Exhibit 10.31
EXECUTION COPY
CREDIT AGREEMENT
among
CII TECHNOLOGIES, INC.,
COMMUNICATIONS INSTRUMENTS, INC.,
VARIOUS LENDERS,
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as an Issuing Lender and the Swingline Lender,
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as the Administrative Agent
Arranged by
BANCAMERICA ROBERTSON STEPHENS
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Dated as of June 19, 1998
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TABLE OF CONTENTS
SECTION PAGE
ARTICLE I.
DEFINITIONS........................................................1
1.01 Defined Terms................................................1
1.02 Other Definitional Provisions...............................28
(a) Defined Terms.......................................28
(b) The Agreement.......................................28
(c) Certain Common Terms................................28
(d) Performance; Time...................................28
(e) Contracts...........................................29
(f) Laws................................................29
1.03 Accounting Principles.......................................29
ARTICLE II.
THE CREDIT FACILITIES.............................................29
2.01 Amounts and Terms of Commitments............................29
(a) The Revolving Loans.................................29
(b) The Swingline Loans.................................30
(c) The Term Loan......................................31
2.02 Loan Accounts; Notes........................................31
2.03 Procedure for Borrowing.....................................32
2.04 Conversion and Continuation Elections for Revolving and
Term Borrowings.............................................34
2.05 Reduction and Termination of Commitments....................35
2.06 Voluntary Prepayments.......................................38
2.07 Mandatory Prepayments.......................................38
2.08 Repayment of Principal......................................41
(a) The Revolving Loans.................................41
(b) The Swingline Loans.................................41
(c) The Term Loan......................................41
2.09 Interest....................................................41
2.10 Fees........................................................44
(a) Commitment Fees.....................................44
(b) Other Fees..........................................45
2.11 Computation of Fees and Interest............................45
2.12 Payments by the Borrower....................................45
2.13 Payments by the Lenders to the Administrative Agent.........46
2.14 Sharing of Payments, etc....................................47
2.15 Security and Guaranties.....................................47
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ARTICLE III.
THE LETTERS OF CREDIT.............................................48
3.01 The Letter of Credit Subfacility............................48
3.02 Issuance, Amendment and Renewal of Letters of Credit........49
3.03 Participations, Drawings and Reimbursements.................51
3.04 Repayment of Participations.................................53
3.05 Role of the Issuing Lenders.................................53
3.06 Obligations Absolute........................................54
3.07 Cash Collateral Pledge......................................55
3.08 Letter of Credit Fees.......................................55
3.09 Uniform Customs and Practice................................57
3.10 Transitional Provisions.....................................57
ARTICLE IV.
TAXES, YIELD PROTECTION AND ILLEGALITY............................57
4.01 Taxes.......................................................57
4.02 Illegality..................................................61
4.03 Increased Costs and Reduction of Return.....................62
4.04 Funding Losses..............................................62
4.05 Inability to Determine Rates................................63
4.06 Increased Costs on Eurodollar Loans.........................63
4.07 Certificates of Lenders.....................................64
4.08 Change of Lending Office, Replacement Lender, etc...........64
4.09 Survival....................................................65
ARTICLE V.
CONDITIONS PRECEDENT..............................................65
5.01 Conditions to Loans and Letters of Credit on the
Effective Date..............................................65
(a) Credit Agreement....................................66
(b) Resolutions; Incumbency.............................66
(c) Articles of Incorporation; By-laws and Good
Standing............................................67
(d) Subsidiary Guaranty.................................67
(e) Pledge Agreement....................................67
(f) Security Agreement..................................68
(g) Legal Opinions......................................68
(h) Other Documents.....................................68
(i) Payment of Fees and Expenses........................68
(j) Certificates........................................69
(k) Solvency Certificate. .............................69
(l) Transaction.........................................70
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(m) Adverse Changes.....................................70
(n) Governmental and Third Party Approvals..............71
(o) Litigation..........................................71
(p) Shareholders' Agreements, Management Agreements
and Holdings Tax
Sharing Agreement...............................71
(q) Financial Statements................................71
(r) Insurance...........................................72
(s) Minimum Revolving Loan Availability.................72
(t) Subordinated Debt Compliance........................72
5.02 Conditions to all Borrowings and the Issuance of any
Letters of Credit...........................................72
(a) Notice..............................................72
(b) Continuation of Representations and Warranties......72
(c) No Existing Default.................................72
(d) No Material Adverse Effect..........................73
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES....................................73
6.01 Corporate Existence and Power...............................73
6.02 Corporate Authorization; No Contravention...................74
6.03 Governmental Authorization..................................74
6.04 Binding Effect..............................................74
6.05 Litigation..................................................74
6.06 No Default..................................................75
6.07 ERISA Compliance............................................75
6.08 Use of Proceeds; Margin Regulations.........................76
6.09 Title to Properties.........................................76
6.10 Taxes.......................................................76
6.11 Financial Statements........................................76
6.12 Securities Law, etc.; Compliance............................76
6.13 Governmental Regulation.....................................77
6.14 Labor Controversies.........................................77
6.15 Subsidiaries................................................77
6.16 Patents, Trademarks, etc....................................77
6.17 Accuracy of Information.....................................77
6.18 Hazardous Materials.........................................77
6.19 Collateral Documents........................................78
6.20 Solvency....................................................78
6.21 Representations and Warranties in the other Documents.......79
6.22 Capitalization..............................................79
6.23 Special Purpose Corporation.................................80
6.24 Insurance...................................................80
6.25 Borrower Senior Subordinated Note; etc......................80
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6.26 The Transaction.............................................81
6.27 Year 2000 Compliance........................................81
ARTICLE VII.
AFFIRMATIVE COVENANTS.............................................82
7.01 Financial Statements........................................82
7.02 Certificates; Other Information.............................83
7.03 Notices.....................................................83
7.04 Books, Records and Inspections..............................86
7.05 Maintenance of Property; Insurance..........................86
7.06 Corporate Franchises........................................87
7.07 Compliance with Law.........................................87
7.08 Payment of Taxes............................................87
7.09 Contributions...............................................87
7.10 End of Fiscal Years; Fiscal Quarters........................88
7.11 Cash Management System......................................88
7.12 Foreign Subsidiaries Security...............................88
7.13 Future Liens on Real Property...............................89
7.14 Holdings Preferred Stock....................................89
7.15 Use of Proceeds; Margin Regulations.........................90
ARTICLE VIII.
NEGATIVE COVENANTS................................................90
8.01 Liens.......................................................90
8.02 Consolidation, Merger, Purchase or Sale of Assets, etc......93
8.03 Dividends...................................................96
8.04 Indebtedness................................................98
8.05 Advances, Investments and Loans............................100
8.06 Transactions with Affiliates...............................103
8.07 Capital Expenditures.......................................104
8.08 Consolidated Coverage Ratios...............................105
8.09 Maximum Leverage Ratio.....................................106
8.10 Minimum Consolidated EBITDA................................106
8.11 Limitation on Voluntary Payments and Modification of
Indebtedness; Modifications of Certificate of
Incorporation, By-Laws and Certain Other
Agreements; etc.........................................107
8.12 Limitation on Certain Restrictions on Subsidiaries.........109
8.13 Limitation on Issuance of Capital Stock....................110
8.14 Business...................................................110
8.15 Limitation on Creation of Subsidiaries.....................110
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ARTICLE IX
EVENTS OF DEFAULT................................................111
9.01 Event of Default...........................................111
(a) Non-Payment........................................111
(b) Representation or Warranty.........................111
(c) Specific Defaults..................................111
(d) Other Defaults.....................................111
(e) Cross-Default......................................111
(f) Insolvency; Voluntary Proceedings..................112
(g) Involuntary Proceedings............................112
(h) ERISA..............................................112
(i) Judgments..........................................113
(j) Change of Control..................................113
(k) Collateral; Guaranties.............................113
9.02 Remedies...................................................113
9.03 Rights Not Exclusive.......................................114
ARTICLE X.
THE GUARANTY.....................................................114
10.01 Guaranty from Holdings....................................114
ARTICLE XI.
THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, THE
ISSUING LENDERS AND THE ARRANGER........................118
11.01 Appointment and Authorization.............................118
11.02 Delegation of Duties......................................119
11.03 Liability of Agent........................................119
11.04 Reliance by Agent.........................................120
11.05 Notice of Default.........................................120
11.06 Credit Decision...........................................121
11.07 Indemnification...........................................121
11.08 Agent in Individual Capacity..............................122
11.09 Successor Agent...........................................122
11.10 The Arranger..............................................123
ARTICLE XII.
MISCELLANEOUS....................................................123
12.01 Amendments and Waivers....................................123
12.02 Notices...................................................124
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12.03 No Waiver; Cumulative Remedies............................125
12.04 Costs and Expenses........................................125
12.05 Indemnity.................................................126
12.06 Successors and Assigns....................................127
12.07 Assignments, Participations, etc..........................127
12.08 Confidentiality...........................................129
12.09 Set-off...................................................129
12.10 Notification of Addresses, Lending Offices, etc...........130
12.11 Counterparts..............................................130
12.12 Severability..............................................130
12.13 No Third Parties Benefited................................130
12.14 Governing Law and Jurisdiction............................130
12.15 Waiver of Jury Trial......................................131
12.16 Domicile of Loans.........................................131
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SCHEDULE 1.01(a) -- Lending Offices
SCHEDULE 1.01(b) -- Commitments
SCHEDULE 1.01(c) -- Subsidiary Guarantors
SCHEDULE 3.10 -- Existing L/Cs
SCHEDULE 6.15 -- Subsidiaries
SCHEDULE 6.24 -- Insurance
SCHEDULE 8.01 -- Existing Liens
SCHEDULE 8.04 -- Existing Indebtedness
SCHEDULE 8.05 -- Existing Investments
EXHIBIT A -- Form of Revolving Note
EXHIBIT B -- Form of Term Note
EXHIBIT C -- Form of Notice of Borrowing
EXHIBIT D -- Form of Notice of Conversion/Continuation
EXHIBIT E -- Form of Pledge Agreement
EXHIBIT F -- Form of Subsidiary Guaranty
EXHIBIT G -- Form of Security Agreement
EXHIBIT H -- Form of Guarantor Supplement
EXHIBIT I -- Form of Leverage Ratio Certificate
EXHIBIT J-1 -- Form of Kirkland & Ellis Opinion
EXHIBIT J-2 -- Form of McGuire, Wood & Bissette, P.A. Opinion
EXHIBIT K -- Form of Solvency Certificate
EXHIBIT L -- Form of Assignment and Acceptance
EXHIBIT M -- Form of Compliance Certificate
EXHIBIT N -- Form of Intercompany Note
EXHIBIT O -- Form of Holdings Shareholder Subordinated Note
EXHIBIT P -- List of Closing Documents
EXHIBIT Q -- Form of Contribution and Indemnification
Agreement
EXHIBIT R -- Form of Borrowing Base Certificate
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CREDIT AGREEMENT
CREDIT AGREEMENT, dated as of June 19, 1998, among CII
TECHNOLOGIES, INC., a Delaware corporation ("Holdings"), COMMUNICATIONS
INSTRUMENTS, INC., a North Carolina corporation (the "Borrower"), the several
financial institutions from time to time party to this Agreement (the
"Lenders"), BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as an
Issuing Lender and the Swingline Lender, and BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as the Administrative Agent.
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions set
forth herein, the Lenders are willing to make available to the Borrower the
respective credit facilities provided for herein;
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained herein, the parties agree as follows:
ARTICLE I.
DEFINITIONS
1.01 Defined Terms. As used in this Agreement, the capitalized
terms in the preamble and the recitals hereto shall have the meanings therein
given them, and the following words and terms shall have the meanings specified
below:
"Acquired Entity or Business" has the meaning specified in the
definition of "Consolidated Net Income".
"Additional Junior Subordinated Note Investment" means the
cash payment by shareholders of Holdings of the purchase price consideration for
the Holdings Junior Subordinated Note issued as one of the Additional Junior
Subordinated Note Documents.
"Additional Junior Subordinated Note Documents" means that
certain CII Technologies, Inc. Junior Subordinated Promissory Note (Series B) of
even date herewith executed and delivered by Holdings and made payable to CHS in
an original principal amount of $5,000,000, and that certain Junior
Subordination Agreement of even date herewith among CHS and the holders of
Holdings Junior Subordinated Notes issued prior to the date hereof.
"Additional Subordinated Guaranty" means the guaranty by
Corcom of the Borrower's payment and performance obligations under and with
respect to the Borrower Senior Subordinated Notes pursuant to the terms and
conditions of the Additional Subordinated Guaranty Documents.
"Additional Subordinated Guaranty Documents" means that
certain Supplemental Indenture of even date herewith executed by Corcom pursuant
to the Borrower Senior Subordinated Note Indenture.
"Adjustment Date" means (A) the earlier of (x) the date which
is 90 days after Holdings' fiscal quarter ending December 31, 1998 and (y) the
date which is two Business Days after Holdings has delivered a Leverage Ratio
Certificate to the Agent in accordance with Section 12.02 as of the end of such
fiscal quarter (the "First Adjustment Date") and (B) after the First Adjustment
Date, the earlier of (x) each date which is 45 days after the end of a fiscal
quarter of Holdings (or, in the case of the fourth fiscal quarter of Holdings,
90 days) and (y) the date which is two Business Days after Holdings has
delivered a Leverage Ratio Certificate to the Administrative Agent in accordance
with Section 12.02 as of the end of a fiscal quarter.
"Administrative Agent" means Bank of America in its capacity
as representative for the Lenders hereunder, and any successor agent.
"Administrative Agent's Payment Office" means the address for
payments set forth on the signature page hereto in relation to the
Administrative Agent or such other address as the Administrative Agent may from
time to time specify in accordance with Section 12.02.
"Affiliate" means, with respect to any Person, any other
Person (i) directly or in directly controlling, controlled by, or under direct
or indirect common control with, such Person or (ii) that directly or indirectly
owns more than 5% of any class of the capital stock, of or equity interests in,
such Person. A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such other Person, whether through the ownership
of voting securities, by contract or otherwise.
"Agent" means Bank of America, in its capacity as
Administrative Agent and as Collateral Agent, in each case for the Lenders and
certain other beneficiaries hereunder and under the Collateral Documents, and
shall include any successor to the Agent appointed pursuant to Article XI.
"Agent-Related Persons" has the meaning specified in Section
11.03.
"Aggregate Commitment" means, collectively, the Aggregate
Revolving Commitment and the Aggregate Term Commitment.
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"Aggregate Revolving Commitment" means the combined Revolving
Commitments of the Lenders in the initial principal amount of $25,000,000 as
such amount may be reduced from time to time pursuant to this Agreement.
"Aggregate Term Commitment" means the combined Term
Commitments of the Lenders in the principal amount of $35,000,000.
"Agreement" means this Credit Agreement as from time to time
amended, modified or supplemented.
"Applicable Margin" means the margin to be added to the Base
Rate or LIBOR, as the case may be, in accordance with Section 2.09(a).
"Arranger" means BancAmerica Robertson Stephens.
"Asset Sale" means the direct or indirect sale, lease (other
than operating leases entered into in the ordinary course of business),
transfer, conveyance or other disposition (including, without limitation,
dispositions pursuant to sale and leaseback transactions), in a single
transaction or a series of transactions, by Holdings or any of its Subsidiaries
to any Person (other than to Holdings or any of its Wholly-Owned Subsidiaries)
of any property or assets of Holdings or any of its Subsidiaries, other than
sales of assets pursuant to Sections 8.02(ii), (iii), (iv), (viii), (ix), (xii),
(xiii), (xiv), (xv), (xvi), (xvii) and (xviii).
"Assignee" has the meaning specified in Section 12.07(a).
"Assignment and Acceptance" has the meaning specified in
Section 12.07(a).
"Attorney Costs" means and includes all reasonable fees and
disbursements of any law firm or other external counsel and, without
duplication, the allocated cost of internal legal services and all reasonable
disbursements of internal counsel.
"Bank of America" means Bank of America National Trust and
Savings Association, a national banking association, in its individual capacity.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of
1978 (11 U.S.C. ss.101, et seq.).
"Base Rate" means, for any day, the higher of (a) the
Reference Rate or (b) the Federal Funds Rate plus 1/2%, in each case as in
effect for such day.
"Base Rate Loan" means each Swingline Loan, Revolving Loan and
Term Loan that bears interest based on the Base Rate.
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"Borrower" has the meaning specified in the preamble hereto.
"Borrower Senior Subordinated Note Documents" means the
Borrower Senior Subordinated Note Indenture, the Borrower Senior Subordinated
Notes, the Additional Subordinated Guaranty Documents and all other documents
and agreements executed and delivered pursuant to the Borrower Senior
Subordinated Note Indenture, including any guaranty given by Holdings thereunder
as permitted by Section 8.04(vii).
"Borrower Senior Subordinated Note Indenture" means the
Indenture, dated as September 18, 1997, among the Borrower, the Subsidiary
Guarantors and Norwest Bank Minnesota National Association, as trustee, as
amended, modified or supplemented from time to time in accordance with the terms
hereof and thereof.
"Borrower Senior Subordinated Notes" means the Borrower's 10%
senior subordinated notes due 2004 (which term includes the senior subordinated
notes of the Borrower issued as part of the Exchange Offer).
"Borrowing" means a borrowing hereunder consisting of one or
more Loans made to the Borrower on the same Borrowing Date by the Lenders or the
Swingline Lender pursuant to Section 2.01, and may be a Swingline Borrowing, a
Revolving Borrowing or a Term Borrowing.
"Borrowing Base" means, at any time, the sum of (a)
eighty-five percent (85%) of the Net Amount of Eligible Receivables at such time
plus (b) sixty percent (60%) of the value (determined on a first-in-first-out
basis and valued at the lower of cost or market value) of Eligible Inventory at
such time.
"Borrowing Base Certificate" means a certificate in
substantially the form of Exhibit R, to be executed by a Responsible Officer of
Holdings and delivered pursuant to Section 7.01(e).
"Borrowing Date" means, in relation to any Loan, the date of
the borrowing of such Loan as specified in the relevant Notice of Borrowing for
a Borrowing.
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in San Francisco or Chicago are authorized
or required by law to close and, if such term is used in relation to any
Eurodollar Loan or the Interest Period therefor, any such day on which dealings
are carried on by and between banks in Dollar deposits in the London interbank
market.
"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority, or any other law,
rule or regulation, whether or not having the force of law (but with which a
Lender customarily complies) regarding capital adequacy of any bank or of any
corporation controlling a bank.
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"Capital Expenditures" means, for any period and with respect
to any Person, the aggregate of all expenditures by such Person and its
Subsidiaries for the acquisition or leasing of fixed or capital assets or
additions to equipment (including replacements, capitalized repairs and
improvements during such period) which is capitalized under GAAP on a
consolidated balance sheet of such Person and its Subsidiaries.
"Capital Lease" has the meaning specified in the definition of
"Capital Lease Obligations".
"Capital Lease Obligations" means all monetary obligations of
Holdings or any of its Subsidiaries under any leasing or similar arrangement
which, in accordance with GAAP, is classified as a capital lease ("Capital
Lease").
"Cash Collateralize" means to pledge and deposit with or
deliver to the Administrative Agent, for the benefit of the Administrative
Agent, the Issuing Lenders and the Lenders, as collateral for the Letter of
Credit Obligations, cash or deposit account balances pursuant to documentation
in form and substance reasonably satisfactory to the Administrative Agent and
the Issuing Lenders (which documents are hereby consented to by the Lenders).
Derivatives of such term shall have corresponding meanings. Cash collateral
shall be invested in Cash Equivalents of a tenor reasonably satisfactory to the
Administrative Agent and as instructed by the Borrower, which Cash Equivalents
shall be held in the name of the Borrower and under the control of the
Administrative Agent in a manner reasonably satisfactory to the Collateral
Agent.
"Cash Equivalents" means any or all of the following: (i)
obligations of, or guaranteed as to interest and principal by, the United States
Government maturing within one year after the date on which such obligations are
purchased; (ii) open market commercial paper of any corporation (other than
Holdings, the Borrower or any of its Subsidiaries) incorporated under the laws
of the United States or any State thereof or the District of Columbia rated P-1
or its equivalent by Moody's or A-1 or its equivalent or higher by S&P; (iii)
time deposits or certificates of deposit maturing within one year after the
issuance thereof issued by commercial banks organized under the laws of any
country which is a member of the OECD and having a combined capital and surplus
in excess of $250,000,000 or which is a Lender; (iv) repurchase agreements with
a term of not more than seven days with respect to securities described in
clause (i) above entered into with an office of a bank or trust company meeting
the criteria specified in clause (iii) above; (v) bankers' acceptances with
maturities not exceeding one year and overnight bank deposits in each case with
an office of a bank or trust company meeting the criteria specified in clause
(iii) above; and (vi) money market, mutual or similar funds substantially all of
whose investments are comprised of the investments described in clauses (i)
through (v) above.
"CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. ss. 9601 et seq.
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"Change of Control" means (a) (i) prior to a Qualified Public
Equity Offering, the Permitted Holders shall cease to own on a fully diluted
basis in the aggregate at least 51% of the economic and voting interest in
Holdings' capital stock and (ii) on and after the consummation of a Qualified
Public Equity Offering, (x) the consummation of any transaction (including,
without limitation, any merger or consolidation) the result of which is that any
"person" (as such term is defined in Section 13(d)(3) of the Exchange Act) or
group of related persons, together with any Affiliates thereof (other than the
Permitted Holders), becomes the "beneficial owner" (as such term is defined in
Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, of
more than 35% of the Voting Stock of Holdings (as determined on a fully diluted
basis and measured by voting power rather than number of shares) provided that
the Permitted Holders "beneficially own" (as such term is defined in Rule 13d-3
and Rule 13d-5 under the Exchange Act), directly or indirectly, in the aggregate
a lesser percentage of the Voting Stock of Holdings than such other "person" or
group of related persons and do not have the right or ability by voting power,
contract or otherwise to elect or designate for election a majority of the Board
of Directors of Holdings or (y) the first day on which a majority of the members
of the Board of Directors of Holdings are not Continuing Directors or (b) the
Borrower shall cease to be a direct Wholly-Owned Subsidiary of Holdings or (c) a
"change of control" or similar event shall occur under the Borrower Senior
Subordinated Note Documents or any Refinancing Subordinated Indebtedness.
"CHS" means Code, Hennessy & Simmons, III, L.P., a Delaware
limited partnership.
"CHS Management" means CHS Management III, L.P., a Delaware
limited partnership.
"CHS Management Agreement" means the Management Agreement,
dated as of September 18, 1997, between the Borrower and CHS Management, as
amended, modified or supplemented from time to time in accordance with the terms
hereof and thereof.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any regulations promulgated thereunder.
"Collateral" means all property with respect to which any
security interest has been granted (or purported to be granted) pursuant to any
Collateral Document, as well as all Obligations which have been Cash
Collateralized.
"Collateral Agent" means the Administrative Agent acting as
collateral representative for the Lenders and certain other beneficiaries
pursuant to the Collateral Documents.
"Collateral Documents" means the Pledge Agreement, the
Subsidiary Guaranty, the Security Agreement, each Guarantor Supplement and each
Security Instrument.
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"Commitment" means, for each Lender, the amount set forth
opposite such Lender's name under the caption "Total Commitment" on Schedule
1.01(b) (or as such Lender's "Total Commitment (Total Outstanding Loans and
Commitments)" on Schedule I to the most recent Assignment and Acceptance to
which such Lender is a party), as such amount may be modified from time to time
pursuant to the provisions hereof.
"Commitment Percentage" means, as to any Lender, the
percentage equivalent of such Lender's Commitment divided by the Commitments of
all the Lenders, provided that if the Commitments have been terminated in full,
the "Commitment Percentage" of each Lender shall be determined by dividing such
Lender's Commitment immediately prior to such termination by all the Lenders'
Commitments immediately prior to such termination.
"Compliance Certificate" means the compliance certificate in
substantially the form of Exhibit M, to be executed by a Responsible Officer of
Holdings and delivered pursuant to Section 7.02(a).
"Consolidated EBIT" means, for any period, Consolidated Net
Income for such period before Consolidated Interest Expense (calculated without
regard to the proviso contained in the definition thereof) and provision for
taxes for such period and without giving effect to (w) any extraordinary gains
or losses, (x) any gains or losses from sales of assets other than from sales of
inventory sold in the ordinary course of business and any income or loss from
discontinuing operations, (y) any premiums, fees or expenses incurred in
connection with any Permitted Acquisition and any related financings, and (z)
the amortization or depreciation of any amounts required or permitted by
Accounting Principles Board Opinion Nos. 16 (including non-cash write-ups and
non-cash charges relating to inventory and fixed assets, in each case arising in
connection with any Permitted Acquisition) and 17 (including non-cash charges
relating to intangibles and goodwill arising in connection with any Permitted
Acquisition).
"Consolidated EBITDA" means, for any period, Consolidated EBIT
for such period, adjusted by (x) adding thereto, without duplication, the sum of
(i) the amount of all amortization of goodwill and other intangibles (including
debt issuance and other deferred financing, legal and accounting costs
(including those associated with the Transaction and any Permitted Acquisition
consummated after the Effective Date)) and depreciation, (ii) all fees and
expenses incurred in connection with the Transaction, (iii) all management fees
paid during such period to CHS Management or its Affiliates to the extent
permitted under Section 8.06 (iv) and (iv) other non-cash charges and expenses
(including non-cash charges or expenses included in costs of goods sold), in
each case to the extent that same were deducted in arriving at Consolidated EBIT
for such period and (y) subtracting therefrom, without duplication, the sum of
(i) the amount of all non-cash credits to the extent that same were included in
arriving at Consolidated EBIT for such period (but which will be added back to
Consolidated EBITDA in any subsequent period to the extent cash is received in
respect of any such non-cash credits in such subsequent period) and (ii) the
amount of all (but which will be added back to Consolidated EBITDA in any
subsequent period to the extent cash is received in respect of any such non-cash
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credits in such subsequent period) cash payments made in such period to the
extent that same relate to a non-cash charge incurred in a previous period.
Notwithstanding anything in this Agreement to the contrary, solely for purposes
of determining the Borrower's compliance with Sections 8.08(a), 8.09 and 8.10,
and for purposes of calculating the Consolidated Senior Leverage Ratio, (x) in
the case of the Measurement Period ending on September 30, 1998, Consolidated
EBITDA for such Measurement Period shall be the actual Consolidated EBITDA for
such Measurement Period multiplied by 4, (y) in the case of the Measurement
Period ending on December 31, 1998, Consolidated EBITDA for such Measurement
Period shall be the actual Consolidated EBITDA for such Measurement Period
multiplied by 2, and (z) in the case of the Measurement Period ending on March
31, 1999, Consolidated EBITDA for such Measurement period shall be the actual
Consolidated EBITDA for such Measurement Period multiplied by a fraction the
numerator of which is 4 and the denominator of which is 3.
"Consolidated Fixed Charge Coverage Ratio" means, for any
period, ratio of (x) Consolidated EBITDA for such period minus Capital
Expenditures made or incurred during such period to (y) the sum of regularly
scheduled installments of principal with respect to Consolidated Indebtedness
which are scheduled to become due and payable during such period plus
Consolidated Interest Expense that is paid or would be payable in cash for such
period (it being understood that, in any event, the interest payment to be made
on the Holdings Junior Subordinated Notes pursuant to Section 8.11(iii)(y) in
any year shall be treated as if such payment was made on December 31 of the
immediately preceding fiscal year of Holdings).
