iv) and (y) January 5, 1998, a fee (the "Restatement Fee")
equal to $100,000 for each Bank for distribution to each Bank.
(c) The Borrower agrees to pay the Administrative Agent for pro
rata distribution to the respective Issuing Bank and the Participants
(based upon their respective Percentages) a fee in respect of each Letter
of Credit (the "Letter of Credit Fee") for the period from and including
the date of issuance of such Letter of Credit to and including the
termination date of such Letter of Credit on the daily average Stated
Amount of such Letter of Credit, computed at the rate per annum equal to
the then Applicable Margin for Eurodollar Loans. Accrued Letter of Credit
Fees shall be due and payable quarterly in arrears on the last Business Day
of each March, June, September and December and on the Maturity Date (or
such earlier date upon which the Total Commitment shall have been
terminated).
(d) The Borrower agrees to pay to the Administrative Agent for
the account of the respective Issuing Bank a facing fee in respect of each
Letter of Credit issued by such Issuing Bank (the "Facing Fee") agreed to
from time to time by such Issuing Bank and the Borrower.
(e) The Borrower agrees to pay to the respective Issuing Bank
upon each drawing under a Letter of Credit such amount as shall be agreed
by such Issuing Bank and the Borrower.
(f) The Borrower shall pay to the Administrative Agent, for its
own account, such fees as shall have been agreed upon by such parties.
3.02 Voluntary Reduction of Commitments At any time upon at
least five Business Days' prior notice to the Administrative Agent at its
Notice Office (which notice the Administrative Agent shall promptly
transmit to each of the Banks), the Borrower shall have the right, without
premium or penalty, to permanently reduce the Total Commitment in whole or
in part, in integral multiples of $5,000,000, provided that no such
reduction shall exceed the amount equal to the amount of the Total
Unutilized Commitment as in effect immediately before giving effect to such
reduction. Any such reduction shall apply proportionately to reduce the
Commitment of each Bank.
3.03 Mandatory Reduction of Commitments. On each date upon which
a mandatory prepayment of Loans would be required to be made pursuant to
Sections 4.02(b), and 4.02(c) if Loans were then outstanding, the Total
Commitment shall be permanently reduced by the amount of such required
prepayment (determined as if Loans were outstanding on the full amount of
the Total Commitment). Each reduction to the Total Commitment pursuant
to this Section 3.03 shall apply proportionately to reduce the Commitment
of each Bank.
Section 4. Prepayments; Payments.
4.01 Voluntary Prepayments. The Borrower shall have the right to
prepay the Loans made to it, without premium or penalty, in whole or in
part from time to time on the following terms and conditions: (i) the
Borrower shall give the Administrative Agent prior to 11:00 A.M. (New York
time) at its Notice Office at least three Business Days' prior notice of
its intent to prepay the Loans, which notice shall identify (a) the amount
of such prepayment, (b) the Type of Loans to be prepaid and (c) in the case
of Eurodollar Loans, the specific Borrowing or Borrowings pursuant to which
made, which notice the Administrative Agent shall promptly transmit to the
respective Banks; (ii) each partial prepayment of the Loans of the Borrower
shall be in an aggregate principal amount of at least $1,000,000, provided
that no partial prepayment of Eurodollar Loans made pursuant to any
Borrowing shall reduce the outstanding Eurodollar Loans made pursuant to
such Borrowing to an amount less than $5,000,000; and (iii) prepayments of
Eurodollar Loans may be made pursuant to this Section 4.01 only on the last
day of an Interest Period applicable thereto. Each prepayment pursuant to
this Section 4.01 in respect of any Loans shall be applied pro rata among
all Loans.
4.02 Mandatory Prepayments. (a) If on any date the sum of the
aggregate outstanding principal amount of Loans plus the amount of Letter
of Credit Outstandings exceeds the Total Commitment as then in effect less
the Acquisition Basket Amount, then there shall be required to be repaid by
the Borrower on such date that principal amount of Loans as is equal to
such excess. If, after giving effect to the repayment of all outstanding
Loans, the Letter of Credit Outstandings exceeds the Total Commitment then
in effect less the Acquisition Basket Amount, then there shall be paid to
the Administrative Agent at the Payment Office on such date an amount of
cash or Cash Equivalents equal to the amount by which such sum exceeds the
Total Commitment then in effect less the Acquisition Basket Amount, such
cash or Cash Equivalents to be held as security for the obligations of the
Borrower hereunder in a manner satisfactory to the Borrower, the
Administrative Agent and the Required Banks.
(b) In addition to any other mandatory repayments pursuant to
this Section 4.02 and subject to Section 4.02(e), the Loans shall be
required to be paid on each date of the receipt by the Borrower or any of
its Subsidiaries of any Net Cash Proceeds from any sale or other
disposition of assets by the Borrower or any of its Subsidiaries (excluding
(i) sales of inventory in the ordinary course of business, (ii) sales of
obsolete equipment in the ordinary course of business the proceeds of which
are promptly used to purchase replacement equipment therefor and (iii)
sales the Net Sale Proceeds of which are less than $100,000) in an amount
equal to 100% of the Net Cash Proceeds therefrom, provided that no amount
shall be required to be applied pursuant to this Section 4.02(b) other than
as a result of Designated Asset Sales until such time as the aggregate Net
Cash Proceeds which but for this proviso are required to be so applied and
have not been so applied equals or exceeds $1,000,000.
(c) In addition to any other mandatory repayments pursuant to
this Section 4.02 and subject to Section 4.02(e), the Loans shall be
required to be repaid on each date of, and in an amount equal to the
proceeds (net of underwriting discounts and commissions and other
reasonable costs associated therewith) from, any sale of equity by the
Borrower or any of its Subsidiaries (excluding (i) sales of equity by any
Subsidiary to the Borrower or any wholly-owned Subsidiary of the Borrower,
(ii) the issuance of stock of the Borrower to the ESOP whether in the form
of a contribution or purchase, (iii) the issuance of stock to employees or
directors pursuant to employee benefit or similar plans, (iv) stock issued
in payment for the stock of another corporation then being acquired by the
Borrower or a Subsidiary, provided that such acquisition is permitted by
this Agreement and the other Credit Documents, (v) stock issued by
Hoeganaes to Persons (other than the Borrower or a Subsidiary) which are
shareholders of Hoeganaes to the extent such issuance does not increase
such shareholder's proportionate ownership interest in Hoeganaes) and
(vi) stock issued by any Subsidiary to any Person that is a shareholder of,
or any Affiliate of a shareholder of, Hoeganaes to the extent such issuance
does not exceed the proportionate ownership of Hoeganaes held by such
shareholder (or such shareholder's Affiliate).
(d) With respect to each repayment of Loans pursuant to this
Section 4.02, the Borrower may designate the specific Loans which are to
be repaid and, in the case of Eurodollar Loans, the specific Borrowing or
Borrowings pursuant to which made, provided that: (i) repayments of
Eurodollar Loans made pursuant to this Section 4.02 may only be made on the
last day of an Interest Period applicable thereto unless all Eurodollar
Loans with Interest Periods ending on such date of required prepayment and
all Base Rate Loans have been paid in full; (ii) if any repayment of
Eurodollar Loans made pursuant to a single Borrowing shall reduce the
outstanding Eurodollar Loans made pursuant to such Borrowing to an amount
less than $5,000,000 such Borrowing shall immediately be converted into
Base Rate Loans; and (iii) each repayment shall be applied pro rata among
all Loans.
(e) Notwithstanding the foregoing, the amounts required to be
applied to the repayment of the Loans under Section 4.02(c) by reason of
the sale of assets of, or equity in, Hoeganaes, shall be limited to the
amount which is otherwise required to be so applied multiplied by a
fraction the numerator of which is the number of shares of Hoeganaes owned
by the Borrower and its Subsidiaries on the date of the required payment
and the denominator of which is the number of shares of Hoeganaes
outstanding on the date of the required payment.
4.03 Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement or any Note
shall be made to the Administrative Agent for the account of the Bank or
Banks entitled thereto not later than 2:00 p.m. (New York time) on the date
when due and shall be made in Dollars in immediately available funds at the
Payment Office of the Administrative Agent. Whenever any payment to be made
hereunder or under any Note shall be contemplated to be due on a day which
is not a Business Day, the due date thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal,
interest shall be payable at the applicable rate during such extension.
4.04 Net Payments. (a) All payments made by the Borrower
hereunder, under any Note or under any other Credit Document will be made
without setoff, counterclaim or other defense. All such payments will be
made free and clear of, and without deduction or withholding for, any
present or future taxes, levies, imposts, duties, fees, assessments or
other charges of whatever nature now or hereafter imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein (but excluding, except as provided below, any tax imposed on or
measured by the net income of a Bank pursuant to the laws of the
jurisdiction (or any political subdivision or taxing authority thereof) in
which the principal office or lending office of such Bank is located) and
all interest, penalties or similar liabilities with respect thereto
(collectively, together with any amounts payable pursuant to the next
sentence, "Taxes"). The Borrower shall also reimburse each Bank, upon the
written request of such Bank, for taxes imposed on or measured by the net
income of such Bank pursuant to the laws of the United States of America
(or any State or political subdivision thereof) or the jurisdiction (or any
political subdivision or taxing authority thereof) in which the principal
office or lending office of such Bank is located as such Bank shall
determine are payable by such Bank in respect of Taxes paid to or on behalf
of such Bank pursuant to this or the preceding sentence. If any Taxes are
so levied or imposed, the Borrower agrees to pay the full amount of such
Taxes, and such additional amounts as may be necessary so that every
payment of all amounts due hereunder, under any Note or under any other
Credit Document, after withholding or deduction for or on account of any
Taxes, will not be less than the amount provided for herein or in such
Note. The Borrower will furnish to the Administrative Agent within 45 days
after the date the payment of any Taxes, or any withholding or deduction on
account thereof, is due pursuant to applicable law certified copies of tax
receipts evidencing such payment by the Borrower. The Borrower will
indemnify and hold harmless the Administrative Agent and each Bank, and
reimburse the Administrative Agent or such Bank upon its written request,
for the amount of any Taxes so levied or imposed and paid or withheld on
behalf of such Bank.
(b) Each Bank that is not a United States person (as such term
is defined in Section 7701(a)(30) of the Code) agrees to deliver to the
Borrower and the Administrative Agent, or in the case of a Bank that is an
assignee or transferee of an interest under this Agreement pursuant to
Section 12.04 (unless the respective Bank was already a Bank hereunder
immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Bank, (i) two accurate and complete original
signed copies of Internal Revenue Service Form 4224 or 1001 (or successor
forms) certifying to such Bank's entitlement to a complete exemption from
United States withholding tax with respect to payments to be made under
this Agreement and under any Note, or (ii) if the Bank is not a "bank"
within the meaning of Section 881 (c)(3)(A) of the Code and cannot deliver
either Internal Revenue Service Form 1001 or 4224 pursuant to clause (i)
above, (x) a certificate (any such certificate, a "Section 4.04(b)(ii)
Certificate") and (y) two accurate and complete original signed copies of
Internal Revenue Service Form W-8 (or successor form) certifying to such
Bank's entitlement to a complete exemption from United States withholding
tax with respect to payments of interest to be made under this Agreement
and under any Note; provided, however, that any Bank which has previously
delivered such forms which would otherwise satisfy the requirements of this
sentence shall hereafter be deemed to have complied with the requirements
of this sentence. In addition, each Bank agrees that from time to time,
when a lapse in time or change in circumstances renders the previous
certification obsolete or inaccurate in any material respect, it will
deliver to the Borrower and Administrative Agent two new accurate and
complete original signed copies of Internal Revenue Service form 4224 or
1001, or Form W-8 and a Section 4.04(b)(ii) Certificate, as the case may
be, and such other forms as may be required in order to confirm or
establish the entitlement of Bank to a continued exemption form or
reduction in United States withholding tax with respect to payments under
this Agreement and any Note, or it shall immediately notify the Borrower
and the Administrative Agent of its inability to deliver any such Form or
Certificate. Notwithstanding anything to the contrary contained in Section
4.04(a), (x) the Borrower shall be entitled, to the extent it is required
to do so by law, to deduct or withhold income or similar taxes imposed by
the United States (or any political subdivision or taxing authority thereof
or therein) from interest, fees or other amounts payable hereunder for the
account of any Bank which is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax
purposes to the extent that such Bank has not provided to the Borrower and
Administrative Agent U.S. Internal Revenue Service Forms that establish a
complete exemption from such deduction or withholding and (y) the Borrower
shall not be obligated pursuant to Section 4.04(a) hereof to gross-up
payments to be made to a Bank in respect of income or similar taxes imposed
by the United States if such Bank has not provided to the Borrower and the
Administrative Agent the Internal Revenue Services Forms required to be
provided to the Borrower and the Administrative Agent pursuant to this
Section 4.04(b) or to the extent that such Forms do not establish a
complete exemption from withholding of such taxes.
Section 5. Conditions Precedent.
5.01 Conditions Precedent to the Second Restatement Effective
Date. The occurrence of the Second Restatement Effective Date is subject
to the satisfaction of the following conditions:
(a) Execution of Agreement; Notes. (i) This Agreement shall
have been executed and delivered as set forth in Section 12.10 and (ii)
there shall have been delivered to the Administrative Agent for the account
of the Banks the appropriate Notes in the amount, maturity and as otherwise
provided in this Agreement;
(b) Officer's Certificate. On the Second Restatement Effective
Date, the Administrative Agent shall have received a certificate dated such
date signed by an appropriate corporate officer of the Borrower stating
that to the best of such officer's knowledge all of the applicable condi-
tions set forth in Sections 5.01(d), (e), (h), (i) and (j) have been
satisfied as of such date;
(c) Opinions of Counsel. The Administrative Agent shall have
received an opinion, addressed to each of the Banks and dated the Second
Restatement Effective Date, (i) from Jones, Day, Reavis & Pogue, special
counsel to the Borrower and its Subsidiaries, covering the matters set
forth in, and substantially in the form of, Exhibit D hereto and such other
matters incident to the transactions contemplated herein as the
Administrative Agent may request, (ii) from Stephen R. Smith, Vice
President and General Counsel of the Borrower, covering the matters set
forth in and substantially in the form of Exhibit E hereto and such other
matters incident to the transactions contemplated herein as the
Administrative Agent may request;
(d) Existing Security Documents. (i) Except to the extent
heretofore released, each of the Subsidiary Guaranties, Security Agreements
and Pledge Agreements executed and delivered pursuant to the Original
Credit Agreement, as amended and restated prior to the Second Restatement
Effective Date or required to be executed and delivered on the Second
Restatement Effective Date by the terms of this Agreement shall be in full
force and effect on the Second Restatement Effective Date, (ii) the
security interests and Liens granted to the Collateral Agent pursuant to
such Security Documents shall continue in full force and effect (except to
the extent heretofore released) and shall inure to the benefit of the
Secured Parties, (iii) no filings, recordings, registrations or other
actions shall be necessary or desirable to maintain the perfection and
priority of the security interests granted pursuant thereto in the
Collateral covered thereby and (iv) each of the Credit Parties (other than
the Borrower) shall have executed and delivered a Confirmation and
Ratification Agreement in the form of Exhibit F;
(e) Material Events. On the Second Restatement Effective Date,
no event, action or proceeding shall have occurred or condition shall exist
(and the Banks shall have become aware of no facts or conditions not
previously known) which the Administrative Agent or the Required Banks
shall reasonably determine could have a material adverse effect on (x) the
rights or remedies of the Banks or the Administrative Agent, (y) the abil-
ity of the Borrower or any of its Subsidiaries to perform their respective
obligations under the Credit Documents or (z) the business, property, as-
sets, liabilities, condition (financial or otherwise), operations, results
of operations or prospects of the Borrower and its Subsidiaries taken as a
whole;
(f) Original Credit Agreement. The Borrower shall have paid to
the Administrative Agent for payment to the Banks under the Original Credit
Agreement (i) all amounts due and payable under the Original Credit
Agreement, as amended and restated immediately prior to the Second
Restatement Effective Date, including, but not limited to, all principal,
Fees (as defined in the Original Credit Agreement, as amended and restated
immediately prior to the Second Restatement Effective Date), interest, and
breakage costs (except for principal and interest on the ESOP Loans) and
(ii) all other fees and expenses then due and payable (including, without
limitation, legal fees and expenses) thereunder;
(g) Fees. On the Second Restatement Effective Date, the
Borrower shall have paid to the Administrative Agent and the Banks all Fees
(as defined in this Agreement) and expenses (including, without limitation,
reasonable fees and expenses of counsel) agreed upon by such parties to be
paid on or prior to such date;
(h) Litigation. On the Second Restatement Effective Date, there
shall be no actions, suits or proceedings (including any action, suit or
proceeding for injunctive relief) pending or threatened by any entity
(private or governmental) (i) with respect to this Agreement, the other
Credit Documents or the transactions contemplated thereby, or (ii) which
the Administrative Agent or the Required Banks shall determine is
reasonably likely to have a material adverse effect on the operations,
business, property, assets, condition (financial or otherwise) or prospects
of the Borrower and its Subsidiaries taken as a whole;
(i) Approvals. On the Second Restatement Effective Date, all
necessary governmental (domestic and foreign) and third party approvals in
connection with (i) the consummation of the Loan, (ii) the confirmation,
execution, delivery and performance of any Credit Document which is
required to be confirmed or executed and delivered by the Second
Restatement Effective Date, and to which the Borrower or any of its
Subsidiaries is a party or (iii) the legality, validity, binding effect or
enforceability of any such Credit Document and the transactions
contemplated therein or such other transactions otherwise referred to
therein, shall have been obtained and remain in effect; and
(j) Special Conditions Pertaining to the Disposition. The
obligation of each Bank to make Loans and to issue or participate in
Letters of Credit on or after the Second Restatement Effective Date shall
be subject to the satisfaction of the following conditions:
(i) Valid Execution of all Disposition Documents; Completion
of the Disposition. The "Closing," as defined in all instruments,
agreements, financing statements, financing release statements, legal
opinions and any and all documents necessary to effectuate the
Disposition (the "Disposition Documents") shall have occurred;
(ii) Proceeds from the Disposition. As a result of the
Disposition, the Borrower shall have received proceeds (the
"Disposition Proceeds"), which net of reasonable costs of sale in
connection therewith, brokerage fees and income taxes, other than
income taxes not currently payable, equals or exceeds $60,000,000;
(iii) Application of the Disposition Proceeds.
Simultaneous with the execution of this Agreement and the providing
of Loans hereunder, the Borrower shall use the Disposition Proceeds
to (i) be held as ESOP Loan Security to the extent of and in
accordance with Section 12.17(b)(iii) and (ii) repay all of the
outstanding principal on the Loans less an amount equal to the ESOP
Loan Security;
(k) Outstanding Letters of Credit. National Bank of Canada
shall deliver to The Interlake Corporation and the Administrative Agent a
letter from the National Bank of Canada stating that the letters of
credit issued by the National Bank of Canada pursuant to the Original
Credit Agreement are no longer subject to the terms of the Original
Credit Agreement.
5.02 Conditions to All Credit Events. The obligation of each
Bank to make any Loans or to issue or participate in Letters of Credit
(including without limitation the Loans and Letters of Credit described in
this Section 5.02) on and after the Second Restatement Effective Date is
subject, at the time of each such Credit Event, to the satisfaction of
Section 1.01(iv) and the following conditions:
(a) No Default. There shall exist no Default or Event of
Default.
(b) Representations and Warranties. All representations and
warranties herein and in the other Credit Documents shall be true and
correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of
such Credit Event.
(c) Notice of Borrowing; Letter of Credit Requests. In
the case of a Borrowing, the Administrative Agent shall have received
a Notice of Borrowing meeting the requirements of Section 1.03. In
the case of the issuance of a Letter of Credit, the Issuing Bank shall
have received a Letter of Credit Request meeting the requirements of
Section 2.03, and shall not have received a notice of the type
described in the penultimate sentence of Section 2.03(b), unless such
notice has been rescinded.
