Exhibit 10.1
REVOLVING CREDIT AGREEMENT
Dated as of December 30, 1994
MAGNETEK, INC., a Delaware corporation (the "BORROWER"), and
NATIONSBANK OF TEXAS, N.A., a national banking association (the "BANK"), agree
as follows:
PRELIMINARY STATEMENTS
(a) The Borrower has applied to the Bank for a revolving line of
credit in the amount of $35,000,000.
(b) The Bank is willing to provide such line of credit to the
Borrower on the terms and conditions set forth herein.
(c) Capitalized terms used herein and not otherwise defined are used
with the meanings set forth in Exhibit C hereto.
ARTICLE I
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 1.01. THE ADVANCES. The Bank agrees, on the terms and
conditions hereinafter set forth, to make advances (the "ADVANCES") to the
Borrower from time to time on any Business Day during the period from the date
hereof until March 31, 1995 (such date, or the earlier date of termination of
the Commitment (as defined below) pursuant to Section 1.04 or 5.01, being the
"TERMINATION DATE") in an aggregate amount not to exceed at any time outstanding
$35,000,000, as such amount may be reduced pursuant to Section 1.04 (the
"COMMITMENT"). Each Advance shall be in an amount not less than $1,000,000 or
an integral multiple of $100,000 in excess thereof, EXCEPT that an Advance may
be in an amount equal to the entire unused Commitment. Within the limits of the
Commitment, the Borrower may borrow, prepay pursuant to Section 1.07(a) and
reborrow under this Section 1.01.
SECTION 1.02. MAKING THE ADVANCES. (a) Each Advance shall be made
on notice, given not later than 12:00 noon (Dallas, Texas time) on (or, if such
Advance is to be a Eurodollar Rate Advance, the third Business Day prior to) the
date of the proposed Advance, by the Borrower to the Bank, specifying the date
and amount thereof and selecting the Type thereof and, if such Advance is to be
a Eurodollar Rate Advance, the initial Interest Period for such Advance. Not
later than 12:00 noon (Dallas, Texas time) on the date of such Advance (or 3:00
p.m. (Dallas, Texas time) if such Advance is to be a Base Rate Advance) and upon
fulfillment of the applicable conditions set forth in Article II, the Bank will
make such Advance available to the Borrower in same day funds at the Bank's
address referred to in Section 6.02.
(b) Each notice from the Borrower to the Bank requesting an Advance
shall be irrevocable and binding on the Borrower. In the case of any request
for a Eurodollar Rate Advance, the Borrower shall indemnify the Bank against any
loss, cost or expense incurred by the Bank as a result of any failure to fulfill
on or before the date specified in such notice for such Advance the applicable
conditions set forth in Article II,
including, without limitation, any loss (including loss of anticipated profits),
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by the Bank to fund the Advance when the
Advance, as a result of such failure, is not made on such date.
SECTION 1.03. COMMITMENT FEE. The Borrower agrees to pay to the
Bank a commitment fee on the average daily unused portion of the Commitment from
the date hereof until the Termination Date at the rate of one-half of 1% per
annum, payable on the Termination Date.
SECTION 1.04. MANDATORY REDUCTION OF THE COMMITMENT. The Commitment
shall be automatically reduced on each date on which any prepayment of principal
is required to be made pursuant to Section 1.07(b), in each such case by an
amount equal to the amount of the required principal prepayment.
SECTION 1.05. REPAYMENT. The Borrower shall repay the aggregate
unpaid principal amount of all Advances in accordance with a promissory note of
the Borrower, in substantially the form of Exhibit A hereto (the "NOTE"),
evidencing the indebtedness resulting from such Advances and delivered to the
Bank pursuant to Article II.
SECTION 1.06. INTEREST. (a) ORDINARY INTEREST. Subject to
Section 1.06(b), the Borrower shall pay interest on the unpaid principal amount
of each Advance from the date of such Advance until such principal amount shall
be paid in full, at the following rates per annum:
(i) BASE RATE ADVANCES. During such periods as (and to the
extent that) such Advance is a Base Rate Advance, 2.25% per annum above the Base
Rate in effect from time to time, payable on the first day of each month, on the
Termination Date and on the date such Base Rate Advance shall be Converted into
a Eurodollar Rate Advance or paid in full.