"Consolidated Indebtedness" means, at any time, the principal
amount of all Indebtedness of Holdings and its Subsidiaries at such time
determined on a consolidated basis to the extent that such Indebtedness would be
accounted for as debt on the liability side of a balance sheet in accordance
with GAAP plus, without duplication, (i) the maximum amount available to be
drawn under all letters of credit (including any Letters of Credit), bankers
acceptances and similar obligations issued for the account of Holdings and its
Subsidiaries and all unpaid drawings or reimbursement obligations in respect of
Holdings thereof, (ii) the principal amount of all bonds issued by the Borrower
and its Subsidiaries in connection with workers' compensation obligations, lease
obligations, surety and similar obligations, and (iii) the amount of all
Contingent Obligations of Holdings and its Subsidiaries determined on a
consolidated basis in respect of Indebtedness of other Persons of the type
described above in this definition, provided that Consolidated Indebtedness
shall exclude Indebtedness in respect of any Holdings Junior Subordinated Notes
and Holdings Shareholder Subordinated Notes.
"Consolidated Interest Coverage Ratio" means, for any period,
the ratio of (x) Consolidated EBITDA for such period to (y) Consolidated
Interest Expense that is paid or would be payable in cash for such period (it
being understood that, in any event, the interest payment to be made on the
Holdings Junior Subordinated Notes pursuant to Section 8.11(iii)(y) in any year
shall be treated as if such payment was made on December 31 of the immediately
preceding fiscal year of Holdings).
-8-
"Consolidated Interest Expense" means, for any period, the
total consolidated interest expense of Holdings and its Subsidiaries for such
period (calculated without regard to any limitations on the payment thereof)
(net of interest income of Holdings and its Subsidiaries for such period) plus,
without duplication, that portion of Capital Lease Obligations of Holdings and
its Subsidiaries representing the interest factor for such period provided that
(w) the amortization of debt issuance and deferred financing, legal and
accounting costs with respect to this Agreement, the Borrower Senior
Subordinated Notes and any Refinancing Subordinated Indebtedness, (x) all fees
and expenses incurred in connection with the Transaction and payable as of the
Effective Date, (y) all interest on the Holdings Junior Subordinated Notes to
the extent paid in kind and (z) all interest on any Holdings Shareholder
Subordinated Notes, in each case shall be excluded from Consolidated Interest
Expense to the extent same would otherwise have been included therein. Any cash
payments (other than in respect of principal) made under or on account of the
Holdings Junior Subordinated Notes (whether or not characterized as interest) to
the holders thereof shall be included as interest expense for purposes of this
Agreement. Notwithstanding anything in this Agreement to the contrary, solely
for purposes of determining the Borrower's compliance with Section 8.08(a), (x)
in the case of the Measurement Period ending on December 31, 1998, Consolidated
Interest Expense for such Measurement Period shall be the actual Consolidated
Interest Expense for such Measurement Period multiplied by 2, and (y) in the
case of the Measurement Period ending on March 31, 1999, Consolidated Interest
Expense for such Measurement period shall be the actual Consolidated Interest
Expense for such Measurement Period multiplied by a fraction the numerator of
which is 4 and the denominator of which is 3.
"Consolidated Leverage Ratio" means, at any time, the ratio of
(i) Consolidated Indebtedness at such time to (ii) Consolidated EBITDA for the
Measurement Period then most recently ended, provided that in determining the
Consolidated Leverage Ratio at any time, there shall be subtracted from
Consolidated Indebtedness at such time an amount equal to the amount of
unrestricted cash and/or Cash Equivalents of Holdings and its Subsidiaries as
would be reflected on the consolidated balance sheet of Holdings at such time.
"Consolidated Net Income" means, for any period, the net
income (or loss) of Holdings and its Subsidiaries for such period, determined on
a consolidated basis (after any deduction for minority interests), provided that
(i) in determining Consolidated Net Income, the net income of any other Person
which is not a Subsidiary of Holdings or is accounted for by Holdings by the
equity method of accounting shall be included only to the extent of the payment
of cash dividends or distributions by such other Person to Holdings or a
Subsidiary thereof during such period, (ii) the net income of any Subsidiary of
Holdings (other than the Borrower) shall be excluded to the extent that the
declaration or payment of cash dividends or similar distributions by that
Subsidiary of that net income is not at the date of determination permitted by
operation of its charter or any agreement, instrument or law applicable to such
Subsidiary, (iii) the net income (or loss) of any other Person acquired by such
specified Person or a Subsidiary of such Person in a pooling of interests
transaction for any period prior to the date of such acquisition shall be
excluded, (iv) there shall be included (to the extent not already included) in
determining
-9-
Consolidated Net Income for any period the net income (or loss) of any Person,
business, property or asset acquired during such period pursuant to a Permitted
Acquisition and not subsequently sold or otherwise disposed of by Holdings or
one of its Subsidiaries during such period (each such Person, business, property
or asset acquired and not subsequently disposed of during such period, an
"Acquired Entity or Business"), in each case based on the actual net income (or
loss) of such Acquired Entity or Business for the entire period (including the
portion thereof occurring prior to such acquisition) and (v) in determining
Consolidated Net Income for any period, there shall be excluded any interest
income for such period to the extent otherwise included therein.
"Consolidated Senior Indebtedness" means, at any time, the
outstanding principal balance of the Loans and other Obligations plus the
undrawn amount of all Letters of Credit then outstanding.
"Consolidated Senior Leverage Ratio" means, at any time the
ratio of (i) Consolidated Senior Indebtedness at such time to (ii) Consolidated
EBITDA for the Measurement Period then most recently ended, provided that in
determining the Consolidated Leverage Ratio at any time, there shall be
subtracted from Consolidated Indebtedness at such time an amount equal to the
amount of unrestricted cash and/or Cash Equivalents of Holdings and its
Subsidiaries as would be reflected on the consolidated balance sheet of Holdings
at such time.
"Contingent Obligation" means, as applied to any Person, any
direct or indirect liability of that Person with respect to any Indebtedness,
lease, dividend, letter of credit or other obligation (the "primary
obligations") of another Person (the "primary obligor"), including any
obligation of that Person, whether or not contingent, (a) to purchase,
repurchase or otherwise acquire such primary obligations or any property
constituting direct or indirect security therefor; (b) to advance or provide
funds (i) for the payment or discharge of any such primary obligation, or (ii)
to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency or any balance sheet item, level
of income or financial condition of the primary obligor; (c) 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 (d) otherwise to assure or hold harmless
the holder of any such primary obligation against loss in respect thereof; in
each case, including arrangements wherein the rights and remedies of the holder
of the primary obligation are limited to repossession or sale of certain
property of such Person. The amount of any Contingent Obligation shall be deemed
equal to the stated or determinable amount of the primary obligation in respect
of which such Contingent Obligation is made (or if less, the stated or
determinable amount of such Contingent Obligation) or, if not stated or if
indeterminable, the maximum reasonably anticipated liability in respect thereof.
"Continuation Date" means any date on which the Borrower
elects to continue a Eurodollar Loan as a Eurodollar Loan for a further Interest
Period in accordance with the provisions of Section 2.04.
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"Continuing Director" means, as of any date of determination,
any member of the Board of Directors of Holdings who (i) was a member of such
Board of Directors on the Effective Date or (ii) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board of Directors at the time of
such nomination or election.
"Contractual Obligations" means, as to any Person, any
provision of any security issued by such Person or of any agreement,
undertaking, contract, indenture, mortgage, deed of trust or other instrument,
document or agreement to which such Person is a party or by which it or any of
its property is bound.
"Conversion Date" means any date on which the Borrower elects
to convert a Base Rate Loan to a Eurodollar Loan, or a Eurodollar Loan to a Base
Rate Loan, in each case in accordance with the provisions of Section 2.04.
"Corcom" means Corcom, Inc., an Illinois corporation.
"Credit Party" means each of Holdings, the Borrower and each
Subsidiary Guarantor.
"Default" means any event or circumstance which, with the
giving of notice, the lapse of time, or both, would (if not cured or otherwise
remedied during such time) constitute an Event of Default.
"Disbursement Date" has the meaning specified in Section
3.03(b).
"Dividend" with respect to any Person means that such Person
has declared or paid a dividend or returned any equity capital to its
stockholders as such or made any other distribution, payment or delivery of
property or cash to its stockholders as such, or redeemed, retired, purchased or
otherwise acquired, directly or indirectly, for a consideration any shares of
any class of its capital stock outstanding on or after the 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 fore going 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 Effective Date (or any options or warrants issued by
such Person with respect to its capital stock).
"Dollars" and "$" each mean lawful money of the United States.
"Domestic Lending Office" has the meaning provided in the
definition of "Lending Office".
-11-
"Domestic Subsidiary" means each Subsidiary of Holdings that
is incorporated under the laws of the United States or any State or territory
thereof.
"Effective Date" means the date on which all conditions
precedent set forth in Sections 5.01 and 5.02 are satisfied or waived in
accordance with this Agreement.
"Eligible Assignee" means (a) a commercial bank or commercial
finance company organized under the laws of the United States, or any state
thereof, and having a combined capital and surplus of at least $100,000,000; (b)
a commercial bank or commercial finance company organized under the laws of any
other country which is a member of the OECD, or a political subdivision of any
such country, and having a combined capital and surplus of at least
$100,000,000, provided that such bank or commercial finance company is acting
through a branch or agency located in the United States; (c) a Person that is
primarily engaged in the business of commercial banking or commercial finance
and that is (i) a Subsidiary of a Lender, (ii) a Subsidiary of a Person of which
a Lender is a Subsidiary, or (iii) a Person of which a Lender is a Subsidiary;
and (d) any other entity approved by the Borrower and Administrative Agent.
"Eligible Inventory" means (a) all Inventory owned by the
Borrower or any of its Domestic Subsidiaries which is subject to a first
priority, perfected security interest in favor of the Collateral Agent and (b)
all Inventory owned by any the Borrower's Mexican Subsidiaries to the extent
that the value of such Inventory (determined on a first-in-first-out basis and
valued at the lower of cost or market value) does not exceed $2,000,000 in the
aggregate at any time and that such Inventory is located in Mexico at one or
more premises which are leased or owned by the Borrower or any of its
Subsidiaries. . "Eligible Receivables" means (a) all Receivables which are
subject to a first priority, perfected security interest in favor of the
Collateral Agent and (b) all Receivables (other than those described in clause
(a) of this definition) which arise out of a sale to an account debtor located
outside of the United States to the extent that the Net Amount of Eligible
Receivables with respect to such Receivables does not exceed $5,000,000 in the
aggregate at any time.
"Environmental Claims" means all actions, suits, proceedings
or claims by any Governmental Authority or other Person alleging potential
liability or responsibility for violation of any Environmental Law or for
release or injury to the environment or threat to public health, personal injury
(including sickness, disease or death), property damage, natural resources
damage, or otherwise alleging liability or responsibility for damages (punitive
or otherwise), cleanup, removal, remedial or response costs, restitution, civil
or criminal penalties, injunctive relief, or other type of relief, resulting
from or based upon (a) the presence, placement, discharge, emission or release
(including intentional and unintentional, negligent and non-negligent, sudden or
non-sudden, accidental or non-accidental placement, spills, leaks, discharges,
emissions or releases) of any Hazardous Material at, in, or from property,
whether or not owned by Holdings or any of its Subsidiaries, or (b) any other
circumstances forming the reasonable basis of any violation, or alleged
violation, of any Environmental Law.
-12-
"Environmental Law" has the meaning specified in the
definition of "Hazardous Material".
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations promulgated thereunder as from
time to time in effect.
"ERISA Affiliate" means each person (as defined in Section
3(9) of ERISA) which together with Holdings or a Subsidiary of Holdings would be
deemed to be a "single employer" (i) within the meaning of Section 414(b), (c),
(m) or (o) of the Code or (ii) as a result of Holdings or a Subsidiary of
Holdings being a general partner of such person.
"Eurodollar Lending Office" has the meaning provided in the
definition of "Lending Office".
"Eurodollar Loan" means a Revolving Loan or Term Loan that
bears interest based on LIBOR.
"Event of Default" means any of the events or circumstances
specified in Section 9.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Existing CII Credit Agreement" means the Credit Agreement,
dated as of September 18, 1997, among the Borrower, Holdings, the financial
institutions from time to time party thereto, Bank of America, as Administrative
Agent thereunder, and BancAmerica Robertson Stephens (as successor to
BancAmerica Securities, Inc.), as Arranger thereunder, as amended through and
including the Effective Date.
"Existing Corcom Credit Agreement" means that certain
Revolving Line of Credit Note dated December 31, 1996 in the original maximum
principal amount of $4,000,000 executed and delivered by Corcom and made payable
to American National Bank and Trust Company of Chicago.
"Existing L/C's" has the meaning specified in Section 3.10.
"Federal Funds Rate" means, for any day, the rate set forth in
the weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, "H.15(519)") for such day opposite the caption "Federal Funds
(Effective)". If on any relevant day the appropriate rate for such previous day
is not yet published in H.15(519), the rate for such day will be the arithmetic
mean of the rates for the last transaction in overnight Federal funds arranged
prior to 9:00 a.m. (New York City time) on that day by each of three leading
brokers of Federal funds transactions in New York City selected by the
Administrative Agent.
-13-
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System or any successor thereto.
"Fee Letter" means that certain letter agreement dated March
9, 1998 among the Borrower, the Arranger and Bank of America with respect to
certain fees due and payable to the Arranger and Bank of America in connection
with the financing contemplated by this Agreement.
"First Adjustment Date" has the meaning specified in the
definition of the term "Adjustment Date".
"Foreign Subsidiary" means each Subsidiary of Holdings which
is not a Domestic Subsidiary.
"Form 4224" has the meaning specified in Section 4.01(f).
"Form 1001" has the meaning specified in Section 4.01(f).
"GAAP" means generally accepted accounting principles set
forth from time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board (or
agencies with similar functions of comparable stature and authority within the
accounting profession), or in such other statements by such other entity as may
be in general use by significant segments of the U.S. accounting profession,
which are applicable to the circumstances as of the date of determination.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority) thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guaranteed Creditors" means and includes each of the
Administrative Agent, the Collateral Agent, the Issuing Lenders, the Lenders
and, in the case of any Interest Rate Protection Agreements or Other Hedging
Agreements, also any Affiliate of a Bank which has entered into an Interest Rate
Protection Agreement or Other Hedging Agreement (even if such Lender
subsequently ceases to be a Lender under this Agreement for any reason).
"Guaranteed Obligations" means (i) the full and prompt payment
when due (whether at the stated maturity, by acceleration or otherwise) of the
principal and interest on each note issued by, and Loans made to, the Borrower
under this Agreement and all reimbursement obligations and unpaid drawings with
respect to Letters of Credit, together with all the other obligations (including
obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due) and liabilities (including, without
limitation, indemnities, fees, interest and other Obligations) of the Borrower
to the Lenders, the Administrative Agent,
-14-
the Issuing Lender and the Collateral Agent now existing or hereafter incurred
under, arising out of or in connection with this Agreement or any other Loan
Document and the due performance and compliance by the Borrower with all the
terms, conditions and agreements contained in the Loan Documents and (ii) the
full and prompt payment when due (whether at the stated maturity, by
acceleration or otherwise) of all obligations (including obligations which, but
for the automatic stay under Section 362(a) of the Bankruptcy Code, would become
due) of the Borrower owing under any Interest Rate Protection Agreement or Other
Hedging Agreement entered into by the Borrower with any Lender or any other
Guaranteed Creditor so long as such Lender or affiliate participates in such
Interest Rate Protection Agreement or Other Hedging Agreement, and their
subsequent assigns, if any, whether now in existence or hereafter arising, and
the due performance and compliance with all terms, conditions and agreements
contained therein.
"Guarantor" means Holdings and each Subsidiary Guarantor.
"Guarantor Supplement" means a supplement to the Subsidiary
Guaranty, the Pledge Agreement and the Security Agreement substantially in the
form of Exhibit H, whereby a Subsidiary of the Borrower becomes a party to each
such Loan Document.
"Guaranty" means the guaranty of Holdings pursuant to Article
X and the Subsidiary Guaranty.
"Hazardous Material" means and includes (a) any asbestos,
urea-formaldehyde, PCBs or dioxins or other material composed of or containing
asbestos, PCBs or dioxins, (b) crude oil, any fraction thereof, and any
petroleum product, (c) any natural gas, natural gas liquids, liquefied natural
gas or other natural gas product or synthetic gas, and (d) any hazardous or
toxic waste, substance or material or pollutant or contaminant defined as such
in (or for purposes of) or that may result in the imposition of liability under
any "Environmental Law", defined as the Comprehensive Environmental Response,
Compensation and Liability Act, any so-called "Superfund", or any other
applicable Federal, state, local or other statute, law, ordinance, code, rule,
regulation, order or decree, as now or at any time hereafter in effect,
regulating, relating to, or imposing liability concerning the environment, the
impact of the environment on human health, or any hazardous or toxic waste,
substance or material or pollutant or contaminant.
"Holdings" has the meaning specified in the preamble hereto.
"Holdings Common Stock" has the meaning specified in Section
6.22.
"Holdings Junior Subordinated Notes" means the junior
subordinated promissory notes issued by Holdings pursuant to that certain
Recapitalization Agreement dated as of August 6, 1997, by and among Holdings,
CHS and certain of its present and former shareholders, as amended, and the
junior subordinated promissory note issued as one of the Additional Junior
Subordinated Note Documents, which notes have an aggregate outstanding principal
balance of
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$18,037,999.00 as of the date hereof (after giving effect to the consummation of
the Transactions).
"Holdings Preferred Stock" has the meaning specified in
Section 6.22.
"Holdings Shareholder Subordinated Note" means an unsecured
junior subordinated note issued by Holdings (and not guaranteed or supported in
any way by any Subsidiary of Holdings) in the form of Exhibit O (appropriately
completed), as amended, modified or supplemented from time to time in accordance
with the terms of this Agreement.
"Holdings Tax Sharing Agreement" means the Tax Sharing
Agreement, dated as of September 18, 1997, among Holdings, the Borrower and
certain other Subsidiaries of Holdings, as amended, modified or supplemented
from time to time in accordance with the terms hereof and thereof.
"Indebtedness" of any Person means, without duplication, (a)
all indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services (other than (i)
trade payables entered into in the ordinary course of business pursuant to
ordinary terms and (ii) ordinary course purchase price adjustments); (c) all
reimbursement or payment obligations with respect to letters of credit or
non-contingent reimbursement or payment obligations with respect to bankers'
acceptances and similar documents; (d) all obligations evidenced by notes,
bonds, debentures or similar instruments, including obligations so evidenced
incurred in connection with the acquisition of property, assets or businesses;
(e) all indebtedness created or arising under any conditional sale or other
title retention agreement or sales of accounts receivable, in any such case with
respect to property acquired by the Person (even though the rights and remedies
of the seller or bank under such agreement in the event of default are limited
to repossession or sale of such property); (f) all Capital Lease Obligations;
(g) all net obligations with respect to Interest Rate Protection Agreements and
Other Hedging Agreements; (h) all indebtedness referred to in clauses (a)
through (g) above and clause (i) below secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien upon or in property (including accounts and contracts rights) owned
by such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness, valued, in the case of Indebtedness not assumed,
at the lesser of the amount of such obligation and the fair market value of the
encumbered property or asset; and (i) all Contingent Obligations.
Notwithstanding the foregoing, Indebtedness shall not include trade payables and
accrued expenses incurred by any Person in accordance with customary practices
and in the ordinary course of business of such Person.
"Indebtedness to be Refinanced" means (a) all Indebtedness
evidenced or governed by the Existing CII Credit Agreement and (b) all
Indebtedness evidenced or governed by the Existing Corcom Credit Agreement.
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"Indemnified Liabilities" has the meaning provided in Section
12.05.
"Indemnified Person" has the meaning provided in Section
12.05.
"Insolvency Proceeding" means (a) any case, action or
proceeding before any court or other Governmental Authority relating to
bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution,
winding-up or relief of debtors or similar proceedings, or (b) any general
assignment for the benefit of creditors, composition, marshalling of assets for
creditors, or other, similar arrangement in respect of its creditors generally;
in each case undertaken under U.S. Federal, State or foreign law, including the
Bankruptcy Code.
"Intercompany Loan" has the meaning provided in Section
8.05(xi).
"Intercompany Note" means a promissory note in the form of
Exhibit N.
"Interest Payment Date" means, (a) with respect to any Base
Rate Loan, the last day of the last calendar month of each calendar quarter and
the Termination Date, and (b) with respect to any Eurodollar Loan, the last day
of each Interest Period applicable to such Loan and the date such Loan is repaid
or prepaid; provided, however, that if any Interest Period for any Eurodollar
Loan exceeds three months, then also the date which falls three months after the
beginning of such Interest Period and, if applicable, at three month intervals
thereafter shall also be an "Interest Payment Date".
"Interest Period" means, in relation to any Eurodollar Loan,
the period commencing on the applicable Borrowing Date or any Conversion Date or
Continuation Date with respect thereto and ending on the date one, two, three or
six months thereafter, as selected or deemed selected by the Borrower in its
Notice of Borrowing or Notice of Conversion/Continuation; provided that:
(i) if any Interest Period would otherwise end on a day which
is not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless the result of such extension would
be to carry such Interest Period into another calendar month, in which
event such Interest Period shall end on the immediately preceding
Business Day;
(ii) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month which
is one, two, three or six months, as the case may be, after the
calendar month in which such Interest Period began;
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(iii) the Borrower may not select an Interest Period with
respect to any portion of principal of a Loan which extends beyond a
date on which the Borrower is required to make a scheduled payment of
that portion of principal; and
(iv) no Interest Period for any Loan shall extend beyond the
Termination Date.
"Interest Rate Protection Agreement" means an interest rate
swap, cap, collar or similar arrangement entered into to hedge interest rate
risk (and not for speculative purposes).
"Inventory" means all of the Borrower's, and its Domestic
Subsidiaries' and Mexican Subsidiaries' now owned and hereafter acquired
inventory, goods, merchandise, and other personal property, wherever located, to
be furnished under any contract of service or held for sale or lease, all
returned goods, raw materials, other materials and supplies of any kind, nature
or description which are or might be consumed in the Borrower's or its Domestic
Subsidiaries' or Mexican Subsidiaries' business or used in connection with the
packing, shipping, advertising, selling or finishing of such goods, merchandise
and such other personal property, and all documents of title or other documents
representing them.
"Investment" has the meaning provided in Section 8.05.
"Issuing Lender" means Bank of America or any Affiliate
thereof in its capacity as issuer of one or more Letters of Credit hereunder,
and each other Lender which is designated as an Issuing Lender on the signature
pages hereto, on an Assignment and Acceptance to which it is a party, or on
another writing to which such Lender and the Administrative Agent is a party.
"Kilovac Corporation" means Kilovac Corporation, a California
corporation.
"Lender Affiliate" means a Person engaged primarily in the
business of commercial banking that is an Affiliate of a Lender.
"Lenders" has the meaning specified in the preamble hereto.
"Lending Office" means, with respect to any Lender, the office
or offices of such Lender specified as its "Lending Office", "Domestic Lending
Office" or "Eurodollar Lending Office", as the case may be, on Schedule 1.01(a)
hereto, or such other office or offices of the Lender as it may from time to
time notify the Borrower and the Agent.
"Letter of Credit" means any letter of credit issued (or
deemed issued) by an Issuing Lender pursuant to Article III.
"Letter of Credit Amendment Application" means an application
form for amendment of outstanding standby or commercial documentary letters of
credit as shall at any time be in use by an Issuing Lender, as such Issuing
Lender shall request.
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"Letter of Credit Application" means an application form for
issuances of standby or commercial documentary letters of credit as shall at any
time be in use by an Issuing Lender, as such Issuing Lender shall request.
"Letter of Credit Borrowing" means an extension of credit
resulting from a drawing under any Letter of Credit which shall not have been
reimbursed on or before the Business Day following the respective Disbursement
Date when made nor converted into a Borrowing of Revolving Loans under Section
3.03(b).
"Letter of Credit Commitment" means the commitment of the
Issuing Lenders to issue Letters of Credit, the Letter of Credit Obligations in
respect thereof not to exceed in aggregate amount on any date the lesser of (i)
the Aggregate Revolving Commitment on such date and (ii) $3,000,000.
"Letter of Credit Obligations" means at any time the sum of
(a) the aggregate undrawn amount of all Letters of Credit then outstanding, plus
(b) the amount of all outstanding Letter of Credit Borrowings.
"Letter of Credit Related Documents" means the Letters of
Credit, the Letter of Credit Applications, the Letter of Credit Amendment
Applications and any other document relating to any Letter of Credit, including
any of the Issuing Lenders' standard form documents for letter of credit
issuances.
"Level I" has the meaning specified in Section 2.09(a)(ii).
"Level II" has the meaning specified in Section 2.09(a)(ii).
"Level III" has the meaning specified in Section 2.09(a)(ii).
"Level IV" has the meaning specified in Section 2.09(a)(ii).
"Leverage Ratio Certificate" means a certificate duly executed
by a Responsible Officer of Holdings, substantially in the form of Exhibit I
(with such changes thereto as may be agreed upon from time to time by the
Administrative Agent and Holdings), and including therein, among other things,
calculations supporting the information contained therein.
"LIBOR" means, for each Interest Period for Eurodollar Loans
comprising the same Borrowing, (i) the rate of interest per annum determined by
Bank of America (or any successor Administrative Agent) to be the arithmetic
mean (rounded upward to the nearest whole multiple of 1/16%) of the rate of
interest per annum as the rate at which Dollar deposits for such Interest Period
and in an amount approximately equal to the amount of the proposed Eurodollar
Loan of Bank of America during such Interest Period, would be offered by Bank of
America's (or any successor Administrative Agent's) Eurodollar Lending Office to
major banks in the London
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interbank market at or about 11:00 a.m. (London time) on the second Business Day
prior to the commencement of such Interest Period divided (and rounded upwards
to the nearest whole multiple of 1/100%) by (ii) a percentage equal to 100%
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).
"Lien" means any interest in any real or personal property or
fixture which secures payment or performance of any obligation and shall include
any mortgage, lien, pledge, encumbrance, charge or other security interest of
any kind, whether arising under a Security Instrument or as a matter of law,
judicial process or otherwise, including the retained security title of a
conditional vendor or lessor.
"Loan" means an extension of credit by a Lender to the
Borrower pursuant to Article II and shall include Revolving Loans, Term Loans
and Swingline Loans.
"Loan Documents" means this Agreement (including the guaranty
of Holdings set forth in Article X), each Collateral Document, each Revolving
Note and Term Note, the Fee Letter and all other Security Instruments,
agreements, instruments, certificates or other documents evidencing,
guaranteeing or securing the Loans, Letter of Credit Borrowings or the other
obligations of Holdings, the Borrower or any Subsidiary Guarantor hereunder or
under any Collateral Document.
"Majority Lenders" means at any time Lenders holding more
than 50% of the then Aggregate Commitment, provided that if the Commitments
shall have been terminated in full, "Majority Lenders" shall mean Lenders
holding (including as a result of participations pursuant to Sections
2.01(c)(iv) and 3.03(a) and (d)) more than 50% of the then aggregate unpaid
amount of the Total Exposure.
"Mandatory Borrowing" has the meaning specified in Section
2.01(b)(iv).