5.03 Special Condition to Certain Loans. (a) The obligation of
each Bank to make Loans on and after the Second Restatement Effective Date
the proceeds of which are to be used to make Permitted Acquisitions shall
be subject at the time of such Loans to the matters required in Section
7.09.
(b) The Borrower may only incur Loans (other than Loans incurred
in compliance with (a) above) if the cash and Cash Equivalents held by the
Borrower are less than $2,500,000 at the time of incurrence thereof.
The acceptance of the benefits of each Credit Event shall
constitute a representation and warranty by the Borrower to each of the
Banks that all the applicable conditions specified in this Section 5 have
been satisfied or waived as of that time. All of the documents and papers
referred to in this Section 5, unless otherwise specified, shall be
delivered to the Administrative Agent at the Notice Office for the account
of each of the Banks and in sufficient copies or counterparts for each of
the Banks and shall be satisfactory in form and substance to the
Administrative Agent.
Section 6. Representations, Warranties and Agreements. In
order to induce the Banks to enter into this Agreement and to make the
Loans and issue and participate in Letters of Credit, the Borrower makes
the following representations, warranties and agreements as of the Second
Restatement Effective Date, and as of the date of each subsequent Credit
Event, which shall survive the execution and delivery of this Agreement and
the Notes and the making of the Loans and the issuance of Letters of
Credit:
6.01 Organizational Status Each of the Borrower and its
Subsidiaries (i) is a duly organized and validly existing corporation in
good standing under the laws of the jurisdiction of its incorporation, (ii)
has the power and authority to own its property and assets and to transact
the business in which it is engaged and (iii) is duly qualified as a
foreign corporation and in good standing in each jurisdiction where the
ownership, leasing or operation of property or the conduct of its business
requires such qualification except where the failure to be so qualified
would not be reasonably likely to have a material adverse effect on the
business, operations, property, assets, condition (financial or otherwise),
or prospects of the Borrower and its Subsidiaries taken as a whole.
6.02 Power and Authority. Each of the Credit Parties has the
corporate or other legal power to execute, deliver and perform the terms
and provisions of each of the Credit Documents to which it is a party and
has taken all necessary corporate action to authorize the execution,
delivery and performance by it of each of such Credit Documents. Each of
the Credit Parties has duly executed and delivered each of the Credit
Documents to which it is purported to be a party, and each of such Credit
Documents constitutes its legal, valid and binding obligation enforceable
in accordance with its terms, except to the extent that the enforceability
thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws generally affecting creditors'
rights and general equitable principles.
6.03 No Violation. Neither the execution, delivery or
performance by any Credit Party of the Credit Documents to which it is a
party, nor compliance by it with the terms and provisions thereof, (i) will
contravene any provision of any law, statute, rule or regulation or any
order, writ, injunction or decree of any court or governmental in-
strumentality, (ii) will conflict or be inconsistent with or result in any
breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or
the obligation to create or impose) any Lien (except pursuant to the
Security Documents) upon any of the property or assets of any Credit Party
or any of its Subsidiaries pursuant to the terms of any indenture,
mortgage, deed of trust, credit agreement, loan agreement or any other
material agreement, contract or instrument to which such Credit Party or
any of its Subsidiaries is a party or by which it or any of its property or
assets are bound or to which it may be subject, or (iii) will violate any
provision of the Certificate of Incorporation or By-Laws or comparable
organizational documents of the Borrower or any of its Subsidiaries.
6.04 Governmental Approvals. No order, consent, approval,
license, authorization or validation of, or filing, recording or
registration with (except as have been obtained or made), or exemption by,
any governmental or public body or authority, or any subdivision thereof,
is required to authorize, or is required in connection with, (i) the
execution, delivery and performance of any Credit Document or (ii) the
legality, validity, binding effect or enforceability of any Credit
Document.
6.05 Pledge Agreements. The security interests created in favor
of the Collateral Agent under each of the Pledge Agreements will at all
times from and after the execution thereof, and assuming that the
Collateral Agent maintains possession of the respective Pledge Agreement
Collateral, constitute, to the maximum extent permitted under applicable
law, first priority perfected security interests in the Pledge Agreement
Collateral thereunder subject to no Lien of any other Person, except that
the shares of stock of Hoeganaes are subject to the provisions of Sections
6 and 8 of the Hoeganaes Stockholders Agreement. Except as shall be
accomplished prior to the execution and delivery of a Pledge Agreement, no
consents, filings or recordings are required in order to perfect the
security interests purported to be created by such Pledge Agreement, and no
actions or filings are required to maintain and protect such security
interests except which have been effected or obtained prior to the
execution and delivery of the respective Pledge Agreement.
6.06 Other Security Documents. The Security Documents (excluding
the Pledge Agreements) create, or will create when executed and delivered,
as security for the obligations purported to be secured thereby to the
maximum extent permitted under applicable law, a valid, enforceable and
first perfected security interest in and Liens on all of the respective
Collateral in favor of the Collateral Agent for the benefit of the Secured
Parties, superior to and prior to the rights of all third Persons (except
that (x) security interests in the Security Document Collateral (other than
the Mortgaged Properties) may be subject to the security interests
evidenced by Permitted Liens related thereto, (y) security interest in the
Mortgaged Properties may be subject to Permitted Encumbrances existing
prior to the filing of the Mortgage encumbering such Mortgaged Property and
(z) Liens created pursuant to the Additional Security Documents may be
subject to Liens approved by the Administrative Agent at the time of the
execution and delivery of such Additional Security Documents), and no
actions or filing are required to maintain and protect such security
interests except as have been effected or obtained prior to the execution
and delivery of the respective Security Documents. On and after the date
which is 60 days after the Second Restatement Effective Date, the
Collateral, including the Mortgaged Properties, shall comprise
substantially all of the assets of the Borrower and its Subsidiaries except
for the assets described on Schedule III hereto. Each Credit Party has
good title to all Security Document Collateral free and clear of all Liens
other than the exceptions described in the first sentence of this Section
6.06.
6.07 Financial Statements; Financial Condition; Undisclosed
Liabilities, etc. (a) The consolidated statements of financial condition
of the Borrower and its Subsidiaries at December 29, 1996 and September 28,
1997, and the related consolidated statements of income and retained
earnings and cash flows of the Borrower and its Subsidiaries for the fiscal
year or three-month period, as the case may be, ended on such dates and
heretofore furnished to the Banks present fairly the consolidated financial
condition of the Borrower and its Subsidiaries at the dates of such
statements of financial condition and the consolidated results of the
operations of the Borrower and its Subsidiaries at the date of such
statements of financial condition and the consolidated results of the
operations of the Borrower and its Subsidiaries for such fiscal year or
three-month period, as the case may be. All such financial statements have
been prepared in accordance with generally accepted accounting principles
and practices consistently applied. Since September 28, 1997, there has
been no material adverse change in the business, operations, property,
assets, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole.
(b) Except as fully reflected in the financial statements
delivered pursuant to Section 6.07(a) or in Schedule IV hereto, there were
as of the Second Restatement Effective Date no liabilities or obligations
(excluding current obligations incurred in the ordinary course of business)
with respect to the Borrower or any of its Subsidiaries of any nature what-
soever (whether absolute, accrued, contingent or otherwise and whether or
not due), and the Borrower does not know of any basis for the assertion
against the Borrower or any of its Subsidiaries of any such liability or
obligation which, either individually or in aggregate, are or would be
reasonably likely to be material to the Borrower and its Subsidiaries taken
as a whole.
(c) The pro forma projected balance sheet for the Borrower as of
December 29, 1997 and the pro forma income statement for the Borrower as of
October 26, 1997 (the "Projections") are based on good faith estimates and
assumptions made by the management of the Borrower and its Subsidiaries
and, on the Second Restatement Effective Date, the management believed that
the Projections were reasonable and attainable.
(d) On and as of the Second Restatement Effective Date, after
giving effect to all Indebtedness incurred, and to be incurred, and Liens
created, and to be created, by each Credit Party in connection therewith,
(i) the sum of the assets, at a fair valuation, of the Borrower and its
Subsidiaries taken as a whole will exceed their debts; (ii) the Borrower
and its Subsidiaries taken as a whole have not incurred and do not intend
to, or believe that they will, incur debts beyond their ability to pay such
debts as such debts mature; and (iii) the Borrower and its Subsidiaries
taken as a whole will have sufficient capital and assets with which to
conduct their businesses. For purposes of this Section 6.07(d) "debt"
means any liability on a claim, and "claim" means (x) right to payment,
whether or not such a right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured, or unsecured; or (y) right to an equitable
remedy for breach of performance if such breach gives rise to a payment,
whether or not such right to an equitable remedy is reduced to judgment,
fixed, contingent, matured, unmatured, disputed, undisputed, secured or
unsecured.
6.08 Litigation. There are no actions, suits or proceedings
pending or, to the best knowledge of the Borrower, threatened (i) with
respect to any Credit Document or (ii) that are reasonably likely to
materially and adversely affect the business, operations, property, assets,
condition (financial or otherwise) or prospects of the ESOP or the Borrower
and its Subsidiaries taken as a whole.
6.09 True and Complete Disclosure. All factual information
(taken as a whole) heretofore or contemporaneously furnished by or on
behalf of the Borrower or any of its Subsidiaries in writing to any Bank
(including without limitation all information contained in the Credit
Documents for purposes of or in connection with this Agreement) is true and
accurate in all material respects on the date as of which such information
is dated or certified and not incomplete by omitting to state any fact
necessary to make such information (taken as a whole) not misleading at
such time in light of the circumstances under which such information was
provided.
6.10. Use of Proceeds; Margin Regulations. (a) All proceeds
of the Loans shall be used by the Borrower for Permitted Acquisitions in
accordance with the terms of this Agreement, the Borrower's and its
Subsidiaries' working capital requirements and general corporate purposes.
(b) No part of the proceeds of any Loan will be used by the
Borrower or any Subsidiary thereof to purchase or carry any Margin Stock or
to extend credit to others for the purpose of purchasing or carrying any
Margin Stock. Neither the making of any Loan nor the use of the proceeds
thereof will violate or be inconsistent with the provisions of Regulation
G, T, U or X of the Board of Governors of the Federal Reserve System.
6.11. Tax Returns and Payments. The Borrower and each of its
Subsidiaries filed all federal tax returns and all other material tax
returns, domestic or foreign, required to be filed by it and has paid all
income taxes payable by it which have become due pursuant to such tax
returns and all other material taxes and assessments payable by it which
have become due, other than those not yet delinquent and except for those
contested in good faith and for which adequate reserves have been
established. The Borrower and each of its Subsidiaries paid, or provided
adequate reserves (in the good faith judgment of the management of the
Borrower or such Subsidiary) for the payment of, all federal, state and
local (including foreign) income taxes applicable for all prior fiscal
years and for the current fiscal year to the date hereof.
6.12. Compliance with ERISA. Each Plan is in substantial
compliance with ERISA; no Plan which is a multiemployer plan (as defined in
Section 4001(a)(3) of ERISA) is insolvent or in reorganization within the
meaning of Sections 418E and 418 of the Code, respectively; excluding Plans
which are multiemployer plans (as defined in Section 4001(a)(3) of ERISA),
the aggregate Unfunded Current Liability for all Plans does not exceed $5
million and no Plan has an accumulated or waived funding deficiency within
the meaning of Section 412 of the Code; neither the Borrower nor any of its
Subsidiaries nor any ERISA Affiliate has incurred any material liability to
or on account of a Plan pursuant to Section 515, 4062, 4063, 4064, 4201 or
4204 of ERISA which has not been satisfied or reasonably expects to incur
any liability under any of the foregoing Sections on account of the termi-
nation of participation in or contributions to any such Plan; no
proceedings have been instituted to terminate any Plan other than pursuant
to Section 4041(b) of ERISA; no condition exists which presents a material
risk to the Borrower or any of its Subsidiaries or any ERISA Affiliate of
incurring a material liability to or on account of a Plan pursuant to any
of the Sections of ERISA and the Code specifically referred to in this
Section 6.12; no lien imposed under the Code or ERISA on the assets of the
Borrower or any of its Subsidiaries or any ERISA Affiliate exists or is
reasonably likely to arise on account of any Plan; and each of the Borrower
and its Subsidiaries may terminate contributions to any other employee
benefit plans maintained by them without incurring any liability to any
person interested therein material to the Borrower and its Subsidiaries
taken as a whole. All representations made in this Section 6.12 with
respect to Plans which are multiemployer plans (as defined in Section
4001(a)(3) of ERISA) shall be to the best knowledge of the Borrower.
6.13. Capitalization. On the Second Restatement Effective
Date the authorized capital stock of the Borrower consists of (i)
100,000,000 shares of common stock, $1.00 par value per share (the "Common
Stock"), (ii) 15,000,000 shares of Non-Voting Common Stock, $1.00 par value
per share (the "Non-Voting Common Stock"), and (iii) 2,000,000 shares of
Serial Preferred Stock, $1.00 par value per share. Of the authorized
shares of Serial Preferred Stock, 35,000 are designated Series A1
Convertible Exchangeable Preferred Stock, par value $1.00 per share (the
"Series A1 Preferred"), 35,000 are designated Series A2 Convertible
Exchangeable Preferred Stock, par value $1.00 per share (the "Series A2
Preferred"), 5,000 are designated Series A3 Convertible Preferred Stock,
$1.00 par value per share (the "Series A3 Preferred"), 35,000 are
designated Series B1 Convertible Preferred Stock, par value $1.00 per share
(the "Series B1 Preferred"), 35,000 are designated Series B2 Convertible
Preferred Stock, par value $1.00 per share (the "Series B2 Preferred") and
5,000 are designated Series B3 Convertible Preferred Stock, $1.00 par value
per share (the "Series B3 Preferred"). Immediately prior to the Second
Restatement Effective Date, the number of issued shares of Common Stock was
23,373,695. On the Second Restatement Effective Date, the number of issued
shares of Series A2 Preferred is 35,000, the number of issued shares of
Series A3 Preferred is 5,000, and no shares of Non-Voting Common Stock,
Series A1 Preferred, Series B1 Preferred, Series B2 Preferred or Series B3
Preferred are issued. On the Second Restatement Effective Date, all of the
issued shares of capital stock of the Borrower will have been duly and
validly issued and will be fully paid and non-assessable. The Borrower has
no outstanding securities convertible into or exchangeable for its capital
stock or outstanding any rights to subscribe for or to purchase, or any
options for the purchase of, or any agreements providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to, its capital stock, except (i) shares of capital
stock (and the Exchange Debentures if issued) issuable upon the conversion
or exchange of one or more of the Series A1, A2, A3, B1, B2 or B3 Preferred
and Non-Voting Common Stock or upon conversion of the Exchange Debentures,
(ii) shares of Common Stock issuable upon the exercise of outstanding stock
options and stock appreciation rights granted pursuant to the Borrower's
1986 Stock Incentive Program, (iii) shares of Common Stock issuable upon
the exercise of the outstanding stock options granted pursuant to the
Borrower's 1989 Stock Incentive Program, (iv) shares of Common Stock
issuable upon the exercise of rights heretofore granted, pursuant to the
Rights Agreement between the Borrower and First National dated as of
January 26, 1989, as heretofore amended, with respect to shares of Common
Stock now or hereafter issued and (v) shares of Common Stock which may be
purchased by the ESOP to the extent permitted under Section 8.06(x). The
Borrower is not subject to any obligations (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of its capital stock
or make any payments in connection with stock appreciation rights except
(i) cash payments made in settlement of outstanding stock appreciation
rights granted pursuant to the Borrower's 1986 Stock Incentive Program,
(ii) shares delivered in payment of the option price of outstanding stock
options granted pursuant to the 1986 or 1989 Stock Incentive Programs,
(iii) shares of Common Stock received in lieu of cash as reimbursement for
withholding taxes payable with respect to stock awards, (iv) the
obligations of the Borrower under the Preferred Stock Purchase Agreement,
and the Series A3 Purchase Agreement, the Certificates of Designation
relating to the Series A1, A2 and A3 Preferred and Series B1, B2 and B3
Preferred, the Exchange Debentures and, with respect to the Non-Voting
Common Stock, the Borrower's Restated Certificate of Incorporation, (v) the
obligations of the Borrower pursuant to the ESOP and (vi) the obligations
of Chem-tronics, Inc. pursuant to The Chem-tronics Employee Stock Ownership
Plan effective as of October 1, 1980.
6.14. Subsidiaries. The Persons listed on Schedule V are the
only direct and indirect Subsidiaries and Inactive Subsidiaries of the
Borrower. Schedule V correctly sets forth the percentage ownership (direct
and indirect) of the Borrower in each class of capital stock of each of its
Subsidiaries and Inactive Subsidiaries and also identifies the direct owner
thereof.
6.15. Compliance with Statutes, etc. (a) Except as set
forth on Schedule VI, the Borrower and each of its Subsidiaries are in
compliance with all applicable statutes, regulations and orders of, and all
applicable restrictions imposed by, all governmental bodies, domestic or
foreign, in respect of the conduct of their businesses and the ownership of
their property, except such noncompliances as are not likely to, in the
aggregate, have a material adverse effect on the business, operations,
property, assets, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole.
(b) Except as set forth on Schedule VI, each of the Borrower and
its Subsidiaries has complied with all applicable foreign, federal, state
and local environmental laws (including, without limitation, RCRA and
CERCLA), regulations and ordinances governing its business, products,
properties or assets with respect to all discharges into the ground and
surface water, emissions into the ambient air and generation, accumulation,
storage, treatment, transpor-tation, labeling or disposal of waste
materials or process by-products for which failure to comply is likely to
have a material adverse effect on the property, assets, business,
operations, condition (financial or otherwise) or prospects of the Borrower
and its Subsidiaries taken as a whole, and, except as set forth on Schedule
VI hereto, neither of the Borrower nor its Subsidiaries is liable for any
material (to the Borrower and its Subsidiaries taken as a whole) penalties,
fines or forfeitures for failure to comply with any of the foregoing in the
manner set forth above. Except as set forth in Schedule VI hereto, all
licenses, permits or registrations required for the business of the
Borrower and its Subsidiaries, as conducted as of the Second Restatement
Effective Date, under any foreign, federal, state or local environmental
laws, regulations or ordinances have been obtained, or have been applied
for and are pending as set forth on Schedule VI hereto, and each of the
Borrower and its Subsidiaries is in substantial compliance therewith,
except such licenses, permits or registrations the failure to secure or to
comply therewith is not likely to have a material adverse effect on the
property, assets, business, operations, condition (financial or otherwise)
or prospects of the Borrower and its Subsidiaries taken as a whole.
Neither the Borrower nor any of its Subsidiaries is in any material respect
in noncompliance with, breach of or default under any applicable writ,
order, judgment, injunction, or decree to which any such Person is a party
or which would materially and adversely affect the ability of such Person
to operate any manufacturing plant or other real property and, to the best
of the Borrower's knowledge, no event has occurred and is continuing which
would constitute noncompliance, breach of or default thereunder. Except as
set forth on Schedule VI hereto, there are no legal or governmental
proceedings pending or, to the best of the Borrower's knowledge threatened,
which (a) question the validity, term or entitlement of the Borrower or any
of its Subsidiaries for any permit, license, order or registration required
for the operation of any facility which the Borrower or any of its
Subsidiaries currently operates in the United States, which individually or
in the aggregate, are material to the Borrower and its Subsidiaries taken
as a whole and (b) wherein an unfavorable decision, ruling or finding would
have a material adverse effect on the financial viability of any facility
thereof, which individually or in the aggregate, are material to the
Borrower and its Subsidiaries taken as a whole.
(c) There are no facts, circumstances, conditions or occurrences
on any Mortgaged Property or, to the Borrower's knowledge, any property
adjoining or in the vicinity of any Mortgaged Property, (i) which would
form the basis of any environmental claim against the Borrower or any of
its Subsidiaries or any Mortgaged Property or assets located thereon, or
(ii) which would cause such Mortgaged Property or such assets to be subject
to any restrictions on the ownership, occupancy, use or transferability
thereof under any environmental law, and in each case, would be reasonably
likely to result in a material adverse effect on the business, operations,
property, assets, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole.