(ii) EURODOLLAR RATE ADVANCES. During such periods as (and to
the extent that) such Advance is a Eurodollar Rate Advance for any Interest
Period, a rate per annum equal at all times during such Interest Period to the
sum of the Eurodollar Rate for such Interest Period plus 3.50% per annum,
payable on the last day of such Interest Period.
(b) DEFAULT INTEREST. The interest payable under Section 1.06(a)
shall be increased (i) effective immediately in the case of any Event of Default
under Section 5.01(a) with respect to the payment of principal, interest or
commitment fees, and (ii) effective upon notice from the Bank in the case of any
other Event of Default, and in each case for so long as such Event of Default is
continuing, by 2.00% per annum. Any interest, fees or other amounts (other than
principal) not paid to the Bank when due shall bear interest at the rate
applicable to Base Rate Advances as set forth in Section 1.06(a)(i) plus 2.00%
per annum.
SECTION 1.07. PREPAYMENTS. (a) The Borrower may, upon notice to the
Bank at least one Business Day in advance stating the proposed date and
principal amount of the prepayment, and if such notice is given the Borrower
shall, prepay the outstanding principal amounts of the Advances in whole or in
part; PROVIDED, HOWEVER, that (i) each partial prepayment pursuant to this
Section 1.07(a) shall be in an aggregate principal
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amount not less than $1,000,000, and (ii) upon prepayment of any Eurodollar Rate
Advance, the Borrower shall be obligated to reimburse the Bank in respect
thereof pursuant to Section 6.05(c).
(b) As soon as practicable and in any event within five Business Days
after receipt by the Borrower of any cash consideration from any Divestiture
Assets, the Borrower shall prepay the outstanding principal amounts of the
Advances by an amount equal to 50% of such cash consideration. In the event
that (i) the indebtedness of the Borrower under the Existing Loan Agreement or
the Senior Notes shall be refinanced or otherwise repaid in full, or (ii) the
Borrower or any subsidiary of the Borrower shall, at any time after the date of
this Agreement, pledge or grant a lien or security interest in any assets of the
Borrower or any such subsidiary (other than "Pledged Collateral" as defined in
the Existing Loan Agreement or the capital stock of any "Restricted Subsidiary"
as defined in the Existing Loan Agreement) as security for any obligations of
the Borrower or any subsidiary of the Borrower under or in connection with the
Existing Loan Agreement (as supplemented, modified or amended from time to
time), the Borrower shall immediately (in the case of clause (i)), or within 10
Business Days thereafter (in the case of clause (ii)), prepay in full the
outstanding principal amounts of the Advances. In the event of any prepayment
of Eurodollar Rate Advances pursuant to this Section 1.07(b), the Borrower shall
be obligated to reimburse the Bank in respect thereof pursuant to Section
6.05(c).
(c) Any prepayment of Advances shall be applied first to Base Rate
Advances and then to Eurodollar Rate Advances designated by the Borrower.
SECTION 1.08. INCREASED COSTS ETC.
(a) INCREASED COSTS. If, due to either (i) the introduction of or
any change (other than any change by way of imposition or increase of reserve
requirements referred to in subsection (b) below) in or in the interpretation of
any law or regulation or (ii) the compliance with any guideline or request from
any central bank or other governmental authority (whether or not having the
force of law), there shall be any increase in the cost to the Bank of agreeing
to make or making, funding or maintaining Eurodollar Rate Advances, then the
Borrower shall from time to time, within five Business Days after demand by the
Bank, pay to the Bank additional amounts sufficient to compensate the Bank for
such increased cost. A certificate as to the amount of such increased cost,
submitted to the Borrower by the Bank, shall be conclusive and binding for all
purposes, absent manifest error.
(b) ADDITIONAL INTEREST. The Borrower shall pay to the Bank
additional interest on the unpaid principal amount of each Eurodollar Rate
Advance, from the date of such Eurodollar Rate Advance until such principal
amount is paid in full or such Eurodollar Rate Advance is Converted to a Base
Rate Advance, at an interest rate per annum equal at all times to the remainder
obtained by subtracting (i) the Eurodollar Rate for the Interest Period for such
Eurodollar Rate Advance from (ii) the rate obtained by dividing such Eurodollar
Rate by a percentage equal to 100% minus the reserve percentage applicable
during such Interest Period (or if more than one such percentage shall be so
applicable, the daily average of such percentages for those days in such
Interest Period during which any such percentage shall be so applicable) under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for the Bank with respect
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to liabilities or assets consisting of or including Eurocurrency liabilities
having a term equal to such Interest Period, payable on each date on which
interest is payable on such Eurodollar Rate Advance. Such additional interest
shall be determined by the Bank and notice of the amount thereof shall be given
by the Bank to the Borrower.