"Margin Stock" means "margin stock" as such term is defined in
Regulation G, T, U or X of the Federal Reserve Board.
"Material Adverse Effect" means, relative to any occurrence of
whatever nature (including any adverse determination in any litigation,
arbitration or governmental investigation or proceeding), a material adverse
effect on:
(a) the operations, business, assets, properties, liabilities,
condition (financial or otherwise) or prospects of the Borrower, or of
Holdings and its Subsidiaries taken as a whole; or
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(b) the rights and remedies of the Administrative Agent, the
Collateral Agent and the Lenders under this Agreement or under any
other Loan Document.
"Measurement Period" means (i) at any time on or prior to June
30, 1999, the period from July 1, 1998 through the last day of Holdings' fiscal
quarter then last ended (taken as one accounting period) and (ii) at any time
thereafter, any period of four consecutive fiscal quarters of Holdings (taken as
one accounting period).
"Merger" means the merger of Merger Sub with and into Corcom
pursuant to the terms and conditions of the Merger Agreement.
"Merger Agreement" means that certain Agreement and Plan of
Merger dated March 10, 1998 among the Borrower, Merger Sub and Corcom, and
related disclosure schedules, pursuant to which, among other things, the Merger
is to occur.
"Merger Documents" means the Merger Agreement; that certain
Voting Agreement dated as of March 10, 1998 among Merger Sub, Werner E. Neuman
and James A. Steinback; those certain Employment Agreements dated as of the
effective date of the Merger between Corcom and each of Michael Raleigh,
Fernando Pena, Joseph Ritter, Gary Baltimore, Oswald Hoffman and Sheryl Bishop;
that certain Consulting and Non-Competition Agreement dated as of the effective
date of the Merger between Corcom and Werner E. Neuman; all other agreements,
documents and instruments executed and delivered by Merger Sub or any Credit
Party in connection with the Merger Agreement..
"Merger Sub" means RF Acquisition Corp., an Illinois
corporation and Wholly- Owned Subsidiary of the Borrower.
"Mexican Subsidiary" means each Subsidiary of the Borrower
that is organized under the laws of Mexico.
"Moody's" means Moody's Investors Service, Inc.
"Net Amount of Eligible Receivables" means, at any time, the
gross amount of Eligible Receivables less returns, rebates, discounts, claims,
credits and allowances of any nature at any time issued, owing, granted,
outstanding or claimed.
"Net Cash Proceeds" means, in connection with any Asset Sale,
the cash proceeds (including any cash payments received by way of deferred
payment pursuant to a promissory note, receivable or otherwise, but only as and
when received in cash) of such Asset Sale net of (i) reasonable transaction
costs (including any underwriting, brokerage or other customary selling
commissions and reasonable legal, advisory and other fees and expenses,
including title and recording expenses, associated therewith actually incurred),
(ii) required debt payments (other than pursuant hereto), (iii) taxes estimated
to be paid as a result of such Asset Sale and (iv) any
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portion of such cash proceeds which Holdings determines in good faith should be
reserved for post-closing adjustments or liabilities (to the extent Holdings
delivers to the Lenders a certificate signed by a Responsible Officer of
Holdings as to such determination).
"Net Insurance Proceeds" means, with respect to any Recovery
Event, the cash proceeds (net of reasonable costs and taxes incurred in
connection with such Recovery Event) received by the respective Person in
connection with the respective Recovery Event.
"Net Issuance Proceeds" means, with respect to the issuance of
any Indebtedness for borrowed money, or the issuance or sale of any equity
securities or other equity interests or rights:
(a) the gross cash proceeds received in connection with such
issuance or sale;
minus
(b) all reasonable transaction costs (including legal,
investment banking or other fees and disbursements) paid or incurred in
connection therewith in favor of any Person not an Affiliate of
Holdings or the Borrower.
"Notice of Borrowing" means a notice given by the Borrower to
the Administrative Agent pursuant to Section 2.03(a), in substantially the form
of Exhibit C.
"Notice of Conversion/Continuation" means a notice given by
the Borrower to the Administrative Agent pursuant to Section 2.04(b), in
substantially the form of Exhibit D.
"Obligations" means all Loans, Letter of Credit Borrowings and
other indebtedness, advances, debts, liabilities, obligations, expenses
(including, without limitation, Attorney Costs), covenants and duties, of any
kind or nature, owing by Holdings, the Borrower or any Subsidiary Guarantor to
any Lender, the Administrative Agent, the Collateral Agent, any Issuing Lender
or the Swingline Lender in connection with this Agreement or any other Loan
Document, in each case whether direct or indirect, absolute or contingent, due
or to become due, now existing or hereafter arising, and however acquired
(including those acquired by assignment) or arising and whether or not for the
payment of money or evidenced by any note, guarantee or other instrument.
"OECD" means the Organization for Economic Cooperation and
Development.
"Originating Lender" has the meaning provided in Section
12.07(d).
"Other Hedging Agreement" means any foreign exchange
contracts, currency swap agreements, commodity agreements or other similar
agreements or arrangements designed to protect against the fluctuations in
currency or commodity values.
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"Other Taxes" has the meaning specified in Section 4.01(b).
"Participant" has the meaning specified in Section 12.07(d).
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Acquisition" has the meaning specified in Section
8.02(ix).
"Permitted Holders" means Code, Hennessy & Simmons, Inc., CHS
and their respective Affiliates.
"Permitted Liens" has the meaning provided in Section 8.01.
"Person" means any natural person, corporation, firm, trust,
partnership, limited liability company, business trust, association, government,
governmental agency or authority, or any other entity, whether acting in an
individual, fiduciary, or other capacity.
"Plan" means any defined benefit plan as defined in Section
3(35) of ERISA in respect of which Holdings or any ERISA Affiliate is, or within
the immediately preceding six (6) years was, an "employer" as defined in Section
3(5) of ERISA.
"Pledge Agreement" means the Pledge Agreement in the form of
Exhibit E, as amended, modified or supplemented from time to time in accordance
with the terms thereof and hereof.
"Pledged Securities" has the meaning specified in the Pledge
Agreement.
"Qualified Public Equity Offering" means a bona fide
underwritten sale to the public of common stock of Holdings pursuant to a
registration statement (other than on Form S-8 or any other form relating to
securities issuable under any benefit plan of Holdings or any of its
Subsidiaries, as the case may be) that is declared effective by the Securities
and Exchange Commission and such offering results in gross cash proceeds to
Holdings (exclusive of under writer's discounts and commissions and other
expenses) of at least $30,000,000.
"Qualified Seller Subordinated Debt" means unsecured junior
subordinated notes issued by Holdings or any of its Subsidiaries so long as the
terms of any such junior subordinated note (i) do not provide any collateral
security, (ii) do not contain any mandatory put, redemption, repayment, sinking
fund or other similar provision occurring before September 30, 2004, (iii) do
not contain any covenants other than periodic reporting requirements, (iv) do
not have an interest rate above 12% per annum, (v) do not have any defaults
other than a payment thereunder or a bankruptcy of the obligor thereunder and
(vi) are otherwise reasonably satisfactory to Bank of America (or any successor
Administrative Agent).
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"Receivables" means all of the Borrower's and its Domestic
Subsidiaries' now owned or hereafter acquired or arising accounts, contract
rights, and any other rights to payment for the sale or lease of goods or
rendition of services, whether or not they have been earned by performance.
"Recovery Event" means the receipt by Holdings or any of its
Subsidiaries of any cash insurance proceeds or condemnation awards payable by
reason of theft, loss, physical destruction, damage, taking or any other similar
event with respect to any property or assets of Holdings or any of its
Subsidiaries.
"Reference Rate" means the rate of interest publicly announced
from time to time by Bank of America in San Francisco as its "reference rate."
It is a rate set by Bank of America based upon various factors, including Bank
of America's costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which may be
priced at, above or below such announced rate. Any change in the Reference Rate
announced by Bank of America shall take effect at the opening of business on the
day specified in the public announcement of such change.
"Refinancing" means, collectively, the repayment of all
Indebtedness to be Refinanced (other than unmatured letter of credit obligations
with respect to Existing L/Cs subject to Section 3.10), together with all
accrued interest, premiums, fees, commissions and expenses owing in connection
therewith, and the termination of all commitments under the Existing CII Credit
Agreement and under the Existing Corcom Credit Agreement.
"Refinancing Documents" means payoff letters, termination
agreements, UCC Termination Statements, mortgage releases, intellectual property
reconveyance documents and other similar Lien release instruments, in form and
substance acceptable to the Administrative Agent and executed and delivered by
the creditors to whom the Indebtedness to be Refinanced is owing to evidence
such creditors' agreements as to the outstanding amount of Indebtedness to be
Refinanced, the repayment thereof and such creditors' obligations to terminate
their financing arrangements with the Credit Parties and release their Liens
against the Credit Parties' properties.
"Refinancing Subordinated Indebtedness" has the meaning
specified in Section 8.04(viii).
"Regulation D" shall mean Regulation D of the Federal Reserve
Board or from time to time in effect and any successor to all or a portion
thereof establishing reserve requirements.
"Replaced Lender" has the meaning specified in Section
4.08(b).
"Replacement Lender" has the meaning specified in Section
4.08(b).
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"Reportable Event" means, an event described in Section
4043(c) of ERISA with respect to a Plan that is subject to Title IV of ERISA
other than those events as to which the 30- day notice period is waived under
subsection .22, .23, .25, .27 or .28 of PBGC Regulations issued under Section
4043 of ERISA.
"Requirement of Law" means, as to any Person, any law
(statutory or common), treaty, rule or regulation or determination of a court or
of a Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.
"Responsible Officer" means, for Holdings, the Borrower or any
Subsidiary thereof, its chief executive officer, its president, any of its
executive vice presidents, its chief operating officer, its chief financial
officer or its treasurer or any other officer having substantially the same
authority and responsibility as any of the foregoing officers.
"Revolving Availability" means, at any time, (a) the Borrowing
Base minus (b) all reserves which the Agent deems necessary or desirable, in its
reasonable credit judgment, in connection with the value of, or the perfection
or ability to realize upon, its Liens on, Eligible Receivables or Eligible
Inventory.
"Revolving Commitment" means, for each Lender, the amount set
forth opposite such Lender's name under the caption "Revolving Commitment" on
Schedule 1.01(b) (or on Schedule I of the most recent Assignment and Acceptance
to which such Lender is a party), as such amount may be modified from time to
time pursuant to the provisions hereof.
"Revolving Borrowing" means a Borrowing hereunder consisting
of Revolving Loans made to the Borrower on the same Borrowing Date by the
Lenders ratably according to their respective Commitment Percentages and in the
case of Eurodollar Loans, having the same Interest Periods, provided that any
Base Rate Loans incurred pursuant to Section 4.02 shall be considered as part of
the related Revolving Borrowing of Eurodollar Loans.
"Revolving Loan" means a Loan by a Lender to the Borrower
under Section 2.01(a), which may be a Eurodollar Loan or a Base Rate Loan.
"Revolving Notes" means the promissory notes executed by the
Borrower and made payable to the Lenders pursuant to Section 2.02(b) to evidence
the Revolving Loans.
"S&P" means Standard & Poor's Ratings Service, a division of
McGraw Hill, Inc.
"Security Agreement" means the Security Agreement in the form
of Exhibit G, as amended, modified or supplemented from time to time in
accordance with the terms thereof and hereof.
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"Security Instrument" means any security agreement, chattel
mortgage, assignment, pledge agreement, financing or similar statement or
notice, continuation statement, other agreement or instrument, or amendment or
supplement to any thereof, providing for, evidencing or perfecting any security
interest.
"Specified Default" means (i) any Default under Section
9.01(a), 9.01(f) or 9.01(g) or (ii) any Event of Default under Section 9.01(a),
9.01(b), 9.01(c) (but only as a result of a breach of Section 8.07, 8.08, 8.09
or 8.10), 9.01(e), 9.01(f), 9.01(g), 9.01(i), 9.01(j) or 9.01(k).
"Standby Letter of Credit" has the meaning specified in
Section 3.01(a).
"Subsidiary" of a Person means any corporation, association,
partnership or other business entity of which more than 50% of the voting stock
or other voting equity interests (in the case of Persons other than
corporations) is owned or controlled directly or indirectly by such Person, or
one or more of the Subsidiaries of the Person, or a combination thereof.
"Subsidiary Guarantor" means each of the Domestic Subsidiaries
of the Borrower listed on Schedule 1.01(c) and each other Domestic Subsidiary of
the Borrower (and, to the extent Section 7.12 is operative, each Foreign
Subsidiary of the Borrower) that hereafter executes and delivers a Guarantor
Supplement.
"Subsidiary Guaranty" means the Guaranty in the form of
Exhibit F, as amended, modified or supplemented from time to time in accordance
with the terms hereof and thereof.
"Swingline Amount" means the least of (i) the Aggregate
Revolving Commitment, (ii) the Revolving Availability and (iii) $2,500,000.
"Swingline Borrowing" means a Borrowing of a Swingline Loan
hereunder on any Borrowing Date.
"Swingline Lender" means Bank of America.
"Swingline Loan" means a Loan by the Swingline Lender to the
Borrower pursuant to Section 2.01(b).
"Taxes" has the meaning specified in Section 4.01(a).
"Term Borrowing" means a Borrowing hereunder consisting of
Term Loans made to the Borrower on the Effective Date by the Lenders ratably
according to their respective Commitment Percentages and in the case of
Eurodollar Loans, having the same Interest Periods, provided that any Base Rate
Loans incurred pursuant to Section 4.02 shall be considered as part of the
related Term Borrowing of Eurodollar Loans.
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"Term Commitment" means, for each Lender, the amount set forth
opposite such Lender's name under the caption "Term Commitment" on Schedule
1.01(b) (or on Schedule I of the most recent Assignment and Acceptance to which
such Lender is a party), as such amount may be modified from time to time
pursuant to the provisions hereof.
"Term Loan" means a Loan by a Lender to the Borrower under
Section 2.01(c), which may be a Eurodollar Loan or a Base Rate Loan.
"Term Notes" means the promissory notes executed by the
Borrower and made payable to the Lenders pursuant to Section 2.02(b) to evidence
the Term Loans.
"Termination Date" means the earlier to occur of (a) June 19,
2003 and (b) the date on which the Commitments shall terminate in accordance
with the provisions of this Agreement.
"Total Exposure" means the sum of all outstanding Loans and
Letters of Credit Obligations.
"Trade Letter of Credit" has the meaning specified in Section
3.01(a).
"Transaction" means, collectively, (i) the Merger, (ii) the
Refinancing, (iii) the Additional Junior Subordinated Note Investment, (iv) the
Additional Subordinated Guaranty and (v) the entering into of this Agreement,
the making of the initial Loans hereunder, the issuance of initial Letters of
Credit on the Effective Date, the application of the proceeds of such initial
Loans and the Additional Junior Subordinated Note Investment, and the occurrence
of the Effective Date.
"Transaction Documents" mean, this Agreement, the other Loan
Documents, the Merger Documents, the Refinancing Documents, the Additional
Junior Subordinated Note Documents and the Additional Subordinated Guaranty
Documents.
"Transferee" has the meaning specified in Section 12.08.
"UCC" means 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 actuarial present value of the accumulated plan benefits under
the Plan as of the close of its most recent plan year, determined in accordance
with actuarial assumptions at such time consistent with Statement of Financial
Accounting Standards No. 87, exceeds the market value of the assets allocable
thereto.
"United States" and "U.S." each means the United States of
America.
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"Voting Stock" of any Person as of any date means the capital
stock of such Person that is of the time entitled to vote in the election of the
Board of Directors of such Person.
"Wholly-Owned Domestic Subsidiary" means each Domestic
Subsidiary of Holdings that is also a Wholly-Owned Subsidiary of Holdings.
"Wholly-Owned Foreign Subsidiary" means each Foreign
Subsidiary of Holdings that is also a Wholly-Owned Subsidiary of Holdings.
"Wholly-Owned Subsidiary" means, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's or other
qualifying shares) is at the time owned by such Person and/or one or more
Wholly-Owned Subsidiaries of such Person and (ii) any partnership, association
or other entity in which such Person and/or one or more Wholly-Owned
Subsidiaries of such Person has a 100% equity interest at such time.
1.02 Other Definitional Provisions.
(a) Defined Terms. Unless otherwise specified herein or
therein, all terms defined in this Agreement shall have such defined
meanings when used in any certificate or other document made or
delivered pursuant hereto. The meaning of defined terms shall be
equally applicable to the singular and plural forms of the defined
terms. Terms (including uncapitalized terms) not otherwise defined
herein and that are defined in the UCC shall have the meanings therein
described.
(b) The Agreement. The words "hereof", "herein", "hereunder"
and words of similar import when used in this Agreement shall refer to
this Agreement as a whole and not to any particular provision of this
Agreement; and section, subsection, schedule and exhibit references are
to this Agreement unless otherwise specified.
(c) Certain Common Terms.
(i) The term "documents" includes any and all
instruments, documents, agreements, certificates, indentures,
notices and other writings, however evidenced.
(ii) The terms "including" or "include" are not
limiting and mean "including without limitation" or "include
without limitation".
(d) Performance; Time. Subject to the definition of the term
"Interest Period" in Section 1.01, whenever any performance obligation
hereunder shall be stated to be due or required to be satisfied on a
day other than a Business Day, such performance shall be made or
satisfied on the next succeeding Business Day. In the computation of
periods of time from a specified date to a later specified date, the
word "from" means "from and
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including"; the words "to" and "until" each mean "to but excluding";
and the word "through" means "to and including". If any provision of
this Agreement refers to any action taken or to be taken by any Person,
or which such Person is prohibited from taking, such provision shall be
interpreted to encompass any and all means, direct or indirect, of
taking, or not taking, such action.
(e) Contracts. Unless otherwise expressly provided herein,
references to agreements and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications
thereto, but only to the extent such amendments and other modifications
are not prohibited by the terms of any Loan Document.
(f) Laws. References to any statute or regulation are to be
construed as including all statutory and regulatory provisions
consolidating, amending or replacing such statute or regulation.
1.03 Accounting Principles. Except as provided to the contrary
herein, all accounting terms used herein shall be interpreted in accordance with
GAAP. Unless the context otherwise clearly requires, all financial computations
required under this Agreement shall be made in accordance with generally
accepted accounting principles applied in a manner consistent with those in
effect on December 31, 1997.
ARTICLE II.
THE CREDIT FACILITIES
2.01 Amounts and Terms of Commitments.
(a) The Revolving Loans. Each Lender severally agrees, on the
terms and conditions hereinafter set forth, to make Revolving Loans to
the Borrower from time to time on any Business Day during the period
from the Effective Date to the Termination Date, in an aggregate amount
not to exceed at any time outstanding the amount of such Lender's
Revolving Commitment; provided, however, that after giving effect to
any Revolving Borrowing, the aggregate principal amount of all
outstanding Revolving Loans, together with the aggregate principal
amount of all outstanding Swingline Loans (exclusive of Swingline Loans
which are repaid with the proceeds of, and simultaneously with the
incurrence of, the respective incurrence of Revolving Loans) plus the
aggregate amount of all outstanding Letter of Credit Obligations
(exclusive of unpaid drawings under any Letter of Credit which are
repaid with the proceeds of, and simultaneously with the incurrence of,
the respective incurrence of Revolving Loans), shall not exceed the
lesser of the Aggregate Revolving Commitment and the Revolving
Availability. Within such limits, and subject to the other terms and
conditions hereof, the Borrower may
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borrow Revolving Loans under this Section 2.01(a), repay pursuant to
Section 2.08(a), prepay pursuant to Section 2.06 or 2.07(a) and
reborrow pursuant to this Section 2.01(a).
(b) The Swingline Loans.
(i) The Swingline Lender agrees, on the terms and
conditions hereinafter set forth, to make Swingline Loans to
the Borrower on any Business Day during the period from the
Effective Date to the Termination Date, in an aggregate amount
not to exceed at any time outstanding the Swingline Amount;
provided, however, (x) each Swingline Loan shall be made and
maintained as a Base Rate Loan and (y) that after giving
effect to any Swingline Borrowing, the aggregate principal
amount of all outstanding Swingline Loans, together with the
aggregate principal amount of all outstanding Revolving Loans
plus the aggregate amount of all outstanding Letter of Credit
Obligations (exclusive of unpaid drawings under any Letter of
Credit which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective
incurrence of Revolving Loans), shall not exceed the lesser of
the Aggregate Revolving Commitment and the Revolving
Availability. Within such limits, and subject to the other
terms and conditions hereof, the Borrower may borrow Swingline
Loans under this Section 2.01(b), repay pursuant to Section
2.08(b) or prepay pursuant to Section 2.06 or 2.07(a) and
reborrow pursuant to this Section 2.01(b).
(ii) The Swingline Lender shall not be responsible
for or liable to any Lender for determining whether (A) any
representation or warranty of the Borrower in connection with
any request for a Swingline Loan is correct or (B) any Default
or Event of Default exists or would result from the making of
any such Swingline Loan; provided, however, that the Swingline
Lender shall not make any Swingline Loan after receiving a
written notice from the Borrower or the Majority Lenders
stating that a Default or an Event of Default exists and is
continuing until such time as the Swingline Lender shall have
received written notice from the Administrative Agent that
such Default or Event of Default has been cured or waived.
(iii) Each Swingline Loan shall reduce the available
Aggregate Revolving Commitment. For purposes of Section
2.10(a), each Swingline Loan shall be deemed to utilize only
the Revolving Commitment of the Swingline Lender (but not any
other Lender) by an amount equal to such Swingline Loan (it
being understood that the aggregate principal amount of
Swingline Loans at any time outstanding may exceed the
otherwise unutilized portion of the Revolving Commitment of
the Swingline Lender).
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(iv) On any Business Day, the Swingline Lender may,
in its sole discretion, give notice to the Lenders that its
outstanding Swingline Loans shall be funded with a Revolving
Borrowing of Revolving Loans (provided that each such notice
shall be deemed to have been automatically given upon the
occurrence of a Default or an Event of Default under Section
9.01(e) or 9.01(f) or upon the exercise of any of the remedies
provided in Section 9.02), in which case a Revolving Borrowing
of Revolving Loans constituting Base Rate Loans (each such
Revolving Borrowing, a "Mandatory Borrowing") shall be made on
the immediately succeeding Business Day by all Lenders pro
rata based on each Lender's Commitment Percentage, and the
proceeds thereof shall be applied directly to repay the
Swingline Lender for such outstanding Swingline Loans. Each
Lender hereby irrevocably agrees to make Base Rate Loans upon
one Business Day's notice pursuant to each Mandatory Borrowing
in the amount and in the manner specified in the preceding
sentence and on the date specified in writing by the Swingline
Lender notwithstanding (i) that the amount of the Mandatory
Borrowing may not comply with the minimum borrowing
denominations set forth in Section 2.03(a), (ii) whether any
of the conditions precedent set forth in Section 5.02 is then
satisfied and (iii) whether the borrowing limitations set
forth in this Agreement are met or the amount of the Aggregate
Revolving Commitment then in effect (including the fact that
the Aggregate Revolving Commitment may have been terminated).
In the event that any Mandatory Borrowing cannot for any
reason be made on the date otherwise required above
(including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code in
respect of the Borrower), each Lender hereby agrees that it
shall forthwith purchase from the Swingline Lender (without
recourse or warranty) such assignment of the outstanding
Swingline Loans as shall be necessary to cause the Lenders to
share in such Swingline Loans ratably based upon their
respective Commitment Percent ages, provided that all interest
payable on the Swingline Loans shall be for the account of the
Swingline Lender until the date the respective assignment is
purchased and, to the extent attributable to the purchased
assignment, shall be payable to the Lender purchasing same
from and after such date of purchase. The failure of any
Lender to pay such amount to the Swingline Lender shall not
relieve any other Lender of its obligation to make the payment
to be made by it.
(c) The Term Loan. Each Lender severally agrees, on the terms
and conditions hereinafter set forth, to make a Term Loan to the
Borrower in an amount equal to such Lender's Term Commitment. All Term
Loans shall be made on the Effective Date.
2.02 Loan Accounts; Notes.
(a) The Loans made by each Lender shall be evidenced by the
Revolving Notes, the Term Notes and one or more loan accounts
maintained by such Lender and the Administrative Agent in the ordinary
course of business. The Swingline Loans shall be
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evidenced by one or more loan accounts maintained by the Swingline
Lender and the Administrative Agent in the ordinary course of business.
The loan accounts maintained by the Administrative Agent shall, in the
event of a discrepancy between the entries in the Administrative
Agent's books and any Lender's or the Swingline Lender's books relating
to such loan accounts, be controlling and, absent manifest error, shall
be conclusive as to the amount of the Loans made by the Lenders or the
Swingline Lender's to the Borrower, the interest and payments thereon
and any other amounts owing in respect of this Agreement. Any failure
to make a notation in any such loan account or any error in doing so
shall not limit or otherwise affect the obligations of the Borrower
hereunder to pay any amount owing with respect to the Loans.
(b) On or before the Effective Date, the Borrower shall
execute and deliver to each Lender (and deliver a copy thereof to the
Administrative Agent) a Revolving Note in the form of Exhibit A to
evidence the Revolving Loans owing to such Lender and a Term Note in
the form of Exhibit B to evidence the Term Loan owing to such Lender.
Each such note shall be entitled to all of the rights and benefits of
this Agreement and the other Loan Documents.
2.03 Procedure for Borrowing.
(a) Each Borrowing of Revolving Loans or Term Loans (other
than a Borrowing of Revolving Loans pursuant to Section 2.01(b)(iv) or
Section 3.03(b)) shall be made upon the Borrower's irrevocable written
notice delivered to the Administrative Agent in accordance with Section
12.02 in the form of a Notice of Borrowing (which notice must be
received by the Administrative Agent (i) prior to 10:00 a.m. (Chicago
time) not less than three Business Days prior to the requested
Borrowing Date, in the case of Eurodollar Loans and (ii) prior to 11:00
a.m. (Chicago time) on the requested Borrowing Date, in the case of
Base Rate Loans, specifying:
(A) whether such Borrowing is a Revolving Borrowing,
a Term Borrowing, or both;
(B) the amount of the Borrowing, which shall be in an
aggregate minimum principal amount of (x) in the case of Base
Rate Loans, $100,000 or any multiple of $100,000 in excess
thereof and (y) in the case of Eurodollar Loans, $500,000 or
any multiple of $100,000 in excess thereof;
(C) the requested Borrowing Date, which shall be a
Business Day;
(D) whether the Borrowing is to be comprised of
Eurodollar Loans or Base Rate Loans; and
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(E) the duration of the Interest Period, if any,
applicable to such Loans included in such notice. If the
Notice of Borrowing shall fail to specify the duration of the
Interest Period for any Borrowing comprised of Eurodollar
Loans, such Interest Period shall be one month.
(b) Upon receipt of the Notice of Borrowing, the
Administrative Agent will promptly notify each Lender thereof and of
the amount of such Lender's Commitment Percentage of the Borrowing.