6.16. Investment Company Act. Neither the Borrower nor any
of its Subsidiaries is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
6.17. Public Utility Holding Company Act. Neither the
Borrower nor any of its Subsidiaries is a "holding company," or a
"subsidiary company" of a "holding company," or an "affiliate" of a
"holding company" or of a "subsidiary company" of a "holding company"
within the meaning of the Public Utility Holding Company Act of 1935, as
amended.
6.18. Patents, Licenses, Franchises and Formulas. Except as
set forth in Schedule VII, each of the Borrower and its Subsidiaries owns
all the patents, trademarks, permits, service marks, trade names,
copyrights, licenses, franchises and formulas, or rights with respect to
the foregoing, or each has obtained assignments of all licenses and other
rights of whatever nature necessary for the present conduct of its
businesses, without any known conflict with the rights of others which, or
the failure to obtain which, as the case may be, is likely to result in a
material adverse effect on the business, operations, property, assets,
condition (financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole.
6.19. Restrictions on Subsidiaries. There are no
restrictions on the Borrower or any of its Subsidiaries which prohibit or
otherwise restrict (i) the transfer of cash or other assets (x) between the
Borrower and any of its Subsidiaries or (y) between any Subsidiaries of the
Borrower or (ii) the Borrower or any of its Subsidiaries from granting
Liens or security interests in their respective assets to the Collateral
Agent, other than (x) applicable restrictions of law imposed on
Subsidiaries by the jurisdictions in which such Subsidiaries are
incorporated or do business and (y) those restrictions imposed by the
Hoeganaes Stockholders Agreement.
6.20. Properties. The Borrower and each of its Subsidiaries
have good title to all properties owned by them, including all property
reflected in the consolidated balance sheet of the Borrower and its
Subsidiaries as referred to in Section 6.07(a) (except as sold or otherwise
disposed of since the date of such balance sheet in the ordinary course of
business), free and clear of all Liens, other than as otherwise permitted
by Section 8.01.
6.21 Existing and Continued Security Interests. The Borrower on
behalf of itself and on behalf of its Subsidiaries represent and warrants
that:
(i) Except as set forth herein, the execution, delivery and
performance of this Agreement shall not in any way affect the
respective obligations of the Borrower and its Subsidiaries under any
Credit Document, or any other document executed in connection
therewith other than the Original Credit Agreement, as amended and
restated prior to the Second Restatement Effective Date, to which
either the Borrower or any of its Subsidiaries is a party, including
without limitation, the respective obligations of the Borrower and its
Subsidiaries (if any) under (x) the Amended and Restated Company
Security Agreement (attached hereto as Annex A), (y) the Amended and
Restated Subsidiary U.S. Security Agreement (attached hereto as Annex
B), and (z) any and all documents executed therewith;
(ii) Each Credit Document and each other document executed in
connection therewith, except as heretofore released and other than the
Original Credit Agreement, as amended and restated immediately prior
to the Second Restatement Effective Date, are hereby assumed under and
made a part of this Agreement; and
(iii) On the date hereof, the obligations of the Borrower and
each of its Subsidiaries under the Credit Documents and the documents
executed in connection therewith, except as heretofore released and
other than the Original Credit Agreement as amended and restated prior
to the Second Effective Restatement Date, remain absolute and
unconditional and are not subject to any defense, set-off or
counterclaim; provided that, in the case of each of the Credit
Documents, the Borrower hereby acknowledges and agrees that the
"Obligations" (as defined therein) include all of the Obligations
under and as defined in this Agreement, after giving effect to the
Second Restatement Effective Date and any increase in the amounts
owing to the Banks or the agents.
Section 7. Affirmative Covenants. The Borrower covenants and
agrees that on and after the Second Restatement Effective Date and until
the Total Commitment has terminated, all Letters of Credit are terminated
and the Loans, any Unpaid Drawings and the Notes, together with interest,
Fees and all other obligations incurred hereunder and thereunder, are paid
in full:
7.01 Information Covenants. The Borrower will furnish to each
Bank:
(a) Monthly Reports. Within 20 Business Days after the end
of each fiscal month other than the last such month of any fiscal
quarter of the Borrower, the consolidated balance sheet of the Borrower
as at the end of such month and the related consolidated statements of
income and sources and uses of cash for such month and for the elapsed
portion of the fiscal year ended with the last day of such month, in
each case setting forth comparative figures for the corresponding
month in the prior fiscal year, together with a discussion of the
results thereof, and a schedule of all intercompany Indebtedness
specifically setting forth the details of the obligor, the payee, and
other relevant terms of repayment and whether such Indebtedness is
evidenced by a promissory note or an instrument.
(b) Quarterly Financial Statements. Within 45 days after
the close of each quarterly accounting period in each fiscal year of
the Borrower other than the last such quarter of any fiscal year, the
consolidated and consolidating balance sheet of the Borrower in the
general form as last delivered prior to the Second Restatement
Effective Date as at the end of such quarterly period and the related
consolidated and consolidating statements of income and sources and
uses of cash for such quarterly period and for the elapsed portion of
the fiscal year ended with the last day of such quarterly period, in
each case setting forth comparative figures for the related periods in
the prior fiscal year, all of which shall be certified by the Vice
President-Finance of the Borrower subject to normal year-end audit
adjustments.
(c) Annual Financial Statements. Within 75 days after the
close of each fiscal year of the Borrower, the consolidated and
consolidating balance sheets of the Borrower in the general form as
last delivered prior to the Second Restatement Effective Date as at
the end of such fiscal year and the related consolidated and
consolidating statements of income and retained earnings and sources
and uses of cash for such fiscal year, in each case setting forth
comparative figures for the preceding fiscal year and, in the case of
said consolidated financial statements, certified by Price Waterhouse
or independent certified public accountants of recognized national
standing acceptable to the Administrative Agent or the Required Banks
and in the case of such consolidating financial statements, certified
by the Vice President-Finance of the Borrower, in each case together
with a report of such accounting firm stating that in the course of
its regular audit of the financial statements of the Borrower, which
audit was conducted in accordance with generally accepted auditing
standards, such accounting firm obtained no knowledge of any Default
or Event of Default which has occurred and is continuing or, if in the
opinion of such accounting firm such a Default or Event of Default has
occurred and is continuing, a statement as to the nature thereof.
(d) Budgets. As promptly as same are furnished to the Board
of Directors of the Borrower, but in any event within 30 days after the
first day of each fiscal year of the Borrower, a budget in form
satisfactory to the Administrative Agent prepared by the Borrower for
the twelve months beginning on the first day of such fiscal year
accompanied by the statement of the Vice President-Finance of the
Borrower to the effect that, to the best of his knowledge, such budget
is a reasonable estimate for the period covered thereby. Within 30
days after the first day of the third fiscal quarter of the Borrower,
the Vice President-Finance of the Borrower shall deliver either (i) a
certificate to the effect that, to the best of his knowledge, the
budget previously delivered remains a reasonable estimate for the
remainder of the period covered thereby or (ii) a budget summary for
such remaining period covering any significant changes to the budget
previously delivered.
(e) Officer's Certificates. At the time of the delivery of
the financial statements provided for in Section 7.01(b) and (c), a
certificate of the Vice President-Finance of the Borrower to the
effect that to the best of his knowledge, no Default or Event of
Default has occurred and is continuing, or if the Vice
President-Finance is unable to make the certifications required herein,
he shall supply a statement setting forth the reasons for such
inability, specifying the nature and extent of such reasons. Such
certificate shall also set forth the calculations required to establish
whether the Borrower was in compliance with the provisions of Sections
8.08 through 8.10, inclusive, at the end of such fiscal quarter or
year, as the case may be.
(f) Notice of Default or Litigation. Promptly, and in any
event within three Business Days after any of the Chairman, President,
Vice President-Finance or chief legal officer of the Borrower obtains
actual knowledge thereof, notice of (i) the occurrence of any event
which constitutes a Default or Event of Default or (ii) any litigation
or governmental proceeding pending (x) against the Borrower or any of
its Subsidiaries which could materially and adversely affect the
business, operations, property, assets, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as
a whole or (y) with respect to any Credit Document.
(g) Management Letters. Promptly after the Borrower's
receipt thereof, a copy of any "management letter" received from its
certified public accountants.
(h) Other Reports and Filings. Promptly, copies of all
financial information, proxy materials and other information and
reports, if any, which the Borrower (x) has filed with the Securities
and Exchange Commission or any governmental agencies substituted
therefor (the "SEC") or any comparable agency outside of the United
States or (y) has delivered to holders of, or to any agent or trustee
with respect to, Indebtedness of the Borrower in their capacity as
such a holder, agent or trustee.
(i) Other Information. From time to time, such other
information or documents (financial or otherwise) as the
Administrative Agent, acting in its own capacity or at the request of
any Bank, may reasonably request.
7.02 Books, Records and Inspections. The Borrower will, and will
cause each of its Subsidiaries to, keep proper books of record and account
in which full, true and correct entries in conformity with generally
accepted accounting principles and all requirements of applicable law shall
be made of all dealings and transactions in relation to its business and
activities. The Borrower will, and will cause each of its Subsidiaries to,
permit officers and designated representatives of the Administrative Agent
or the Required Banks, upon two Business Days' notice, to visit and inspect
any of the properties of the Borrower or such Subsidiary, and to examine
the books of account of the Borrower or such Subsidiary and discuss the
affairs, finances and accounts of the Borrower or such Subsidiary with, and
be advised as to the same by, its and their officers, and to conduct audits
of the Borrower's books and records and each of its Subsidiaries' books and
records, all at such reasonable times and intervals and to such reasonable
extent as the Administrative Agent or the Required Banks may request.
7.03 Maintenance of Property, Insurance. The Borrower will, and
will cause each of its Subsidiaries to, (i) keep all property useful and
necessary in its business in good working order and condition, (ii)
maintain with financially sound and reputable insurance companies insurance
which provides substantially the same (or greater) coverage and against at
least such risks as are maintained by other corporations similarly situated
with like property, provided that in no event will any deductible or
self-insurance retention per occurrence (i) in respect of liability claims,
exceed $2.5 million or (ii) in respect of casualty damage, exceed $2.5
million, and (iii) furnish to each Bank, upon written request by the
Administrative Agent, full information as to the insurance carried. The
provisions of this Section 7.03 shall be deemed to be supplemental to, but
not duplicative of, the provisions of any of the Security Documents that
require the maintenance of insurance.
7.04 Corporate Franchises. The Borrower will, and will cause
each of its Subsidiaries to, do or cause to be done, all things necessary
to preserve and keep in full force and effect its existence and its
material rights, franchises, licenses and patents; provided, however, that
nothing in this Section 7.04 shall prevent (x) the withdrawal by the
Borrower or any of its Subsidiaries of its qualification to do business as
a foreign corporation in any jurisdiction, or the failure to preserve
franchises, patents and licenses, in any such case where such withdrawal or
failure could not reasonably be expected to have a material adverse effect
on the business, operations, property, assets, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a
whole or (y) any action expressly permitted by Section 8.02.
7.05 Compliance with Statutes, etc. The Borrower will, and will
cause each of its Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property (including applicable statutes,
regulations, orders and restrictions relating to environmental standards
and controls), except such noncompliances as could not reasonably be
expected to, in the aggregate, have a material adverse effect on the
business, operations, property, assets, condition (financial or otherwise)
or prospects of the Borrower and its Subsidiaries taken as a whole.
7.06 ERISA. As soon as possible and in any event within 10 days
after the Borrower or any of its Subsidiaries or any ERISA Affiliate knows
or has reason to know any of the following, the Borrower will deliver to
each of the Banks a certificate of the Vice President - Finance of the
Borrower setting forth details as to such occurrence and such action, if
any, which the Borrower, such Subsidiary or such ERISA Affiliate is
required or proposes to take, together with any notices given to or filed
with or by the Borrower, its Subsidiaries, ERISA Affiliates, the PBGC, a
Plan participant or the Plan administrator with respect thereto: that a
Reportable Event has occurred, that an accumulated funding deficiency (as
defined in Section 412 of the Code) has been incurred or an application has
been made or is reasonably likely to be made to the Secretary of the
Treasury for a waiver of the minimum funding standard or an extension of
any amortization period under Section 412 of the Code with respect to a
Plan, that a Plan has been or is reasonably likely to be terminated,
reorganized, partitioned or declared insolvent under Title IV of ERISA,
that a Plan has an Unfunded Current Liability giving rise to a lien under
ERISA or the Code, that proceedings have been instituted by the PBGC or are
reasonably likely to be instituted by the PBGC to terminate a Plan, that a
proceeding has been instituted to collect from the Borrower or a Subsidiary
a delinquent contribution to a Plan pursuant to Section 515 of ERISA, or
that the Borrower, any Subsidiary or an ERISA Affiliate will or is
reasonably likely to incur any liability (including any contingent or
secondary liability) to or on account of the termination of or withdrawal
by the Borrower, a Subsidiary or an ERISA Affiliate from a Plan under
Sections 4062, 4063, 4064, 4201 or 4204 of ERISA. With respect to each
Plan which is a single-employer plan (as defined in Section 4001(a)(15) of
ERISA) the Borrower will deliver to the Administrative Agent a complete
copy of the annual report (Form 5500 series) therefor required to be filed
with the Internal Revenue Service and with respect to each Plan which is a
multiemployer plan (as defined in Section 4001(a)(3) of ERISA) the Borrower
will deliver to the Administrative Agent a complete copy of each annual
report (Form 5500 series) therefor provided after the date of this
Agreement to the Borrower or its respective Subsidiaries or ERISA
Affiliates by the administrator of said Plan. Copies of annual reports
required to be delivered to the Banks hereunder shall be delivered no later
than 10 days after the date such report has been filed with the Internal
Revenue Service by the Borrower or any of its Subsidiaries or any ERISA
Affiliate.
7.07 End of Fiscal Years; Fiscal Quarters. Without the prior
written consent of the Required Banks, the Borrower shall not, and shall
not permit any of its Subsidiaries to, change the manner of determining the
date on which any of their fiscal quarters or fiscal years shall end.
7.08 Performance of Obligations. The Borrower will, and will
cause each of its Subsidiaries to, perform all of its obligations under the
terms of each mortgage, indenture, security agreement and other agreement
by which it is bound, except such non-performances as could not reasonably
be expected to, in the aggregate, have a material adverse effect on the
business, operations, property, assets, condition (financial or otherwise)
or prospects of the Borrower and its Subsidiaries taken as a whole.
7.09 Permitted Acquisitions. All Permitted Acquisitions shall be
made in compliance with the provisions of this Section 7.09.
(a) The Borrower shall provide the Administrative Agent and the
Documentation Agent with 15 Business Days' prior written notice of any
proposed Permitted Acquisition, copies of all definitive documents
governing same and all financial information necessary to support the
requirements of clause (b) below.
(b) The Borrower shall provide information, in all respects
satisfactory to the Administrative Agent, the Documentation Agent and
the Required Banks, indicating on a pro forma basis for the period at
least one year prior to and one year after the date of the proposed
Permitted Acquisition compliance with all covenants and agreements set
forth in this Agreement.
(c) The Administrative Agent and the Documentation Agent shall
use their respective reasonable efforts to respond to any such request
for consent within ten Business Days after receipt of the Borrower's
notice of such Permitted Acquisition.
(d) The Borrower may consummate the proposed Permitted
Acquisition if consented to by the Administrative Agent, the
Documentation Agent and the Required Banks (which consent may be
withheld in the sole discretion of any such Person).
7.10. Inactive Subsidiaries. If at any time after the Second
Restatement Effective Date, any Inactive Subsidiary of the Borrower ceases
to be an Inactive Subsidiary other than by virtue of ceasing to exist, it
shall be deemed a Subsidiary of the Borrower under this Agreement, and the
Borrower shall cause such Subsidiary to take all such action as is
necessary to execute and deliver Guaranties and Security Documents (or
counterparts thereof) as if such Inactive Subsidiary were first acquired or
created as a Subsidiary at such time.
7.11. Cash Management. The Borrower shall, and shall cause
its Subsidiaries to, deposit or invest with the Banks all cash and Cash
Equivalents owned or held by the Borrower and/or such Subsidiaries, other
than an amount equal to $2,000,000 at any one time, provided, that,
notwithstanding the foregoing, any Foreign Subsidiary may hold cash and
Cash Equivalents in banks and institutions other than Banks in accordance
with its ordinary course of business cash management.
Section 8. Negative Covenants. The Borrower agrees that on
and after the Second Restatement Effective Date and until the Total
Commitment has terminated, all Letters of Credit have terminated and the
Loans, any Unpaid Drawings and the Notes, together with interest, Fees and
all other obligations incurred hereunder and thereunder, are paid in full:
8.01 Liens. The Borrower will not, and will not permit any of
its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon
or with respect to any property or assets (real or personal, tangible or
intangible) of the Borrower or any of its Subsidiaries whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such
property or assets (including sales of accounts receivable with recourse to
the Borrower or any of its Subsidiaries), or assign any right to receive
income or permit the filing of any financing statement under the UCC or any
other similar notice of Lien under any similar recording or notice statute;
provided that the provisions of this Section 8.01 shall not prevent the
creation, incurrence, assumption or existence of the following:
(i) Liens securing judgments which have been bonded or stayed
within 45 days after arising in the ordinary course of business, to
the extent such judgment does not constitute an Event of Default,
provided the Liens are being contested in good faith and by appro-
priate procedures, and Liens for taxes, governmental assessments or
charges in the nature of taxes not yet due, or Liens for taxes,
governmental assessments or charges in the nature of taxes which have
been bonded or stayed within 45 days after arising and being contested
in good faith and by appropriate procedures for which adequate
reserves have been established;
(ii) Liens in respect of property or assets of the Borrower or
any of its Subsidiaries imposed by law, which were incurred in the
ordinary course of business, such as carriers', warehousemen's,
materialmen's, repairmen's and mechanics' liens and other similar
Liens arising in the ordinary course of business, and (x) which do not
in the aggregate materially detract from the value of such property or
assets or materially impair the use thereof in the operation of the
business of the Borrower and its Subsidiaries or (y) which are being
contested in good faith by appropriate procedures, which procedures
have the effect of preventing or staying while pending the forfeiture
or sale of the property or assets subject to any such Lien;
(iii) Liens in existence on the Second Restatement Effective Date
and acceptable to the Administrative Agent which are listed, and the
property subject thereto described, in Schedule VIII hereto (the
"Permitted Liens");
(iv) Liens created pursuant to the Security Documents;
(v) Utility deposits and pledges or deposits in connection with
worker's compensation, unemployment insurance and other social
security legislation;
(vi) Liens securing Indebtedness in the amount permitted by
Section 8.05(d) upon (i) any property or assets acquired (whether by
purchase, merger or otherwise) after the date hereof (and not
theretofore owned by the Borrower or any of its Subsidiaries), or (ii)
improvements made on any property or assets now owned or hereafter
acquired, securing the purchase price thereof or created or incurred
simultaneously with, or within 180 days after, such acquisition or the
making of such improvements or existing at the time of such
acquisition (whether or not assumed) or the making of such improve-
ments, if (x) such Lien shall be limited to the property or assets so
acquired or the improvements so made, (y) the amount of the
obligations or indebtedness secured by such Liens shall not be
increased after the date of the acquisition of such property or assets
or the making of such improvements, except to the extent improvements
are made to such property or assets after the date of the acquisition
or the making of the initial improvements, and (z) the principal
amount of the obligation or Indebtedness secured by such Lien shall
not exceed 100% of the cost or fair value (which may be determined in
good faith by the Board of Directors of the Borrower), whichever is
lower, of the property or assets or improvements at the time of the
acquisition or making thereof;
(vii) Liens arising under Capital Leases to the extent permitted
by Section 8.05(d);
(viii) Liens on assets of the ESOP and the ESOP Trust in favor of
participants and beneficiaries of the ESOP; and
(ix) Liens in the form of cash collateral securing the
obligations of the Borrower and its Subsidiaries permitted by Section
8.05(g).