(c) INCREASED CAPITAL. If the Bank determines that compliance with
any law or regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) affects or would
affect the amount of capital required or expected to be maintained by the Bank
or any corporation controlling the Bank and that the amount of such capital is
increased by or based upon the existence of the Bank's commitment to lend
hereunder and other commitments of this type, then, upon demand by the Bank, the
Borrower shall, within five Business Days after demand by the Bank, pay to the
Bank, from time to time as specified by the Bank, additional amounts sufficient
to compensate the Bank or such corporation in the light of such circumstances,
to the extent that the Bank reasonably determines such increase in capital to be
allocable to the existence of the Bank's commitment to lend hereunder. A
certificate as to such amounts shall be submitted to the Borrower by the Bank
and shall be conclusive and binding for all purposes, absent manifest error.
SECTION 1.09. INTEREST RATE PROTECTION. If and to the extent that
the Borrower shall fail to select (or shall be prohibited from selecting) the
duration of any Interest Period for any Eurodollar Rate Advance in accordance
with the provisions contained in the definition of "Interest Period" in Exhibit
C, the Bank will forthwith so notify the Borrower and such Advance (to such
extent) will automatically, on the last day of the then existing Interest Period
therefor, Convert into a Base Rate Advance.
SECTION 1.10. VOLUNTARY CONVERSION OF ADVANCE. The Borrower may on
any Business Day, upon notice given to the Bank not later than 12:00 noon
(Dallas, Texas time) on the third Business Day prior to the date of the proposed
Conversion and subject to the provisions of Sections 1.06 and 1.11, Convert an
Advance (or portion thereof) of one Type into an Advance of another Type;
PROVIDED, HOWEVER, that (a) any Conversion of any Eurodollar Rate Advance into a
Base Rate Advance shall be made on, and only on, the last day of an Interest
Period for such Eurodollar Rate Advance (except in the case of any Conversion
pursuant to Section 1.11, in which case the Borrower shall pay to the Bank any
amounts payable pursuant to Section 6.05(c)), and (b) the Borrower may not
Convert a Base Rate Advance into a Eurodollar Rate Advance if any Event of
Default has occurred and is continuing. Each such notice of a Conversion shall,
within the restrictions specified above, specify (i) the date of such
Conversion, (ii) the Advance (or portion thereof) to be Converted, and (iii) if
such Conversion is into a Eurodollar Rate Advance, the duration of the Interest
Period for such Advance.
SECTION 1.11. ILLEGALITY, ETC. (a) Notwithstanding any other
provision of this Agreement, if the Bank shall notify the Borrower that the
introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for the Bank to perform its obligations
hereunder to make Eurodollar Rate Advances or to fund or maintain Eurodollar
Rate Advances hereunder, (i) the obligation of the Bank to make, or to Convert
Advances into, Eurodollar Rate Advances shall be suspended until the Bank shall
notify the Borrower that the circumstances causing such suspension no longer
exist and (ii) the Borrower shall forthwith prepay in full all Eurodollar Rate
Advances of the Bank then outstanding, together with interest accrued thereon,
unless the Borrower, within five Business Days of
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notice from the Bank, Converts all Eurodollar Rate Advances of the Bank then
outstanding into Base Rate Advances in accordance with Section 1.10.
(b) If, with respect to any Eurodollar Rate Advance, the Bank
notifies the Borrower that (i) the Bank is unable to determine the Eurodollar
Rate, or (ii) the Eurodollar Rate for any Interest Period for such Advance
(after taking into account any additional interest payable in respect thereof
pursuant to Section 1.08(b)), will not adequately reflect the cost to the Bank
of making, funding or maintaining such Eurodollar Rate Advance for such Interest
Period, such Eurodollar Rate Advance will automatically, on the last day of the
then existing Interest Period therefor, Convert into a Base Rate Advance, and
the obligation of the Bank to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended until the Bank shall notify the Borrower that the
circumstances causing such suspension no longer exist.