(c) Each Lender will make the amount of its Commitment
Percentage of each Revolving Borrowing and Term Borrowing available to
the Administrative Agent for the account of the Borrower at the
Administrative Agent's Payment Office by 1:00 p.m. (Chicago time) on
the Borrowing Date (or by 2:00 p.m. (Chicago time) on such Borrowing
Date in the case of a Borrowing of Base Rate Loans made on same day
notice) requested by the Borrower in funds immediately available to the
Administrative Agent. Unless any applicable condition of Article V has
not been satisfied, the proceeds of all such Revolving Loans and Term
Loans (other than Revolving Loans made pursuant to a Mandatory
Borrowing) will then be made available to the Borrower by the
Administrative Agent by wire transfer in accordance with written
instructions provided to the Administrative Agent by the Borrower. Each
Lender will make the amount of its Commitment Percentage of each
Mandatory Borrowing available to the Administrative Agent for the
account of the Swingline Lender at the Administrative Agent's Payment
Office by 1:00 p.m. (Chicago time) on the date specified in Section
2.01(b)(iv).
(d) Upon the occurrence and during the continuance of (x) any
Default under Section 9.01(a), 9.01(f) or 9.01(g) or (y) any Event of
Default, the Borrower shall not elect to have a Loan be made as a
Eurodollar Loan.
(e) After giving effect to any Borrowing, there shall not be
more than six different Interest Periods in effect in respect of all
Loans.
(f) (i) Whenever the Borrower desires to make a Swingline
Borrowing hereunder, the Borrower shall give the Administrative Agent
and the Swingline Lender not later than 11:00 a.m. (Chicago time) on
the date that a Swingline Loan is to be made, written notice or
telephonic notice promptly confirmed in writing of each Swingline Loan
to be made hereunder. Each such notice shall be irrevocable and specify
in each case:
(A) the amount of the Swingline Loan, which shall be
in an aggregate minimum principal amount of $50,000 or any
multiple of $50,000 in excess thereof; and
(B) the requested Borrowing Date, which shall be a
Business Day.
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(ii) The Swingline Lender shall not incur any liability to
the Borrower in acting upon any telephonic notice which the Swingline
Lender believes in good faith to have been given by any officer
authorized to act on behalf of the Borrower.
2.04 Conversion and Continuation Elections for Revolving and
Term Borrowings.
(a) The Borrower may upon irrevocable written notice to the
Administrative Agent in accordance with paragraph (b) below:
(ii) elect to convert on any Business Day, any Base
Rate Loans (or any part thereof so long as the minimum
borrowing amounts set forth in Section 2.03(a)(ii)(B)(y) are
still satisfied), other than those constituting Swingline
Loans, into Eurodollar Loans;
(ii) elect to convert on the last day of the Interest
Period with respect thereto, any Eurodollar Loans (or any part
thereof in an amount of not less than $500,000 or an integral
multiple of $100,000 in excess thereof) into Base Rate Loans;
or
(iii) elect to continue on the last day of the
Interest Period with respect thereto, any Eurodollar Loans (or
any part thereof in an amount not less than $500,000 or an
integral multiple of $100,000 in excess thereof);
provided, however, (x) that if the aggregate amount of a Borrowing
comprised of Eurodollar Loans shall have been reduced, by payment,
prepayment or conversion of part thereof to be less than $500,000, the
Eurodollar Loans comprising such Borrowing shall automatically convert
into Base Rate Loans, and on and after such date the right of the
Borrower to continue such Loans as, and convert such Loans into,
Eurodollar Loans shall terminate and (y) Swingline Loans may not be
converted pursuant to this Section 2.04.
(b) The Borrower shall deliver a Notice of
Conversion/Continuation in accordance with Section 12.02 to be received
by the Administrative Agent not later than (i) 10:00 a.m. (Chicago
time) not less than three Business Days in advance of the Conversion
Date or Continuation Date, if the Loans are to be converted into or
continued as Eurodollar Loans and (ii) 11:00 a.m. (Chicago time) not
less than one Business Day in advance of the Conversion Date, if the
Loans are to be converted into Base Rate Loans, specifying:
(A) the proposed Conversion Date or Continuation Date
which shall be a Business Day;
(B) the aggregate principal amount of Loans to be
converted or continued;
(C) the nature of the proposed conversion or
continuation; and
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(D) the duration of the requested Interest Period, if
applicable.
(c) If upon the expiration of any Interest Period applicable
to Eurodollar Loans, the Borrower has failed to select timely a new
Interest Period or the Borrower is not permitted to elect a new
Interest Period, such Loans shall automatically convert into Base Rate
Loans.
(d) Upon receipt of a Notice of Conversion/Continuation, the
Administrative Agent will promptly notify each Lender thereof, or, if
no timely notice is provided by the Borrower, the Administrative Agent
will promptly notify each Lender of the details of any automatic
conversion. All conversions and continuations shall be made pro rata
according to the respective outstanding principal amounts of the Loans
with respect to which the notice was given.
(e) Upon the occurrence and during the continuance of (x) any
Default under Section 9.01(a), 9.01(f) or 9.01(g) or (y) any Event of
Default, the Borrower shall not elect to have a Loan converted into or
continued as a Eurodollar Loan.
(f) Notwithstanding any other provision contained in this
Agreement, after giving effect to any conversion or continuation of any
Loans, there shall not be more than six different Interest Periods in
effect in respect of all Loans.
2.05 Reduction and Termination of Commitments.
(a) The Borrower may, upon not less than three Business Days'
prior notice to the Administrative Agent, terminate the Aggregate
Revolving Commitment (including the Letter of Credit Commitment) or
permanently reduce the Aggregate Revolving Commitment (including the
Letter of Credit Commitment) by an aggregate minimum amount of $500,000
or any multiple of $100,000 in excess thereof; provided, however, that
no such reduction or termination shall be permitted if after giving
effect thereto and to any prepayment of the Revolving Loans and/or
Swingline Loans made on the effective date thereof, (i) the then
outstanding principal amount of the Revolving Loans and Swingline Loans
plus the outstanding Letter of Credit Obligations would exceed the
Aggregate Revolving Commitment then in effect or (ii) the aggregate
amount of Letter of Credit Obligations would exceed the Letter of
Credit Commitment then in effect; and, provided further, that once
reduced in accordance with this Section 2.05, the Aggregate Revolving
Commitment (including the Letter of Credit Commitment) may not be
increased.
(b) On each date after the Effective Date upon which Holdings
or any of its Subsidiaries receives any Net Issuance Proceeds from any
incurrence by Holdings or any of its Subsidiaries of Indebtedness for
borrowed money (other than Indebtedness for borrowed money permitted to
be incurred under Section 8.04 as in effect on the Effective
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Date), the Aggregate Revolving Commitment shall be permanently reduced
by an amount equal to 100% of the Net Issuance Proceeds of the
respective incurrence of Indebtedness minus the aggregate principal
amount of the Term Loan which has been prepaid in connection with such
incurrence of Indebtedness pursuant to Section 2.07(b); provided,
however, that no reduction shall occur hereunder with respect to the
first $500,000 of such Net Issuance Proceeds received after the
Effective Date or with respect to any Net Issuance Proceeds received
after the Effective Date in connection with the incurrence of
Indebtedness for borrowed money secured by Letters of Credit. Nothing
in this paragraph (b) shall be deemed to permit the issuance of any
Indebtedness not otherwise permitted under this Agreement.
(c) On each date after the Effective Date upon which Holdings
or any of its Subsidiaries receives any Net Issuance Proceeds from any
issuance or sale by Holdings or any of its Subsidiaries of any equity
securities or other equity interests or rights, the Aggregate Revolving
Commitment shall be permanently reduced by an amount equal to 50% of
the Net Issuance Proceeds of the respective issuance or sale of such
securities, interests or rights minus the aggregate principal amount of
the Term Loan which has been prepaid in connection with such issuance
or sale pursuant to Section 2.07(c); provided, however, that, no
reduction shall occur hereunder with respect to the first $250,000 of
Net Issuance Proceeds received after the Effective Date in connection
with the issuance or sale of any such securities or other equity
interests or rights.
(d) Within two Business Days after Holdings or any of its
Subsidiaries receives any Net Cash Proceeds from any Asset Sale, the
Aggregate Revolving Commitment shall be permanently reduced on such
date by an amount equal to 100% of the Net Cash Proceeds from such
Asset Sale minus the aggregate principal amount of the Term Loan which
has been prepaid in connection with such Asset Sale pursuant to Section
2.07(d); provided, however, that (i) with respect to no more than
$1,000,000 in the aggregate of such Net Cash Proceeds in any fiscal
year of Holdings, such Net Cash Proceeds shall not give rise to a
reduction to the Aggregate Revolving Commitment pursuant to this
paragraph (d) if no Default or Event of Default then exists and
Holdings has delivered a certificate to the Administrative Agent on or
prior to such date stating that such Net Cash Proceeds shall be used to
purchase replacement assets used or to be used in the Borrower's or any
of its Subsidiaries' business within 270 days following the date of
receipt of such Net Cash Proceeds from such Asset Sale (which
certificate shall set forth the estimates of the proceeds to be so
expended), and if all or any portion of such Net Cash Proceeds are not
so used within such 270 day period, the Aggregate Revolving Commitment
shall be permanently reduced on the last day of such period by an
amount equal to such remaining portion minus the aggregate principal
amount of the Term Loan which has been prepaid in connection with such
Asset Sale pursuant to Section 2.07(d) and (ii) no reduction shall
occur hereunder with respect to the first $500,000 of Net Cash Proceeds
received after the Effective Date in connection with any Asset Sale.
Nothing in
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this paragraph (d) shall be deemed to permit any Asset Sale not
otherwise permitted under this Agreement.
(e) Within 10 days following each date after the Effective
Date upon which Holdings or any of its Subsidiaries receives any cash
proceeds from any Recovery Event, the Aggregate Revolving Commitment
shall be permanently reduced on such date by an amount equal to 100% of
the Net Insurance Proceeds from such Recovery Event minus the aggregate
principal amount of the Term Loan which has been prepaid in connection
with such Recovery Event pursuant to Section 2.07(e), provided,
however, that if no Default or Event of Default then exists and such
proceeds from such Recovery Event do not exceed $4,000,000, such
proceeds shall not give rise to a reduction to the Aggregate Revolving
Commitment pursuant to this paragraph (e) on such date if Holdings has
delivered a certificate to the Administrative Agent on or prior to
such date stating that such proceeds shall be used to replace or
restore any properties or assets in respect of which such proceeds were
paid within 365 days following the date of receipt of such proceeds
(which certificate shall set forth the estimates of the proceeds to be
so expended), and provided further, that (i) if the amount of such
proceeds exceeds $4,000,000, then the Aggregate Revolving Commitment
shall be reduced by the entire amount of such proceeds and not just the
portion in excess of $4,000,000 as provided above in this paragraph
(e), minus the aggregate principal amount of the Term Loan which has
been prepaid in connection with such Recovery Event pursuant to Section
2.07(e) and (ii) if all or any portion of such proceeds are not
contractually committed to be used within 180 days after the date of
receipt of such proceeds or are not actually used within 365 days after
the date of receipt of such proceeds to effect such restoration or
replacement, the Aggregate Commitment shall be permanently reduced on
the last day of such 180-day or 365-day period, as the case may be, by
an amount equal to such remaining portion minus the aggregate principal
amount of the Term Loan which has been prepaid in connection with such
Recovery Event pursuant to Section 2.07(e).
(f) Any reduction of the Aggregate Revolving Commitment and
the Letter of Credit Commitment pursuant to this Section 2.05 shall be
applied pro rata to each Lender's Revolving Commitment in accordance
with such Lender's Commitment Percentage. The amount of any such
reduction of the Aggregate Revolving Commitment shall not be applied to
the Letter of Credit Commitment unless otherwise specified by the
Borrower or required by the definition thereof. All accrued commitment
and letter of credit fees to the effective date of any reduction or
termination of Aggregate Revolving Commitment, shall be paid on the
effective date of such reduction or termination. The Administrative
Agent shall promptly notify the Lenders of any reduction or termination
of the Aggregate Revolving Commitment.
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2.06 Voluntary Prepayments.
(a) (i) The Borrower may, prior to 10:00 a.m. (Chicago time),
upon at least three Business Days' notice to the Administrative Agent
in the case of Eurodollar Loans, and prior to 11:00 a.m. (Chicago
time), upon notice thereof to the Administrative Agent on the Business
Day of the same in the case of Base Rate Loans, ratably prepay
Revolving Loans or Term Loans, in whole or in part in amounts of
$100,000 or an integral multiple of $100,000 in excess thereof.
(ii) The Borrower may at any time prepay Swingline Loans, in
whole or in part in minimum amounts of $50,000 or an integral multiple
of $50,000 in excess thereof; provided, however, that notice of such
prepayment shall be required to be delivered to the Administrative
Agent by 11:00 a.m. (Chicago time) on the date of such prepayment.
(b) Any notice of prepayment delivered pursuant to this
Section 2.06 shall specify the date and amount of such prepayment,
whether Revolving Loans, Term Loans or Swingline Loans are to be
prepared and the type of Loans to be prepaid, including in the case of
Revolving Loans or Term Loans whether such prepayment is of Base Rate
Loans or Eurodollar Loans or any combination thereof. Each such notice
shall be irrevocable by the Borrower and the Administrative Agent will
promptly notify each Lender thereof and of such Lender's Commitment
Percentage of such prepayment, if applicable. If such notice is given
by the Borrower, the Borrower shall make such prepayment and the
payment amount specified in such notice shall be due and payable on the
date specified therein, together with accrued interest to each such
date on the amount prepaid and the amounts, if any, required pursuant
to Section 4.04; provided that interest shall be paid in connection
with any such prepayment of Base Rate Loans (other than a prepayment in
full) on the next occurring Interest Payment Date.
2.07 Mandatory Prepayments.
(a) (i) If on any date (A) the aggregate unpaid principal
amount of outstanding Revolving Loans and Swingline Loans plus the
outstanding Letter of Credit Obligations (to the extent not Cash
Collateralized pursuant to clause (ii) below or as provided for in
Section 3.07) exceeds the lesser of the Aggregate Revolving Commitment
and the Revolving Availability or (B) the aggregate unpaid principal
amount of Swingline Loans exceeds the Swingline Amount, in each such
case the Borrower shall immediately prepay the amount of such excess.
(ii) If on any date the aggregate amount of all Letter of
Credit Obligations shall exceed the lesser of the Letter of Credit
Commitment and the Revolving Availability, the Borrower shall Cash
Collateralize on such date its obligations in respect of Letters of
Credit in an amount equal to such excess.
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(b) On each date after the Effective Date upon which Holdings
or any of its Subsidiaries receives any Net Issuance Proceeds from the
incurrence by Holdings or any of its Subsidiaries of Indebtedness for
borrowed money (other than Indebtedness for borrowed money permitted to
be incurred under Section 8.04 as in effect on the Effective Date), the
Borrower shall promptly prepay the Loans in an amount equal to 100% of
the Net Issuance Proceeds thereof. Nothing in this paragraph (b) shall
be deemed to permit the incurrence of any Indebtedness not otherwise
permitted under this Agreement; provided, however, that no prepayment
shall be required hereunder with respect to the first $500,000 of such
Net Issuance Proceeds received after the Effective Date or with respect
to any Net Issuance Proceeds received after the Effective Date in
connection with the incurrence of Indebtedness for borrowed money
secured by Letters of Credit.
(c) On each date after the Effective Date upon which Holdings
or any of its Subsidiaries receives any Net Issuance Proceeds from the
issuance or sale by Holdings or any of its Subsidiaries of equity
securities or other equity interests or rights, the Borrower shall
promptly prepay the Loans in an amount equal to 50% of the Net Issuance
Proceeds thereof; provided, however, that no prepayment shall be
required hereunder with respect to the first $250,000 of Net Issuance
Proceeds received after the Effective Date in connection with the
issuance on sale of any such Securities or other equity interests or
rights.
(d) Within two Business Days after Holdings or any of its
Subsidiaries receives any Net Cash Proceeds from any Asset Sale, the
Borrower shall promptly prepay the Loans on such date by an amount
equal to 100% of the Net Cash Proceeds from such Asset Sale; provided,
however, that (i) with respect to no more than $1,000,000 in the
aggregate of such Net Cash Proceeds in any fiscal year of Holdings,
such Net Cash Proceeds shall not give rise to a prepayment pursuant to
this paragraph (d) if no Default or Event of Default then exists and
Holdings has delivered a certificate to the Administrative Agent on or
prior to such date stating that such Net Cash Proceeds shall be used to
purchase replacement assets used or to be used in the Borrower's or any
of its Subsidiaries' business within 270 days following the date of
receipt of such Net Cash Proceeds from such Asset Sale (which
certificate shall set forth the estimates of the proceeds to be so
expended), and if all of any portion of such Net Cash Proceeds are not
so used within such 270 day period, the Borrower shall promptly prepay
the Loans on the last day of such period by an amount equal to such
remaining portion and (ii) no prepayment shall be required hereunder
with respect to the first $500,000 of Net Cash Proceeds received after
the Effective Date in connection with any Asset Sale. Nothing in this
paragraph (d) shall be deemed to permit any Asset Sale not otherwise
permitted under this Agreement.
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(e) Within 10 days following each date after the Effective
Date upon which Holdings or any of its Subsidiaries receives any cash
proceeds from any Recovery Event, the Borrower shall promptly prepay
the Loans on such date by an amount equal to 100% of the Net Insurance
Proceeds from such Recovery Event; provided, however, that if no
Default or Event of Default then exists and such proceeds from such
Recovery Event do not exceed $4,000,000, such proceeds shall not give
rise to a prepayment pursuant to this paragraph (e) on such date if
Holdings has delivered a certificate to the Administrative Agent on or
prior to such date stating that such proceeds shall be used to replace
or restore any properties or assets in respect of which such proceeds
were paid within 365 days following the date of receipt of such
proceeds (which certificate shall set forth in the estimates of such
proceeds to be so expended), and provided, further, that (i) if the
amount of such proceeds exceeds $4,000,000, then the Borrower shall
promptly prepay the Loans by the entire amount of such proceeds and not
just the portion in excess of $4,000,000 as provided above in this
paragraph (e), and (ii) if all or any portion of such proceeds are not
contractually committed to be used within 180 days after the date of
receipt of such proceeds or are not actually used within 365 days after
the date of receipt of such proceeds to effect such restoration or
replacement, the Borrower shall promptly prepay the Loans on the last
day of such 180-day or 365-day period, as the case may be, by an amount
equal to such remaining portion.
(f) Any prepayments pursuant to this Section 2.07 shall be
applied to the outstanding Loans, first, to the outstanding Term Loan
installments in the inverse order of their maturities, second, to the
outstanding principal balance of the Swingline Loan, and, then, to the
outstanding principal balance of the Revolving Loans. If, at the time
of the application of any amounts otherwise required to be prepaid
pursuant to this Section 2.07, no Loans are outstanding, but Letter of
Credit Obligations are outstanding, then the Borrower shall Cash
Collateralize such Letter of Credit Obligations in amounts equal to the
prepayments otherwise required hereby.
(g) The Borrower shall pay, together with each prepayment made
by the Borrower under this Section 2.07, accrued interest on the amount
prepaid and any amounts required pursuant to Section 4.04; provided
that interest shall be paid in connection with any such prepayment of
Base Rate Loans (other than a prepayment in full) on the next occurring
Interest Payment Date.
(h) Any prepayments pursuant to this Section 2.07 made on a
day other than an Interest Payment Date for any Loan shall be applied
first to any Base Rate Loans then outstanding and then to Eurodollar
Loans with the shortest Interest Periods remaining.
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2.08 Repayment of Principal.
(a) The Revolving Loans. The Borrower shall repay to the
Lenders in full on the Termination Date the aggregate principal amount
of the Revolving Loans outstanding on the Termination Date.
(b) The Swingline Loans. The Borrower shall repay to the
Swingline Lender in full on the Termination Date the aggregate
principal amount of the Swingline Loans outstanding on the Termination
Date.
(c) The Term Loan. The Borrower shall repay the Term Loan on
each the following dates in the following corresponding amounts:
Date Amount
---- ------
September 30, 1998, December 31, 1998
March 31, 1999 and
June 30, 1999 $1,000,000
September 30, 1999, December 31, 1999
March 31, 2000 and
June 30, 2000 $1,375,000
September 30, 2000, December 31, 2000
March 31, 2001 and
June 30, 2001 $1,750,000
September 30, 2001, December 31, 2001
March 31, 2002 and
June 30, 2002 $2,125,000
September 30, 2002, December 31, 2002
and March 31, 2003 $2,500,000
Termination Date $2,500,000.
2.09 Interest.
(a) Each Loan shall bear interest on the outstanding principal
amount thereof from the Borrowing Date applicable thereto until it
becomes due at a rate per annum equal to the Base Rate or LIBOR, as the
case may be, plus the Applicable Margin then in effect as set forth
below:
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(i) for the period commencing on the Effective Date
and ending on the day immediately preceding the First
Adjustment Date:
Applicable Margin
-----------------
Base Rate 1.500%
LIBOR 2.500%
(ii) from and after the First Adjustment Date, for
each period beginning on an Adjustment Date and ending on the
day immediately preceding the next succeeding Adjustment Date,
the rate per annum for the relevant type of Loan set forth
below opposite the Consolidated Senior Leverage Ratio
determined as at the end of the last fiscal quarter ended
prior to the first day of such period:
Applicable Margin
-----------------
LIBOR Base Rate
----- ---------
Consolidated Senior Leverage
Ratio is less than 0.50
to 1.00 ("Level I") 1.500% 0.500%
Consolidated Senior Leverage
Ratio is less than 1.00 to 1.00
but greater than or equal to
0.50 to 1.00 ("Level II") 2.000% 1.000%
Consolidated Senior Leverage
Ratio is less than 1.75 to 1.00
but greater than or equal to 1.00
to 1.00 ("Level III") 2.250% 1.250%
Consolidated Senior Leverage
Ratio is greater than or
equal to 1.75 to 1.00
("Level IV") 2.500% 1.500%.
(i) If by the last day for determining any Adjustment
Date, Holdings has failed to deliver a Leverage Ratio
Certificate as at the end of the fiscal quarter ended
immediately prior to such Adjustment Date, interest for the
next succeeding period commencing on such Adjustment Date and
ending on the day immediately
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preceding the next succeeding Adjustment Date shall be
computed as if the Consolidated Senior Leverage Ratio were at
Level IV; provided, however, to the extent that Holdings
thereafter delivers a Leverage Ratio Certificate during such
succeeding period, interest for the remainder of such
succeeding period shall be computed at the rate prescribed by
Section 2.09(a)(ii). Subject to Section 2.09(d), at any time
that a Specified Default shall exist, the Applicable Margin
shall be computed as if the Consolidated Senior Leverage Ratio
were at Level IV.
(b) Except as provided in the last sentence of Section
2.09(a)(iii) or in the proviso to the first sentence of Section
2.09(a)(iii), any change in the Applicable Margin due to a change in
the Consolidated Senior Leverage Ratio shall be effective on the
applicable Adjustment Date and shall apply to all Loans that are
outstanding at any time during the period commencing on such Adjustment
Date and ending on the date immediately preceding the next Adjustment
Date.
(c) Interest on each Loan shall be paid in arrears on each
Interest Payment Date. Interest shall also be paid on the date of any
prepayment of any portion of Loans (excluding Base Rate Loans) for the
portion of such Loans so prepaid and upon payment (including
prepayment) of any Loans (excluding Base Rate Loans) in full thereof.
In addition, interest which accrues under Section 2.09(d) also shall be
paid on demand by the Administrative Agent or the Majority Lenders.
(d) If any amount of principal of or interest on any Loan, or
any other regularly scheduled amount payable hereunder or under any
other Loan Document is not paid in full when due, after giving effect
to any applicable grace period (whether at stated maturity, by
acceleration, demand or otherwise), then, notwithstanding the
provisions of Section 2.09(a), the Borrower shall pay interest (after
as well as before judgment) on the overdue principal amount of all
outstanding Loans and on all other overdue amounts (including interest
to the extent permitted by law), at a rate per annum equal to the Base
Rate plus the Applicable Margin plus 2%.
(e) Anything herein to the contrary notwithstanding, the
obligations of the Borrower hereunder shall be subject to the
limitation that payments of interest shall not be required, for any
period for which interest is computed hereunder, to the extent (but
only to the extent) that contracting for or receiving such payment by
the respective Lender would be contrary to the provisions of any law
applicable to such Lender limiting the highest rate of interest which
may be lawfully contracted for, charged or received by such Lender, and
in such event the Borrower shall only pay such Lender interest at the
highest rate permitted by applicable law.
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2.10 Fees. In addition to fees described in Section 3.08:
(a) Commitment Fees.
The Borrower shall pay to the Administrative Agent
for the account of each Lender a commitment fee on the average
daily unused portion of such Lender's Revolving Commitment
(subject to Section 2.01(b)(iii) in the case of the Swingline
Lender), computed on a quarterly basis in arrears, on each
Interest Payment Date for Base Rate Loans based upon the daily
utilization for the previous three month period as calculated
by the Administrative Agent, equal to (A) for the period from
the Effective Date and ending on the day immediately preceding
the First Adjustment Date, 0.50% per annum and (B) from and
after the First Adjustment Date, for each period commencing on
an Adjustment Date and ending on the day immediately preceding
the next succeeding Adjustment Date, the rate per annum set
forth below opposite the relevant Level of Consolidated Senior
Leverage Ratio determined as at the end of the last fiscal
quarter ended prior to the first day of such period:
Consolidated
Senior
Leverage Ratio Rate
--------------- ----
Level I 0.300%
Level II 0.400%
Level III 0.500%
Level IV 0.500%
provided, however, that if by the last day for determining any
Adjustment Date, Holdings has failed to deliver a Leverage
Ratio Certificate as at the end of the fiscal quarter ended
immediately prior to such Adjustment Date, the commitment fee
for the next succeeding period beginning on such Adjustment
Date and ending on the next succeeding Adjustment Date shall
be computed as if the Consolidated Senior Leverage Ratio were
at Level IV; provided further, however, to the extent that
Holdings thereafter delivers a Leverage Ratio Certificate
during such succeeding period the commitment fee for the
remainder of such succeeding period shall be computed at the
rate prescribed in the table above in this Section 2.10(a)(i).
In addition, at any time that a Specified Default shall exist,
the commitment fee shall be computed as if the Consolidated
Senior Leverage Ratio were at Level IV. Such commitment fees
shall be paid in arrears on each Interest Payment Date for
Base Rate Loans.
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(b) Other Fees. The Borrower shall pay such other fees as have
or may be agreed between or among, CHS, Holdings, the Borrower, the
Administrative Agent and the Arranger from time to time, including,
without limitation, pursuant to the Fee Letter.
2.11 Computation of Fees and Interest.
(a) All computations of interest payable in respect of Base
Rate Loans shall be made on the basis of a year of 365 or 366 days, as
the case may be, and actual days elapsed. All other computations of
fees and interest under this Agreement shall be made on the basis of a
360-day year (of 12 months with 30 days each) and actual days elapsed.
Interest and fees shall accrue during each period during which interest
or such fees are computed from the first day thereof to the last day
thereof.
(b) The Administrative Agent will promptly notify the
Borrower, and the Lenders of each determination of LIBOR; provided,
however, that any failure to do so shall not relieve the Borrower of
any liability hereunder. Except as otherwise provided in the last
sentence of Section 2.09(a)(iii) or in the proviso to the first
sentence of Section 2.09(a)(iii), any change in the interest rate on a
Loan resulting from a change in the Applicable Margin shall become
effective as of the opening of business on the relevant Adjustment
Date. The Administrative Agent will promptly notify the Borrower and
the Lenders of the effective date and the amount of each such change,
provided, however, that any failure to do so shall not relieve the
Borrower of any liability hereunder.