8.02 Consolidation, Merger, Sale of Assets, etc. The Borrower
will not, and will not permit any of its Subsidiaries to, wind up,
liquidate or dissolve its affairs or enter into any transaction of merger
or consolidation, or convey, sell, lease or otherwise dispose of (or agree
to do any of the foregoing at any future time) all or any part of its
property or assets, or enter into any partnerships, joint ventures or
sale-leaseback transactions, or purchase or otherwise acquire (in one or a
series of related transactions) any part of the property or assets (other
than purchases or other acquisitions of inventory, materials and equipment
in the ordinary course of business) of any Person except that:
(i) the Borrower and its Subsidiaries may in the ordinary
course of business sell and lease inventory;
(ii) Capital Expenditures shall be permitted to the extent not
in violation of Section 8.08;
(iii) the Borrower and its Subsidiaries may sell or otherwise
dispose of any assets which, in the reasonable judgment of such
Person, have become uneconomic, obsolete or worn out;
(iv) the Borrower and its Subsidiaries may sell assets the book
value of which in any one case does not exceed $2,500,000, provided
that (x) the aggregate book value of assets sold or otherwise disposed
of pursuant to this clause (iv) in any one fiscal year does not exceed
$7,500,000 and (y) the proceeds of each such sale or disposition are
applied to repay the Loans to the extent required by Section 4.02;
(v) the Borrower and its Subsidiaries may make Designated
Asset Sales, provided that the proceeds of any such sale are applied to
repay the Loans to the extent provided in Section 4.02;
(vi) the Borrower may merge with one or more wholly-owned
Subsidiaries provided the Borrower is the surviving entity and the
Borrower or a Subsidiary may transfer assets in the ordinary course of
business to the Borrower or a Subsidiary which is a Subsidiary
Assignor, a Subsidiary Guarantor and a Subsidiary Pledgor, and a
Subsidiary which is not a Subsidiary Assignor, Subsidiary Guarantor or
Subsidiary Pledgor may transfer assets in the ordinary course of
business to the Borrower or a Subsidiary;
(vii) purchases, acquisitions or investments permitted by
Section 8.06 shall be permitted;
(viii) with the prior written consent of the Required Banks,
any other assets which do not constitute all or substantially all of
the Collateral may be sold or transferred and any wholly-owned
Subsidiary may merge or consolidate with one or more such other
wholly-owned Subsidiaries, provided that (x) if either such
wholly-owned Subsidiary was a Subsidiary Assignor, Subsidiary Guarantor
or Subsidiary Pledgor immediately prior to the merger or consolidation,
the surviving entity is a wholly-owned Subsidiary which is a
Subsidiary Assignor, a Subsidiary Guarantor or a Subsidiary Pledgor,
respectively, and (y) no Default or Event of Default exists or would
result therefrom;
(ix) those Subsidiaries listed on Schedule IX may be wound up,
liquidated, and/or dissolved so long as upon such winding-up,
liquidation and/or dissolution, the assets of such Subsidiaries are
transferred to the immediate parent of such Subsidiary, or to the
Borrower, or to a Subsidiary which is a Subsidiary Assignor, a
Subsidiary Guarantor or a Subsidiary Pledgor;
(x) any Subsidiary which has made a Distribution permitted
under Section 8.03 may be wound up, liquidated and/or dissolved so
long as, immediately following such Distribution, the assets of such
Subsidiary are less than $25,000; and
(xi) Permitted Acquisitions shall be permitted in compliance
with Section 7.09.
To the extent the Required Banks waive any provision of this
Section 8.02 with respect to the sale of any Collateral, or any Collateral
is sold as permitted by this Section 8.02, such Collateral shall be sold
free and clear of the Liens created by the Security Documents, and the
Collateral Agent shall be authorized to take such actions as it deems
appropriate in connection therewith.
8.03 Distributions. The Borrower shall not authorize, declare or
pay, or permit any of its Subsidiaries to authorize, declare or pay, any
Distributions, except that:
(i) any Subsidiary of the Borrower may make Distributions to
the Borrower or any wholly-owned Subsidiary of the Borrower;
(ii) payments required to be made in respect of stock appreciation
rights outstanding on the Second Restatement Effective Date shall be
permitted;
(iii) the settlement of stock options outstanding on the Second
Restatement Effective Date shall be permitted, provided that the
aggregate amount paid in respect of such settlements shall not exceed
$1.5 million, and the issuance of stock options to employees in
cancellation of or consideration of the surrender and cancellation of
outstanding options, to the extent such issuance, surrender or
cancellation may be deemed a Distribution, shall be permitted;
(iv) Hoeganaes shall be permitted to make Distributions in
respect of its capital stock on a pro rata basis to its shareholders,
and any Subsidiary of Hoeganaes shall be permitted to make
Distributions to Hoeganaes or any Subsidiary of Hoeganaes;
(v) the redemption of outstanding shareholder rights shall be
permitted, provided that the aggregate amount paid in respect of such
redemption shall not exceed $400,000;
(vi) the retirement or acquisition by way of transfer from any
Person to the Borrower of capital stock of the Borrower in payment of
all or any portion of the exercise price of any warrants, options or
rights to acquire capital stock of the Borrower shall be permitted;
(vii) the retirement or acquisition by way of transfer from any
Person to the Borrower of capital stock of the Borrower acquired by
such Person from the Borrower pursuant to a grant or award of such
capital stock of the Borrower made by the Borrower shall be permitted,
provided that such retirement or acquisition is in satisfaction of all
or any portion of income and/or employment taxes to be withheld by the
Borrower with respect to such Person and; provided further, that the
aggregate amount paid in respect of such retirements and acquisitions
shall not exceed $2,000,000; and
(viii) the retirement or acquisition of shares of Series A1, A2,
A3, B1, B2 or B3 Preferred or Non-Voting Common Stock upon exchange or
conversion of the same for any such capital stock or Common Stock
pursuant to the Preferred Stock Purchase Agreements shall be
permitted.
8.04 Leases. The Borrower will not permit the aggregate payments
(including, without limitation, any property taxes paid as additional rent
or lease payments) by the Borrower and its Subsidiaries on a consolidated
basis under agreements to rent or lease any real or personal property
(other than Capital Leases), during any fiscal year of the Borrower to
exceed $20,000,000.
8.05 Indebtedness. The Borrower will not, and will not permit
any of its Subsidiaries to, contract, create, incur, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement, including
without limitation Indebtedness permitted under 12.17, and the other Credit
Documents;
(b) Indebtedness of the Borrower or its Subsidiaries existing on
the Second Restatement Effective Date to the extent same is listed on
Schedule X and any extensions, renewals or refinancings thereof provided
that the aggregate principal amount thereof is not increased ("Existing
Debt");
(c) Indebtedness of the Borrower or its Subsidiaries under any
Hedging Agreement existing prior to the Second Restatement Effective Date;
(d) Indebtedness arising under Capital Leases and the
Indebtedness secured by Liens permitted pursuant to Section 8.01(vi),
provided that (i) the aggregate principal amount of Indebtedness under this
clause (d) incurred in any fiscal year of the Borrower shall not exceed
$20,000,000 and (ii) after giving effect to the incurrence of such
Indebtedness, the Borrower, on a pro forma basis, would be in compliance
with the provisions of Section 8.10 on the last day of the fiscal quarter
last ended for which financial statements are available;
(e) Indebtedness of the Borrower under Section 6(c) of the
Hoeganaes Stockholders Agreement arising in connection with the purchase of
shares permitted by Section 8.06;
(f) Indebtedness (i) of the Borrower or The Interlake Companies,
Inc. to any Subsidiary including but not limited to any Subsidiary which is
a Subsidiary Assignor or a Subsidiary Guarantor (for purposes of this
clause (f) only, each Subsidiary Assignor or Subsidiary Guarantor, a
"Subsidiary Credit Party"), (ii) of a Subsidiary Credit Party to either (a)
the Borrower, (b) The Interlake Companies, Inc. or (c) any other Subsidiary
Credit Party; provided, however, if the Indebtedness permitted under this
clause (ii) is of a Subsidiary Credit Party which is not a Foreign
Subsidiary, then only Indebtedness to the extent permitted under
subparagraph (f)(ii)(a) or (b) hereof, (iii) of any Subsidiary which is not
a Subsidiary Credit Party to any other Subsidiary (other than Hoeganaes)
which is not a Subsidiary Credit Party, (iv) notwithstanding the foregoing,
Indebtedness of any Subsidiary which is not a Subsidiary Credit Party to a
Subsidiary Credit Party shall be permitted if (x) the aggregate principal
amount thereof does not exceed $45,000,000 at any time outstanding or (y)
the proceeds of any Indebtedness incurred in excess of the amount permitted
under clause (x) are returned (by way of dividend or otherwise) to a
Borrower within five Business Days of the incurrence thereof and the
Administrative Agent shall have received five Business Days prior written
notice of the incurrence of such Indebtedness and subsequent notice that
the dividend or other returning payment has been made, (v) of any
Subsidiary Credit Party which is a Foreign Subsidiary to any Foreign
Subsidiary which is not a Subsidiary Credit Party and (vi) among the
Borrower and its Subsidiaries outstanding as of November 30, 1993, provided
that such Indebtedness shall only be permitted (A) if described in writing
to the Administrative Agent on or before such date and (B) if either (1)
such Indebtedness is otherwise permitted under clauses (i) through (v) of
this clause (f) or (2) the repayment of such Indebtedness shall, based on
a certificate of the chief financial officer of the Borrower, create costs,
adverse tax or legal consequences which the Administrative Agent determines
(in its sole discretion) are material;
(g) Obligations of the Borrower or a Subsidiary in respect of
letters of credit, guaranties and other similar instruments supporting
obligations incurred in the ordinary course of business, provided that the
aggregate principal amount of Indebtedness under this clause (g) shall not
exceed $15,000,000 at any one time outstanding;
(h) other Indebtedness of the Borrower, provided that the
aggregate principal amount of Indebtedness under this clause (h) shall not
exceed $20,000,000 at any one time outstanding;
(i) Indebtedness arising in connection with performance bonds
and surety bonds supporting obligations other than for borrowed money
incurred in the ordinary course of business consistent with past practices;
and
(j) Indebtedness of the Borrower to the National Bank of Canada
in respect of letters of credit originally issued under the Original Credit
Agreement as the same may be renewed from time to time.
8.06 Advances, Investments and Loans. Other than in connection
with any Permitted Acquisition, the Borrower will not, and will not permit
any of its Subsidiaries to, lend money or credit or make advances to any
Person, or purchase or acquire any stock, obligations or securities of, or
any other interest in, or make any capital contribution to, any other
Person, or hold any cash or Cash Equivalents, except that the following
shall be permitted:
(i) the Borrower and its Subsidiaries may acquire and hold
receivables owing to it, if created or acquired in the ordinary course
of business and payable or dischargeable in accordance with customary
trade terms;
(ii) the Borrower and its Subsidiaries may acquire and hold cash
and Cash Equivalents, provided that so long as any Loans are
outstanding the aggregate amount of cash and Cash Equivalents held by
the Borrower and its Subsidiaries shall not exceed $2,500,000;
(iii) the Borrower and its Subsidiaries may make advances to
employees for moving, relocation, employee home purchase program and
travel expenses, drawing accounts and similar expenditures in the
ordinary course of business;
(iv) the Borrower may make contributions to the ESOP to pay the
administrative expenses of the ESOP; provided that contributions of
capital stock of the Borrower to the ESOP need not be so used and
loans to the ESOP permitted under Section 8.06(x) need not be so used;
(v) The Borrower or any Subsidiary may purchase shares of stock
of Hoeganaes offered to it pursuant to Section 6(c) of the Hoeganaes
Stockholders Agreement, provided that (A) after giving effect to such
purchase no Default or Event of Default would exist and (B) in the
event such purchase is not permitted by Clause (A) the Required Banks
shall consent to such purchase;
(vi) the Borrower and its Subsidiaries may acquire Indebtedness
of other Persons (other than pursuant to clause (vii) below) in
connection with the sale of assets permitted by Section 8.02, provided
that (x) the aggregate principal thereof, when added to outstanding
Indebtedness owed the Borrower and its Subsidiaries described in
clause (vii) of this Section 8.06 at the time such Indebtedness is
acquired, shall not exceed $5 million and (y) the cash proceeds of
such Indebtedness are applied to repay the Loans to the extent
required by Section 4.02;
(vii) Indebtedness acquired by the Borrower or a Subsidiary under
Section 6(c) of the Hoeganaes Stockholders Agreement in connection
with a transaction permitted by Section 8.02(vii), provided that the
cash proceeds, as received, of such Indebtedness are applied to repay
the Loans to the extent required by Section 4.02;
(viii) the Borrower and its Subsidiaries may make the intercompany
loans permitted by Section 8.05(f) and the intercompany transfer of
assets permitted by Section 8.02(vi);
(ix) the Borrower and its Subsidiaries may form new
Subsidiaries, provided that all transactions with, and investments in,
such new Subsidiaries shall comply with the provisions of this
Agreement;
(x) the Borrower may make one or more loans at any time or from
time to time to the ESOP Trust that shall not exceed $2,500,000 in the
aggregate provided, that the note or notes evidencing any such loan,
and any additional stock of the Borrower purchased by the ESOP with
the proceeds of any such Loan and not yet released from the suspense
account created or maintained in connection with each Loan, are
pledged to the Collateral Agent pursuant to security arrangements
satisfactory to it and the Borrower; and
(xi) (x) the Borrower and its Subsidiaries may make advances or
loans to, or investments in, Subsidiaries of the Borrower in an amount
not to exceed $1,000,000 annually and (y) the Borrower and its
Subsidiaries may make investments described in the proviso to the
definition of Capital Expenditures.
8.07 Transactions with Affiliates. The Borrower will not, and
will not permit any of its Subsidiaries to, enter into any transaction or
series of related transactions, whether or not in the ordinary course of
business, with any Affiliate, other than on terms and conditions
substantially as favorable to the Borrower or such Subsidiary as would be
obtainable by the Borrower or such Subsidiary at the time in a comparable
arm's-length transaction with a Person other than an Affiliate, except that
(i) loans, advances, transfers, sales or purchases of shares and other
transactions may be incurred and made to the extent permitted by Sections
8.02, 8.03, 8.05 and 8.06 and (ii) the Borrower and its Subsidiaries may
effect intercompany transactions and transfers of goods and services in the
ordinary course of business and in conformity with the business practices
in effect on the Second Restatement Effective Date.
8.08 Capital Expenditures. (a) The Borrower will not, nor will
it permit any of its Subsidiaries to, make or incur Capital Expenditures in
any period set out below, in excess of the amount that, together with any
amounts expended pursuant to Section 8.06(x) in such period, is set forth
below opposite such period:
Period Amount
Second Restatement Effective Date
through March 29, 1998 $20,000,000
Second Restatement Effective Date
through the Maturity Date $40,000,000
8.09 Minimum Consolidated Net Worth. The Borrower's Consolidated
Net Worth at any time may not be less than an amount equal to (i) the
Borrower's Consolidated Net Worth at December 25, 1994 (i.e., negative
$257,280,386), minus (ii) $30,000,000, plus (iii) Cumulative Consolidated
Net Income at such time.
8.10. Minimum Consolidated EBITDA. Consolidated EBITDA for
any four fiscal quarter period ending on the last day of any fiscal quarter
set forth below shall be greater than the amount set forth opposite such
fiscal quarter:
Fiscal Period Amount
For the fourth quarter of 1997 $72,000,000
For the first quarter of 1998 $66,000,000
For the second quarter of 1998 $60,000,000
8.11. Limitation on Voluntary Payments and Modifications of
Indebtedness; Modifications of Certificate of Incorporation, By-Laws and
Certain Other Agreements, etc. The Borrower will not, and will not permit
any of its Subsidiaries to, (i) make any voluntary or optional payment or
prepayment on or redemption or acquisition for value of (including, without
limitation, by way of depositing with the trustee with respect thereto
money or securities before due for the purpose of paying when due) (a) any
Existing Debt or Indebtedness under Senior Notes or Permanent Subordinated
Debentures; provided that the Borrower may make Note Repurchases in an
aggregate amount not to exceed the amount of Disposition Proceeds at
purchase prices not to exceed one hundred ten percent of the face value of
such Senior Notes or Permanent Subordinated Debentures, or (b) Indebtedness
under Section 6 of the Hoeganaes Stockholders Agreement, or the Convertible
Preferred Stock, (ii) amend or modify, or permit the amendment or
modification of, any provision of any agreement (including, without
limitation, any purchase agreement, indenture, loan agreement or security
agreement) relating to any of the foregoing, (iii) amend, modify or change
its Certificate of Incorporation or By-Laws or comparable organizational
documents (including, without limitation, by the filing or modification of
any certificate of designation), or any agreement entered into by it, with
respect to its capital stock (except changes which could not reasonably be
expected to materially adversely affect the Banks), or enter into any new
agreement with respect to its capital stock, except for those which could
not reasonably be expected to materially adversely affect the Banks, (iv)
amend, modify or change any, or enter into any new shareholders'
agreements, except to the extent such action could not reasonably be
expected to materially adversely affect the Banks, (v) amend, modify or
change the Hoeganaes Stockholders Agreement, the Hoeganaes Research and
Development Agreement or (vi) offer any shares of stock of Hoeganaes
pursuant to Section 6(c) of the Hoeganaes Stockholders Agreement.
Notwithstanding the foregoing, the Borrower or Arwood Corporation shall be
permitted to prepay any amounts payable by Arwood Corporation under a Loan
Agreement, dated as of August 1, 1979, by and between The Industrial
Development Authority of the State of New Hampshire and Arwood Corporation,
in the event of a default by First W-G Acquisition Corporation (or any
successor thereof) under such Loan Agreement.
8.12. Limitation on Restrictions on Subsidiary Dividends,
Other Distributions and on Granting of Liens. The Borrower will not, and
will not permit any of its Subsidiaries to, directly or indirectly, create
or otherwise cause or suffer to exist or become effective any encumbrance
or restriction on the ability of (I) any Subsidiary of the Borrower to (a)
pay dividends or make any other distributions on its capital stock or any
other interest or participation in its profits, owned by the Borrower or
any Subsidiary of the Borrower, or pay or repay any Indebtedness owed to
the Borrower or a Subsidiary, (b) make loans or advances to the Borrower or
(c) transfer any of its properties or assets to the Borrower or its
Subsidiaries or (II) the Borrower or any of its Subsidiaries to grant Liens
or security interests on the assets of such Person in favor of the Banks,
except for such encumbrances or restrictions existing under or by reason of
(i) applicable law, (ii) this Agreement, (iii) to the extent restricting
the disposition of any property serving as security therefor, any
agreements relating to Indebtedness permitted pursuant to Section 8.05(d)
and (g), (iv) customary provisions restricting subletting or assignment of
any lease governing a leasehold interest of the Borrower or any of its
Subsidiaries, and (v) customary restrictions on dispositions of real
property interests found in reciprocal easement agreements of the Borrower
or any of its Subsidiaries.
8.13. Limitation on Issuances of Capital Stock by
Subsidiaries. The Borrower shall not permit any of its Subsidiaries to
issue any capital stock (including by way of sales of treasury stock) or
any options or warrants to purchase, or securities convertible into,
capital stock, except for (i) transfers and replacements of then
outstanding shares of capital stock and (ii) stock splits, stock dividends
and issuances which do not decrease the percentage ownership of the
Borrower or any of its Subsidiaries in any class of the capital stock of
such Subsidiary, provided that if the stock of the respective Subsidiary
issuing any shares of stock or other securities as permitted by this
Section 8.13 is pledged pursuant to a Pledge Agreement, then any shares
issued pursuant to preceding clauses (i) and (ii) shall be delivered
directly to the Collateral Agent for pledge pursuant to the respective
Pledge Agreement.