SECTION 1.12. PAYMENTS AND COMPUTATIONS. (a) The Borrower shall make
each payment hereunder and under the Note not later than 12:00 noon (Dallas,
Texas time) on the day when due in U.S. dollars to the Bank at its address
referred to in Section 6.02 in same day funds.
(b) The Borrower hereby authorizes the Bank, if and to the extent
payment is not made when due hereunder or under the Note, to charge from time to
time against any or all of the Borrower's accounts with the Bank any amount so
due.
(c) All computations of interest based on the Base Rate and of
commitment fees shall be made by the Bank on the basis of a year of 365 days,
and all computations of interest based on the Eurodollar Rate shall be made by
the Bank on the basis of a year of 360 days, in each case for the actual number
of days (including the first day but excluding the last day) occurring in the
period for which such interest or commitment fees are payable. Each
determination by the Bank of an interest rate hereunder shall be conclusive and
binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder or under the Note shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or commitment fees, as the
case may be; PROVIDED, HOWEVER, if such extension would cause payment of
interest on or principal of Eurodollar Rate Advance to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
ARTICLE II
CONDITIONS OF LENDING
SECTION 2.01. CONDITION PRECEDENT TO INITIAL ADVANCE. The obligation
of the Bank to make its initial Advance is subject to the condition precedent
that the Bank shall have received on or before the day of such Advance the
following, each dated such day, in form and substance satisfactory to the Bank:
(a) The Note.
(b) Certified copies of the resolutions of the Board of Directors of
the Borrower approving this Agreement and the Note, and of all documents
evidencing other
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necessary corporate action and governmental approvals, if any, with respect to
this Agreement and the Note.
(c) A certificate of the Secretary or an Assistant Secretary of the
Borrower certifying the names and true signatures of the officers of the
Borrower authorized to sign this Agreement and the Note and any other documents
to be delivered hereunder.
(d) Favorable opinions of Samuel A. Miley, General Counsel of the
Borrower, and Gibson, Dunn & Crutcher, counsel for the Borrower, substantially
in the form of Exhibits B-1 and B-2 hereto and as to such other matters as the
Bank may reasonably request.
(e) Evidence satisfactory to the Bank to confirm that the Borrower
has completed all actions required of it under the Existing Loan Agreement to
redesignate MagneTek Europe N.V. and the subsidiaries set forth on Schedule I to
the Third Amendment to the Existing Loan Agreement as "Restricted Subsidiaries"
as defined in the Existing Loan Agreement.
SECTION 2.02. CONDITIONS PRECEDENT TO ALL ADVANCES. The obligation
of the Bank to make each Advance (including the initial Advance) shall be
subject to the further conditions precedent that on the date of such Advance the
following statements shall be true (and each of the giving of the applicable
notice requesting such Advance and the acceptance by the Borrower of the
proceeds of such Advance shall constitute a representation and warranty by the
Borrower that on the date of such Advance such statements are true):
(a) The representations and warranties contained in Section 3.01 are
correct on and as of the date of such Advance, before and after giving effect to
such Advance and to the application of the proceeds therefrom, as though made on
and as of such date, and
(b) No event has occurred and is continuing, or would result from
such Advance or from the application of the proceeds therefrom, which
constitutes an Event of Default or would constitute an Event of Default but for
the requirement that notice be given or time elapse or both.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The
Borrower represents and warrants as follows:
(a) The Borrower is a corporation duly incorporated, validly existing
and in good standing under the laws of the jurisdiction indicated at the
beginning of this Agreement.
(b) The execution, delivery and performance by the Borrower of this
Agreement and the Note are within the Borrower's corporate powers, have been
duly authorized by all necessary corporate action, and do not (i) contravene the
Borrower's charter or by-laws or any applicable laws, or (ii) contravene or
constitute a default under,
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or require any consent, waiver or approval that has not been obtained pursuant
to, the Existing Loan Agreement, the Senior Notes, the Subordinated Indentures
or any other material contractual restriction binding on or affecting the
Borrower.
(c) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required for
the due execution, delivery and performance by the Borrower of this Agreement or
the Note.
(d) This Agreement is, and the Note when delivered hereunder will be,
legal, valid and binding obligations of the Borrower enforceable against the
Borrower in accordance with their respective terms.