(c) Each determination of an interest rate by the
Administrative Agent shall be conclusive and binding on the Borrower
and the Lenders in the absence of manifest error.
2.12 Payments by the Borrower.
(a) All payments (including prepayments) to be made by the
Borrower on account of principal, interest, drawings under Letters of
Credit, fees and other amounts required hereunder shall be made, except
as otherwise expressly provided herein, without set-off or counterclaim
and shall, except as otherwise expressly provided with respect to
drawings under Letters of Credit and elsewhere herein, be made to the
Administrative Agent for the ratable account of the Lenders at the
Administrative Agent's Payment Office, and shall be made in Dollars and
in immediately available funds, no later than 1:00 p.m. (Chicago time)
on the date specified herein. The Administrative Agent will promptly
distribute to each Lender its share, if any, of such principal,
interest, fees or other amounts, in like funds as received. Any payment
which is received by the Administrative Agent later than 1:00 p.m.
(Chicago time) shall be deemed to have been received on the immediately
succeeding Business Day and any applicable interest or fee shall
continue to accrue until such payment is deemed to have been received.
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(b) Whenever any payment hereunder 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 interest or fees, as the case
may be, subject to the provisions set forth in the definition of the
term of "Interest Period" herein.
(c) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the
Lenders hereunder that the Borrower will not make the payment in full,
the Administrative Agent may assume that the Borrower has made such
payment in full to the Administrative Agent as required hereunder on
such date in immediately available funds and the Administrative Agent
may (but shall not be so required), in reliance upon such assumption,
cause to be distributed to each Lender on such due date an amount equal
to the amount then due such Lender. If and to the extent the Borrower
shall not have made such payment in full to the Administrative Agent,
each Lender shall repay to the Administrative Agent on demand such
amount distributed to such Lender, together with interest thereon for
each day from the date such amount is distributed to such Lender until
the date such Lender repays such amount to the Administrative Agent, at
the Federal Funds Rate as in effect for each such day.
2.13 Payments by the Lenders to the Administrative Agent.
(a) Unless the Administrative Agent shall have received notice
from a Lender on the Effective Date or, with respect to each Borrowing
after the Effective Date, at least one Business Day prior to the date
of any proposed Borrowing (other than a Borrowing of a Swingline Loan
which in accordance with Section 2.03(f) is funded directly by the
Swingline Lender), that such Lender will not make available to the
Administrative Agent for the account of the Borrower the amount of such
Lender's Commitment Percentage of the Loans included in such Borrowing,
the Administrative Agent may assume that each Lender has made such
amount available to the Administrative Agent as required hereunder on
the Borrowing Date and the Administrative Agent may (but shall not be
so required), in reliance upon such assumption, make available to the
Borrower on such date a corresponding amount. If and to the extent any
Lender shall not have made its full amount available to the
Administrative Agent in immediately available funds and the
Administrative Agent in such circumstances has made available to the
Borrower such amount, such Lender shall immediately make such amount
available to the Administrative Agent, together with interest at the
Federal Funds Rate from the date of such Borrowing to the date on which
the Administrative Agent recovers such amount from such Lender or the
Borrower. A notice of the Administrative Agent submitted to any Lender
with respect to amounts owing under this Section 2.13(a) shall be
conclusive, absent manifest error. If such amount is so made available,
such payment to the Administrative Agent shall constitute such Lender's
Loan on the Borrowing Date for all purposes of this Agreement. If such
amount is not made available to the Administrative Agent on the next
Business Day following such Borrowing Date, the Administrative Agent
may notify the Borrower
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of such failure to fund and, upon demand by the Administrative Agent,
the Borrower shall pay such amount to the Administrative Agent for the
Administrative Agent's account, together with interest thereon for each
day elapsed since such Borrowing Date, at a rate per annum equal to the
interest rate applicable at the time to the Loans comprising such
Borrowing.
(b) The failure of any Lender to make any Loan on any
Borrowing Date shall not relieve any other Lender of any obligation
hereunder to make a Loan on such Borrowing Date, but no Lender shall be
responsible for the failure of any other Lender to make the Loan to be
made by such other Lender on any Borrowing Date.
2.14 Sharing of Payments, etc.
(a) If, other than as expressly provided elsewhere herein, any
Lender shall obtain on account of the Obligations owing to it any
payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) in excess of its Commitment Percentage
of payments on account of the Obligations of the same kind obtained by
all the Lenders, such Lender shall forthwith (i) notify the
Administrative Agent of such fact, and (ii) purchase from the other
Lenders such participations in such Obligations made by them as shall
be necessary to cause such purchasing Lender to share the excess
payment ratably with each of them; provided, however, that if all or
any portion of such excess payment is thereafter recovered from the
purchasing Lender, such purchase shall to that extent be rescinded and
each other Lender shall repay to the purchasing Lender the purchase
price paid therefor, together with an amount equal to such paying
Lender's Commitment Percentage (according to the proportion of (A) the
amount of such paying Lender's required repayment to (B) the total
amount so recovered from the purchasing Lender) of any interest or
other amount paid or payable by the purchasing Lender in respect of the
total amount so recovered. The Administrative Agent will keep records
(which shall be conclusive and binding in the absence of manifest
error) of participations purchased pursuant to this Section 2.14 and
will in each case notify the Lenders following any such purchases.
(b) The Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 2.14 may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off, but subject to Section 12.09) with
respect to such participation as fully as if such Lender were the
direct creditor of the Borrower in the amount of such participation.
2.15 Security and Guaranties.
(a) All Obligations of the Borrower, Holdings and the
Subsidiary Guarantors under this Agreement and all other Loan Documents
to which they are a party shall be secured in accordance with the
Collateral Documents.
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(b) All Obligations of the Borrower under this Agreement and
all other Loan Documents to which it is a party shall be
unconditionally guaranteed by Holdings pursuant to Article X and by the
Subsidiary Guarantors pursuant to the Subsidiary Guaranty.
ARTICLE III.
THE LETTERS OF CREDIT
3.01 The Letter of Credit Subfacility.
(a) On the terms and conditions set forth herein, (i) each
Issuing Lender agrees, (A) from time to time, on any Business Day
during the period from the Effective Date to the date which is 30 days
prior to the Termination Date to issue (x) irrevocable sight standby
Letters of Credit (each such standby Letter of Credit, a "Standby
Letter of Credit") for the account of the Borrower and (y) irrevocable
sight commercial Letters of Credit (each such commercial Letter of
Credit, a "Trade Letter of Credit" and each such Trade Letter of Credit
and each Standby Letter of Credit, a "Letter of Credit") for the
account of the Borrower, and to amend or renew Letters of Credit
previously issued by it, in accordance with Sections 3.02(c) and
3.02(d), and (B) to honor drafts, and honor other payment demands that
strictly comply with, the Letters of Credit; and (ii) the Lenders
severally agree to participate in Letters of Credit issued for the
account of the Borrower; provided, however, that no Issuing Lender
shall issue any Letter of Credit if as of the date of, and after giving
effect to, the issuance of such Letter of Credit, (x) the aggregate
amount of all Letter of Credit Obligations (exclusive of unpaid
drawings under any Letter of Credit which are repaid with the proceeds
of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) plus the aggregate principal amount of
all Revolving Loans and all Swingline Loans shall exceed the lesser of
the Aggregate Revolving Commitment and the Revolving Availability, or
(y) the Letter of Credit Obligations (exclusive of unpaid drawings
under any Letter of Credit which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of
Revolving Loans) shall exceed the lesser of the Letter of Credit
Commitment and the Revolving Availability. All Letters of Credit shall
be denominated in Dollars.
(b) No Issuing Lender shall issue any Letter of Credit if:
(i) any order, judgment or decree of any Governmental
Authority shall by its terms purport to enjoin or restrain
such Issuing Lender from issuing such Letter of Credit, or any
Requirement of Law applicable to such Issuing Lender or any
request or directive (whether or not having the force of law)
from any Governmental Authority with jurisdiction over such
Issuing Lender shall prohibit, or request that such Issuing
Lender refrain from, the issuance of letters of credit
generally or such Letter of Credit in particular or shall
impose upon such Issuing
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Lender with respect to such Letter of Credit any restriction,
reserve or capital requirement (for which such Issuing Lender
is not otherwise compensated hereunder) not in effect on the
Effective Date or shall impose upon such Issuing Lender any
unreimbursed loss, cost or expense which was not applicable on
the Effective Date and which such Issuing Lender in good faith
deems material to it;
(ii) such Issuing Lender has received written notice
from the Majority Lenders, the Administrative Agent or the
Borrower on or prior to the Business Day prior to the
requested date of issuance of such Letter of Credit, that one
or more of the applicable conditions contained in Article V is
not then satisfied;
(iii) the expiry date of any requested Letter of
Credit (x) is more than (A) in the case of Standby Letters of
Credit, one year after the date of issuance or (B) in the case
of Trade Letters of Credit, 180 days after the date of
issuance, unless (in each case) the Majority Lenders and such
Issuing Lender have approved such expiry date in writing or
(y) is later than the 30th day prior to the Termination Date;
(iv) any requested Letter of Credit is not in form
and substance acceptable to such Issuing Lender, or the
issuance, of a Letter of Credit shall violate any applicable
policies of such Issuing Lender; or
(v) such Letter of Credit is in a face amount less
than $100,000.
3.02 Issuance, Amendment and Renewal of Letters of Credit.
(a) Each Letter of Credit shall be issued upon the irrevocable
written request of the Borrower received by an Issuing Lender (with a
copy sent by the Borrower to the Administrative Agent) at least five
days (or such shorter time as such Issuing Lender may agree in a
particular instance in its sole discretion) prior to the proposed date
of issuance. Each such request for issuance of a Letter of Credit shall
be by facsimile, confirmed immediately in an original writing, in the
form of a Letter of Credit Application, and shall specify in form and
detail satisfactory to such Issuing Lender: (i) the proposed date of
issuance of the Letter of Credit (which shall be a Business Day); (ii)
the face amount of the Letter of Credit; (iii) the expiry date of the
Letter of Credit; (iv) the name and address of the beneficiary thereof;
(v) the documents to be presented by the beneficiary of the Letter of
Credit in case of any drawing thereunder; (vi) the full text of any
certificate to be presented by the beneficiary in case of any drawing
thereunder; and (vii) such other matters as the Issuing Lender may
reasonably require.
(b) From time to time while a Letter of Credit is outstanding
and prior to the Termination Date, the Issuing Lender with respect
thereto will, upon the written request of the Borrower received by such
Issuing Lender (with a copy sent by the Borrower to the
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Administrative Agent) at least five days (or such shorter time as such
Issuing Lender may agree in a particular instance in its sole
discretion) prior to the proposed date of amendment, amend any Letter
of Credit issued by it. Each such request for amendment of a Letter of
Credit shall be made by facsimile, confirmed immediately in an original
writing, made in the form of a Letter of Credit Amendment Application
and shall specify in form and detail satisfactory to the Issuing Lender
with respect thereto: (i) the Letter of Credit to be amended; (ii) the
proposed date of amendment of the Letter of Credit (which shall be a
Business Day); (iii) the nature of the proposed amendment; and (iv)
such other matters as such Issuing Lender may reasonably require. No
Issuing Lender shall be under any obligation to amend any Letter of
Credit if: (A) such Issuing Lender would have no obligation at such
time to issue such Letter of Credit in its amended form under the terms
of this Agreement; or (B) the beneficiary of any such Letter of Credit
does not accept the proposed amendment to the Letter of Credit.
(c) The Administrative Agent will promptly notify the Lenders
of the receipt by it of any Letter of Credit Application or Letter of
Credit Amendment Application.
(d) Each Issuing Lender and the Lenders agree that, while a
Letter of Credit issued by such Issuing Lender is outstanding and prior
to the Termination Date, at the option of the Borrower and upon the
written request of the Borrower received by such Issuing Lender (with a
copy sent by the Borrower to the Agent) at least five days (or such
shorter time as such Issuing Lender may agree in a particular instance
in its sole discretion) prior to the proposed date of notification of
renewal, such Issuing Lender shall be entitled to authorize the
automatic renewal of such Letter of Credit. Each such request for
renewal of a Letter of Credit shall be made by facsimile, confirmed
immediately in an original writing, in the form of a Letter of Credit
Amendment Application, and shall specify in form and detail
satisfactory to the applicable Issuing Lender: (i) the Letter of Credit
to be renewed; (ii) the proposed date of notification of renewal of the
Letter of Credit (which shall be a Business Day); (iii) the revised
expiry date of the Letter of Credit; and (iv) such other matters as
such Issuing Lender may reasonably require. No Issuing Lender shall be
under any obligation to renew any Letter of Credit if such Issuing
Lender would have no obligation at such time to issue or amend such
Letter of Credit in its renewed form under the terms of this Agreement.
If any outstanding Letter of Credit shall provide that it shall be
automatically renewed unless the beneficiary thereof receives notice
from the applicable Issuing Lender that such Letter of Credit shall not
be renewed, and if at the time of renewal such Issuing Lender would be
entitled to authorize the automatic renewal of such Letter of Credit in
accordance with this Section 3.02(d) upon the request of the Borrower
but such Issuing Lender shall not have received any Letter of Credit
Amendment Application from the Borrower with respect to such renewal or
other written direction by the Borrower with respect thereto, such
Issuing Lender shall nonetheless be permitted to allow such Letter of
Credit to be renewed, and the Borrower and the Lenders hereby authorize
such renewal, and, accordingly, such Issuing Lender shall be deemed to
have received a Letter of Credit Amendment Application from the
Borrower requesting
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such renewal. Notwithstanding anything in this Section 3.02(d) to the
contrary, no Issuing Lender shall issue a Letter of Credit that, by its
terms, automatically renews unless such Letter of Credit expressly
provides that, regardless of such automatic renewal provisions, in no
event shall such Letter of Credit's term be extended beyond a date
which is later than the 30th day prior to the Termination Date.
(e) This Agreement shall control in the event of any conflict
with any Letter of Credit Related Document (other than any Letter of
Credit).
(f) Each Issuing Lender will also deliver to the
Administrative Agent, concurrently or promptly following its delivery
of a Letter of Credit, or amendment to or renewal of a Letter of
Credit, to an advising bank or a beneficiary, a true and complete copy
of each such Letter of Credit or amendment to or renewal of a Letter of
Credit.
3.03 Participations, Drawings and Reimbursements.
(a) Immediately upon the issuance of each Letter of Credit,
each Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the applicable Issuing Lender
a participation in such Letter of Credit and each drawing thereunder in
an amount equal to the product of (i) the Commitment Percentage of such
Lender times (ii) the maximum amount available to be drawn under such
Letter of Credit and the amount of such drawing, respectively. For
purposes of Section 2.10(a), each issuance of a Letter of Credit shall
be deemed to utilize the Revolving Commitment of each Lender by an
amount equal to the amount of such participation.
(b) In the event of any request for a drawing under a Letter
of Credit by the beneficiary or transferee thereof, the applicable
Issuing Lender will promptly notify the Borrower. The Borrower shall
reimburse such Issuing Lender prior to 1:00 p.m. (Chicago time), on the
Business Day immediately following each date that any amount is paid by
such Issuing Lender under any Letter of Credit (each such date on which
any amount is so paid by an Issuing Lender, a "Disbursement Date"), in
an amount equal to the amount so paid by such Issuing Lender. In the
event the Borrower shall fail to reimburse an Issuing Lender for the
full amount of any drawing under any Letter of Credit issued by it by
1:00 p.m. (Chicago time) on the Business Day immediately following the
respective Disbursement Date, such Issuing Lender will promptly notify
the Administrative Agent and the Administrative Agent will promptly
notify each Lender thereof, and the Borrower shall be deemed to have
requested that Revolving Loans consisting of Base Rate Loans be made by
the Lenders (and hereby irrevocably consents to such deemed request)
pursuant to Section 2.01(b) to be disbursed on the Business Day
immediately following the respective Disbursement Date under such
Letter of Credit. Any notice given by an Issuing Lender or the
Administrative Agent pursuant to this Section 3.03(b) may be oral if
immediately confirmed in writing (including by facsimile); provided,
however, that the lack
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of such an immediate confirmation shall not affect the conclusiveness
or binding effect of such notice.
(c) Regardless of any failure of the satisfaction of any
condition set forth in Section 5.02 or any other reason, each Lender
shall upon receipt of any notice pursuant to Section 3.03(b) make
available to the Administrative Agent for the account of the applicable
Issuing Lender an amount in Dollars and in immediately available funds
equal to its Commitment Percentage of the amount of the drawing,
whereupon the participating Lenders shall each be deemed to have made a
Revolving Loan consisting of a Base Rate Loan to the Borrower in that
amount. If any Lender so notified shall fail to make available to the
Administrative Agent for the account of the applicable Issuing Lender
the amount of such Lender's Commitment Percentage of the amount of the
drawing by no later than 1:00 p.m. (Chicago time) on the Business Day
immediately following the respective Disbursement Date, then interest
shall accrue on such Lender's obligation to make such payment, from the
Business Day immediately following the respective Disbursement Date to
the date such Lender makes such payment, at a rate per annum equal to
(i) the Federal Funds Rate in effect from time to time during the
period commencing on the later of the Business Day immediately
following the respective Disbursement Date and the date such Lender
receives notice of the Disbursement Date prior to 1:00 p.m. (Chicago
time) on such date and ending on the date three Business Days
thereafter, and (ii) thereafter at the Base Rate as in effect from time
to time plus the Applicable Margin. The Administrative Agent will
promptly give notice of the occurrence of the Disbursement Date, but
failure of the Administrative Agent to give any such notice on the
Disbursement Date or in sufficient time to enable any Lender to effect
such payment on such date shall not relieve such Lender from its
obligations under this Section 3.03.
(d) With respect to any unreimbursed drawing which is not
converted into Revolving Loans consisting of Base Rate Loans to the
Borrower in whole or in part, for any reason, the Borrower shall be
deemed to have incurred from the applicable Issuing Lender a Letter of
Credit Borrowing in the amount of such drawing, which Letter of Credit
Borrowing shall be due and payable on demand by the Majority Lenders
(together with interest) and shall bear interest from the respective
Disbursement Date at a rate per annum equal to the Base Rate, plus the
Applicable Margin for Base Rate Loans, plus in the case of any Letter
of Credit Borrowing outstanding after the Business Day immediately
following the respective Disbursement Date, 2% per annum, and each
Lender's payment to such Issuing Lender pursuant to Section 3.03(c)
shall be deemed payment in respect of its participation in such Letter
of Credit Borrowing.
(e) Each Lender's obligation in accordance with this Agreement
to make the Revolving Loans or fund its participation in any Letter of
Credit Borrowing, as contemplated by this Section 3.03, as a result of
a drawing under a Letter of Credit shall be absolute and unconditional
and without recourse to the applicable Issuing Lender and shall not be
affected by any circumstance, including (i) any set-off, counterclaim,
defense or
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other right which such Lender may have against such Issuing Lender, the
Borrower or any other Person for any reason whatsoever; (ii) the
occurrence or continuance of a Default, an Event of Default, a Material
Adverse Effect, or any failure of the satisfaction of any condition set
forth in Section 5.02; or (iii) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing.
3.04 Repayment of Participations.
(a) Upon (and only upon) receipt by the Administrative Agent
for the account of an Issuing Lender of funds from the Borrower (i) in
reimbursement of any payment made by such Issuing Lender under the
Letter of Credit with respect to which any Lender has paid the
Administrative Agent for the account of such Issuing Lender for such
Lender's participation in a Letter of Credit pursuant to Section 3.03,
or (ii) in payment of interest on amounts described in clause (i), the
Administrative Agent will pay to each Lender, in the same funds as
those received by the Administrative Agent for the account of such
Issuing Lender, the amount of such Lender's Commitment Percentage of
such funds, and such Issuing Lender shall receive the amount of the
Commitment Percentage of such funds of any Lender that did not so pay
the Administrative Agent for the account of such Issuing Lender.
(b) If the Administrative Agent or an Issuing Lender is
required at any time to return to the Borrower, or to a trustee,
receiver, liquidator, custodian, or any similar official in any
Insolvency Proceeding, any portion of the payments made by the Borrower
to the Administrative Agent for the account of such Issuing Lender
pursuant to Section 3.04(a) in reimbursement of a payment made under
the Letter of Credit or interest or fee thereon, each Lender shall, on
demand of the Administrative Agent, forthwith return to the
Administrative Agent or such Issuing Lender the amount of its
Commitment Percentage of any amounts so returned by the Administrative
Agent or such Issuing Lender plus interest thereon from the date such
demand is made to the date such amounts are returned by such Lender to
the Administrative Agent or such Issuing Lender, at a rate per annum
equal to the Federal Funds Rate in effect from time to time.
3.05 Role of the Issuing Lenders.
(a) Each Lender and the Borrower agree that, in paying any
drawing under a Letter of Credit, the applicable Issuing Lender shall
not have any responsibility to obtain any document (other than any
sight draft and certificates expressly required by the Letter of
Credit) or to ascertain or inquire as to the validity or accuracy of
any such document or the authority of the Person executing or
delivering any such document.
(b) Neither the Issuing Lenders nor any of their respective
correspondents, participants or assignees of any such Issuing Lender
shall be liable to any Lender for: (i) any action taken or omitted in
connection herewith at the request or with the approval of
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the Majority Lenders; (ii) any action taken or omitted in the absence
of gross negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any Letter of Credit
Related Document.
(c) The Borrower hereby assumes all risks of the acts or
omissions of any beneficiary or transferee with respect to its use of
any Letter of Credit. Neither the Issuing Lenders nor any of the
respective correspondents, participants or assignees of any such
Issuing Lender, shall be liable or responsible for any of the matters
described in clauses (i) through (vii) of Section 3.06; provided,
however, that the Borrower may have a claim against an Issuing Lender,
and an Issuing Lender may be liable to the Borrower, to the extent, but
only to the extent, of any direct, as opposed to consequential or
exemplary, damages suffered by the Borrower which the Borrower proves
were caused by such Issuing Lender's willful misconduct or gross
negligence or such Issuing Lender's willful failure to pay under any
Letter of Credit after the presentation to it by the beneficiary of a
sight draft and certificate(s) or other documents strictly complying
with the terms and conditions of such Letter of Credit. In furtherance
and not in limitation of the foregoing: (i) each Issuing Lender may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary; and (ii) each Issuing Lender shall not be
responsible for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign a Letter
of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any
reason.
3.06 Obligations Absolute. The obligations of the Borrower
under this Agreement and any Letter of Credit Related Document to reimburse an
Issuing Lender for a drawing under a Letter of Credit, and to repay any Letter
of Credit Borrowing and any drawing under a Letter of Credit converted into
Revolving Loans, shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement and each such other
Letter of Credit Related Document under all circumstances, including the
following:
(i) any lack of validity or enforceability of this Agreement
or any Letter of Credit Related Document;
(ii) any change in the time, manner or place of payment of, or
in any other term of, all or any of the obligations of the Borrower in
respect of any Letter of Credit or any other amendment or waiver of or
any consent to departure from all or any of the Letter of Credit
Related Documents;
(iii) the existence of any claim, set-off, defense or other
right that the Borrower or any Subsidiary of the Borrower may have at
any time against any beneficiary or any transferee of any Letter of
Credit (or any Person for whom any such beneficiary or any such
transferee may be acting), an Issuing Lender or any other Person,
whether in connection
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with this Agreement, the transactions contemplated hereby or by the
Letter of Credit Related Documents or any unrelated transaction;
(iv) any draft, demand, certificate or 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; or any loss or delay in the
transmission or otherwise of any document required in order to make a
drawing under any Letter of Credit;
(v) any payment by an Issuing Lender under any Letter of
Credit against presentation of a draft or certificate that does not
strictly comply with the terms of any Letter of Credit; or any payment
made by an Issuing Lender under any Letter of Credit to any Person
purporting to be a trustee in bankruptcy, debtor-in-possession,
assignee for the benefit of creditors, liquidator, receiver or other
representative of or successor to any beneficiary or any transferee of
any Letter of Credit, including any arising in connection with any
Insolvency Proceeding;
(vi) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the obligations of
the Borrower in respect of any Letter of Credit; or
(vii) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defense available to, or
a discharge of, the Borrower or a guarantor.
3.07 Cash Collateral Pledge. Upon (a) the request of the
Administrative Agent, (i) if an Issuing Lender has honored any full or partial
drawing request on any Letter of Credit and such drawing has resulted in a
Letter of Credit Borrowing hereunder, or (ii) if, as of the Termination Date,
any Letters of Credit may for any reason remain outstanding and partially or
wholly undrawn, or (b) the occurrence of the circumstances described in Section
2.07 requiring the Borrower to Cash Collateralize Letters of Credit, then the
Borrower shall immediately Cash Collateralize the Letter of Credit Obligations
in an amount equal to such Letter of Credit Obligations (or in the case of
clause (b) above, the amount required pursuant to Section 2.07) and such cash
will be held as security for all Obligations of the Borrower to the Lenders
hereunder in a cash collateral account to be established by the Administrative
Agent, and during the existence of an Event of Default, the Administrative Agent
may, upon the request of the Majority Lenders, apply such amounts so held to the
payment of such outstanding Obligations.
3.08 Letter of Credit Fees.
(a) The Borrower shall pay to the Administrative Agent for the
account of each Lender a letter of credit fee with respect to the
Letters of Credit computed on the average daily maximum amount
available to be drawn of the outstanding Letters of Credit, on each
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Interest Payment Date for Base Rate Loans based upon Letters of Credit
outstanding for the previous three-month period. The letter of credit
fee shall be equal to (i) for the period from the Effective Date and
ending on the day immediately preceding the First Adjustment Date,
2.500% per annum and (ii) from and after the First Adjustment Date, for
each period commencing on an Adjustment Date and ending on the day
immediately preceding the next succeeding Adjustment Date, the rate per
annum set forth below opposite the relevant Level of Consolidated
Senior Leverage Ratio determined as at the end of the last fiscal
quarter ended prior to the first day of such period:
Consolidated
Senior
Leverage Ratio Rate
-------------- ----
Level I 1.500%
Level II 2.000%
Level III 2.250%
Level IV 2.500%
provided, however, that if by the day for determining any Adjustment
Date Holdings has failed to deliver a Leverage Ratio Certificate as at
the end of the fiscal quarter ended immediately prior to such
Adjustment Date, the letter of credit fee for the next succeeding
period beginning on such Adjustment Date and ending on the day
immediately preceding the next succeeding Adjustment Date shall be
computed as if the Consolidated Senior Leverage Ratio were at Level IV;
provided further, however, to the extent that Holdings thereafter
delivers a Leverage Ratio Certificate during such succeeding period,
the letter of credit fee for the remainder of such succeeding period
shall be computed at the rate prescribed in the table above in this
Section 3.08(a). In addition, at any time that a Specified Default
shall exist, the letter of credit fee shall be computed as if the
Consolidated Senior Leverage Ratio were at Level IV. Such letter of
credit fee shall be due and payable in arrears on each Interest Payment
Date for Base Rate Loans.
(b) The Borrower shall pay to each Issuing Lender a letter of
credit fronting fee for each Letter of Credit issued by such Issuing
Lender in an amount, and at such times, as is required by such Issuing
Lender (but in no event in an amount in excess of .25% per annum of the
face amount of such Letter of Credit).
(c) The Borrower shall pay to each Issuing Lender from time to
time on demand the normal issuance, presentation, amendment and other
processing fees, and other standard costs and charges, of such Issuing
Lender relating to letters of credit as from time to time in effect.