8.14. Business. The Borrower will not, and will not permit
its Subsidiaries to, engage (directly or indirectly) in any business other
than the business in which the Borrower and its Subsidiaries are engaged on
the Second Restatement Effective Date, plus reasonable extensions and
expansions thereof.
Section 9. Events of Default. Upon the occurrence of any of
the following specified events (each an "Event of Default"):
9.01 Payments. The Borrower shall (i) default in the payment
when due of any payment of principal of its Loans or Notes, or (ii)
default, and such default shall continue for at least two Business Days, of
any payment of any Unpaid Drawing or interest on its Loans, Unpaid Drawings
or Notes, or of any Fees or any other amounts owing by it hereunder or
thereunder; or
9.02 Representations, etc. Any representation, warranty or
statement made by any Credit Party herein or in any other Credit Document
or in any certificate delivered pursuant hereto or thereto shall prove to
be untrue in any material respect; or
9.03 Covenants. The Borrower shall (i) default in the due
performance or observance by it of any term, covenant or agreement
contained in Sections 7.09, 7.10, 7.11 and/or 8 (other than a default under
Section 8.01 arising by reason of a non-consensual Lien securing an
obligation not in excess of $2,500,000) or (ii) default in the due
performance or observance by it of any term, covenant or agreement (other
than those referred to in Sections 9.01 and 9.02 and clause (i) of this
Section 9.03) contained in this Agreement and such default shall continue
unremedied for a period of 30 days after written notice to the Borrower by
the Administrative Agent or the Required Banks. No waiver, modification,
alteration or amendment of this Section 9.03 or of any definition used in
this Section 9.03 or of any component definition used therein shall be
permitted without the prior written consent of the Required Banks; or
9.04 Default Under Other Agreements. (i) The Borrower or any of
its Subsidiaries shall (x) default in any payment of any Indebtedness
(other than the Obligations) beyond the period of grace, if any, provided
in the instrument or agreement under which such Indebtedness was created or
(y) default in the observance or performance of any agreement or condition
relating to any Indebtedness (other than the Obligations) or contained in
any instrument or agreement evidencing, securing or relating thereto, or
any other event shall occur or condition exist, the effect of which default
or other event or condition is to cause, or to permit the holder or holders
of such Indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause (determined without regard to whether any notice is
required), any such Indebtedness to become due prior to its stated maturity
or (ii) any Indebtedness of the Borrower or any of its Subsidiaries shall
be declared to be due and payable, or required to be prepaid other than by
a regularly scheduled or other mandatory required prepayment, prior to the
stated maturity thereof; provided that it shall not constitute an Event of
Default pursuant to this Section 9.04 unless the aggregate amount of all
Indebtedness referred to in clauses (i) and (ii) above exceeds $2,500,000
at any one time; or
9.05 Bankruptcy, etc. The Borrower or any of its Subsidiaries
shall commence a voluntary case concerning itself under Title 11 of the
United States Code entitled "Bankruptcy," as now or hereafter in effect, or
any successor thereto (the "Bankruptcy Code"); or an involuntary case is
commenced against the Borrower or any of its Subsidiaries, and the petition
is not controverted within 30 days, or is not dismissed within 60 days,
after commencement of the case; or a custodian (as defined in the
Bankruptcy Code) is appointed for, or takes charge of, all or substantially
all of the property of the Borrower or any of its Subsidiaries, or the
Borrower or any of its Subsidiaries commences any other proceeding under
any reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to the Borrower or any of its
Subsidiaries, or there is commenced against the Borrower or any of its
Subsidiaries any such proceeding which remains undismissed for a period of
30 days, or the Borrower or any of its Subsidiaries is adjudicated
insolvent or bankrupt; or any order of relief or other order approving any
such case or proceeding is entered; or the Borrower or any of its
Subsidiaries suffers any appointment of any custodian or the like for it or
any substantial part of its property to continue undischarged or unstayed
for a period of 30 days; or the Borrower or any of its Subsidiaries makes
a general assignment for the benefit of creditors; or any corporate action
is taken by the Borrower or any of its Subsidiaries for the purpose of
effecting any of the foregoing; or
9.06 ERISA. (a) Any Plan shall fail to maintain the minimum
funding standard required for any plan year or a waiver of such standard or
extension of any amortization period is sought or granted under Section 412
of the Code, (b) any Plan is, shall have been or is reasonably likely to be
terminated or the subject of termination proceedings under ERISA, (c) any
Plan shall have an Unfunded Current Liability or (d) the Borrower, any of
its Subsidiaries or an ERISA Affiliate has incurred or is reasonably likely
to incur a liability to or on account of a Plan under Section 515, 4062,
4063, 4064, 4201 or 4204 of ERISA; and there shall result from any event or
events described in clause (a), (b), (c) or (d) above (i) the imposition of
a lien upon the assets of the Borrower or any of its Subsidiaries or an
ERISA Affiliate or (ii) the granting of a security interest, or (iii) a
liability or a material risk of incurring a liability to the PBGC or the
Internal Revenue Service or a Plan or a trustee appointed under ERISA or a
penalty under Section 4971 of the Code; and which event or events described
in clauses (i), (ii) and (iii) above, in the reasonable opinion of the
Required Banks, would have a material adverse effect upon the business,
operations, property, assets, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole; or
9.07 Pledge Agreements. Any Pledge Agreement shall cease to be
in full force and effect, or shall cease to give the Collateral Agent the
Liens, rights, powers and privileges purported to be created thereby in
favor of the Collateral Agent for the benefit of the Banks, or any Credit
Party shall default in the due performance or observance of any term,
covenant or agreement on its part to be performed or observed pursuant to
any Pledge Agreement; or
9.08 Other Security Documents. Any Security Document (other than
a Pledge Agreement) shall cease to be in full force and effect, or shall
cease to give the Collateral Agent the Liens, rights, powers and privileges
purported to be created thereby in favor of the Collateral Agent for the
benefit of the Banks, or any Credit Party shall default in the due
performance and observance of any term, covenant or agreement on its part
to be performed or observed pursuant to any Security Document and such
default shall, in the case of such default or failure to observe any term,
covenant or agreement other than those found in Sections 2.04, 2.05 and
2.07 of any Security Agreement, continue unremedied for a period of 30 days
after written notice to such Credit Party by any of the Collateral Agent,
the Administrative Agent or the Required Banks; or
9.09 Guaranty. Any Guaranty or any provision thereof shall cease
to be in full force and effect as to any Guarantor (other than in
accordance with the express terms thereof), or any Guarantor or any Person
acting by or on behalf of any Guarantor shall deny or disaffirm such Guar-
antor's obligations under its Guaranty or the respective Guarantor shall
default in the due performance or observance of any term, covenant or
agreement on its part to be performed or observed pursuant to any Guaranty;
or
9.10. Judgments. One or more judgments or decrees shall be
entered against the Borrower or any of its Subsidiaries involving in the
aggregate for the Borrower and its Subsidiaries a liability of $2,500,000
or more in excess of available coverage under applicable insurance, and all
such judgments or decrees shall not have been vacated, discharged pending
appeal within 30 days from the entry thereof; or
9.11. Change in Control. (a) If during any period of two
consecutive years, individuals who at the beginning of any such period
constitute the Directors of the Borrower cease for any reason to constitute
at least a majority thereof, unless the election, or the nomination for
election by the Borrower's stockholders, of each Director of the Borrower
first elected during such period was approved by a vote of at least two-thirds
of the Directors of the Borrower then still in office who were Directors of
the Borrower at the beginning of any such period or (b) the acquisition,
whether directly or indirectly, by any Person or "group" (as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) (other
than an employee benefit or stock ownership plan of the Borrower) of more than
50% of the common stock of the Borrower shall have occurred or (c) any change
of control or similar event (including, without limitation, any Fundamental
Change, as defined in the form of Convertible Preferred Stock) shall occur
which requires, or gives any holder the right to require, the redemption of
the Convertible Preferred Stock; or
9.12. Environmental Liabilities. The Borrower makes payments
in excess of $5,000,000 pursuant to CERCLA in any single fiscal year with
respect to remediation at the St. Louis River Site, provided, that the
Borrower may carry over 100% of any year's unused remediation expenditures,
up to a maximum aggregate amount of $20,000,000;
then, and in any such event, and at any time thereafter, if any Event of
Default shall then be continuing, the Administrative Agent shall upon the
written request of the Required Banks, by written notice to the Borrower,
take any or all of the following actions, without prejudice to the rights
of the Administrative Agent, any Bank or the holder of any Note to enforce
its claims against any Credit Party (provided, that, if an Event of Default
specified in Section 9.05 shall occur with respect to the Borrower, the
result which would occur upon the giving of written notice by the
Administrative Agent to the Borrower as specified in clauses (i), (ii) and
(v) below shall occur automatically without the giving of any such notice):
(i) declare the Total Commitment terminated, whereupon the Commitments of
each Bank shall forthwith terminate immediately and any Fees shall
forthwith become due and payable without any other notice of any kind; (ii)
declare the principal of and any accrued interest in respect of all Loans
and the Notes and all obligations owing hereunder and thereunder to be,
whereupon the same shall become, forthwith due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; (iii) in the case of the Collateral Agent,
exercise any rights or remedies in its capacity as Collateral Agent under
the Security Documents; (iv) terminate any Letter of Credit which may be
terminated in accordance with its terms; and (v) direct the Borrower to pay
(and the Borrower agrees that upon receipt of such notice, or upon the
occurrence of an Event of Default specified in Section 9.05 in respect of
the Borrower, it will pay) to the Collateral Agent at the Payment Office
such additional amounts of cash, to be held as security for the
reimbursement obligations of the Borrower for Drawings that may
subsequently occur thereunder, equal to the aggregate Stated Amount of all
Letters of Credit issued and then outstanding.
Section 10. Definitions and Accounting Terms.
10.01 Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms
defined):
"Acquisition Basket Amount" shall mean $86,000,000 (i) plus the
amount of any Letter of Credit issued or continued under this Agreement
which is not drawn and is returned to the letter of credit issuer or is
otherwise terminated (ii) less an amount equal to the principal amount of
Loans incurred to make Permitted Acquisitions in compliance with this
Agreement.
"Additional Security Documents" shall mean all agreements,
mortgages and other documentation delivered pursuant to Section 7.10.
"Adjusted CD Rate" shall mean, on any day, the sum (rounded to
the nearest 1/100 of 1%) of (1) the rate obtained by dividing (x) the most
recent weekly average dealer offering rate for negotiable certificates of
deposit with a three-month maturity in the secondary market as published in
the most recent Federal Reserve System publication entitled "Select
Interest Rates," published weekly on Form H.15 as of the date hereof, if
such publication or a substitute containing the foregoing rate information
shall not be published by the Federal Reserve System for any week, the
weekly average offering rate determined by the Administrative Agent on the
basis of quotations for such certificates received by it from three
certificate of deposit dealers in New York of recognized standing or, if
such quotations are unavailable, then on the basis of other sources
reasonably selected by the Administrative Agent, by (y) a percentage equal
to 100% minus the stated maximum rate of all reserve requirements as
specified in Regulation D applicable on such day to a three-month
certificate of deposit of a member bank of the Federal Reserve System in
excess of $100,000 (including, without limitation, any marginal, emergency,
supplemental, special or other reserves), plus (2) the then daily net
annual assessment rate as estimated by the Administrative Agent for
determining the current annual assessment payable by the Administrative
Agent to the Federal Deposit Insurance Corporation for insuring three month
certificates of deposit.
"Adjusted LIBOR Rate" shall mean with respect to a Borrowing of
Eurodollar Loans for any Interest Period, an interest rate per annum
(rounded upwards, if necessary, to the next 1/16th of 1%) equal to the
product of (a) LIBOR in effect for such Interest Period and (b) a fraction
(expressed as a decimal) the numerator of which is the number 1 and the
denominator of which is the number 1 minus the then stated maximum rate of
all reserve requirements (including without limitation any marginal,
emergency, supplemental, special or other reserves) applicable to any
member bank of the Federal Reserve System in respect of Eurocurrency
liabilities as defined in Regulation D (or any successor category of
liabilities under Regulation D). For purposes hereof, the term "LIBOR"
shall mean the arithmetic average (rounded upwards, if necessary, to the
next 1/16th of 1%) determined by the Administrative Agent at which dollar
deposits approximately equal in principal amount to the Administrative
Agent's portion of the respective Borrowing of Eurodollar Loans and for a
maturity comparable to such Interest Period are offered to the principal
London office of the Administrative Agent in the London interbank market at
approximately 11:00 A.M., London time, two Business Days prior to the
commencement of such Interest Period.
"Adjusted Net Income" for any fiscal period shall mean
Consolidated Net Income for such fiscal period (after provision for taxes)
plus the amount of all net non-cash charges (including, without limitation,
depreciation, deferred tax expense, non-cash interest expense, write-downs
of inventory and other non-cash charges), in each case that were deducted
in arriving at the Consolidated Net Income for such fiscal period less the
amount of all net non-cash gains and gains from sales of assets (other than
sales of inventory and equipment in the ordinary course of business) that
were added in arriving at said Consolidated Net Income for such fiscal
period.
"Administrative Agent" shall have the meaning provided in the
first paragraph of this Agreement.
"Affiliate" shall mean, with respect to any Person, any other
Person (i) directly or indirectly controlling (including, but not limited
to, all directors and officers of such Person), controlled by, or under
direct or indirect common control with, such Person or (ii) that directly
or indirectly owns more than 5% of the voting securities of such Person.
A Person shall be deemed to control a corporation if such Person possesses,
directly or indirectly, the power to direct or cause the direction of the
management and policies of such corporation, whether through the ownership
of voting securities, by contract or otherwise.
"Agreement" shall mean this Second Amended and Restated Credit
Agreement, as modified, supplemented or amended from time to time.
"Alternate Base Rate" shall mean on any day the highest of (i)
the Prime Rate for such day, (ii) the Adjusted CD Rate plus 1% and (iii)
the Federal Funds Effective Rate plus 1/2%.
"Applicable Margin" shall mean a percentage per annum equal to
(i) in the case of Base Rate Loans and all other interest rates determined
by reference to the Alternate Base Rate, 1 % and (ii) in the case of
Eurodollar Loans, 2 %.
"Arwood Asset Purchase Agreement" shall mean one or more
agreements between (a) the Borrower, The Interlake Companies, Inc. and
Arwood Corporation, and (b) First W-G Acquisition Corporation, providing
for the sale of substantially all of the assets of Arwood Corporation.
"Assignment and Acceptance" shall have the meaning provided in
Section 12.04(b).
"Bank" shall mean each financial institution initially party
hereto in its capacity as a "Bank", as well as any institution which
becomes a "Bank" hereunder pursuant to Section 12.04.
"Bankruptcy Code" shall have the meaning provided in Section
9.05.
"Base Rate Loans" shall mean any Loan designated as such by the
Borrower at the time of the incurrence thereof or conversion thereto.
"Borrower" shall have the meaning provided in the first paragraph
of this Agreement.
"Borrowing" shall mean the incurrence of one Type of Loan by the
Borrower from the Banks on a given date (or resulting from conversions on
a given date) having in the case of Eurodollar Loans the same Interest
Period.
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day except Saturday, Sunday and any day
which shall be in New York City a legal holiday or a day on which banking
institutions are authorized by law or other government action to close and
(ii) with respect to all notices and determinations in connection with, and
payments of principal and interest on, Eurodollar Loans, any day which is
a Business Day described in clause (i) above and which is also a day for
trading by and between banks in the London interbank Eurodollar market.
"Capital Expenditures" shall mean, for any period, the aggregate
of all expenditures, (whether paid in cash or accrued as liabilities during
that period), excluding interest capitalized during construction, by the
Borrower and its Subsidiaries during such period that, in conformity with
generally accepted accounting principles, are required to be included in or
reflected by the property and equipment or similar fixed asset accounts
reflected in the consolidated balance sheet of the Borrower and its
Subsidiaries, but excluding expenditures made in connection with the
replacement or restoration of assets, to the extent reimbursed or financed
from insurance proceeds paid on account of the loss of or damage to the
assets being replaced or restored, or from awards of compensation arising
from the taking by condemnation or eminent domain of such assets being
replaced or from the proceeds of the sale or other disposition of such
assets under the threat of such taking; provided that there shall be
included in the definition of Capital Expenditures up to $5,000,000 in any
fiscal year in expenditures of the Borrower other than Permitted
Acquisitions for (i) securities acquired by the Borrower and/or its
Subsidiaries of another Person representing at least 50% of the voting and
economic interests in such Person and (ii) assets the acquisition of which
would not otherwise constitute a Capital Expenditure and would not
otherwise be permitted under Section 8.06. With respect to equipment which
is purchased substantially simultaneously with the trade-in of existing
equipment owned by the Borrower or its Subsidiaries, only that portion of
the purchase price which exceeds the greater of the book value or the
trade-in amount of the equipment being traded in at such time shall be
included in Capital Expenditures.
"Capital Lease", as applied to any Person, shall mean any lease
of any property (whether real, personal or mixed) by that Person as lessee
which in conformity with generally accepted accounting principles, is, or
is required to be, accounted for as a capital lease on the balance sheet of
that Person.
"Capital Lease Obligations" shall mean all obligations under
Capital Leases of the Borrower or any of its Subsidiaries in each case
taken at the amount thereof accounted for as liabilities in accordance with
generally accepted accounting principles.
"Cash Equivalents" shall mean, as to any Person, (i) securities
issued or directly and fully guaranteed or insured by the United States or
any agency or instrumentality thereof (provided that the full faith and
credit of the United States is pledged in support thereof) having maturi-
ties of not more than six months from the date of acquisition, (ii) time
deposits and certificates of deposit of any commercial bank incorporated in
the United States of recognized standing having capital and surplus in
excess of $100,000,000 with maturities of not more than six months from the
date of acquisition by such Person, (iii) repurchase obligations with a
term of not more than seven days for underlying securities of the types
described in clause (i) above, provided that there shall be no restriction
on the maturities of such underlying securities pursuant to this clause
(iii) entered into with a bank meeting the qualifications specified in
clause (ii) above, (iv) commercial paper issued by the parent corporation
of any commercial bank (provided that the parent corporation and the bank
are both incorporated in the United States) of recognized standing having
capital and surplus in excess of $500,000,000 and commercial paper issued
by any Person incorporated in the United States rated at least A-1 or the
equivalent thereof by Standard & Poor's Corporation or at least P-1 or the
equivalent thereof by Moody's Investors Service, Inc. and in each case
maturing not more than six months after the date of acquisition by such
Person, and (v) investments in money market funds substantially all of
whose assets are comprised of securities of the types described in clauses
(i) through (iv) above.
"Cash Flow" shall mean, for any period, the sum of (i)
Consolidated EBITDA for such period, minus (ii) Capital Expenditures
incurred during such period and permitted by Section 8.08.
"CERCLA" shall mean the Comprehensive Environmental Response
Compensation and Liability Act of 1980, as same may be amended from time to
time.
"Chase" shall mean The Chase Manhattan Bank.
"Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time. Section references to the Code are to the Code, as in
effect at the date of this Agreement, and to any subsequent provisions of
the Code amendatory thereof, supplemental thereto or substituted therefor.
"Collateral" shall mean all "Collateral" under, and as defined
in, any Security Document.
"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Banks pursuant to the Security Documents.
"Commitment" shall mean, with respect to each Bank, (i) prior to
the repayment of the ESOP Loans as provided in Section 12.17(b)(iv) the
amount, if any, set forth opposite such Bank's name in Schedule I, Part A,
directly below the column entitled "Commitment" and (ii) after the
repayment of the ESOP Loans as provided for in Section 12.17(b)(iv), the
amount, if any, set forth opposite such Bank's name in Schedule I, Part B,
directly below the column entitled "Commitment", as the respective amounts
under clause (i) or (ii) may be reduced from time to time pursuant to
Sections 3.02, 3.03 and 9 or otherwise modified as provided in Section
12.04.