(e) The obligations of the Borrower under this Agreement and the Note
constitute, and are entitled to the benefits of, "Senior Indebtedness" as
defined in the Subordinated Indentures.
(f) The balance sheets of the Borrower and its subsidiaries as at
June 30, 1994, and the related statements of income and retained earnings of the
Borrower and its subsidiaries for the fiscal year then ended, copies of which
have been furnished to the Bank, fairly present, in all material respects, the
financial condition of the Borrower and its subsidiaries as at such date and the
results of the operations of the Borrower and its subsidiaries for the period
ended on such date, all in accordance with generally accepted accounting
principles consistently applied, and since June 30, 1994, there has been no
material adverse change in such condition or operations or in the business,
properties or prospects of the Borrower and its subsidiaries, taken as a whole.
(g) Except as disclosed in reports filed by the Borrower pursuant to
the reporting requirements under the Securities Exchange Act of 1934, as
amended, there is no pending or, to the Borrower's knowledge, threatened action
or proceeding affecting the Borrower or any of its subsidiaries before any
court, governmental agency or arbitrator, which may materially adversely affect
the financial condition or operations of the Borrower and its subsidiaries,
taken as a whole, or which purports to affect the legality, validity or
enforceability of this Agreement or the Note.
(h) No proceeds of any Advance will be used to acquire any equity
security of a class which is registered pursuant to Section 12 of the Securities
Exchange Act of 1934.
(i) The Borrower is not engaged in the business of extending credit
for the purpose of purchasing or carrying margin stock (within the meaning of
Regulation U issued by the Board of Governors of the Federal Reserve System),
and no proceeds of any Advance will be used to purchase or carry any margin
stock or to extend credit to others for the purpose of purchasing or carrying
any margin stock.
(j) Neither the Borrower nor any of its subsidiaries is or is
required to be registered as an "investment company" under the Investment
Company Act of 1940.
(k) The representations and warranties of the Borrower contained in
Section 4.1 (with the State of Tennessee substituted for the State of
California), the last clause of Section 4.2 and Sections 4.8, 4.9, 4.13, 4.16,
4.18 and the first sentence of Section 4.20 of the Existing Loan Agreement are
true and correct as of the date hereof as though made on and as of the date
hereof.
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ARTICLE IV
COVENANTS OF THE BORROWER
SECTION 4.01. AFFIRMATIVE COVENANTS. So long as the Note shall
remain unpaid or the Bank shall have any Commitment hereunder, the Borrower
will, unless the Bank shall otherwise consent in writing:
(a) COMPLIANCE WITH LAWS, ETC. Comply, and cause each of its
subsidiaries to comply, in all material respects with all applicable laws,
rules, regulations and orders, such compliance to include, without limitation,
paying before the same become delinquent all taxes, assessments and governmental
charges imposed upon it or upon its property except to the extent contested in
good faith.
(b) LOAN AGREEMENT COVENANTS. Comply with all covenants and
obligations of the Borrower under the Existing Loan Agreement, including,
without limitation, Sections 6.14, 6.15, 6.16 and 6.17 thereof.
(c) REPORTING REQUIREMENTS. Furnish to the Bank:
(i) as soon as available and in any event within 45 days
after the end of each of the first three quarters of each fiscal year
of the Borrower, balance sheets of the Borrower and its subsidiaries
as of the end of such quarter and statements of income and retained
earnings of the Borrower and its subsidiaries for the period
commencing at the end of the previous fiscal year and ending with the
end of such quarter, certified by the chief financial officer of the
Borrower;
(ii) as soon as available and in any event within 90 days
after the end of each fiscal year of the Borrower, a copy of the
annual report for such year for the Borrower and its subsidiaries,
containing financial statements for such year certified in a manner
acceptable to the Bank by Ernst & Young or other independent public
accountants reasonably acceptable to the Bank;
(iii) as soon as possible and in any event within five days
after the occurrence of each Event of Default and each event which,
with the giving of notice or lapse of time, or both, would constitute
an Event of Default, continuing on the date of such statement, a
statement of the chief financial officer of the Borrower setting
forth details of such Event of Default or event and the action which
the Borrower has taken and proposes to take with respect thereto;
(iv) promptly after the sending or filing thereof, copies of
all reports which the Borrower sends to any of its securityholders,
and copies of all reports and registration statements (other than in
respect of employee stock plans) which the Borrower or any subsidiary
files with the Securities and Exchange Commission or any national
securities exchange; and
(v) such other information respecting the condition or
operations, financial or otherwise, of the Borrower or any of its
subsidiaries as the Bank may from time to time reasonably request.