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3.09 Uniform Customs and Practice. The Uniform Customs and
Practice for Documentary Credits as most recently published by the International
Chamber of Commerce shall in all respects be deemed a part of this Article III
as if incorporated herein and (unless otherwise expressly provided in the
Letters of Credit) shall apply to the Letters of Credit.
3.10 Transitional Provisions. Pursuant to the Existing CII
Credit Agreement Bank of America, as "Issuing Lender" thereunder, issued and may
hereafter continue to issue prior to the Effective Date, certain "Letters of
Credit" (as defined therein) for the account of the Borrower (to the extent
outstanding on the Effective Date and set forth on Schedule 3.10 hereto, the
"Existing L/C's"). As of the Effective Date, the Existing L/C's shall remain
outstanding, constitute Letters of Credit under this Agreement, and upon
satisfaction of the conditions set forth in Article V hereof, shall be deemed to
have been issued on the Effective Date for all purposes under this Agreement,
including, without limitation, for the purpose of the accrual and payment of
letter of credit fees payable pursuant to Section 3.08 for the remaining term of
such Existing L/C's (but shall not, however, result in the payment by the
Borrower of additional customary processing fees for the issuance or any
amendment or renewal of such Existing L/C's with respect to issuances,
amendments and renewals occurring prior to the Effective Date). All "Letter of
Credit Obligations" (as defined in the Existing CII Credit Agreement) which
remain outstanding on the Effective Date with respect to the Existing L/C's
shall constitute Letter of Credit Obligations for all purposes under this
Agreement.
ARTICLE IV.
TAXES, YIELD PROTECTION AND ILLEGALITY
4.01 Taxes.
(a) Subject to Section 4.01(g), any and all payments made by
Holdings and the Borrower to any Lender or the Administrative Agent
under this Agreement shall be made free and clear of, and without
deduction or withholding for or on account of, any and all present or
future taxes, levies, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto, excluding, in the case of each
Lender and the Administrative Agent (except as otherwise provided in
Section 4.01(c)), as the case may be, such taxes as are imposed on or
measured by such Person's net income or net profits by the jurisdiction
under the laws of which such Person is organized or has its principal
office or in which the Lending Office of such Person is located or any
political subdivision thereof (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes").
(b) In addition, the Borrower and Holdings shall pay any
present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies which arise from any payment
made hereunder or from the execution, delivery or
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registration of, or otherwise with respect to, this Agreement or any
other Loan Document (hereinafter referred to as "Other Taxes").
(c) Subject to Section 4.01(g), the Borrower and Holdings
shall indemnify and hold harmless each Lender and the Administrative
Agent for (i) the full amount of Taxes and Other Taxes (including any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable
under Section 4.01(d) and this Section 4.01(c)) and (ii) the full
amount of all taxes imposed on or measured by the net income or net
profits of such Lender or the Administrative Agent pursuant to the laws
of the jurisdiction in which such Lender or the Administrative Agent is
organized or has its principal office or in which the Lending Office of
such Person is located or under the laws of any political subdivision
or taxing authority of any such jurisdiction in which such Lender or
the Administrative Agent is organized or has its principal office or in
which their Lending Office is located paid by such Lender or the
Administrative Agent as a result of amounts payable by the Borrower
under Section 4.01(d) and this Section 4.01(c), and any liability
(including penalties, interest, additions to tax and expenses) arising
therefrom or with respect thereto, whether or not such taxes or other
liabilities were correctly or legally asserted.
(d) If the Borrower or Holdings shall be required by law to
deduct or withhold any Taxes or Other Taxes from or in respect of any
sum payable hereunder to any Lender or the Administrative Agent, then,
subject to Section 4.01(g):
(i) the sum payable shall be increased as necessary
so that after making all required deductions (including
deductions applicable to additional sums payable under this
Section 4.01(d)) such Lender or the Administrative Agent, as
the case may be, receives an amount equal to the sum it would
have received had no such deductions or withholdings been
made;
(ii) the Borrower or Holdings shall make such
deductions; and
(iii) the Borrower or Holdings shall pay the full
amount deducted to the relevant taxation authority or other
authority in accordance with applicable law.
(e) Within 30 days after the date of any payment by the
Borrower or Holdings of Taxes or Other Taxes, such Person shall furnish
to the Administrative Agent, at its address referred to in Section
12.02, the original or a certified copy of a receipt evidencing payment
thereof, or other evidence of payment satisfactory to the
Administrative Agent.
(f) Each Lender which is organized under the laws of a
jurisdiction outside the United States agrees that:
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(i) it shall, no later than the Effective Date (or,
in the case of a Lender which becomes a party hereto pursuant
to Section 12.07 after the Effective Date, the date upon which
such Lender becomes a party hereto) deliver to the Borrower
and the Administrative Agent two accurate and complete signed
originals of Internal Revenue Service Form 4224 or any
successor thereto ("Form 4224"), or two accurate and complete
signed originals of Internal Revenue Service Form 1001 or any
successor thereto ("Form 1001"), as appropriate, in each case
indicating that such Lender is on the date of delivery thereof
entitled to receive all payments under this Agreement free
from withholding of United States Federal income tax;
(ii) if at any time such Lender makes any change in
its place of incorporation or fiscal residence necessitating a
new Form 4224 or Form 1001, such Lender shall promptly deliver
to the Borrower through the Administrative Agent in
replacement for, or in addition to, the forms previously
delivered by such Lender hereunder, two accurate and complete
signed originals of Form 4224 or Form 1001, as appropriate, in
each case indicating that such Lender is on the date of
delivery thereof entitled to receive all payments under this
Agreement free from withholding of United States Federal
income tax;
(iii) it shall, to the extent it is legally entitled
to do so, before or promptly after such Lender makes any
change of a Lending Office or its principal office, or the
occurrence of any event (including the passing of time but
excluding any event mentioned in clause (ii) above) requiring
a change in or renewal of the most recent Form 4224 or Form
1001 previously delivered by such Lender, deliver to the
Borrower through the Administrative Agent two accurate and
complete original signed copies of Form 4224 or Form 1001 in
replacement for the forms previously delivered by such Lender
indicating that such Lender continues to be entitled to
receive all payments under this Agreement free from any
withholding of any United States Federal income tax;
(iv) it shall, to the extent it is legally entitled
to do so, promptly upon the Borrower's or the Administrative
Agent's reasonable request to that effect, deliver to the
Borrower or the Administrative Agent (as the case may be) such
other forms or similar documentation as may be required from
time to time by any applicable law, treaty, rule or regulation
in order to establish such Lender's complete exemption from
withholding on all payments under this Agreement; and
(v) without limiting or restricting any Lender's
right to increased amounts under Section 4.01(d) from the
Borrower and Holdings upon satisfaction of such Lender's
obligations under the provisions of this Section 4.01(f), if
such Lender is entitled to a reduction in the applicable
withholding tax, the Administrative Agent may (but shall not
be obligated to) withhold from any interest to such Lender an
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amount equivalent to the applicable withholding tax after
taking into account such reduction. If the forms or other
administrative documentation required by clause (i) are not
delivered to the Administrative Agent, then the Administrative
Agent shall withhold from any interest payment to Lender not
providing such forms or other documentation, an amount
equivalent to the applicable withholding tax and in addition,
the Administrative Agent shall also withhold against periodic
payments other than interest payments to the extent United
States withholding tax is not eliminated by obtaining Form
4224 or Form 1001. The Borrower shall indemnify and hold
harmless the Administrative Agent and each of its officers,
directors, employees, counsel, agents and attorney-in-fact, on
an after tax basis, from and against all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, charges, expenses or disbursements (including
attorney's fees) of any kind whatsoever incurred as a result
of or in connection with the Administrative Agent's failure to
withhold as provided pursuant to the preceding sentence,
unless such failure constitutes gross negligence or willful
misconduct of the Administrative Agent itself as the same is
determined by a final judgment of a court of competent
jurisdiction and the obligations in this sentence shall
survive payment of all other Obligations.
(g) Neither the Borrower nor Holdings will be required to pay
any additional amounts in respect of Taxes imposed by the United States
Federal government pursuant to Sections 4.01(a) or 4.01(d) to any
Lender if and to the extent the obligation to pay such additional
amounts would not have arisen but for a failure by such Lender to
comply with its obligations under Section 4.01(f) in respect of its
Lending Office.
(h) Each Lender agrees that it shall, at any time upon
reasonable advance request in writing by the Borrower or the
Administrative Agent, promptly deliver such certification or other
documentation as may be required under the law or regulation in any
applicable jurisdiction and which such Lender is entitled to submit to
avoid or reduce withholding taxes on amounts to be paid by the Borrower
or Holdings and received by such Lender pursuant to this Agreement or
any other Loan Document.
(i) Subject to Section 4.01(g), the Borrower and Holdings
shall indemnify each Lender and the Administrative Agent, to the extent
required by this Section 4.01 within 30 days after receipt of written
request from such Lender or the Administrative Agent thereof
accompanied by a written statement describing in reasonable detail the
Taxes or Other Taxes or other additional amounts that are the subject
of the basis for such indemnity and the computation of the amount
payable.
(j) If the Borrower or Holdings is required to pay additional
amounts to any Lender or the Administrative Agent pursuant to Section
4.01(d), then such Lender shall, upon the Borrower's request, use its
reasonable best efforts (consistent with policy considerations of such
Lender) to change the jurisdiction of its Lending Office so as to
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reduce or eliminate any such additional payment which may thereafter
accrue if such change in the sole judgment of such Lender is not
otherwise disadvantageous to such Lender.
(k) Each Lender agrees that it will (i) take all reasonable
actions reasonably requested by Holdings or the Borrower (consistent
with policy considerations by such Lender) to maintain all exemptions,
if any, available to it from withholding taxes (whether available by
treaty or existing administrative waiver), and (ii) to the extent
reasonable, otherwise cooperate with Holdings or the Borrower to
minimize any amounts payable by Holdings or the Borrower under this
Section 4.01, in any case described in the preceding clauses (i) and
(ii), however, only if such action or cooperation is not
disadvantageous to such Lender in the sole judgment of such Lender.
4.02 Illegality.
(a) If any Lender shall determine that (i) the introduction of
any Requirement of Law, or any change in any Requirement of Law, or in
the interpretation or administration thereof, has made it unlawful, or
(ii) any central bank or other Governmental Authority has asserted that
it is unlawful for any Lender or its Lending Office to make a
Eurodollar Loan or to convert any Base Rate Loan to a Eurodollar Loan,
then, on notice thereof by such Lender to the Borrower through the
Administrative Agent, the obligation of such Lender to make or convert
any such Loans shall be suspended until such Lender shall have notified
the Administrative Agent and the Borrower that the circumstances giving
rise to such determination no longer exist.
(b) If a Lender shall determine that it is unlawful to
maintain any Eurodollar Loan, the Borrower shall, unless otherwise
permitted under paragraph (c) below, prepay in full all Eurodollar
Loans of such Lender then outstanding, together with interest accrued
thereon, either on the last day of the Interest Period thereof if such
Lender may lawfully continue to maintain such Eurodollar Loans to such
day, or immediately, if the Lender may not lawfully continue to
maintain such Eurodollar Loans, together with any amounts required to
be paid in connection therewith pursuant to Section 4.04.
(c) If the Borrower is required to prepay any Eurodollar Loan
immediately, then concurrently with such prepayment, the Borrower shall
borrow from the affected Lender, in the aggregate amount of such
repayment, Base Rate Loans.
(d) Before giving any notice to the Administrative Agent
pursuant to this Section 4.02, the affected Lender shall designate a
different Lending Office with respect to its Eurodollar Loans if such
designation will avoid the need for giving such notice or making such
demand and will not, in the judgment of such Lender, be illegal,
inconsistent with the policies of such Lender or otherwise
disadvantageous to such Lender.
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4.03 Increased Costs and Reduction of Return.
(a) If any Lender or Issuing Lender shall determine that, due
to either (i) the introduction of or any change in or in the
interpretation or administration of any law or regulation (other than
any law or regulation relating to taxes, including those relating to
Taxes or Other Taxes) after the Effective Date 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) made
after the Effective Date, there shall be any increase in the cost to
such Lender of agreeing to make or making, funding or maintaining any
Eurodollar Loans or participating in any Letter of Credit Obligations,
or any increase in the cost to such Issuing Lender of agreeing to
issue, issuing or maintaining any Letter of Credit or of agreeing to
make or making, funding or maintaining any unpaid drawing under any
Letter of Credit, then the Borrower shall be liable for, and shall from
time to time, within ten days of demand therefor by such Lender or
Issuing Lender, as the case may be (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account
of such Lender or Issuing Lender, additional amounts as are sufficient
to compensate such Lender or Issuing Lender for such increased costs.
(b) If any Lender or Issuing Lender shall have determined that
(i) the introduction of any Capital Adequacy Regulation after the
Effective Date, (ii) any change in any Capital Adequacy Regulation
after the Effective Date, (iii) any change in the interpretation or
administration of any Capital Adequacy Regulation by any central bank
or other Governmental Authority charged with the interpretation or
administration thereof after the Effective Date, or (iv) compliance by
any Lender (or its Lending Office) or Issuing Lender, as the case may
be, or any corporation controlling such Lender or Issuing Lender, as
the case may be, with any Capital Adequacy Regulation adopted after the
Effective Date, affects or would affect the amount of capital required
or expected to be maintained by such Lender or Issuing Lender or any
corporation controlling such Lender or Issuing Lender and (taking into
consideration such Lender's, Issuing Lender's or such corporation's
policies with respect to capital adequacy and such Lender's, the
Issuing Lender's or corporation's desired return on capital) determines
that the amount of such capital is (or is required to be) increased as
a consequence of its Commitment, Loans, participations in Letters of
Credit, or obligations under this Agreement, then, within ten days of
demand by Issuing Lender (with a copy to the Administrative Agent), the
Borrower shall be liable for and shall immediately pay to such Lender
or Issuing Lender, from time to time as specified by such Lender or
Issuing Lender, additional amounts sufficient to compensate such Lender
or Issuing Lender for such increase.
4.04 Funding Losses. The Borrower agrees to reimburse each
Lender and to hold each Lender harmless from any loss, cost or expense (other
than loss of margin) which such Lender may sustain or incur as a consequence of:
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(a) any failure by the Borrower to make any payment of
principal of any Eurodollar Loan (including payments made after any
acceleration thereof) when due;
(b) any failure by the Borrower to borrow a Eurodollar Loan or
continue a Eurodollar Loan or convert a Base Rate Loan to a Eurodollar
Loan after the Borrower has given (or is deemed to have given) a Notice
of Borrowing or a Notice of Conversion/ Continuation as the case may
be;
(c) any failure by the Borrower to make any prepayment of a
Eurodollar Loan after the Borrower has given a notice in accordance
with Section 2.06; or
(d) any payment or prepayment (including pursuant to Section
2.07 or after acceleration thereof) of a Eurodollar Loan for any reason
whatsoever on a day which is not the last day of the Interest Period
with respect thereto;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain any Eurodollar Loan hereunder or from fees
payable to terminate the deposits from which such funds were obtained.
4.05 Inability to Determine Rates. Notwithstanding any
provisions herein to the contrary, if, in relation to any proposed Eurodollar
Loan, (a) the Administrative Agent shall have determined (which determination
shall be conclusive and binding upon all parties hereto) that by reason of
circumstances affecting the interbank markets adequate and fair means do not
exist for ascertaining LIBOR to be applicable to such Eurodollar Loan or (b) the
Administrative Agent shall have received notice from the Majority Lenders that
LIBOR determined or to be determined for any Interest Period will not adequately
and fairly reflect the cost to such Lenders (as conclusively certified by such
Lenders) of making or maintaining their affected Loans during such affected
Interest Period, then, the obligation of the Lenders to make, continue or
maintain Eurodollar Loans or to convert Base Rate Loans into Eurodollar Loans
shall be suspended until the Administrative Agent upon the instruction of the
Majority Lenders revokes such notice in writing. If, notwithstanding the
provisions of this Section 4.05, any Lender has made available to the Borrower
its Commitment Percentage of any such proposed Eurodollar Loan, then such
Eurodollar Loan shall immediately be converted into a Base Rate Loan.
4.06 Increased Costs on Eurodollar Loans. At any time that any
Lender shall incur increased costs or reductions in the amounts received or
receivable hereunder with respect to any Eurodollar Loans (other than any
increased cost or reduction in the amount received or receivable resulting from
the imposition of or a change in the rate of net income taxes or similar
charges) because of (x) any change since the date of this Agreement in any
Requirement of Law or governmental guideline, order or request (whether or not
having the force of law), or in the interpretation or administration thereof and
including the introduction of any new law or governmental rule, regulation,
guideline, order or request (such as, for example, but not limited to, a change
in official reserve requirements, but, in all events, excluding reserves
required under
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Regulation D to the extent included in the computation of LIBOR) and/or (y)
other circumstances affecting such Lender, the interbank Eurodollar market or
the position of such Lender in such market, then the Borrower shall pay to each
such Lender, upon written demand therefor (accompanied by the written notice
referred to in Section 4.07 below), such additional amounts (in the form of an
increased rate of, or a different method of calculating, interest or otherwise
as such Lender in its sole discretion shall determine) as shall be required to
compensate such Lender for such increased costs or reductions in amounts
received or receivable hereunder.
4.07 Certificates of Lenders. Any Lender, the Swingline Lender
or any Issuing Lender claiming reimbursement or compensation pursuant to this
Article IV shall deliver to the Borrower or Holdings, as applicable (with a copy
to the Administrative Agent) a certificate setting forth in reasonable detail
the amount payable to such Person hereunder and such certificate shall be
conclusive and binding on the Borrower or Holdings in the absence of manifest
error. In determining any amounts payable under Section 4.03(b), each Lender,
the Swingline Lender, and each Issuing Lender, as the case may be, shall act
reasonably and in good faith and will use averaging and attribution methods
which are reasonable.
4.08 Change of Lending Office, Replacement Lender, etc.
(a) Each Lender agrees that upon the occurrence of an event
giving rise to the operation of Section 4.02, 4.03 or 4.06 with respect
to such Lender, it will if so requested by the Borrower, use reasonable
efforts (consistent with its internal policy and legal and regulatory
restrictions) to designate a different Lending Office for any Loans
affected by such event with the object of avoiding the consequence of
the event giving rise to the operation of such section; provided,
however, that such designation would not, in the sole judgment of such
Lender, be otherwise disadvantageous to such Lender. Nothing in this
Section 4.08(a) shall affect or postpone any of the obligations of the
Borrower or the right of any Lender provided in Section 4.02, 4.03 or
4.06.
(b) Notwithstanding anything to the contrary contained herein
or in any other Loan Document, (x) upon the occurrence of any event
that obligates the Borrower or Holdings to pay any amount under Section
4.01 or giving rise to the operation of Section 4.02, 4.03 or 4.06 with
respect to such Lender or (y) as provided in Section 12.01(b) in the
case of certain refusals by a Lender to consent to certain proposed
changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Majority Lenders, the
Borrower shall have the right, if no Default or Event of Default then
exists or will exist immediately after giving effect to the respective
replacement, to replace such Lender (the "Replaced Lender") by
designating another Lender or an Eligible Assignee (such Lender or
Eligible Assignee being herein called a "Replacement Lender") to which
such Replaced Lender shall assign, in accordance with Section 12.07 and
without recourse to or warranty by, or expense to, such Replaced
Lender, the rights and obligation of such Replaced Lender hereunder
(except for such rights as survive repayment of the Loans), and, upon
such assignment, such Replaced Lender shall no longer be a party
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hereto or have any rights hereunder and such Replacement Lender shall
succeed to the rights and obligations of such Replaced Lender
hereunder. The Borrower shall pay to such Replaced Lender in same day
funds on the date of replacement all interest, fees and other amounts
then due and owing such Replaced Lender by the Borrower hereunder to
and including the date of replacement, including, without limitation,
costs incurred under Sections 4.01, 4.02, 4.03 or 4.06.
(c) Notwithstanding anything to the contrary contained in
Section 4.02, 4.03 or 4.06, unless a Lender gives notice to the
Borrower that the Borrower is obligated to pay an amount under any such
Section within 180 days after the later of (x) the date such Lender
incurs the respective increased costs, loss, expense or liability,
reduction in amounts received or receivable or reduction in return on
capital or (y) the date such Lender has actual knowledge of its
incurrence of the respective increased costs, loss, expense or
liability, reductions in amounts received or receivable or reduction in
return on capital, then such Lender shall only be entitled to be
compensated for such amount by the Borrower pursuant to said Section
4.02, 4.03 or 4.06, as the case may be, to the extent the respective
increased costs, loss, expense or liability, reduction in amounts
received or receivable or reduction in return on capital are incurred
or suffered on or after the date which occurs 180 days prior to such
Lender giving such notice to the Borrower as provided above that the
Borrower is obligated to pay the respective amounts pursuant to said
Section 4.02, 4.03 or 4.06, as the case may be. This paragraph (c)
shall have no applicability to any Section of this Agreement other than
said Section 4.02, 4.03 or 4.06.
4.09 Survival. The agreements and obligations of Holdings and
the Borrower in this Article IV shall survive the payment of all other
Obligations.
ARTICLE V.
CONDITIONS PRECEDENT
5.01 Conditions to Loans and Letters of Credit on the
Effective Date. The occurrence of the Effective Date, the obligation of each
Lender to make Loans hereunder and the obligation of each Issuing Lender to
issue Letters of Credit on the Effective Date is subject to the condition that
the Administrative Agent shall be reasonably satisfied that the following
conditions have been satisfied on or before the Effective Date and, to the
extent applicable, shall have received on or before the date for making such
Loans and/or issuing such Letters of Credit all of the following, in form and
substance reasonably satisfactory to the Administrative Agent and each Lender
and (except for the original instruments or documents representing Pledged
Collateral) in sufficient copies for each Lender:
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(a) Credit Agreement. This Agreement executed by the Borrower,
Holdings, the Administrative Agent, the Issuing Lender, the Swingline
Lender and each of the Lenders (or, in the case of any party as to
which an executed counterpart shall not have been received, receipt by
the Administrative Agent in form satisfactory to it of facsimile or
other written confirmation from such party of execution of a
counterpart hereof by such party), together with the Revolving Notes
and Term Notes executed by the Borrower and made payable to the
Lenders.
(b) Resolutions; Incumbency.
(i) Copies of the resolutions of the Board of
Directors of the Borrower approving and authorizing the
execution, delivery and performance by the Borrower of this
Agreement and the other Transaction Documents to be delivered
by the Borrower, and authorizing the borrowing of the Loans
and the issuance of the Letters of Credit, certified as of the
Effective Date by the Secretary or an Assistant Secretary of
the Borrower;
(ii) Copies of the resolutions of the Board of
Directors of Holdings approving and authorizing the execution,
delivery and performance by Holdings of this Agreement
(including the guaranty of the Obligations of the Borrower)
and the other Transaction Documents to be delivered by
Holdings, certified by the Secretary or an Assistant Secretary
of Holdings;
(iii) Copies of the resolutions of the Board of
Directors of each Subsidiary Guarantor approving and
authorizing the execution, delivery and performance by such
Subsidiary Guarantor of the Subsidiary Guaranty and the other
Transaction Documents to be delivered by such Subsidiary
Guarantor;
(iv) Copies of the resolutions of the Board of
Directors of Merger Sub approving and authorizing the
execution, delivery and performance by Merger Sub of the
Merger Agreement and the other Transaction Documents to be
delivered by Merger Sub; and
(v) Certificates of the Secretary or Assistant
Secretary of Holdings, the Borrower, Merger Sub and each
Subsidiary Guarantor certifying the names, incumbency and true
signatures of the officers of Holdings, the Borrower, Merger
Sub and such Subsidiary Guarantor authorized to execute,
deliver and perform, as applicable, this Agreement and all
other Transaction Documents, notices, requests and other
communications to be delivered hereunder or thereunder.
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(c) Articles of Incorporation; By-laws and Good Standing.
Each of the following documents:
(i) the articles or certificate of incorporation of
Holdings, the Borrower, Merger Sub and each Subsidiary
Guarantor as in effect on the Effective Date, certified by the
Secretary of State (or similar, applicable Governmental
Authority) of the State of such Credit Party's or Merger Sub's
organization as of a recent date and by the Secretary or
Assistant Secretary of Holdings, the Borrower, Merger Sub and
such Subsidiary Guarantor as of the Effective Date, and the
bylaws of Holdings, the Borrower, Merger Sub and such
Subsidiary Guarantor as in effect on the Effective Date,
certified by the Secretary or Assistant Secretary of Holdings,
the Borrower, Merger Sub and each Subsidiary Guarantor as of
the Effective Date;
(ii) a good standing certificate for Holdings, the
Borrower and each Subsidiary Guarantor from the Secretary of
State of the State of such Credit Party's organization and
each state where Holdings, the Borrower and each Subsidiary
Guarantor is qualified to do business as a foreign corporation
as of a recent date; and
(iii) a bring-down certificate, to the extent
reasonably available, of Holdings, the Borrower and each
Subsidiary Guarantor from the Secretary of State of the State
of such Credit Party's organization, dated the Effective Date.
(d) Subsidiary Guaranty. The Subsidiary Guaranty, duly
executed by each Subsidiary Guarantor.
(e) Pledge Agreement.
(i) The Pledge Agreement, duly executed by each
Credit Party named as a signatory thereto;
(ii) all certificates and instruments (endorsed in
blank) representing the Pledged Securities then to be pledged;
(iii) an undated stock power for each such
certificate executed in blank; and
(iv) with respect to Pledged Securities, if any,
consisting of book-entry shares, evidence that all actions
described in the Pledge Agreement which are necessary to
create and perfect the security interests pursuant to the
Pledge Agreement in accordance with Articles 8 and 9 of the
UCC have been taken.
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(f) Security Agreement.
(i) The Security Agreement, duly executed by each
Credit Party;
(ii) proper Financing Statements (Form UCC-1 or the
equivalent) fully executed for filing under the UCC or other
appropriate filing offices of each jurisdiction as may be
necessary or, in the reasonable opinion of the Administrative
Agent, desirable to perfect the security interests purported
to be created by the Security Agreement;
(iii) evidence of the completion of all other
recordings and filings of, or with respect to, the Security
Agreement as may be necessary or to perfect the security
interests intended to be created by the Security Agreement;
and
(iv) evidence that all other actions necessary or to
perfect and protect the security interests purported to be
created by the Security Agreement have been taken.
(g) Legal Opinions.
(i) An opinion of Kirkland & Ellis, counsel to
Holdings, the Borrower, Merger Sub and the Subsidiary
Guarantors, addressed to the Administrative Agent and the
Lenders, containing opinions substantially in the form of
Exhibit J-1 and as to such other matters as the Administrative
Agent may reasonably request;
(ii) An opinion of McGuire, Wood & Bissette, P.A.,
North Carolina counsel to the Borrower, addressed to the
Administrative Agent and the Lenders containing opinions
substantially in the form of Exhibit J-2 and as to such other
matters as the Administrative Agent may reasonably request;
and
(iii) Opinions delivered in connection with the
Merger pursuant to the Merger Agreement, together with
reliance letters in favor of the Administrative Agent and the
Lenders to the extent available.
(h) Other Documents. The other agreements, documents and
instruments described in the List of Closing Documents attached hereto
as Exhibit P, each duly executed where appropriate and in form and
substance reasonably satisfactory to the Administrative Agent.