"Commitment Commission" shall have the meaning provided in
Section 3.01(a).
"Common Stock" shall have the meaning provided in Section 6.13.
"Company Pledge Agreement" shall mean the Pledge Agreement
entered into by the Borrower pursuant to the Original Credit Agreement, as
the same may be amended, modified or supplemented from time to time.
"Company Security Agreement" shall mean the Company Security
Agreement entered into pursuant to the Original Credit Agreement, as same
may be amended, modified or supplemented from time to time.
"Consolidated Cash Interest Expense" shall mean, for any period,
net interest expense, whether paid or accrued (including the interest
component of Capital Lease Obligations), of the Borrower and its
Subsidiaries on a consolidated basis, including, without limitation, (i)
all commissions, discounts and other fees and charges owed with respect to
letters of credit, (ii) net costs under Hedging Agreements and (iii)
interest capitalized during construction, but excluding, however, interest
expense not payable in cash (including amortization of discount and
deferred debt expenses and amortization of non-cash discount and non-cash
cost of any Hedging Agreements), all as determined in conformity with
generally accepted accounting principles.
"Consolidated Current Assets" shall mean, at any date, all the
current assets (other than cash and Cash Equivalents) of the Borrower and
its Subsidiaries determined on a consolidated basis in conformity with
generally accepted accounting principles.
"Consolidated Current Liabilities" shall mean, at any date, the
total current liabilities of the Borrower and its Subsidiaries determined
on a consolidated basis in conformity with generally accepted accounting
principles, less the current portion of the Funded Debt.
"Consolidated EBIT" shall mean, for each period, the earnings for
such period before extraordinary items, minority interests, provisions for
income taxes, and net interest expense.
"Consolidated EBITDA" shall mean, for any period, the sum of (i)
Consolidated EBIT for such period, plus (ii) depreciation and amortization
expenses deducted in determining Consolidated EBIT for such period.
"Consolidated Net Income" shall mean for any fiscal period the
net income of the Borrower and its Subsidiaries for such fiscal period
determined on a consolidated basis.
"Consolidated Net Worth" shall mean, on any date of determination
thereof, shareholders' equity (including preferred stock) of the Borrower
and its Subsidiaries on a consolidated basis.
"Contingent Obligation" shall mean, as to any Person, any
obligation of such Person guaranteeing any Indebtedness, leases, dividends
or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of such Person, whether or
not contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or
supply funds (x) for the purchase or payment of any such primary obligation
or (y) to maintain working capital or equity capital of the primary obligor
or otherwise to maintain the net worth or solvency of the primary obligor,
(iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability
of the primary obligor to make payment of such primary obligation or (iv)
otherwise to assure or hold harmless the holder of such primary obligation
against loss in respect thereof; provided, however, that the term
Contingent Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of
any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which
such Contingent Obligation is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder) as determined by such Person in
good faith.
"Continuing Bank" shall mean each Original Bank with a Commitment
under this Agreement (immediately upon giving effect to this Agreement on
the Second Restatement Effective Date).
"Convertible Preferred Stock" shall mean, collectively, the
Series A1, A2 and A3 Convertible Exchangeable Preferred Stock and the
Series B1, B2 and B3 Convertible Preferred Stock referred to in Section
6.13.
"Credit Documents" shall mean this Agreement and once executed
and delivered pursuant to the terms of the Original Credit Agreement or
this Agreement, each Note, each Letter of Credit Request, each Notice of
Borrowing, each Notice of Conversion, each Security Document, each Hedging
Agreement and each Guaranty, except as released prior to or in accordance
with the execution of this Agreement.
"Credit Event" shall mean the making of any Loan or the issuance
of any Letter of Credit.
"Credit Party" shall mean and include the Borrower and each
Subsidiary of the Borrower which has executed and delivered any Credit
Document.
"Cumulative Consolidated Net Income" shall mean, on any date,
Consolidated Net Income on a cumulative basis for all fiscal quarters of
the Borrower ending after December 25, 1994 (for which Consolidated Net
Income was a positive number), all determined on the basis of generally
accepted accounting principles as in effect on December 25, 1994.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Designated Asset Sales" shall mean the sale of the assets listed
on Schedule XI.
"Disposition" shall mean the sale (x) by The Interlake Companies,
Inc. of (i) Dexion (Australia) Pty Ltd., (ii) Dexion (North Asia_ Ltd.) and
its subsidiary, Dexion Storage Equipment (Shanghai) So. Ltd. and (iii)
Dexion Incorporated and (y) by Interlake DRC Limited of Dexion Group plc
and all of its subsidiaries including, but not limited to, Dexion Holding
GmbH and Dexion International Ltd.
"Disposition Documents" shall have the meaning set forth in
Section 5.01(j)(i).
"Disposition Proceeds" shall have the meaning set forth in
Section 5.01(j)(ii).
"Distribution" with respect to any Person shall mean that such
Person has declared or paid any dividend or returned any capital to its
stockholders or authorized or made any other distribution, payment or
delivery of property (other than capital stock of the Borrower) or cash to
its stockholders, as such, or redeemed, retired, purchased, or otherwise
acquired, directly or indirectly, for consideration, any shares of any
class of its capital stock outstanding on or after the Second Restatement
Effective Date (or any options or warrants issued by such Person with
respect to its capital stock), or set aside any funds for any of the
foregoing purposes, or shall have permitted any of its Subsidiaries to
purchase or otherwise acquire for a consideration any shares of any class
of the capital stock of such Person outstanding on or after the Second
Restatement Effective Date (or any options or warrants issued by such
Person with respect to its capital stock). Without limiting the foregoing,
"Distributions" with respect to any Person shall also include all payments
made or required to be made by such Person with respect to any stock
appreciation rights plans, equity incentive or achievement plans or any
similar plans or the setting aside of any funds for the foregoing purposes.
"Documentation Agent" shall have the meaning provided in the
first paragraph hereof.
"Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States (expressed in dollars).
"Drawing" shall have the meaning provided in Section 2.05(b).
"Eligible Assignee" shall mean (a) a commercial bank having
total assets in excess of $1,000,000,000, or (b) a finance company,
insurance company or other financial institution or fund, reasonably
acceptable to the Administrative Agent, who has regularly engaged in
making, purchasing, or investing in loans and having total assets in excess
of $300,000,000.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time. Section references to ERISA are to
ERISA, as in effect at the date of this Agreement, and to any subsequent
provisions of ERISA, amendatory thereof, supplemental thereto or
substituted therefor.
"ERISA Affiliate" shall mean any person (as defined in Section
3(9) of ERISA) which together with the Borrower or any of its Subsidiaries
would be deemed to be a member of the same "controlled group" within the
meaning of Section 414(b), (c), (m) or (o) of the Code.
"ESOP" shall mean The Interlake Corporation Employee Stock
Ownership Plan effective as of September 1, 1989.
"ESOP Trust" shall mean the trust created and maintained under
the ESOP pursuant to the ESOP Trust Agreement, as amended from time to time
to the extent permitted herein.
"ESOP Trust Agreement" shall mean The Interlake Corporation
Employee Stock Ownership Trust Agreement by and between the Borrower and
LaSalle National Trust, N.A. (successor to LaSalle National Bank) creating,
and governing the terms of, the ESOP Trust.
"Eurodollar Loans" shall mean any Loan designated as such by the
Borrower at the time of the incurrence thereof or conversion thereto.
"Event of Default" shall have the meaning provided in Section 9.
"Exchange Debentures" shall mean the Junior Convertible
Subordinated Debentures exchangeable in certain circumstances for
outstanding shares of Convertible Preferred Stock in accordance with the
terms thereof.
"Existing Debt" shall have the meaning provided in Section
8.05(b).
"Facing Fee" shall have the meaning provided in Section 3.01(d).
"Federal Funds Effective Rate" shall mean for any period, a
fluctuating interest rate equal for each day during such period to the
weighted average of the rates on overnight Federal Funds transactions with
members of the Federal Reserve System arranged by Federal Funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the
average of the quotations for such day on such transactions received by the
Administrative Agent from three Federal Funds brokers of recognized
standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to or referred to
in Section 3.01.
"First National" shall mean The First National Bank of Chicago.
"Foreign Subsidiary" shall mean each Subsidiary of the Borrower
not incorporated under the laws of the United States or of any State
thereof.
"Funded Debt" shall at the time of determination thereof mean
Indebtedness of the Borrower and its Subsidiaries which by its terms is
payable more than one year from such date or which may be extended at the
option of the Borrower under a revolving credit or similar agreement to a
date more than one year from such date of determination, provided that all
Indebtedness hereunder shall at all times constitute Funded Debt.
"Guarantor" shall mean any Person guarantying the obligations of
another pursuant to a Guaranty.
"Guaranty" shall mean and include the Subsidiary Guaranties.
"Hedging Agreement" shall mean any interest rate or currency
fluctuation protection agreement or any other similar interest rate or
currency fluctuation hedging transaction, including, without limitation,
swaps, caps, floors, collars and similar agreements.
"Hoeganaes" shall mean Hoeganaes Corporation, a Delaware
corporation.
"Hoeganaes Research and Development Agreement" shall mean the
Research and Development Agreement dated February 8, 1994 between Hoeganaes
AB and Hoeganaes Corporation, as such Agreement was in effect on the Fifth
Amendment Effective Date without giving effect to any amendment,
modification, or supplement thereto without the prior written consent of
the Required Banks.
"Hoeganaes Stockholders Agreement" shall mean the Stockholders
Agreement dated February 8, 1994 by and between The Interlake Companies,
Inc., Hoeganaes Aktiebolag and Hoeganaes, as such Agreement was in effect
on the Fifth Amendment Effective Date without giving effect to any
amendment, modification or supplement thereto without the prior written
consent of the Required Banks.
"Inactive Subsidiary" shall mean any Subsidiary which is not
engaged in any business activities and the assets and liabilities of which,
in each case, are less than $10,000.
"Indebtedness" shall mean, as to any Person, without duplication,
(i) all indebtedness (including principal, interest, fees and charges) of
such Person for borrowed money or for the deferred purchase price of
property or services, (ii) the face amount of all letters of credit issued
for the account of such Person, (iii) all liabilities of the types
described in clauses (i), (ii), (iv), (v) and (vi) of this definition which
are secured by any Lien on any property owned by such Person, whether or
not such liabilities have been assumed by such Person, (iv) the aggregate
amount required to be capitalized under leases under which such Person is
the lessee, (v) all Contingent Obligations of such Person and (vi) all
obligations of such Person under Hedging Agreements or other similar
agreements.
"Initial Borrowing Date" shall mean the date of the initial
incurrence of term loans as defined in, and pursuant to, the Original
Credit Agreement.
"Interest Period" shall have the meaning provided in Section
1.09.
"Issuing Bank" shall mean any Bank which at the request of the
Borrower and with the consent of the Administrative Agent agrees, in such
Bank's sole determination, to become an Issuing Bank for purposes of
issuing Letters of Credit pursuant to Section 2.
"Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Letter of Credit Fee" shall have the meaning provided in Section
3.01(c).
"Letter of Credit Outstandings" shall mean, at any time, the sum
of (i) the aggregate Stated Amount of all outstanding Letters of Credit and
(ii) the aggregate amount of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided in
Section 2.03(a).
"Lien" shall mean any mortgage, pledge, hypothecation,
encumbrance, lien (statutory or other), preference, priority or other
security agreement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
lease having substantially the same effect as any of the foregoing and any
assignment or deposit arrangement in the nature of a security device).
"Loan" shall have the meaning set forth in 1.01.
"Margin Stock" shall have the meaning provided in Regulation U of
the Board of Governors of the Federal Reserve System.
"Material Subsidiary" shall mean (x) each Subsidiary which is not
a Foreign Subsidiary and (y) each Foreign Subsidiary other than a
Subsidiary (i) the fair market value of the assets of which are less than
$1 million and (ii) the consolidated net income of which for the fiscal
year most recently ended was less than $500,000.
"Maturity Date" shall mean June __, 1998.
"Mortgage" shall have the meaning assigned thereto in the
Original Credit Agreement.
"Mortgage Policies" shall have the meaning provided in the
Original Credit Agreement.
"Mortgaged Properties" shall mean and include all real properties
owned or leased by the Borrower and/or any of its Subsidiaries to the
extent listed on Schedule XII hereof.
"Net Cash Proceeds" shall mean the Net Sale Proceeds of any asset
sale which are paid in cash including the cash received by way of deferred
payments pursuant to a note receivable or otherwise (other than the portion
of such deferred payment constituting interest) but only as and when so
received.
"Net Sale Proceeds" shall mean, with respect to any sale of
assets, the amount of cash, the principal amount of promissory notes or
other debt securities, and the fair market value of all other non-cash
proceeds received in connection therewith, net of reasonable costs of sale
in connection therewith, brokerage fees, payments of Indebtedness
associated with Liens encumbering such assets and income taxes, other than
income taxes not currently payable in cash.
"New Banks" shall mean each of the Persons listed on Schedule I
hereto which is not a Continuing Bank.
"Non-Continuing Bank" shall mean each Original Bank who is not a
Continuing Bank.
"Non-Public Information" shall have the meaning set forth in
Section 12.16.
"Non-Voting Common Stock" shall have the meaning provided in
Section 6.13.
"Note" shall have the meaning provided in Section 1.05.
"Note Repurchase" shall mean any acquisition, repurchase,
redemption, retirement or other purchase of Permanent Subordinated
Debentures or Senior Notes.
"Notice of Borrowing" shall have the meaning provided in Section
1.03.
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean the office of the Administrative Agent
shown opposite its name on the signature pages hereof, or such other office
as the Administrative Agent may hereafter designate in writing as such to
the other parties hereto.
"Obligations" shall mean all amounts owing to the Administrative
Agent or any Bank pursuant to the terms of this Agreement or any other
Credit Document.
"Original Bank" shall mean a Bank with a commitment on Schedule
I of the Original Credit Agreement as amended and restated prior to the
Second Restatement Effective Date.
"Original Credit Agreement" shall mean the Credit Agreement,
dated as of September 27, 1989, among the Borrower, certain Subsidiaries,
the Banks, Chemical Bank (now The Chase Manhattan Bank), as Administrative
Agent and The First National Bank of Chicago, as Co-Agent, as amended and
restated as of May 28, 1992 and as in effect immediately prior to the
Second Restatement Effective Date.
"Original Loans" shall mean, collectively the Original Term Loans
and the Original Revolving Loans.
"Original Revolving Loans" shall mean the "Revolving Loans"
under, and as defined in, the Original Credit Agreement.
"Original Term Loans" shall mean the "Term Loans" under, and as
defined in, the Original Credit Agreement.
"Participant" shall have the meaning provided in Section 2.04(a).
"Payment Office" shall mean the office of the Administrative
Agent located at 270 Park Avenue, New York, New York 10017, or such other
office as the Administrative Agent may hereafter designate in writing as
such to the other parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA or any successor thereto.
"Percentage" shall mean, for each Bank, a fraction (expressed as
a percentage), the numerator of which is the Commitment of such Bank, as in
effect at the time of determination, and the denominator of which is the
Total Commitment, as in effect at such time.
"Permanent Subordinated Debentures" shall mean the Senior
Subordinated Debentures due 2002 of the Borrower as issued pursuant to
the Indenture dated as of June 18, 1992 between the Borrower and Harris
Trust and Savings Bank, as trustee.
"Permitted Acquisitions" shall mean the acquisition by the
Borrower or any Subsidiary thereof of substantially all of the assets or
not less than 50% of the capital stock of any other Person engaged in a
line of business in which the Borrower or such Subsidiary is engaged on the
Second Restatement Effective Date.
"Permitted Encumbrances" shall mean (i) those liens, encumbrances
and other matters affecting title to any Mortgaged Property listed in the
Mortgage Policies in respect thereof and found acceptable by the Collateral
Agent in its reasonable judgment, (ii) as to any particular Mortgaged
Property at any time, such easements, encroachments, covenants, rights of
way, minor defects, irregularities or encumbrances on title which are not
unusual with respect to property similar in character to any such Mortgaged
Property and which do not, in the reasonable opinion of the Collateral
Agent, materially impair such Mortgaged Property for the purpose for which
it is held by the mortgagor thereof, or the lien held by the Collateral
Agent, (iii) zoning, land use and similar laws, rules and regulations
pertaining to the Mortgaged Properties, which are not violated by the
existing improvements and the present use made by the Mortgagor thereof of
the Land and Improvements (as defined in the respective Mortgage), (iv)
real estate taxes, general and special assessments not yet delinquent, (v)
Liens permitted under Sections 8.01(i), (iii) and (iv) to the extent
affecting the respective Mortgaged Property and (vi) such other items as
the Collateral Agent may consent to.
"Permitted Liens" shall have the meaning provided in Section
8.01(iii).
"Person" shall mean any individual, partnership, joint venture,
firm, corporation, association, limited liability company, trust or other
enterprise or any government or political subdivision or any agency,
department or instrumentality thereof.
"Plan" shall mean any multiemployer or single-employer plan (as
each such term is defined in Section 4001 of ERISA) subject to Title IV of
ERISA which is maintained or contributed to, or at any time during the five
calendar years preceding the Second Restatement Effective Date was
maintained or contributed to, for or on behalf of employees of the Borrower
or a Subsidiary or an ERISA Affiliate.
"Pledge Agreement Collateral" shall mean all "Collateral" under,
and as defined in, each of the Pledge Agreements.
"Pledge Agreements" shall mean and include, each Company Pledge
Agreement and each Subsidiary Pledge Agreement.
"Pledged Securities" shall mean all "Pledged Securities" under,
and as defined in, the Pledge Agreements.
"Preferred Stock Purchase Agreement" shall mean, collectively,
the Preferred Stock Purchase Agreement dated as of March 6, 1992 (the
"Purchase Agreement") between the Borrower and the other parties listed on
the signature pages thereto, the Certificates of Designation and the
Exchange Debentures (each as defined in the Purchase Agreement).
"Prime Rate" shall mean the rate which Chase announces from time
to time as its prime lending rate, the Prime Rate to change when and as
such prime lending rate changes. The Prime Rate is a reference rate and
does not necessarily represent the lowest or best rate actually charged to
any customer. Chase may make commercial loans or other loans at rates of
interest at, above or below the Prime Rate.
"Projections" shall have the meaning provided in Section 6.07(c).
"RCRA" shall mean the Resources Conservation and Recovery Act, as
the same may be amended from time to time.
"Register" shall have the meaning provided in Section 12.04(d).
"Registered Notes" shall have the meaning provided in Section
12.04(e).
"Regulation D" shall mean Regulation D of the Board of Governors
of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing reserve requirements.
"Reportable Event" shall mean an event described in Section
4043(b) of ERISA with respect to a Plan (as to which the 30 day notice
requirement has not been waived by the PBGC) which is a single-employer
plan (as defined in Section 4001(a)(15) of ERISA).
"Required Banks" shall mean the Administrative Agent, the
Documentation Agent, and the Banks, the sum of whose commitments (or after
termination thereof, outstanding Loans) represent an amount greater than
fifty percent of the sum of the Total Commitment (or after the termination
thereof, the sum of the then total outstanding Loans).
"Restatement Fee" shall have the meaning provided in Section
3.01(b).
"Second Restatement Effective Date" shall have the meaning set
forth in Section 12.10.
"SEC" shall have the meaning provided in Section 7.01(h).
"Secured Party" shall mean the Banks and any other Person granted
the benefit of a security interest pursuant to the terms of any Security
Document.
"Security Agreement" shall mean the Company Security Agreement
and each Subsidiary Security Agreement.
"Security Document Collateral" shall mean the "Collateral" as
described and defined in each respective Security Document other than any
Pledge Agreement.