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SECTION 4.02. NEGATIVE COVENANTS. So long as the Note shall remain
unpaid or the Bank shall have any Commitment hereunder, the Borrower will not,
without the written consent of the Bank:
(a) LIENS, ETC. Create or suffer to exist, or permit any of its
subsidiaries to create or suffer to exist, any lien, security interest or other
charge or encumbrance, or any other type of preferential arrangement in the
nature of a lien, security interest or encumbrance, upon or with respect to any
of its properties, whether now owned or hereafter acquired, or assign, or permit
any of its subsidiaries to assign, any right to receive income, in each case to
secure or provide for the payment of any Debt of the Borrower or any other
person or entity, other than liens, security interests and other charges,
encumbrances or preferential arrangements that are not prohibited by the
Existing Loan Agreement or that secure the obligations of the Borrower or any
subsidiary of the Borrower thereunder or in connection therewith.
(b) DEBT. Create or suffer to exist, or permit any of its
subsidiaries to create or suffer to exist, any Debt, other than Debt that is not
prohibited under the Existing Loan Agreement.
(c) LEASE OBLIGATIONS. Create or suffer to exist, or permit any of
its subsidiaries to create or suffer to exist, any obligations for the payment
of rental for any property under leases or agreements to lease, other than those
that are not prohibited by the Existing Loan Agreement.
(d) DIVIDENDS, ETC. Declare or make any dividend payment or other
distribution of assets, properties, cash, rights, obligations or securities on
account of any shares of any class of capital stock of the Borrower, or
purchase, redeem or otherwise acquire for value (or permit any of its
subsidiaries to do so) any shares of any class of capital stock of the Borrower
or any warrants, rights or options to acquire any such shares, now or hereafter
outstanding, except that, so long as no Event of Default has occurred and is
continuing, the Borrower may (i) declare and make any dividend payment or other
distribution payable in common stock of the Borrower, and (ii) purchase, redeem
or otherwise acquire shares of its common stock or warrants, rights or options
to acquire any such shares with the proceeds received from the substantially
concurrent issue of new shares of its common stock, in each case to the extent
that the same is not prohibited by the Existing Loan Agreement.
(e) MERGERS, ETC. Merge or consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to, or acquire all or substantially all of the
assets of, any person or entity, or permit any of its subsidiaries to do so,
except to the extent not prohibited by the Existing Loan Agreement.
(f) PREPAYMENT OF SENIOR NOTES AND SUBORDINATED OBLIGATIONS. Pay,
prepay, redeem, repurchase or defease, or make any sinking fund or other
payments in respect of, the principal of the Senior Notes or any Subordinated
Obligations (other than the principal payment in an aggregate amount not to
exceed $22,500,000 due in January 1995 under the Senior Notes), or permit any of
its subsidiaries to do so.
(g) USE OF PROCEEDS. Use the proceeds of any Advance for any purpose
other than working capital and other general corporate purposes of the Borrower.
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(h) AMENDMENT, ETC. OF EXISTING LOAN AGREEMENT AND RELATED DOCUMENTS.
Supplement, modify, amend or refinance the Existing Loan Agreement or any of the
other "Loan Documents" as defined therein.