(i) Payment of Fees and Expenses. Evidence that all fees,
costs and expenses (including Attorney Costs of the Administrative
Agent) payable by the Borrower on or before the Effective Date have
been (or, upon application of the proceeds of the initial Loans
hereunder, will be) paid to the extent then invoiced, and evidence that
the fees
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payable on the Effective Date pursuant to the Fee Letter will be paid
upon application of the proceeds of the initial Loans hereunder.
(j) Certificates.
(i) Certificates signed by a Responsible Officer of
Holdings and the Borrower, dated as of the Effective Date
stating that:
(A) The representations and warranties of
Holdings and the Borrower contained in Article VI and
in the other Loan Documents to which they are a party
are true and correct in all material respects on and
as of such date, as though made on and as of such
date (except to the extent such representations and
warranties expressly relate to an earlier date, in
which case such representations and warranties shall
be true and correct in all material respects as of
such earlier date);
(B) no Default or Event of Default exists or
would result from any Borrowing on the Effective
Date; and
(C) the conditions set forth in paragraphs
(l), (n) and (o)(i) of this Section 5.01 have been
satisfied;
(ii) Certificates signed by a Responsible Officer of
each of the Subsidiary Guarantors, dated as of the Effective
Date, stating that the representations and warranties of such
Subsidiary Guarantor contained in the Subsidiary Guaranty, the
Pledge Agreement, the Security Agreement and each other Loan
Document to which it is a party, are true and correct in all
material respects on and as of such date, as though made on
and as of such date (except to the extent such representations
and warranties expressly relate to an earlier date, in which
case such representations and warranties shall be true and
correct in all material respects as of such earlier date); and
(iii) a pro forma Borrowing Base Certificate as of
the Effective Date, based upon the most recently available
financial information available to the Borrower and giving
effect to the consummation of the Transaction.
(k) Solvency Certificate. A solvency certificate from the
Chief Financial Officer of Holdings in the form of Exhibit K, together
with a contribution and indemnification agreement executed and
delivered by each Credit Party in the form of Exhibit Q.
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(l) Transaction.
(i) (x) The Merger shall have been consummated in all
material respects in accordance with the Merger Documents and
all applicable laws, (y) each of the conditions precedent to
the consummation of the Merger, as set forth therein, shall
have been satisfied and not waived except with the consent of
the Administrative Agent and (z) no material breach of any
term or provision of the Merger Documents has occurred;
(ii) (x) The transactions contemplated by the
Additional Junior Subordinated Note Documents shall have been
consummated in all material respects in accordance therewith
and all applicable laws, (y) Holdings shall have received
gross cash proceeds of at least $5,000,000 from the Additional
Junior Subordinated Note Investment, and (z) all of such
proceeds shall have been contributed by Holdings to the equity
capital of the Borrower;
(iii) The Administrative Agent shall have received
the Refinancing Documents containing agreements and other
assurances from the creditors holding Indebtedness to be
Refinanced that, upon application of the proceeds of the
initial Loans to be made hereunder, (x) the Refinancing will
have been consummated and shall be effective, (y) such
creditors will have thereupon terminated and released all
security interests and Liens on the assets owned by Holdings
and its Subsidiaries and all guaranties in respect thereof,
and (z) the Administrative Agent will immediately receive such
releases of security interests in and Liens on the assets
owned by Holdings and its Subsidiaries as may be reasonably
requested by the Administrative Agent;
(iv) The Additional Subordinated Guaranty shall have
been issued in accordance with the Additional Subordinated
Guaranty Documents and all applicable laws; and
(v) The Administrative Agent shall have received true
and correct copies of all Transaction Documents.
(m) Adverse Changes. Since January 31, 1997, nothing shall
have occurred (and neither the Administrative Agent nor the Lenders
shall have become aware of any facts or conditions not known previous
to such date) which the Administrative Agent or the Majority Lenders
shall reasonably determine has had, or could reasonably be expected to
have, a Material Adverse Effect. Since December 31, 1997, nothing shall
have occurred (and neither the Administrative Agent nor the Lenders
shall have become aware of any facts or conditions not known by such
Persons previous to such date) which the Administrative Agent or the
Majority Lenders shall reasonably determine has had, or could
reasonably be expected to have, a material adverse effect upon the
operations, business,
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assets, properties, liabilities, condition (financial or otherwise) or
prospects of Corcom and its Subsidiaries taken as a whole.
(n) Governmental and Third Party Approvals. All governmental
and material third party approvals necessary in connection with the
Transaction shall have been obtained and be in full force and effect,
and all applicable waiting periods shall have expired without any
action being taken or threatened by any competent authority which would
restrain, prevent or otherwise impose materially adverse conditions on
the Transaction or the financing thereof.
(o) Litigation. There shall be no actions, suits or
proceedings pending or threatened (i) with respect to the Transaction
or any Transaction Document or (ii) which the Administrative Agent or
the Majority Lenders shall reasonably determine could reasonably be
expected to have a (x) material adverse effect on the Transaction, (y)
a Material Adverse Effect or (z) a material adverse effect upon the
operations, business, assets, properties, liabilities, condition
(financial or otherwise) or prospects of Corcom and its Subsidiaries
taken as a whole.
(p) Shareholders' Agreements, Management Agreements and
Holdings Tax Sharing Agreement.
(i) All agreements entered into by Holdings or any of
its Subsidiaries governing the terms and relative rights of
its capital stock and any agreements entered into by
shareholders relating to any such entity with respect to its
capital stock;
(ii) the Holdings Tax Sharing Agreement; and
(iii) all management and consulting agreements
entered into by Holdings or any of its Subsidiaries (including
the CHS Management Agreement).
(q) Financial Statements.
(i) A pro forma consolidated balance sheet as at
April 30, 1998 of Holdings after giving effect to the
consummation of the Transaction, the making of the initial
Loans hereunder and the application of the proceeds thereof;
(ii) consolidated balance sheets, income statements
and statements of income of Holdings for the fiscal month
ended April 30, 1998, the fiscal quarter ended March 31, 1998,
and the fiscal year ended December 31, 1997; and
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(iii) consolidated projected financial statements
(including cash flow projections) of the Borrower and its
Subsidiaries for the years 1998 through 2003, after giving
effect to the Transactions.
(r) Insurance. Evidence of insurance complying with the
requirements of Section 7.05 for the business and properties of
Holdings and its Subsidiaries.
(s) Minimum Revolving Loan Availability. After giving effect
to the Loans to be made and the Letters of Credit to be issued or
outstanding on the Effective Date, each of the Aggregate Revolving
Commitment and the Revolving Availability as of the Effective Date
shall exceed the sum of the aggregate principal amount of all
outstanding Revolving Loans and Swingline Loans, plus the aggregate
amount of all outstanding Letter of Credit Obligations, by an amount
equal to or greater than $10,000,000.
(t) Subordinated Debt Compliance. The Borrower's projections
delivered pursuant to Section 5.01(q) shall reasonably indicate that at
no time on or prior to the Termination Date would any portion of the
projected outstanding Obligations and other Consolidated Indebtedness,
not constituting "Permitted Debt" exceed the maximum amount of "Debt"
permitted under Section 4.12 of the Borrower Senior Subordinated Note
Indenture (as such terms in quotations are defined therein).
5.02 Conditions to all Borrowings and the Issuance of any
Letters of Credit. The obligation of each Lender to make any Loan hereunder
(other than a Revolving Loan made pursuant to a Mandatory Borrowing) and the
obligation of the Issuing Lender to issue, renew or amend any Letter of Credit
is subject to the satisfaction of the following conditions precedent on the
relevant Borrowing Date or date of issuance, as the case may be:
(a) Notice. The Administrative Agent shall have received a
Notice of Borrowing or in the case of a Swingline Loan, the notice
required under Section 2.03(f); or in the case of any issuance of any
Letter of Credit, the applicable Issuing Lender and the Administrative
Agent shall have received a Letter of Credit Application, as required
under Section 3.02;
(b) Continuation of Representations and Warranties. The
representations and warranties contained in Article VI and in the other
Loan Documents shall be true and correct in all material respects on
and as of such Borrowing Date or date of issuance (except to the extent
such representations and warranties expressly refer to an earlier date,
in which case they shall be true and correct in all material respects
as of such earlier date);
(c) No Existing Default. No Default or Event of Default shall
exist or shall result from such Borrowing or issuance of such Letter of
Credit; and
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(d) No Material Adverse Effect. Since December 31, 1997, no
events have occurred which, individually or in the aggregate, have had,
or could reasonably be expected to have, a Material Adverse Effect.
Each Notice of Borrowing, request for a Swingline Loan or Letter of Credit
Application submitted by the Borrower hereunder shall be deemed to constitute a
representation and warranty by the Borrower hereunder, as of the date of each
such notice or application and as of the date of each Borrowing that the
applicable conditions in this Section 5.02 are satisfied.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
Each of Holdings and the Borrower represents and warrants with
respect to itself and its Subsidiaries to the Administrative Agent, the Issuing
Lenders and each Lender as of the Effective Date and as of the date of each
Borrowing of Loans or issuance, renewal or amendment of each Letter of Credit
that:
6.01 Corporate Existence and Power. Each of Holdings and each
of its Subsidiaries:
(a) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation;
(b) has the power and authority and has or will have on or
prior to the date required to be obtained all governmental licenses,
authorizations, consents and approvals to execute, deliver and perform
its obligations under the Transaction Documents to which it is a party
and has duly executed and delivered each such Transaction Document, in
each case other than (i) immaterial third party authorizations,
consents and approvals for the Transaction and (ii) filings necessary
to perfect the security interest in the Collateral under the Security
Agreement (which filings have been made to the extent that this
representation and warranty is made (or deemed made) after 10 days
after the Effective Date);
(c) is duly qualified to do business as a foreign corporation,
and licensed and in good standing, under the laws of each jurisdiction
where its ownership, lease or operation of property or the nature or
conduct of its business requires such qualification or license except
where the failure so to qualify could not reasonably be expected to
have a Material Adverse Effect; and
(d) is in compliance with all Requirements of Law, except to
the extent that the failure to do so could not reasonably be expected
to have a Material Adverse Effect.
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6.02 Corporate Authorization; No Contravention. The execution,
delivery and performance by each of Holdings and each of its Subsidiaries of any
Transaction Document to which such Person is party have been duly authorized by
all necessary corporate action, and do not and will not:
(a) contravene the terms of any of such Person's charter or
by-laws;
(b) conflict with or result in any breach or contravention of,
or the creation or imposition of (or the obligation to create or
impose) any Lien (except pursuant to the Collateral Documents) under,
any document evidencing any material Contractual Obligation to which
such Person is a party or any order, injunction, writ or decree of any
Governmental Authority to which such Person or its property is subject;
or
(c) violate any Requirement of Law.
6.03 Governmental Authorization. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, Holdings or any
of its Subsidiaries of any Transaction Document to which any such Person is a
party, in each case other than (i) immaterial approvals, consents, exemptions or
authorizations relating to the Transaction and (ii) filings necessary to perfect
security interest in the Collateral under the Security Agreement (which filings
have been made to the extent that this representation and warranty is made (or
deemed made) after 10 days after the Effective Date).
6.04 Binding Effect. This Agreement and each other Transaction
Document to which Holdings or any of its Subsidiaries is a party constitute the
legal, valid and binding obligations of Holdings and each of its Subsidiaries
to the extent such Person is a party thereto, enforceable against such Person in
accordance with their respective terms, except to the extent that enforceability
may be limited by applicable bankruptcy, insolvency, or similar laws affecting
the enforcement of creditors' rights generally or by equitable principles of
general applicability.
6.05 Litigation. There are no actions, suits, proceedings,
claims or disputes pending, or to the best knowledge of Holdings or the
Borrower, threatened at law, in equity, in arbitration or before any
Governmental Authority, against Holdings or any of its Subsidiaries or any of
their respective properties or assets which:
(a) purport to affect or pertain to this Agreement or any
other Loan Document; or
(b) could reasonably be expected to have a Material Adverse
Effect.
As of the Effective Date, no injunction, writ, temporary
restraining order or any order of any nature has been issued by any court or
other Governmental Authority purporting to enjoin or restrain the execution,
delivery or performance of this Agreement or any other
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Transaction Document, or directing that any other transaction provided for
herein not be consummated as herein provided.
6.06 No Default. No Default or Event of Default exists or
would result from the incurring of any Obligations by Holdings, the Borrower or
any Subsidiary Guarantor. Neither Holdings nor any of its Subsidiaries is in
default under or with respect to any Contractual Obligation in any respect
which, individually or together with all such defaults, could reasonably be
expected to have a Material Adverse Effect.
6.07 ERISA Compliance. Each Plan (and each related trust,
insurance contract or fund) is in material compliance with its terms and with
all applicable laws, including, without limitation, ERISA and the Code; each
Plan (and each related trust, if any) which is intended to be qualified under
Section 401(a) of the Code has received a determination letter from the Internal
Revenue Service to the effect that it meets the requirements of Sections 401(a)
and 501(a) of the Code; no Reportable Event has occurred; no Plan which is a
multiemployer plan (as defined in Section 4001(a)(3) of ERISA) is insolvent or
in reorganization; no Plan has an Unfunded Current Liability which, when added
to the aggregate amount of Unfunded Current Liabilities with respect to all
other Plans, exceeds $250,000; no Plan which is subject to Section 412 of the
Code or Section 302 of ERISA has an accumulated funding deficiency, within the
meaning of such sections of the Code or ERISA, or has applied for or received a
waiver of an accumulated funding deficiency or an extension of any amortization
period, within the meaning of Section 412 of the Code or Section 303 or 304 of
ERISA; all contributions required to be made with respect to a Plan have been
timely made; neither Holdings nor any Subsidiary of Holdings nor any ERISA
Affiliate has incurred any material liability (including any indirect,
contingent or secondary liability) to or on account of a Plan pursuant to
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of
ERISA or Section 401(a)(29), 4971 or 4975 of the Code or expects to incur any
such material liability under any of the foregoing sections with respect to any
Plan; no condition exists which presents a material risk to Holdings or any
Subsidiary of Holdings or any ERISA Affiliate of incurring a material liability
to or on account of a Plan pursuant to the foregoing provisions of ERISA and the
Code; no proceedings have been instituted to terminate or appoint a trustee to
administer any Plan which is subject to Title IV of ERISA; no action, suit,
proceeding, hearing, audit or investigation with respect to the administration,
operation or the investment of assets of any Plan (other than routine claims for
benefits) is pending, expected or threatened; using actuarial assumptions and
computation methods consistent with Part 1 of subtitle E of Title IV of ERISA,
the aggregate liabilities of Holdings and its Subsidiaries and its ERISA
Affiliates to all Plans which are multiemployer plans (as defined in Section
4001(a)(3) of ERISA) in the event of a complete withdrawal therefrom, as of the
close of the most recent fiscal year of each such Plan, would not exceed
$250,000; each group health plan (as defined in Section 607(1) of ERISA or
Section 4980B(g)(2) of the Code) which covers or has covered employees or former
employees of Holdings, any Subsidiary of Holdings, or any ERISA Affiliate has at
all times been operated in material compliance with the provisions of Part 6 of
subtitle B of Title I of ERISA and Section 4980B of the Code; no lien imposed
under the Code or ERISA on the assets of Holdings or any Subsidiary of Holdings
or any ERISA Affiliate exists or is likely to arise on
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account of any Plan; and Holdings and its Subsidiaries may cease contributions
to or terminate any employee benefit plan maintained by any of them without
incurring any material liability.
6.08 Use of Proceeds; Margin Regulations. The proceeds of the
Loans are intended to be and shall be used solely for the purposes set forth in
and permitted by Section 7.15.
6.09 Title to Properties. Holdings and each of its
Subsidiaries have good record and marketable title in fee simple to, or valid
leasehold interests in, all material property owned or leased by them, free and
clear of all Liens other than Permitted Liens.
6.10 Taxes. Each of Holdings and each of its Subsidiaries has
filed all federal and state income tax returns and all other material tax
returns, domestic and foreign, required to be filed by it and has paid all taxes
and assessments payable by it which have become due, except for immaterial taxes
and taxes contested in good faith and adequately disclosed and fully provided
for on the financial statements of Holdings and its Subsidiaries in accordance
with GAAP. Holdings and each of its Subsidiaries have at all times paid, or have
provided adequate reserves (in the good faith judgment of the management of
Holdings) for the payment of, all federal, state, local and foreign income taxes
(other than immaterial taxes) applicable for all prior fiscal years and for the
current fiscal year to date. There is no material action, suit, proceeding,
investigation, audit, or claim now pending or, to the best knowledge of Holdings
and the Borrower threatened, by any authority regarding any taxes relating to
Holdings or any of its Subsidiaries. As of the Effective Date, neither Holdings
nor any of its Subsidiaries has entered into an agreement or waiver or been
requested to enter into an agreement or waiver extending any statute of
limitations relating to the payment or collection of taxes of Holdings or any of
its Subsidiaries, or is aware of any circumstances that would cause the taxable
years or other taxable periods of Holdings or any of its Subsidiaries not to be
subject to the normally applicable statute of limitations.
6.11 Financial Statements. All balance sheets, statements of
operations and other financial data of Holdings and its Subsidiaries which have
been or shall hereafter be furnished to the Administrative Agent and the Lenders
for the purposes of or in connection with this Agreement or any transaction
contemplated hereby do and will present fairly, in all material respects, the
financial condition of Holdings and its Subsidiaries as of the dates thereof and
the results of their operations for the period(s) covered thereby. The
projections which have been furnished by (or on behalf of) Holdings or any of
its Subsidiaries to the Administrative Agent or any Lender pursuant to Section
5.01(q) represent management's good faith estimates of future performance based
upon historical financial information and reasonable assumptions of management,
it being recognized that such projections are not to be viewed as facts and do
not constitute a warranty as to the future performance of Holdings or its
Subsidiaries and that actual results may vary from projected results and such
variances may be material.
6.12 Securities Law, etc.; Compliance. All transactions
contemplated by this Agreement and the other Loan Documents comply with (x)
Regulations T, U and X of the Federal Reserve Board and (y) all other applicable
laws and any rules and regulations thereunder.
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6.13 Governmental Regulation. Neither Holdings nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940 or
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.
6.14 Labor Controversies. There are no labor controversies
pending or, to the best of Holdings' and the Borrower's knowledge, threatened
against it or any of its Subsidiaries which could reasonably be expected to have
a Material Adverse Effect.
6.15 Subsidiaries. Holdings has no Subsidiaries, except, on
the date hereof, those Subsidiaries which are identified in Schedule 6.15 and,
thereafter, those Subsidiaries permitted to be formed or acquired in compliance
with the terms hereof.
6.16 Patents, Trademarks, etc. Each of Holdings and each of
its Subsidiaries owns (or is licensed to use) and possesses all such patents,
patent rights, trademarks, trademark rights, trade names, trade name rights,
service marks, service mark rights, copyrights, permits, licenses and
authorizations as it considers necessary for the conduct of the business of
Holdings and its Subsidiaries as now conducted without, individually or in the
aggregate, any infringement upon rights of other Persons which could reasonably
be expected to have a Material Adverse Effect.
6.17 Accuracy of Information. All factual information
heretofore or contemporaneously herewith furnished by or on behalf of Holdings
or any of its Subsidiaries in writing to the Administrative Agent or any Lender
for purposes of or in connection with this Agreement or any transaction
contemplated hereby and all other such factual information here after furnished
by or on behalf of Holdings or any of its Subsidiaries to the Administrative
Agent or any Lender will be, 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 material fact necessary to make such information, in the
light of the circumstances existing at the time such information was delivered,
not misleading.
6.18 Hazardous Materials. Neither Holdings nor any of its
Subsidiaries have caused or permitted any Hazardous Material to be disposed of
or otherwise released, either from, on or under any property currently or
formerly legally or beneficially owned or operated by, or otherwise used by,
Holdings or any of its Subsidiaries, which has or could reasonably be expected
to have a Material Adverse Effect. No such property has ever been used as a dump
site or storage site for any Hazardous Materials or otherwise contains or
contained Hazardous Materials, which has or could reasonably be expected to have
a Material Adverse Effect. The failure, if any, of Holdings or any of its
Subsidiaries, in connection with their current and former properties or their
businesses, to be in compliance with any Environmental Law or to obtain any
permit, certificate, license, approval and other authorization under such
Environmental Laws has not had, nor is reasonably expected to have, a Material
Adverse Effect. Neither Holdings nor any of its Subsidiaries have entered into,
have agreed to or are subject to any judgment, decree or order or other similar
requirement of any Governmental Authority under any Environmental Law, including
without limitation, relating to compliance or to investigation, cleanup,
remediation or removal of Hazardous Materials, which has or could reasonably be
expected to have a Material Adverse Effect. Neither Holdings nor any of its
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Subsidiaries have contractually assumed any liabilities or obligations under any
Environmental Law which have or could reasonably be expected to have a Material
Adverse Effect. There are no facts or circumstances which exist that could
reasonably be expected to give rise to liabilities with respect to Hazardous
Materials or any Environmental Law, which have or could reasonably be expected
to have a Material Adverse Effect.
6.19 Collateral Documents.
(i) The provisions of the Pledge Agreement will be, on and
after the Effective Date, effective to create, in favor of the
Collateral Agent for the benefit of the Lenders and the Collateral
Agent, legal, valid and enforceable security interests in all of the
Collateral described therein, and upon the taking of and continued
possession of such Collateral by the Collateral Agent on or prior to
the Effective Date, the Pledge Agreement shall constitute, as of and
after the Effective Date, a fully perfected security interest in such
Collateral superior in right to any other security interests, existing
or future, which any Person may have against such Collateral, except to
the extent, if any, otherwise provided in the Pledge Agreement; and
(ii) the provisions of the Security Agreement are effective to
create in favor of the Collateral Agent for the benefit of the Lenders
and the Collateral Agent, a legal, valid and enforceable security
interest in all right, title and interest in all of the Collateral
described therein, and the Security Agreement, upon the filing of Form
UCC-1 financing statements or the appropriate equivalent (which filing,
if this representation is being made more than 10 days after the
Effective Date, has been made), create a fully perfected first priority
lien on, and security interest in, all right, title and interest in all
of the Collateral described in the Security Agreement to the extent
that such security interests can be perfected by the filing of a
financing statement under the UCC or in which a filing may be made in
the United States Patent and Trademark Office or in the United States
Copyright Office, subject to no other Liens other than Permitted Liens.
6.20 Solvency. On and as of the Effective Date and after
giving effect to the Transaction and to all Indebtedness being incurred or
assumed and Liens created by the Credit Parties in connection therewith (a) the
sum of the assets, at a fair valuation on a going-concern basis, of each of the
Borrower on a stand-alone basis and of Holdings and its Subsidiaries taken as a
whole will exceed its debts; (b) each of the Borrower on a stand-alone basis and
Holdings and its Subsidiaries taken as a whole has not incurred and does not
intend to incur, and does not believe that it will incur, debts beyond its
ability to pay such debts as such debts mature; and (c) each of the Borrower on
a stand alone basis and Holdings and its Subsidiaries taken as a whole will have
sufficient capital with which to conduct its business. For purposes of this
Section 6.20,
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"debt" means any liability on a claim, and "claim" means (i) 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 (ii) 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. The amount of contingent
liabilities at any time shall be computed as the amount that, in the light of
all the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability.
6.21 Representations and Warranties in the other Documents.
All representations and warranties made by any Credit Party or Merger Sub in the
Merger Documents and in the other Transaction Documents were true and correct in
all material respects at the time as of which such representations and
warranties were made (or deemed made) and shall be true and correct in all
material respects as of Effective Date as if such representations and warranties
were made on and as of such date, unless stated to relate to a specific earlier
date, in which case such representations and warranties shall be true and
correct in all material respects as of such earlier date.
6.22 Capitalization.
(a) On the Effective Date and after giving effect to the
Transaction and the other transactions contemplated hereby, the
authorized capital stock of Holdings shall consist of (i) 7,800,000
shares of common stock, $.01 par value per share ("Holdings Common
Stock"), of which 1,003,880 shares shall be issued and outstanding and
(ii) 110,000 shares of preferred stock, $.01 par value per share
("Holdings Preferred Stock"), of which 1,962 shares shall be issued and
outstanding. All outstanding shares of capital stock of Holdings have
been duly and validly issued and are fully paid and non-assessable.
Holdings does not have outstanding any 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 agreement providing for the issuance (contingent or otherwise) of,
or any calls, commitments or claims of any character relating to, its
capital stock, except (i) for options to purchase shares of Holdings'
Common Stock which may be issued from time to time to directors,
officers and employees of Holdings or any of its Subsidiaries and (ii)
as provided in the Shareholders Agreement.
(b) On the Effective Date and after giving effect to the
Transaction and the other transactions contemplated hereby, the
authorized capital stock of (i) the Borrower shall consist of 1,000
shares of common stock, $.01 par value per share, of which 1,000 shares
shall be issued and outstanding and owned by Holdings, (ii) Kilovac
shall consist of 200,000 shares of Class A common stock, $.01 par value
per share, of which 124,785 shares shall be issued and outstanding and
owned by the Borrower and 200,000 shares of Class B shares of common
stock, $.01 par value per shares, none of which shares shall be issued
and outstanding and (iii) Corcom shall consist of 1,000 shares of
common stock,
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$.01 par value per share, of which 1,000 shares shall be issued and
outstanding and owned by the Borrower. All outstanding shares of
capital stock of the Borrower, Kilovac and Corcom have been duly and
validly issued, are fully paid and nonassessable. Neither the Borrower,
Kilovac nor Corcom has 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 agreement providing for the issuance (contingent or otherwise) of,
or any calls, commitments or claims of any character relating to, its
capital stock.
6.23 Special Purpose Corporation. Holdings engages in no
significant business activities and has no significant assets (other than the
capital stock of the Borrower, Investments permitted to be made by it pursuant
to Section 8.05(xvi), immaterial assets used for the performance of those
activities permitted to be performed by Holdings pursuant to Section 8.14(b) and
any obligations held by it to the extent permitted by Section 8.05(vi)) or
liabilities (other than those incurred under this Agreement and under the other
Transaction Documents to which it is a party and, after the issuance thereof in
accordance with the terms of this Agreement, additional Holdings Junior
Subordinated Notes, the Holdings Shareholder Subordinated Notes, any
Intercompany Note and any guaranty issued under Section 8.04(vii) or
8.04(viii)).
6.24 Insurance. Schedule 6.24 sets forth a true and complete
listing of all insurance maintained by Holdings and its Subsidiaries as of the
Effective Date, and with the amounts insured (and any deductibles) set forth
therein.
6.25 Borrower Senior Subordinated Note; etc.
(a) The subordination provisions contained in the Borrower
Senior Subordinated Note Documents are enforceable against the
Borrower, the respective Subsidiary Guarantors and the holders thereof,
and all Obligations and Guaranteed Obligations (as defined in the
Subsidiary Guaranty) are within the definition of "Senior Debt" or
"Guarantor Senior Debt", as the case may be, included in such
subordination provisions, and the Borrower's incurrence of the
Obligations are permitted under Section 4.12 of the Borrower Senior
Subordinated Note Indenture.
(b) The subordination provisions contained in the Holdings
Junior Subordinated Notes are enforceable against Holdings and the
holders thereof, and all Guaranteed Obligations (as defined in this
Agreement) and within the definition of "Superior Debt" included in
such subordination provisions.
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6.26 The Transaction.