"Security Documents" shall mean, once executed and delivered
pursuant to the Original Credit Agreement or this Agreement, each Pledge
Agreement, each Security Agreement, the Cash Collateral Agreement, dated
March 14, 1990, executed by the Borrower and the Collateral Agent for the
benefit of the Banks, and each Mortgage.
"Senior Notes" shall mean the Senior Notes due 2001 of the
Borrower as issued pursuant to the Indenture dated as of June 26, 1995
between the Borrower and Bank One, Columbus, N.A. as Trustee.
"Series A1 Preferred" shall have the meaning provided in Section
6.13.
"Series A2 Preferred" shall have the meaning provided in Section
6.13.
"Series A3 Preferred" shall have the meaning provided in Section
6.13.
"Series A3 Purchase Agreement" shall mean the Preferred Stock
Purchase Agreement dated as of May 7, 1992 between the Borrower and the
other parties listed on the signature pages thereto and the Certificates of
Designation (as defined in the Series A3 Purchase Agreement).
"Series B1 Preferred" shall have the meaning provided in Section
6.13.
"Series B2 Preferred" shall have the meaning provided in Section
6.13.
"Series B3 Preferred" shall have the meaning provided in Section
6.13.
"Specified Bank" shall have the meaning provided in Section
12.04(e).
"St. Louis River Site" shall mean, the CERCLA (Superfund) site
located in West Duluth, Minnesota, in regard to which the Borrower and
others have been identified as responsible parties, and which is generally
referred to as the St. Louis River/Interlake/Duluth Tar site.
"Standby Letter of Credit" shall have the meaning provided in
Section 2.01(a).
"Stated Amount" of each Letter of Credit shall mean the maximum
amount available to be drawn thereunder, determined without regard to
whether any conditions to drawing could then be met.
"Subsidiary" shall mean, as to any Person, (i) any corporation
more than 50% of the stock of which of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the directors of
such corporation (irrespective of whether or not at the time stock of any
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 by such
Person and/or one or more Subsidiaries of such Person and (ii) any
partnership, association, joint venture or other entity in which such
Person and/or one or more Subsidiaries of such Person has more than a 50%
equity interest at the time, provided that no Person which constitutes an
Inactive Subsidiary shall be deemed to be a Subsidiary of the Borrower for
purposes of this Agreement. Unless otherwise expressly provided, all
references herein to "Subsidiary" shall mean a Subsidiary of the Borrower.
"Subsidiary Assignor" shall mean each Subsidiary of the Borrower
other than Hoeganaes and any Foreign Subsidiary which is not a Subsidiary
Guarantor, all of which are listed on Schedule XIII.
"Subsidiary Guarantor" shall mean each Subsidiary of the Borrower
other than Hoeganaes.
"Subsidiary Guaranty" shall mean each Subsidiary Guaranty entered
into pursuant to the Original Credit Agreement, and once executed and
delivered, any guaranty entered into pursuant to Section 7.10 hereto, each
as may be amended, modified or supplemented from time to time.
"Subsidiary Pledge Agreement" shall mean each Subsidiary Pledge
Agreement entered into pursuant to the Original Credit Agreement or this
Agreement, and once executed and delivered, any pledge agreement entered
into pursuant to Section 7.10, each as may be amended, modified or
supplemented from time to time.
"Subsidiary Pledgor" shall mean each Subsidiary of the Borrower
which owns capital stock of a Material Subsidiary of the Borrower other
than Hoeganaes.
"Subsidiary Security Agreement" shall mean and include each of
the Subsidiary Security Agreements entered into pursuant to the Original
Credit Agreement and shall include, after the execution and delivery
thereof, any such security agreements entered into pursuant to Section
7.10, each as same may be amended, modified or supplemented from time to
time.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Total Commitment" shall mean, at any time, the sum of the
Commitments of each of the Banks.
"Total Unutilized Commitment" shall mean, at any time, the sum of
the Unutilized Commitments of each of the Banks.
"Trade Letter of Credit" shall have the meaning provided in
Section 2.01(a).
"Type" shall mean any type of Loan determined with respect to the
interest option applicable thereto, i.e., a Base Rate Loan or a Eurodollar
Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time
in effect in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan means the amount, if
any, by which the present value of the accrued benefits under the Plan as
of the close of its most recent plan year exceeds the fair market value of
the assets allocable thereto as of the close of its most recent plan year,
determined in accordance with Section 412 of the Code.
"United States" and "U.S." shall each mean the United States of
America.
"Unpaid Drawings" shall have the meaning provided in Section
2.05(a).
"Unutilized Commitment" of any Bank at any time shall mean the
Commitment of such Bank less (i) the aggregate principal amount of Loans
made by such Bank and then outstanding and (ii) the product of such Bank's
Percentage and the Letter of Credit Outstandings at such time.
"Working Capital" shall mean Consolidated Current Assets less
Consolidated Current Liabilities.
Section 11. The Administrative Agent.
11.01 Appointment. The Banks hereby designate Chase as
Administrative Agent (for purposes of this Section 11, the term
"Administrative Agent" shall include Chase in its capacity as Collateral
Agent pursuant to the Security Documents) to act as specified herein and in
the other Credit Documents. Each Bank hereby irrevocably authorizes, and
each holder of any Note by the acceptance of such Note shall be deemed
irrevocably to authorize, the Administrative Agent to take such action on
its behalf under the provisions of this Agreement, the other Credit
Documents and any other instruments and agreements referred to herein or
therein and to exercise such powers and to perform such duties hereunder
and thereunder as are specifically delegated to or required of the
Administrative Agent by the terms hereof and thereof and such other powers
as are reasonably incidental thereto. The Administrative Agent may perform
any of its duties hereunder by or through its officers, directors, agents
or employees. The Documentation Agent shall have no duties hereunder.
11.02 Nature of Duties. The Administrative Agent shall have
no duties or responsibilities except those expressly set forth in this
Agreement and the Security Documents. Neither the Administrative Agent nor
any of its officers, directors, agents or employees shall be liable for any
action taken or omitted by it or them hereunder or under any other Credit
Document or in connection herewith or therewith, unless caused by its or
their gross negligence or willful misconduct. The duties of the
Administrative Agent shall be mechanical and administrative in nature; the
Administrative Agent shall not have by reason of this Agreement or any
other Credit Document a fiduciary relationship in respect of any Bank; and
nothing in this Agreement or any other Credit Document, expressed or
implied, is intended to or shall be so construed as to impose upon the
Administrative Agent any obligations in respect of this Agreement or any
other Credit Document except as expressly set forth herein.
11.03 Lack of Reliance on the Administrative Agent.
Independently and without reliance upon the Administrative Agent, each
Bank, to the extent it deems appropriate, has made and shall continue to
make (i) its own independent investigation of the financial condition and
affairs of each Credit Party in connection with the making and the
continuance of the Loans and the taking or not taking of any action in
connection herewith and (ii) its own appraisal of the creditworthiness of
each Credit Party and, except as expressly provided in this Agreement, the
Administrative Agent shall have no duty or responsibility, either initially
or on a continuing basis, to provide any Bank with any credit or other
information with respect thereto, whether coming into its possession before
the making of the Loans, or at any time or times thereafter. The
Administrative Agent shall not be responsible to any Bank for any recitals,
statements, information, representations or warranties herein or in any
document, certificate or other writing delivered in connection herewith or
for the execution, effectiveness, genuineness, validity, enforceability,
perfection, collectibility, priority or sufficiency of this Agreement or
any other Credit Document (except insofar as this Agreement or any other
Credit Document expressly imposes obligations upon the Administrative
Agent) or the financial condition of any Credit Party or be required to
make any inquiry concerning either the performance or observance of any of
the terms, provisions or conditions of this Agreement or any other Credit
Document, or the financial condition of any Credit Party or the existence
or possible existence of any Default or Event of Default.
11.04 Certain Rights of the Administrative Agent. If the
Administrative Agent shall request instructions from the Required Banks
with respect to any act or action (including failure to act) in connection
with this Agreement or any other Credit Document, the Administrative Agent
shall be entitled to refrain from such act or taking such action unless and
until the Administrative Agent shall have received instructions from the
Required Banks; and the Administrative Agent shall not incur liability to
any Person by reason of so refraining. Without limiting the foregoing, no
Bank shall have any right of action whatsoever against the Administrative
Agent as a result of the Administrative Agent acting or refraining from
acting hereunder or under any other Credit Document in accordance with the
instructions of the Required Banks or where otherwise expressly provided
herein, such other requisite number of Banks.
11.05 Reliance. The Administrative Agent shall be entitled
to rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, statement, certificate, telex, teletype or telecopier
message, cablegram, radiogram, order or other document or telephone message
signed, sent or made by any Person that the Administrative Agent believed
(in the absence of gross negligence on its part) to be the proper Person
and, with respect to all legal matters pertaining to this Agreement and any
other Credit Document and its duties hereunder and thereunder, upon advice
of counsel selected by it.
11.06 Indemnification. To the extent the Administrative
Agent is not reimbursed and indemnified by the Borrower, the Banks will
reimburse and indemnify the Administrative Agent, in proportion to their
respective Commitments, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against the Administrative Agent in
performing its duties hereunder or under any other Credit Document, in any
way relating to or arising out of this Agreement or any other Credit
Document; provided that no Bank shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Administrative
Agent's gross negligence or willful misconduct.
11.07 The Administrative Agent in its Individual Capacity.
With respect to its obligation to make Loans and participate in Letters of
Credit under this Agreement, the Administrative Agent shall have the rights
and powers specified herein for a "Bank" and may exercise the same rights
and powers as though it were not performing the duties specified herein;
and the term "Banks," "holders of Notes" or any similar terms shall, unless
the context clearly otherwise indicates, include the Administrative Agent
in its individual capacity. The Administrative Agent and/or its Affiliates
may own stock of any Credit Party and may accept deposits from, lend money
to, and generally engage in any kind of banking, trust or other business
with any Credit Party or any Affiliate of any Credit Party as if it were
not performing the duties specified herein, and may accept fees and other
consideration from any Credit Party for services in connection with this
Agreement and otherwise without having to account for the same to the
Banks.
11.08 Holders. The Administrative Agent may deem and treat
the payee of any Note as the owner thereof for all purposes hereof unless
and until a written notice of the assignment, transfer or endorsement
thereof, as the case may be, shall have been filed with the Administrative
Agent. Any request, authority or consent of any Person or entity who, at
the time of making such request or giving such authority or consent, is the
holder of any Note shall be conclusive and binding on any subsequent
holder, transferee, assignee or endorsee, as the case may be, of such Note
or of any Note or Notes issued in exchange therefor.
11.09 Resignation by the Administrative Agent. (a) The
Administrative Agent may resign from the performance of all its functions
and duties hereunder and/or under the other Credit Documents at any time by
giving 25 Business Days' prior written notice to the Borrower and the
Banks. Such resignation shall take effect upon the appointment of a
successor Administrative Agent pursuant to clauses (b) and (c) below or as
otherwise provided below.
(b) Upon any such notice of resignation, the Banks shall appoint
a successor Administrative Agent hereunder or thereunder who shall be a
commercial bank or trust company reasonably acceptable to the Borrower.
(c) If a successor Administrative Agent shall not have been so
appointed within such 25 Business Day period, the Administrative Agent,
with the consent of the Borrower, shall then appoint a successor
Administrative Agent who shall serve as Administrative Agent hereunder or
thereunder until such time, if any, as the Banks appoint a successor
Administrative Agent as provided above.
(d) If no successor Administrative Agent has been appointed
pursuant to clause (b) or (c) above by the 30th Business Day after the date
such notice of resignation was given by the Administrative Agent, the
Administrative Agent's resignation shall become effective and the Banks
shall thereafter perform all the duties of the Administrative Agent
hereunder and/or under any other Credit Document until such time, if any,
as the Banks appoint a successor Administrative Agent as provided above.
Section 12. Miscellaneous.
12.01 Payment of Expenses, etc. The Borrower agrees to: (i)
whether or not the transactions herein contemplated are consummated, pay
all reasonable out-of-pocket costs and expenses of the Administrative Agent
in connection with the preparation, execution and delivery of the Credit
Documents and the documents and instruments referred to therein (including,
without limitation, the reasonable fees and disbursements of one special
counsel and of any local or foreign counsel); (ii) pay all reasonable
out-of-pocket costs and expenses of the Administrative Agent in connection with
any amendment, waiver or consent relating to the Credit Documents and the
documents and instruments referred to therein (including without
limitation, the reasonable fees and disbursements of one special counsel
and of any local or foreign counsel) and of the Administrative Agent and
each of the Banks in connection with the enforcement of the Credit
Documents and the documents and instruments referred to therein (including,
without limitation, the reasonable fees and disbursements of counsel for
the Administrative Agent and for each of the Banks; (iii) pay and hold each
of the Banks harmless from and against any and all present and future stamp
and other similar taxes with respect to the foregoing matters and save each
of the Banks harmless from and against any and all liabilities with respect
to or resulting from any delay or omission (other than to the extent
attributable to such Bank) to pay such taxes; and (iv) indemnify the
Administrative Agent and each Bank, its officers, directors, employees,
representatives and agents from and hold each of them harmless against any
and all losses, liabilities, claims, damages, or expenses incurred by any
of them as a result of, or arising out of, or in any way related to, or by
reason of, any investigation, litigation or other proceeding (whether or
not the Administrative Agent or any Bank is a party thereto) related to the
entering into and/or performance of any Credit Document or the use of the
proceeds of any Loans hereunder or the consummation of any transactions
contemplated in any Credit Document, including, without limitation, the
reasonable fees and disbursements of counsel incurred in connection with
any such investigation, litigation or other proceeding (but excluding any
such losses, liabilities, claims, damages or expenses to the extent
incurred by reason of the gross negligence or willful misconduct of the
Person to be indemnified); provided that the Borrower shall not be required
to pay for the legal fees and expenses of more than one outside counsel for
all persons indemnified under this clause (iv) unless, in the written
opinion of outside counsel reasonably satisfactory to the Borrower,
representation of all such indemnified persons would be inappropriate due
to the existence of an actual or potential conflict of interest. The
Administrative Agent and each Bank agrees to notify the Borrower promptly
of any assertion against it (or any of its officers, directors, employees,
representatives or agents) of any claim or the commencement of any action
or proceeding relating to any transaction contemplated hereby, provided
that the failure of the Administrative Agent or such Bank to notify the
Borrower shall not affect the rights of the Administrative Agent, any Bank
or any other person entitled to indemnification pursuant to this Section
12.01 but the Borrower shall not be deemed to be in default of its
obligation to so indemnify until such notice has been received by the
Borrower and the Borrower has failed to perform as required by this Section
12.01.
12.02 Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and continuance of an
Event of Default, each Bank is hereby authorized at any time or from time
to time, without presentment, demand, protest or other notice of any kind
to any Credit Party or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and apply any and all
deposits (general or special) and any other Indebtedness at any time held
or owing by such Bank (including without limitation by branches and
agencies of such Bank wherever located) to or for the credit or the account
of such Credit Party against and on account of the Obligations and
liabilities of such Credit Party under this Agreement or under any of the
other Credit Documents, including, without limitation, all interests in
Obligations of such Party purchased by such Bank pursuant to Section
12.06(b), and all other claims of any nature or description arising out of
or connected with this Agreement or any other Credit Document, irrespective
of whether or not such Bank shall have made any demand hereunder and
although said Obligations, liabilities or claims, or any of them, shall be
contingent or unmatured.
12.03 Notices. Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall
be in writing (including telegraphic, telex, telecopier or cable
communication) and mailed, telegraphed, telexed, telecopied, cabled or
delivered, if to Borrower, at its address specified opposite its signature
below or in any Credit Document executed by it; if to any Bank, at its
address specified opposite its signature below; and if to the
Administrative Agent, at its Notice Office; or, as to the Borrower or the
Administrative Agent, at such other address as shall be designated by such
party in a written notice to the other parties hereto and, as to each other
party, at such other address as shall be designated by such party in a
written notice to the Borrower and the Administrative Agent. All such
notices and communications shall, when mailed, telegraphed, telexed,
telecopied, or cabled or sent by overnight courier, be effective upon
receipt, or in any event, three Business Days after being deposited in the
mails, delivered to the telegraph company, cable company or overnight
courier, as the case may be, or sent by telex or telecopier, except that
notices and communications to the Administrative Agent shall not be
effective until received by the Administrative Agent.
12.04 Successors and Assigns. (a) This Agreement shall be
binding upon and inure to the benefit of the Borrower, the Administrative
Agent and the Banks and their respective successors and assigns. The
Borrower may not assign or transfer any of its rights or obligations
hereunder without the written consent of the Banks. Each Bank may sell
participations to any Person in all or part of any Loan, or all or any part
of its Notes or Commitments, to another bank or other entity, in which
event, without limiting the foregoing, the provisions of Sections 1.10,
1.11, 2.06 and 4.04 shall inure to the benefit of each purchaser of a
participation and the pro rata treatment of payments, as described in
Sections 4.01 and 4.02, shall be determined as if the Bank had not sold
such participation. In the event any Bank shall sell any participation,
such Bank shall retain the sole right and responsibility to enforce the
obligations of the Borrower relating to the Loans, including, without
limitation, the right to approve any amendment, modification or waiver of
any provision of this Agreement other than amendments, modifications or
waivers with respect to any (i) fees payable hereunder to the Banks, (ii)
the amount of principal or the rate of interest payable on, or the dates
fixed for the final repayment of principal of the Loans and (iii) the
release of the Lien on all or substantially all of the Collateral.
(b) Each Bank may assign to one or more Banks or Eligible
Assignees all or a portion of its interests, rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Commitment and the same portion of the related Loans at the time owing to
it and the related Note or Notes held by it); provided, however, that (i)
other than in the case of an assignment to an Affiliate of the assigning
Bank or another Bank, each of the Administrative Agent and the Borrower
must give its prior written consent (provided that the Borrower's consent
shall not be required if a Default or Event of Default shall have occurred
and be occurring), which consent will not be unreasonably withheld, (ii) in
the event such assignment is not made to an Affiliate of the assigning Bank
or another Bank, the aggregate amount of the Commitment and/or Loans of the
assigning Bank subject to each such assignment (determined as of the date
the Assignment and Acceptance with respect to such assignment is delivered
to the Administrative Agent) shall in no event be less than $5,000,000 or
such lesser amount representing the entire remaining Commitment of such
assigning Bank, and, (iii) the parties to each such assignment shall
execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register (as defined below), an Assignment and Acceptance
in the form of Exhibit G hereto (each, an "Assignment and Acceptance") with
blanks appropriately completed, together with any Note or Notes subject to
such assignment and a processing and recordation fee of $3,000 and,
provided further, that no such transfer or assignment by a Specified Bank
will be effective until recorded by the Administrative Agent on the
Register pursuant to Section 12.04(d) hereof. Upon such execution,
delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be
at least five Business Days after the execution thereof (A) the assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Bank hereby
and (B) the Bank thereunder shall, to the extent provided in such
assignment, be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Bank's rights and obligations under this Agreement,
such Bank shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance,
the Bank assignor thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other
than the representation and warranty that it is the legal and beneficial
owner of the interest being assigned thereby free and clear of any adverse
claim, such Bank assignor makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or
representations made in or to in connection with the Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished
pursuant hereto; (ii) such Bank assignor makes no representation or
warranty and assumes no responsibility with respect to the financial
condition of the Borrower or the performance or observance by the Borrower
of any of its obligations under this Agreement or any other instrument or
document furnished pursuant hereto; (iii) such assignee confirms that it
has received a copy of this Agreement, together with copies of the
financial statements referred to in Section 6.07 and such other documents
and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv)
such assignee will, independently and without reliance upon the
Administrative Agent, such Bank assignor or any other Bank and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement; (v) such assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto; and (vi) such assignee agrees that it will
perform in accordance with their terms all the obligations that by the
terms of this Agreement are required to be performed by it as a Bank.