ARTICLE V
EVENTS OF DEFAULT
SECTION 5.01. EVENTS OF DEFAULT. If any of the following events
("EVENTS OF DEFAULT") shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of the Note when the
same becomes due payable; or shall fail to pay any interest on the Note within
two Business Days after the same becomes due and payable; or shall fail to pay
any other amount payable hereunder within five Business Days after the same
becomes due and payable; or
(b) Any representation or warranty made by the Borrower herein or by
the Borrower (or any of its officers) in connection with this Agreement shall
prove to have been incorrect in any material respect when made; or
(c) The Borrower shall fail to perform or observe (i) any term,
covenant or agreement contained in Section 4.01(c)(iii) or 4.02, or (ii) any
other term, covenant or agreement contained in this Agreement on its part to be
performed or observed if such failure shall remain unremedied for 30 days after
written notice thereof shall have been given to the Borrower by the Bank; or
(d) Any Loan Agreement Event of Default shall have occurred; or
(e) The Bank shall have determined that any set of events or
circumstances has occurred and continues to exist which (i) has or could
reasonably be expected to have any material adverse effect whatsoever upon the
validity or enforceability of this Agreement or the Note, or (ii) materially
impairs or could reasonably be expected to materially impair the ability of the
Borrower to perform its obligations under this Agreement and the Note;
then, and in any such event, the Bank (i) may, by notice to the Borrower,
declare its obligation to make Advances to be terminated, whereupon the same
shall forthwith terminate, and (ii) may, by notice to the Borrower, declare the
Note, all interest thereon and all other amounts payable under this Agreement to
be forthwith due and payable, whereupon the Note, all such interest and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Borrower; PROVIDED, HOWEVER, that in the event of an actual or
deemed entry of an order for relief with respect to the Borrower under the
Federal Bankruptcy Code, (A) the obligation of the Bank to make Advances shall
automatically be terminated and (B) the Advances, the Note, all such interest
and all such amounts shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower.
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ARTICLE VI
MISCELLANEOUS
SECTION 6.01. AMENDMENTS, ETC. No amendment or waiver of any
provision of this Agreement or the Note, nor consent to any departure by the
Borrower therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Bank, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
SECTION 6.02. NOTICES, ETC. All notices, consents and other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic, telex or cable communication) and mailed, telecopied, telegraphed,
telexed, cabled or delivered, if to the Borrower, at its address at 26 Century
Boulevard, Nashville, Tennessee 37229-0159, Attention: Treasurer; and if to the
Bank, at its address at 901 Main Street, Dallas, Texas 75202, Attention: Kay
Hibbs, Corporate Banking Officer, with a copy to 444 South Flower Street, Suite
1500, Los Angeles, California 90071, Attention: Andrea Collias, Vice President;
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other party. All such notices and communications
shall, when mailed, telecopied, telegraphed, telexed or cabled, be effective
when deposited in the mails, telecopied, delivered to the telegraph company,
confirmed by telex answerback or delivered to the cable company, respectively,
except that notices to the Bank pursuant to the provisions of Article I shall
not be effective until received by the Bank.
SECTION 6.03. NO WAIVER; REMEDIES. No failure on the part of the
Bank to exercise, and no delay in exercising, any right hereunder or under the
Note shall operate as a waiver thereof; nor shall any single or partial exercise
of any such right preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 6.04. ACCOUNTING TERMS. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the financial statements referred to in Section 3.01(f).
SECTION 6.05. COSTS EXPENSES AND TAXES. (a) The Borrower agrees to
pay, within five Business Days after demand, all reasonable costs and expenses
in connection with the preparation, execution, delivery, administration,
modification and amendment of this Agreement, the Note and the other documents
to be delivered hereunder (including, without limitation, Section 6.08 hereof),
including, without limitation, the reasonable fees and out-of-pocket expenses of
counsel for the Bank with respect thereto and with respect to advising the Bank
as to its rights and responsibilities under this Agreement. The Borrower
further agrees to pay on demand all costs and expenses, if any (including
reasonable counsel fees and expenses), in connection with the enforcement
(whether through negotiations, legal proceedings or otherwise) of this
Agreement, the Note and the other documents to be delivered hereunder,
including, without limitation, reasonable counsel fees and expenses in
connection with the enforcement of rights under this Section 6.05(a). In
addition, the Borrower shall pay any and all stamp and other taxes payable or
determined to be payable in connection with the execution and delivery of this
Agreement, the Note and the other documents to be delivered hereunder, and
agrees to
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save the Bank harmless from and against any and all liabilities with respect to
or resulting from any delay in paying or omission to pay such taxes.