(d) The Administrative Agent shall maintain at its Notice Office
a copy of each Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Banks and the Commitments
of, and principal amount of the Loans owing to, each Bank from time to time
(the "Register"). The entries in the Register shall be conclusive in the
absence of manifest error and the Borrower, the Administrative Agent and
the Banks may treat each person the name of which is recorded in the
Register as a Bank hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower or any Bank at
any reasonable time and from time to time upon reasonable prior notice.
With respect to any Specified Bank, the Administrative Agent shall maintain
the Register, solely for purposes of this Section 12.04(d), as an agent of
the Borrower. The transfer of the Commitments and Loans of any Specified
Bank and the rights to the principal of, and interest on, any Loans or any
Loans made pursuant to such Commitments shall not be effective until such
transfer is recorded in the Register maintained by the Administrative Agent
with respect to ownership of such Commitments and Loans and prior to such
recordation all amounts owing to the transferor with respect to such
Commitments and Loans shall remain owing to the transferor. The
registration of an assignment or transfer by a Specified Bank of all or
part of its Commitments and Loans shall be recorded by the Administrative
Agent on the Register only upon the acceptance by the Administrative Agent
of a properly executed and delivered Assignment and Acceptance pursuant to
Section 12.04(b). Coincident with the delivery by a Specified Bank of such
Assignment and Acceptance to the Administrative Agent for acceptance and
registration of an assignment or transfer of all or part of a Loan, or as
soon thereafter as practicable, the assigning or transferor Specified Bank
shall surrender the Registered Note evidencing such Loan, and thereupon one
or more new Registered Notes in the same aggregate principal amount shall
be issued to the assigning or transferor Specified Bank and/or the new
Bank. The Administrative Agent shall indemnify and defend the Borrower for
and against any and all actions, claims, costs and damages which arise from
or out of the agency relationship established by this Section 12.04(d)
other than any actions, claims, costs and damages which result primarily
from the gross negligence or willful misconduct of the Borrower. Subject to
Section 11.02, neither the Administrative Agent nor the Borrower shall be
liable in any respect to the Banks in connection with the maintenance of
the transfer and registration system pursuant to this Section 12.04(d).
(e) Upon its receipt of an Assignment and Acceptance executed by
an assigning Bank and the assignee thereunder together with any Note or
Notes subject to such assignment, the written consent to such assignment
and the Fee payable in respect thereto, the Administrative Agent shall, if
such Assignment and Acceptance has been completed with blanks appropriately
filled, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Borrower. Within five Business Days after receipt of
notice, the Borrower, at its own expense, shall execute and deliver to the
Administrative Agent in exchange for the surrendered Notes new Notes to the
order of such assignee in accordance with the provisions of Section 1.05
hereof and, if the assigning Bank has retained Commitments and/or Loans
hereunder, new Notes to the order of the assigning Bank in an amount equal
to the Commitments and/or Loans retained by it hereunder. Such new Notes
shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Notes, shall be dated the effective date of such
Assignment and Acceptance and shall otherwise be in substantially the form
of the respective Note. Thereafter, such surrendered Notes shall be marked
canceled and returned to the Borrower. Each new Bank that is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code)
and that could become completely exempt from withholding of any tax,
assessment or other charge or levy imposed by or on behalf of the United
States of America or any taxing authority thereof in respect of payment of
Obligations due to such Bank if the Obligations were in registered form for
U.S. Federal income tax purposes may request the Borrower (through the
Administrative Agent), and the Borrower thereby agrees, upon such Bank's
satisfaction of the requirements of Sections 4.04(b), to record such
Obligations in the Register and exchange any Notes evidencing such
Obligations for Notes in registered form ("Registered Notes") for U.S.
Federal income tax purposes (which form shall be in substantially the form
of Exhibit B, as the case may be, except that such Registered Notes shall
be made payable to such Bank or its registered assigns). Registered Notes
shall be deemed to be and shall be Notes for all purposes of the Credit
Agreement and the other Credit Documents. Any Bank that makes a request
pursuant to the second immediately preceding sentence and receives
Registered Notes in exchange for its Notes, together with any subsequent
transferee or assignee of such Bank, is hereinafter called a "Specified
Bank." Registered Notes may not be exchanged for Notes that are not in
registered form.
(f) Any Bank may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 12.04, disclose to the assignee or participant or proposed assignee
or participant, any information relating to the Borrower furnished to such
Bank by or on behalf of the Borrower, provided that prior to any such dis-
closure, each such assignee or participant or proposed assignee or
participant shall have executed a confidentiality letter in the form of
Exhibit H hereto with respect to the preservation of the confidentiality of
any confidential information relating to the Borrower and its Subsidiaries
received from such Bank.
12.05 No Waiver; Remedies Cumulative. No failure or delay on
the part of the Administrative Agent or any Bank or any holder of a Note in
exercising any right, power or privilege hereunder or under any other
Credit Document and no course of dealing between any Credit Party and the
Administrative Agent or any Bank or the holder of any Note shall operate as
a waiver thereof; nor shall any single or partial exercise of any right,
power or privilege hereunder or under any other Credit Document preclude
any other or further exercise thereof or the exercise of any other right,
power or privilege hereunder or thereunder. The rights and remedies herein
expressly provided are cumulative and not exclusive of any rights or
remedies which the Administrative Agent or any Bank or the holder of any
Note would otherwise have. No notice to or demand on any Credit Party in
any case shall entitle such Credit Party to any other or further notice or
demand in similar or other circumstances or constitute a waiver of the
rights of the Administrative Agent, the Banks or the holder of any Note to
any other or further action in any circumstances without notice or demand.
12.06 Payments Pro Rata. (a) The Administrative Agent
agrees that promptly after its receipt of each payment from or on behalf of
any Credit Party in respect of any Obligations of such Credit Party
hereunder or under any Credit Document, it shall distribute such payment to
the Banks pro rata based upon their respective shares, if any, of the
Obligations with respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon
security, by the exercise of the right of setoff or banker's lien, by
counterclaim or cross action, by the enforcement of any right under the
Credit Documents, or otherwise), which is applicable to the payment of the
principal of, or interest on, the Loans, Unpaid Drawings or Commitment
Commission, of a sum which with respect to the related sum or sums received
by other Banks is in a greater proportion than the total of such Obligation
then owed and due to such Bank bears to the total of such Obligation then
owed and due to all of the Banks immediately prior to such receipt, then
such Bank receiving such excess payment shall purchase for cash without
recourse or warranty from the other Banks an interest in the Obligations of
such Credit Party to such Banks in such amount as shall result in a
proportional participation by all the Banks in such amount; provided that
if all or any portion of such excess amount is thereafter recovered from
such Bank, such purchase shall be rescinded and the purchase price restored
to the extent of such recovery, but without interest.
12.07 Calculations; Computations. (a) The financial
statements to be furnished to the Banks pursuant hereto shall be made and
prepared in accordance with generally accepted accounting policies and
principles consistently applied throughout the periods involved (except as
set forth in the notes thereto). The Projections have been made and
prepared in accordance with the same accounting policies and principles as
the financial statements delivered pursuant to Section 6.07(a). All
calculations and computations determining compliance with Sections 4.02 and
8 shall utilize accounting principles and policies in conformity with those
used to prepare the financial statements referred to in Section 6.07(a).
(b) All computations of interest, Commitment Commission and Fees
hereunder shall be made on the actual number of days elapsed over a period
of 360 days. All interest shall accrue from the date funds are made
available to the Borrower to, but not including, the date of repayment
thereof or of the end of an Interest Period therefor; provided that if any
Loan is repaid on the same day on which it is borrowed hereunder, one day's
interest shall be paid on such Loan.
12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.
(a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE BORROWER HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. Any
legal action or proceeding with respect to this Agreement or any other
Credit Document may be brought in the courts of the State of New York or of
the United States for the Southern District of New York, and, by execution
and delivery of this Agreement, the Borrower hereby irrevocably accepts for
itself and in respect of its property, generally and unconditionally, the
jurisdiction of the aforesaid courts. The Borrower hereby irrevocably
designates, appoints and empowers CT Corporation System, with offices on
the date hereof at 1633 Broadway, New York, New York as its designee,
appointee and agent to receive, accept and acknowledge for and on its
behalf, and in respect of its property, service of any and all legal
process, summons, notices and documents which may be served in any such
action or proceeding. The Administrative Agent agrees to use reasonable
good faith efforts to mail, by registered or certified mail, to the
Borrower, at its address set forth opposite its signature below, copies of
any correspondence mailed or delivered to CT Corporation System in
connection with the immediately preceding sentence; provided that no
failure of the Borrower to receive, for any reason, copies of such
correspondence shall in any way affect the effectiveness of the delivery of
any legal process, summons, notice or documents delivered to the Borrower's
agent for service of process. If for any reason such designee, appointee
and agent shall cease to be available to act as such, the Borrower agrees
to designate a new designee, appointee and agent in New York City on the
terms and for the purposes of this provision satisfactory to the
Administrative Agent. The Borrower further irrevocably consents to the
service of process out of any of the aforementioned courts in any such
action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to the Borrower at its address set forth
opposite its signature below, such service to become effective thirty days
after such mailing. Nothing herein shall affect the right of the
Administrative Agent, any Bank or the holder of any Note to serve process
in any other manner permitted by law or to commence legal proceedings or
otherwise proceed against the Borrower in any other jurisdiction.
(b) The Borrower hereby irrevocably waives any objection which
it may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Agreement
or any other Credit Document brought in the courts referred to in clause
(a) above and hereby further irrevocably waives and agrees not to plead or
claim in any such court, any such action or proceeding brought in any such
court has been brought in an inconvenient forum. The Borrower further
waives any right it may have to trial by jury in any court or jurisdiction,
including, without limitation, the jurisdictions and courts referred to in
clause (a) above.
12.09 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. A set of counterparts executed by all the parties hereto shall
be lodged with the Borrower and the Administrative Agent.
12.10 Effectiveness. This Agreement shall become effective on
the date (the "Second Restatement Effective Date") on which (i) the
Borrower, the Administrative Agent, the Documentation Agent and each of
the Continuing Banks shall have signed a copy hereof (whether the same or
different copies) and shall have delivered the same to the Administrative
Agent at the Payment Office of the Administrative Agent or, in the case
of the Banks, shall have given to the Administrative Agent telephonic
(confirmed in writing), written telex or facsimile transmission notice
(actually received) at such office that the same has been signed and
mailed to it and (ii) the conditions set forth in Section 5.01 have been
satisfied.
12.11. Headings Descriptive. The headings of the several
sections and subsections of this Agreement are inserted for convenience
only and shall not in any way affect the meaning or construction of any
provision of this Agreement.
12.12. Amendment or Waiver. Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed,
waived, discharged or terminated unless such change, waiver, discharge or
termination is in writing signed by the Borrower and the Required Banks;
provided, however, that no such change, waiver, discharge or termination
shall, without the consent of each Bank affected thereby (i) extend the
final maturity of any Loan or Note, or reduce the rate or extend the time
of payment of interest or Fees thereon, or increase the Commitments of any
Bank over the amount thereof then in effect (it being understood that a
waiver of any Default or Event of Default or of a mandatory reduction in
the Total Commitment shall not constitute a change in the terms of any
Commitment of any Bank, (ii) release all or substantially all of the
Collateral or the Guaranties except, in each case as shall be otherwise
provided herein or in any other Credit Document, (iii) amend, modify or
waive any provision of this Section, (iv) reduce the percentage specified
in the definition of Required Banks or (v) consent to the assignment or
transfer by the Borrower of any of its rights and obligations under this
Agreement. Notwithstanding anything to the contrary contained herein, the
modifications contemplated by 12.04 (to the extent needed to make new Banks
party to this Agreement) shall in each case be permitted in accordance with
the terms thereof.
12.13. Obligation to Make Payments in Dollars. The obligation
of the Borrower to make payment in Dollars of the principal of and interest
on the Notes and any other amounts due hereunder or under any other Credit
Document to the Payment Office of the Administrative Agent as provided in
Section 4.03 shall not be discharged or satisfied by any tender, or any
recovery pursuant to any judgment, which is expressed in or converted into
any currency other than Dollars, except to the extent such tender or
recovery shall result in the actual receipt by the Administrative Agent at
its Payment Office on behalf of the Banks or holders of the Notes of the
full amount of Dollars expressed to be payable in respect of the principal
of and interest on the Notes and all other amounts due hereunder or under
any other Credit Document. The obligation of the Borrower to make payments
in Dollars as aforesaid shall be enforceable as an alternative or
additional cause of action for the purpose of recovery in Dollars of the
amount, if any, by which such actual receipt shall fall short of the full
amount of Dollars expressed to be payable in respect of the principal of
and interest on the Notes and any other amounts due under any other Credit
Document, and shall not be affected by judgment being obtained for any
other sums due under this Agreement or under any other Credit Document.
12.14. Survival. All indemnities set forth herein including,
without limitation, in Sections 1.10, 1.11, 2.06, 4.04, 11.06 and 12.01
shall survive the execution and delivery of this Agreement and the Notes
and the making and repayment of the Loans.
12.15. Domicile of Loans. Each Bank may transfer and carry
its Loans at, to or for the account of any branch, office, Subsidiary or
Affiliate of such Bank, provided that the Borrower shall not be responsible
for costs arising under Section 1.10, 1.11, 2.06 or 4.04 resulting from any
such transfer to the extent not otherwise applicable to such Bank prior to
such transfer.
12.16. Confidentiality. Subject to Section 12.04 the Banks
shall hold all Non-Public Information obtained pursuant to the requirements
of this Agreement in accordance with its customary procedure for handling
confidential information of this nature and in accordance with safe and
sound banking practices and in any event may make disclosure reasonably
required by any bona fide assignee or participant in connection with the
contemplated transfer of any Loans or participation therein or as required
or requested by any governmental agency or representative thereof or
pursuant to legal process, provided that, unless specifically prohibited by
applicable law or court order, each Bank shall notify the Borrower of any
request by any governmental agency or representative thereof (other than
any such request in connection with an examination of the financial
condition of such Bank by such governmental agency) for disclosure of any
such Non-Public Information prior to disclosure of such information, and
provided further that in no event shall any Bank be obligated or required
to return any materials furnished by the Borrower or any Subsidiary.
"Non-Public Information" shall mean information other than (i) information
which is publicly available or becomes publicly available other than as a
result of a breach by the relevant Bank of its obligations under this Section
12.16, (ii) information which becomes available to a Bank from a source
other than the Borrower or its representatives and not in contravention of
any other confidentiality obligations of which such Bank has actual
knowledge or (iii) information which was available to the relevant Bank on
a non-confidential basis prior to its disclosure by the Borrower to such
Bank.
12.17. Amendment and Restatement; ESOP Loans. (a) Upon the
effectiveness of this Agreement, the parties hereto agree that the Original
Credit Agreement is amended and restated in its entirety upon the terms and
conditions set forth herein, and except as described in clause (b)(ii),
below shall be of no further force or effect.
(b) Notwithstanding anything to the contrary contained in this
Agreement, the Original Credit Agreement and any and all amendments
thereto, with respect to the ESOP Loans (as defined in the Original Credit
Agreement):
(i) Upon the occurrence of the Second Restatement Effective
Date, the Continuing Banks will be deemed to have purchased the ESOP
Loans of the Non-Continuing Banks from such Non-Continuing Banks;
(ii) Until the repayment of the ESOP Loans, the ESOP Loans
will be (x) held by the Continuing Banks and (y) governed by the terms
and conditions of the Original Credit Agreement, as in effect
immediately prior to the Second Restatement Effective Date;
(iii) An amount of the Disposition Proceeds equal to the
outstanding obligations on the ESOP Loans on the Second Restatement
Effective Date paid to the Banks under the terms Section 5.01(j)(iii)
will be delivered to the Administration Agent and held by it for the
benefit of the Continuing Banks as security pursuant to security
arrangements satisfactory to the Administrative Agent (the "ESOP Loan
Security") for the repayment of the ESOP Loans (which Disposition
Proceeds may be applied to repay the ESOP Loans at any time); and
(iv) On January 2, 1998, the Administrative Agent will apply,
without any further instruction from any other Person, the ESOP Loan
Security to the outstanding principal of the ESOP Loans, and provided
that the ESOP Loans are repaid in full, the terms and conditions of
the Original Credit Agreement, as amended and restated immediately
prior to the Second Restatement Effective Date, will have no force and
effect, except as otherwise provided for in, or unless otherwise
incorporated by, this Agreement.
12.18 Conversion of Original Loans of Continuing Banks;
Termination of Commitments of Non-Continuing Banks. Notwithstanding
anything to the contrary contained in the Original Credit Agreement, this
Agreement or any other Credit Document, the Borrower and each of the Banks
hereby agree that on the Second Restatement Effective Date, (i) each Bank
with a Commitment as set forth on Schedule I (after giving effect to the
Second Restatement Effective Date) shall make or maintain (including by way
of conversion) that principal amount of Loans to the Borrower as is
required by Section 1.01, provided that if the Original Loans of any
Continuing Bank outstanding on the Second Restatement Effective Date
(immediately before giving effect thereto) exceed the aggregate principal
amount of Loans required to be made available by such Bank on such date
(after giving effect to the Second Restatement Effective Date), then
Original Loans of such Continuing Bank in an amount equal to such excess
shall be repaid on the Second Restatement Effective Date, together with
interest thereon, to such Continuing Bank and (ii) in the case of each
Non-Continuing Bank, all of such Non-Continuing Bank's Original Loans
outstanding on the Second Restatement Effective Date shall be repaid in
full on such date, together with interest thereon and all accrued Fees (and
any other amounts) owing to such Non-Continuing Bank, and the Commitment
(under, and as defined in, the Original Credit Agreement) of such
Non-Continuing Bank, if any, shall be terminated, effective upon the occurrence
of the Second Restatement Effective Date. Notwithstanding anything to the
contrary contained in the Original Credit Agreement, this Agreement or any
other Credit Document, the parties hereto hereby consent to the repayments
and reductions required above, and agree that in the event that any
Original Bank shall fail to execute a counterpart of this Agreement prior
to the occurrence of the Second Restatement Effective Date, such Original
Bank shall be deemed to be a Non-Continuing Bank and, concurrently with the
occurrence of the Second Restatement Effective Date, the Commitment (under,
and as defined in, the Original Credit Agreement) of such Original Bank, if
any, shall be terminated, all Original Loans of such Original Bank
outstanding on the Second Restatement Effective Date shall be repaid in
full, together with interest thereon and all accrued Fees (and any other
amounts) owing to such Original Bank, and concurrently with the occurrence
of the Second Restatement Effective Date, such Original Bank shall no
longer constitute a "Bank" under this Agreement and the other Credit
Documents, provided that all indemnities of the Credit Parties under the
Original Credit Agreement and the other Credit Documents (as in effect
prior to the Second Restatement Effective Date) for the benefit of such
Original Bank shall survive in accordance with the terms thereof.
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date
first above written.
Address:
The Interlake Corporation
550 Warrenville Road
Lisle, IL 60532-4387
Attention:_______________
THE INTERLAKE CORPORATION
By: /s/Stephen Gregory
Name: Stephen Gregory
Title: Vice President - Finance
and Chief Financial Officer
BANKS
The Chase Manhattan Bank
270 Park Avenue
New York, NY 10017
Attention:_______________
THE CHASE MANHATTAN BANK,
Individually and as
Administrative Agent
By: /s/Timothy Storms
Name: Timothy Storms
Title: Managing Director
The First National Bank of
Chicago
One First National Plaza
Suite 0088
Chicago, IL 60670
Attention: _______________
THE FIRST NATIONAL BANK OF
CHICAGO
Individually, and as Documentation Agent
By: /s/Karen Kizer
Name: Karen Kizer
Title: Senior Vice President
SCHEDULE I
to
Credit Agreement
COMMITMENTS
Part A
Bank
The Chase Manhattan Bank $51,000,000
The First National Bank of Chicago $51,000,000
TOTAL Commitment $102,000,000
Part B
Bank
The Chase Manhattan Bank $53,000,000
The First National Bank of Chicago $53,000,000
TOTAL Commitment $106,000,000