(b) The Borrower agrees to indemnify and hold harmless the Bank and
its affiliates (including, without limitation, NationsBanc Capital Markets,
Inc.) and their officers, directors, employees, agents and advisors (each an
"INDEMNIFIED PARTY") from and against any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees and
expenses of counsel) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of, or in connection with the preparation for a defense of, any claim,
investigation, litigation or proceeding arising out of, related to or in
connection with this Agreement, the Note, the Advances, or any of the
transactions contemplated hereby or thereby, or any action or inaction by the
Bank in connection therewith, in each case whether or not such claim,
investigation, litigation or proceeding is brought or asserted by the Borrower,
its directors, shareholders or creditors or an Indemnified Party or any
Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated hereby are consummated, except to the extent such
claim, damage, loss, liability or expense is found in a final, non-appealable
judgment by a court of competent jurisdiction to have resulted from such
Indemnified Party's gross negligence or willful misconduct. Each of the
Borrower and the Bank also agrees not to assert any claim against the other, any
of its affiliates, or any of their respective directors, officers, employees,
attorneys and agents, on any theory of liability, for special, indirect,
consequential or punitive damages arising out of or otherwise relating to any of
the transactions contemplated herein or the actual or proposed use of the
proceeds of the Advances.
(c) If any payment of principal of any Eurodollar Rate Advance is
made other than on the last day of the Interest Period for such Advance, as a
result of a payment pursuant to Section 1.11 or acceleration of the maturity of
the Advances and the Note pursuant to Section 5.01 or for any other reason, the
Borrower shall, within five Business Days after demand, pay to the Bank any
amounts required to compensate the Bank for additional losses, costs or expenses
which it may reasonably incur as a result of such payment, including, without
limitation, any loss (including loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by the Bank to fund or maintain such Advance.
SECTION 6.06. RIGHT OF SET-OFF. Upon the occurrence and during the
continuance of any Event of Default, the Bank is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by the Bank to
or for the credit or the account of the Borrower against any and all of the
obligations of the Borrower now or hereafter existing under this Agreement and
the Note, whether or not the Bank shall have made any demand under this
Agreement or the Note and although such obligations may be unmatured. The Bank
agrees promptly to notify the Borrower after any such set-off and application,
PROVIDED that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of the Bank under this Section are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) which the Bank may have.
SECTION 6.07. BINDING EFFECT. (a) This Agreement and the Note shall
be binding upon and inure to the benefit of the Borrower and the Bank and their
respective successors and assigns, except that the Borrower shall not have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Bank. Without
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limitation on the foregoing, the Bank may at any time and from time to time
(i) assign its rights and obligations hereunder and under the Note, in whole or
in part, to NationsBanc Capital Markets, Inc. or any other affiliate of the
Bank, and (ii) sell participations in its rights and obligations hereunder and
under the Note.
(b) Notwithstanding any other provision set forth in this Agreement,
the Bank may at any time create a security interest in all or any portion of its
rights under this Agreement (including, without limitation, the Advances owing
to it and the Note held by it) in favor of any Federal Reserve Bank in
accordance with Regulation A of the Board of Governors of the Federal Reserve
System.
SECTION 6.08. CERTAIN ASSIGNMENTS. In the event that the Bank shall
at any time hereafter elect to assign portions of the Commitment and the
Advances made by it hereunder to one or more other banks, financial institutions
or other parties, the Borrower shall execute and deliver such instruments,
documents and agreements as the Bank may reasonably request in order to amend
this Agreement and the Note (in whole or in part) to provide, and/or to replace
this Agreement and the Note (in whole or in part) with, a multi-lender revolving
credit and term loan agreement and/or a note purchase agreement or similar
arrangement (in each case including promissory notes issued thereunder)
containing terms similar to those set forth in this Agreement and the Note, with
such additions thereto and changes therein as the Bank may reasonably deem
necessary or appropriate in order to reflect the structure of the financing.
SECTION 6.09. GOVERNING LAW. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 6.10. COUNTERPARTS. This Agreement may be executed by each
of the parties hereto in separate counterparts, and shall become effective when
each party shall have executed and delivered to the other parry at least one
such counterpart hereof.
SECTION 6. 11. WAIVER OF JURY TRIAL. Each of the Borrower and the
Bank hereby irrevocably waives all right to trial by jury in any action,
proceeding or counterclairn (whether based on contract, tort or otherwise)
arising out of or relating to this Agreement, the Notes, the Advances or the
actions of the Bank in the negotiation, administration, performance or
enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
MAGNETEK, INC.
By: [SIGNED]
Title: Vice President & Treasurer
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NATIONSBANK OF TEXAS, N.A.
By: [SIGNED]
Vice President
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