(a) Each of the Transaction Documents filed with the
Securities and Exchange Commission and other securities authorities complied in
all material respects with the provisions of the Exchange Act and all other
applicable federal securities laws, state securities or "Blue Sky" laws, foreign
securities laws, general corporation laws and rules and regulations thereunder;
(b) All conditions precedent to, and all consents necessary to
permit, the Merger pursuant to the Merger Agreement have been satisfied or
delivered, or waived with the prior written consent of the Administrative Agent,
and no material breach of any term or provision of any Merger Document has
occurred and no action has been taken by any competent authority which
restrains, prevents or imposes material adverse conditions upon, or seeks to
restrain, prevent or impose material adverse conditions upon, the Merger or the
funding of any Loans and issuance of any Letters of Credit hereunder;
(c) Merger Sub has merged with and into Corcom pursuant to the
Merger Agreement in compliance with the Illinois Business Corporation Act of
1983, as amended, and all other applicable laws;
(d) The transactions contemplated by the Additional Junior
Subordinated Note Documents have been consummated in all material respects in
accordance therewith and all applicable laws, Holdings received gross cash
proceeds of at least $5,000,000 from the Additional Junior Subordinated Note
Investment, and all such proceeds shall have been contributed by Holdings to the
equity capital of the Borrower; and
(e) The transactions contemplated by the Additional
Subordinated Guaranty Documents have been consummated in all material respects
in accordance therewith and all applicable laws.
6.27 Year 2000 Compliance. As of the Effective Date, the
Borrower is in the process of reviewing and assessing all computer applications
which are material to the Borrower's and its Subsidiaries' businesses with
respect to the ability of such applications to correctly recognize references
to, and abbreviations of, the year 2000 (including, without limitation,
references to "00" as the year 2000 and not the year 1900). The Borrower
reasonably believes that to the extent one or more of such computer applications
of the Borrower or its Subsidiaries is unable to correctly recognize such
references to, or abbreviations of, the year 2000, that such deficiencies would
be addressed prior to the year 2000 to the extent such deficiencies could
reasonably be expected to have a Materially Adversely Effect.
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ARTICLE VII.
AFFIRMATIVE COVENANTS
Each of Holdings and the Borrower agrees with the
Administrative Agent, each Issuing Lender and each Lender that, until all
Commitments and Letters of Credit have terminated and all Obligations (other
than indemnities for which no request for payment has been made) have been paid
and performed in full:
7.01 Financial Statements. Holdings and the Borrower shall
deliver to the Administrative Agent in form and detail reasonably satisfactory
to the Administrative Agent and the Majority Lenders:
(a) as soon as available, but not later than 90 days after the
end of each fiscal year of Holdings, (i) a copy of the audited
consolidated balance sheet of Holdings and its consolidated
Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income or operations, shareholders' equity
and cash flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, and
accompanied by the opinion of Deloitte & Touche LLP or another
nationally-recognized independent public accounting firm reasonably
acceptable to the Administrative Agent which report shall state that
such consolidated financial statements present fairly, in all material
respects, the financial position for the periods indicated in
conformity with GAAP applied on a basis consistent with prior years
(except for changes agreed upon by Holdings and such auditors which are
disclosed and described in such statements), and (ii) management's
discussion and analyses of the material operational and financial
developments during such fiscal year. The accountant's opinion referred
to above shall not be qualified or limited because of a restricted or
limited examination by such accountant of any material portion of the
records of Holdings or any of its Subsidiaries;
(b) as soon as available, but not later than 45 days after the
end of each of the first three fiscal quarters of each fiscal year of
Holdings, a copy of the unaudited consolidated balance sheet of
Holdings and its consolidated Subsidiaries as of the end of such fiscal
quarter and the related consolidated statements of income,
shareholders' equity and cash flows for the period commencing on the
first day and ending on the last day of such fiscal quarter, and
certified by either the Chief Financial Officer, the Vice
President-Finance or any other Responsible Officer of Holdings as being
complete and correct and fairly presenting in all material respects,
in accordance with GAAP (subject to normal year-end audit adjustments
and the absence of footnote disclosure), the financial position and the
results of operations of Holdings and its Subsidiaries;
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(c) as soon as available, but not later than 30 days following
the first day of each fiscal year of Holdings, a budget (including
budgeted statements of income and sources and uses of cash and balance
sheets) prepared by Holdings for each of the twelve months of such
fiscal year prepared in detail; and
(d) as soon as available, but in any event not later than 30
days after the end of each calendar month, a Borrowing Base Certificate
with respect to such month then ended.
7.02 Certificates; Other Information. Holdings and the
Borrower shall furnish to the Administrative Agent:
(a) concurrently with the delivery of the financial statements
referred to in Sections 7.01(a) and (b), (x) a Compliance Certificate
and (y) a certificate executed and delivered by a Responsible Officer
of Holdings certifying that the Borrower was in compliance with the
provisions of Section 4.12 of the Borrower Senior Subordinated Note
Indenture for the period ended as of the date of such financial
statements (together with a schedule calculating such compliance in
reasonable detail satisfactory to the Administrative Agent);
(b) to the extent not previously delivered with respect to any
Adjustment Date, concurrently with the delivery of the financial
statements referred to in Sections 7.01(a) and (b), a Leverage Ratio
Certificate duly executed by a Responsible Officer of Holdings;
(c) promptly after Holdings' or any of its Subsidiaries'
receipt thereof, a copy of any "management letter" received from its
certified public accountants and management's response thereto;
(d) promptly after the same are sent, copies of all financial
statements and reports which Holdings sends to its shareholders
generally; and promptly after the same are filed, copies of all
financial statements and regular, periodical or special reports which
Holdings or any of its Subsidiaries may make to, or file with, the
Securities and Exchange Commission; and
(e) promptly, such additional business, financial and other
information with respect to Holdings or any of its Subsidiaries as the
Administrative Agent or any Lender may from time to time reasonably
request.
7.03 Notices. Holdings and the Borrower shall, upon any
Responsible Officer of Holdings or the Borrower obtaining knowledge thereof,
give notice (accompanied by a reasonably detailed explanation with respect
thereto) promptly to the Administrative Agent, the Issuing Lender and each
Lender of:
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(a) the occurrence of any Default or Event of Default;
(b) any litigation, arbitration or governmental investigation
or proceeding which has been instituted or, to the knowledge of a
Responsible Officer of Holdings or the Borrower, is threatened against
Holdings or any of its Subsidiaries or to which any of their respective
properties is subject (i) which could reasonably be expected to result
in a Material Adverse Effect or (ii) relates to this Agreement, any
other Transaction Document, the Transaction or any of the transactions
contemplated hereby;
(c) promptly after any Responsible Officer of Holdings or the
Borrower obtains knowledge thereof, notice of one or more of the
following environmental matters, unless such environmental matters
could not, individually or when aggregated with all other such
environmental matters, be reasonably expected to have a Material
Adverse Effect:
(i) any pending or threatened Environmental Claim
against Holdings or any of its Subsidiaries or any real
property owned or operated by Holdings or any of its
Subsidiaries;
(ii) any condition or occurrence on or arising from
any real property owned or operated by Holdings or any of its
Subsidiaries that (a) results in noncompliance by Holdings or
any of its Subsidiaries with any applicable Environ mental Law
or (b) could be expected to form the basis of an Environmental
Claim against Holdings or any of its Subsidiaries or any such
real property;
(iii) any condition or occurrence on any real
property owned or operated by Holdings or any of its
Subsidiaries that could be expected to cause such real
property to be subject to any restrictions on the ownership,
occupancy, use or transferability by Holdings or any of its
Subsidiaries of such real property under any Environmental
Law; and
(iv) the taking of any removal or remedial action in
response to the actual or alleged presence of any Hazardous
Material on any real property owned or operated by Holdings or
any of its Subsidiaries as required by any Environmental Law
or any governmental or other administrative agency; provided,
that in any event Holdings shall deliver to the Administrative
Agent and each Lender all notices received by Holdings or any
of its Subsidiaries from any government or governmental agency
under, or pursuant to, CERCLA which identify Holdings or any
of its Subsidiaries as potentially responsible parties for
remediation costs or which otherwise notify Holdings or any of
its Subsidiaries of potential liability under CERCLA; and
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(d) as soon as possible and, in any event, within ten (10)
days after any Responsible Officer of Holdings or the Borrower knows or
has reason to know of the occurrence of any of the following, Holdings
will deliver to the Administrative Agent a certificate of the Chief
Financial Officer of Holdings setting forth in reasonable detail
information as to such occurrence and the action, if any, that
Holdings, such Subsidiary or such ERISA Affiliate is required or
proposes to take, together with any notices required or proposed to be
given to or filed with or by Holdings, the Subsidiary, the ERISA
Affiliate, the PBGC, a Plan participant or the Plan administrator with
respect thereto: that a Reportable Event has occurred (except to the
extent that Holdings has previously delivered to the Lenders a
certificate and notices (if any) concerning such event pursuant to the
next clause hereof); that a contributing sponsor (as defined in Section
4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA is subject
to the advance reporting requirement of PBGC Regulation Section 4043.61
(without regard to subparagraph (b)(1) thereof), and an event described
in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation
Section 4043 is reasonably expected to occur with respect to such Plan
within the following 30 days; that an accumulated funding deficiency,
within the meaning of Section 412 of the Code or Section 302 of ERISA,
has been incurred or an application may reasonably be expected to be or
has been made for a waiver or modification of the minimum funding
standard (including any required installment payments) or an extension
of any amortization period under Section 412 of the Code or Section 303
or 304 of ERISA with respect to a Plan; that any contribution required
to be made with respect to a Plan has not been timely made; that a Plan
has been or may reasonably be expected to be terminated, reorganized,
partitioned or declared insolvent under Title IV of ERISA; that a Plan
has an Unfunded Current Liability which, when added to the amount of
Unfunded Current Liabilities with respect to all other Plans, exceeds
$250,000; that proceedings may be reasonably expected to be or have
been instituted to terminate or appoint a trustee to administer a Plan
which is subject to Title IV of ERISA; that a proceeding has been
instituted pursuant to Section 515 of ERISA to collect a delinquent
contribution to a Plan; that Holdings, any Subsidiary of Holdings or
any ERISA Affiliate will or may reasonably be expected to incur any
material liability (including any indirect, contingent, or secondary
liability) to or on account of the termination of or withdrawal from a
Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA
or with respect to a Plan under Section 401(a)(29), 4971, 4975 or 4980
of the Code or Section 409 or 502(i) or 502(l) of ERISA or with respect
to a group health plan (as defined in Section 607(1) of ERISA or
Section 4980B(g)(2) of the Code) under Section 4980B of the Code; or
that Holdings or any Subsidiary of Holdings may incur any material
liability pursuant to any employee welfare benefit plan (as defined in
Section 3(1) of ERISA) with respect to providing benefits to retired
employees or other former employees (other than as required by Section
601 of ERISA or Section 4980B of the Code) or any Plan in addition to
the liability that existed under the terms of such Plan or Plans on the
Effective Date. Upon request of the Administrative Agent or any Lender,
Holdings will deliver to the Administrative Agent (i) a complete copy
of the annual report (on Internal Revenue Service Form 5500-series) of
each Plan (including, to the extent required, the related financial and
actuarial statements
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and opinions and other supporting statements, certifications, schedules
and information) required to be filed with the Internal Revenue Service
and (ii) copies of any records, documents or other information that
must be furnished to the PBGC with respect to any Plan pursuant to
Section 4010 of ERISA. In addition to any certificates or notices
delivered to the Administrative Agent pursuant to the first sentence
hereof, copies of annual reports and any records, documents or other
information required to be furnished to the PBGC, and any material
notices received by Holdings, any Subsidiary of Holdings or any ERISA
Affiliate with respect to any Plan shall be delivered to the
Administrative Agent no later than ten (10) days after the date such
annual report has been filed with the Internal Revenue Service or such
records, documents and/or information has been furnished to the PBGC or
such notice has been received by Holdings, the Subsidiary or the ERISA
Affiliate, as applicable.
7.04 Books, Records and Inspections. Holdings shall, and shall
cause each of its Subsidiaries to, keep proper books of record and accounts in
which full, true and correct entries in conformity with GAAP and all
requirements of law shall be made of all dealings and transactions in relation
to its business and activities. Holdings shall, and shall cause each of its
Subsidiaries to, permit officers and designated representatives of the
Administrative Agent or any Lender to visit and inspect, under guidance of
officers of Holdings or such Subsidiary, any of the properties of Holdings or
such Subsidiary and, under guidance of officers of Holdings or such Subsidiary,
to examine the books of account of Holdings or such Subsidiary and discuss the
affairs, finances and accounts of Holdings or such Subsidiary with, and be
advised as to the same by, its and their officers and independent accountants,
all upon reasonable prior notice and at such reasonable times and intervals and
to such reasonable extent as the Administrative Agent or such Lender may
reasonably request.
7.05 Maintenance of Property; Insurance.
(a) Holdings shall, and shall cause each of its Subsidiaries
to, (i) keep all property necessary to the business of Holdings and its
Subsidiaries in reasonably good working order and condition, ordinary
wear and tear excepted, (ii) maintain insurance on all such property in
at least such amounts and against at least such risks as is consistent
and in accordance with industry practice for companies similarly
situated owning similar properties in the same general areas in which
Holdings or any of its Subsidiaries operates, and (iii) furnish to the
Administrative Agent, on each date on which financial statements are
delivered pursuant to Section 7.01(a), full information as to the
insurance carried.
(b) Holdings shall, and shall cause each of its Subsidiaries
to, at all times keep its property insured in favor of the Collateral
Agent, and all policies or certificates (or certified copies thereof)
with respect to such insurance (and any other insurance maintained by
Holdings and/or such Subsidiaries) (i) shall be endorsed to the
Collateral Agent's satisfaction for the benefit of the Collateral Agent
(including, without limitation, by naming the Collateral Agent as loss
payee and/or additional insured), (ii) shall state that
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such insurance policies shall not be cancelled without at least 30
days' prior written notice thereof (or 10 days' prior written notice in
the case of nonpayment of premium) by the respective insurer to the
Collateral Agent (or such shorter period of time as a particular
insurance company policy generally provides) and (iii) shall be
deposited with the Collateral Agent.
(c) If Holdings or any of its Subsidiaries shall fail to
insure its property in accordance with this Section 7.05, or if
Holdings or any of its Subsidiaries shall fail to so endorse and
deposit all policies or certificates with respect thereto, the
Collateral Agent shall have the right (but shall be under no
obligation) to procure such insurance and Holdings and the Borrower
agree to reimburse the Collateral Agent for all reasonable costs and
expenses of procuring such insurance.
7.06 Corporate Franchises. Holdings shall, and shall 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 7.06 shall prevent (i) sales of assets and other transactions by
Holdings or any of its Subsidiaries in accordance with Section 8.02 or (ii) the
withdrawal by Holdings or any of its Subsidiaries of its qualification as a
foreign corporation in any jurisdiction where such withdrawal could not
reasonably be expected to have a Material Adverse Effect.
7.07 Compliance with Law. Holdings shall, and shall cause each
of its Subsidiaries to, comply with all Requirements of Law of any Governmental
Authority, except such noncompliances as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
7.08 Payment of Taxes. Holdings shall pay and discharge, and
shall cause each of its Subsidiaries to pay and discharge, all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any properties belonging to it, prior to the date on
which penalties attach thereto, and all lawful claims for sums that have become
due and payable which, if unpaid, might become a Lien not otherwise permitted
under Section 8.01(i); provided, that neither Holdings nor any of its
Subsidiaries shall be required to pay any such tax, assessment, charge, levy or
claim which is immaterial or is being contested in good faith and by proper
proceedings if it has maintained adequate reserves with respect thereto in
accordance with GAAP.
7.09 Contributions. Except as expressly permitted by Section
8.03(vii), Section 8.05(xvi) and the last sentence of Section 8.11, Holdings
shall contribute as a common equity contribution to the capital of the Borrower
upon its receipt thereof, any cash proceeds received by Holdings after the
Effective Date from any asset sale, any incurrence of Indebtedness, any Recovery
Event, any sale or issuance of its equity or any cash capital contributions
received by Holdings, including, without limitation, the proceeds from the
Additional Junior Subordinated Note Investment.
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7.10 End of Fiscal Years; Fiscal Quarters. Holdings shall, for
financial reporting purposes, cause (i) each of its, and each of its
Subsidiaries', fiscal years to end on December 31 of each year and (ii) each of
its, and each of its Subsidiaries', fiscal quarters to end on March 31, June 30,
September 30 and December 31 of each year.
7.11 Cash Management System. Holdings shall maintain, and
shall cause each of its Subsidiaries to maintain, their cash management system
on a basis consistent with their cash management system as in effect on the
Effective Date (although no daily cash sweeps against outstanding Loans shall be
required); provided, however, to the extent that any Credit Party maintains any
bank account (other than payroll accounts) with an institution other than the
Administrative Agent in which more than $250,000 is maintained at any time, such
Credit Party shall promptly notify the Administrative Agent thereof, and to the
extent requested by Lender of America (or any successor Administrative Agent) or
the Majority Lenders, such Credit Party shall cause such other institution to
enter into lockbox and blocked account arrangements with the Collateral Agent on
terms reasonably acceptable to Bank of America (or any successor Administrative
Agent).
7.12 Foreign Subsidiaries Security. (a) Within 30 days
following the request therefor by the Administrative Agent at any time after the
Effective Date, or immediately upon Holdings' or any of its Subsidiaries
acquisition thereof after the Effective Date if requested by the Administrative
Agent, in any case in the Administrative Agent's sole discretion, Holdings shall
pledge, or cause to be pledged, pursuant to the Pledge Agreement, an amendment
thereto, or a similar separate pledge agreement, in any case in form and
substance reasonably acceptable to the Administrative Agent, 66% of the issued
and outstanding capital stock and other equity interests of each Foreign
Subsidiary of Holdings (or such lesser percentage owned by Holdings and its
Subsidiaries), as additional security for the Obligations.
(b) If following a change in the relevant sections of the Code
or the regulations, rules, rulings, notices or other official pronouncements
issued or promulgated thereunder, counsel for the Borrower reasonably acceptable
to the Administrative Agent does not within 30 days after a request from the
Administrative Agent or the Majority Lenders deliver evidence, in form and
substance mutually satisfactory to the Agent and the Borrower, with respect to
any Foreign Subsidiary which has not already had all of its stock pledged
pursuant to the Pledge Agreement that (i) a pledge (x) of 66-2/3% or more of the
total combined voting power of all classes of capital stock of such Foreign
Subsidiary entitled to vote, or (y) of any promissory note issued by such
Foreign Subsidiary to the Borrower or any of its Domestic Subsidiaries, (ii) the
entering into by such Foreign Subsidiary of a security agreement in
substantially the form of the Security Agreement or (iii) the entering into by
such Foreign Subsidiary of a guaranty in substantially the form of the
Subsidiary Guaranty, in any such case could reasonably be expected to cause (I)
the undistributed earnings of such Foreign Subsidiary as determined for Federal
income tax purposes to be treated as a deemed dividend to such Foreign
Subsidiary's United States parent for Federal income tax purposes or (II) other
material adverse federal income tax consequences to the Credit Parties, then in
the case of a failure to deliver the evidence described in clause (i) above,
that
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portion of such Foreign Subsidiary's outstanding capital stock or any promissory
notes so issued by such Foreign Subsidiary, in each case not theretofore pledged
pursuant to the Pledge Agreement shall be pledged to the Collateral Agent for
the benefit of the Lenders pursuant to the Pledge Agreement or a Guarantor
Supplement (or another pledge agreement in substantially similar form, if
needed), and in the case of a failure to deliver the evidence described in
clause (ii) above, such Foreign Subsidiary shall execute and deliver the
Security Agreement or a Guarantor Supplement (or another security agreement in
substantially similar form, if needed), granting the Collateral Agent for the
benefit of the Lenders a security interest in all of such Foreign Subsidiary's
assets and securing the Obligations of the Borrower under the Loan Documents
and, in the event the Subsidiary Guaranty shall have been executed by such
Foreign Subsidiary, the obligations of such Foreign Subsidiary thereunder, and
in the case of a failure to deliver the evidence described in clause (iii)
above, such Foreign Subsidiary shall execute and deliver the Subsidiary Guaranty
or a Guarantor Supplement (or another guaranty in substantially similar form, if
needed), guaranteeing the Obligations of the Borrower under the Loan Documents,
in each case to the extent that the entering into such Pledge Agreement,
Security Agreement, Subsidiary Guaranty, Guarantor Supplement (or similar
instrument) is permitted by the laws of the respective foreign jurisdiction and
with all documents delivered pursuant to this Section 7.12 to be in form and
substance reasonably satisfactory to the Administrative Agent.
(c) The Borrower shall execute and deliver, or cause to be
executed and delivered, to the Administrative Agent, concurrently with the
execution and delivery of any Collateral Documents pursuant to this Section
7.12, such corporate resolutions, legal opinions, corporate certificates,
financing statements, stock certificates, stock powers, and other foreign and
domestic perfection documents (as applicable) as the Administrative Agent shall
reasonably request in connection with such execution and delivery.
7.13 Future Liens on Real Property. The Borrower shall, and
shall cause its Subsidiaries to, execute and deliver to the Collateral Agent,
for the benefit of the Lenders, as additional security for the Obligations,
within 30 days following the request therefor by the Administrative Agent after
the Effective Date, in the Administrative Agent's sole discretion, a mortgage,
deed of trust or similar interest in any or all fee simple interests in real
property now owned or hereafter acquired by Holdings or any of its Subsidiaries
and located in the United States, together with such title insurance policies
(mortgagee's form), title insurance endorsements, certified land surveys and
local counsel opinions with respect thereto, the same to be in form and
substance reasonably acceptable to the Administrative Agent. Each such mortgage,
deed of trust or similar instrument shall create a first priority Lien in favor
of the Collateral Agent, for the benefit of the Lenders, against such real
property, subject only to Liens permitted under Section 8.01.
7.14 Holdings Preferred Stock. Holdings shall pay all
Dividends on the Holdings Preferred Stock in additional shares of Holdings
Preferred Stock rather than in cash; provided that in lieu of issuing additional
shares of Holdings Preferred Stock as Dividends, Holdings may
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increase the liquidation preference of the shares of the Holdings Preferred
Stock in respect of which such Dividends have accrued.
7.15 Use of Proceeds; Margin Regulations.
(a) All proceeds of the Revolving Loans shall be used for the
working capital and general corporate purposes of the Borrower and its
Subsidiaries, including to make Permitted Acquisitions, provided that
up to $14,000,000 of Revolving Loans in the aggregate may be incurred
on the Effective Date to finance, in part, the Transaction and to pay
fees and expenses in connection therewith. All proceeds of the Term
Loan shall be used to finance, in part, the Transaction and to pay fees
and expenses in connection therewith.
(b) Holdings and the Borrower shall ensure that no part of any
Loan or Letter of Credit will be used to purchase or carry any Margin
Stock or to extend credit for the purpose of purchasing or carrying any
Margin Stock or will violate or be inconsistent with the provisions of
Regulations T, U and X of the Federal Reserve Board.
ARTICLE VIII.
NEGATIVE COVENANTS
Each of Holdings and the Borrower agrees with the
Administrative Agent, each Issuing Lender and each Lender that, until all
Commitments and Letters of Credit have terminated and all Obligations (other
than indemnities for which no request for payment has been made) have been paid
and performed in full:
8.01 Liens. Holdings 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
Holdings 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 Holdings 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 (Liens described below are herein referred to as "Permitted Liens"):
(i) inchoate Liens for taxes, assessments or governmental
charges or levies not yet due or Liens for taxes, assessments or
governmental charges or levies being contested in good faith and by
appropriate proceedings for which adequate reserves have been
established in accordance with GAAP or which are immaterial;
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(ii) Liens in respect of property or assets of Holdings or any
of its Subsidiaries imposed by law, which were incurred in the ordinary
course of business and do not secure Indebtedness for borrowed money,
such as carriers', warehousemen's, materialmen'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
Holdings' or such Subsidiary's property or assets or materially impair
the use thereof in the operation of the business of Holdings or such
Subsidiary or (y) which are being contested in good faith by
appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the property or assets subject to
any such Lien;
(iii) Liens in existence on the Effective Date which are
listed, and the property subject thereto described, in Schedule 8.01,
provided that (x) the aggregate principal amount of the Indebtedness,
if any, secured by such Liens does not increase from that amount
outstanding at the time of any such renewal, replacement or extension
and (y) any such renewal, replacement or extension does not encumber
any additional assets or properties (other than proceeds and products
of such assets or properties and accessions, replacements and
substitutions thereof) of Holdings or any of its Subsidiaries;
(iv) Liens created pursuant to the Collateral Documents;
(v) licenses, sublicenses, leases or subleases granted to
other Persons not materially interfering with the conduct of the
business of Holdings or any of its Subsidiaries;
(vi) Liens upon assets of the Borrower or any of its
Subsidiaries subject to Capital Lease Obligations to the extent such
Capital Lease Obligations are permitted by Section 8.04(iv), provided
that (x) such Liens only serve to secure the payment of Indebtedness
arising under such Capital Lease Obligation and (y) the Lien
encumbering the asset giving rise to the Capital Lease Obligation does
not encumber any other asset of the Borrower or any Subsidiary of the
Borrower;
(vii) Liens placed upon property acquired after the Effective
Date and used in the ordinary course of business of the Borrower or any
of its Subsidiaries at the time of the acquisition thereof by the
Borrower or any such Subsidiary or within 90 days thereafter to secure
Indebtedness incurred to pay all or a portion of the purchase price
thereof or to secure Indebtedness incurred solely for the purpose of
financing the acquisition of any such property or extensions, renewals
or replacements of any of the foregoing for the same or a lesser
amount, provided that (x) the aggregate outstanding principal amount of
all Indebtedness secured by Liens permitted by this clause (vii), when
added to the aggregate outstanding principal of all Indebtedness
secured by Liens permitted under clause (vi) of this Section 8.01,
shall not at any time outstanding exceed $2,000,000 and (y) in all
events, the Lien encumbering the property so acquired does not encumber
any
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other asset (other than proceeds and products of such property and
accessions, replacements and substitutions thereof) of the Borrower or
such Subsidiary;
(viii) easements, rights-of-way, restrictions, zoning rights,
encroachments and other similar charges or encumbrances, and minor
title deficiencies, in each case not securing Indebtedness and not
materially interfering with the conduct of the business of Holdings or
any of its Subsidiaries;
(ix) Liens arising from precautionary UCC financing statement
filings regarding operating leases;
(x) Liens arising out of the existence of judgments or awards
to the extent not constituting an Event of Default under Section
9.01(i);
(xi) statutory and common law landlords' liens under leases to
which Holdings or any of its Subsidiaries is a party;
(xii) (x) Liens (other than Liens imposed under ERISA)
incurred in the ordinary course of business in connection with workers
compensation claims, unemployment insurance and social security
benefits and (y) Liens securing the performance of bids, tenders,
leases and contracts in the ordinary course of business, statutory
obligations, surety bonds, performance bonds and other obligations of a
like nature incurred in the ordinary course of business (exclusive of
obligations in respect of the payment for borrowed money), provided
that the aggregate outstanding amount of obligations secured by Liens
permitted by this clause (xii)(y) (and the value of all cash and
property encumbered by Liens permitted pursuant to this clause
(xii)(y)) shall not at any time exceed $1,000,000;
(xiii) Liens on property or assets acquired pursuant to a
Permitted Acquisition, or on property or assets of a Subsidiary of the
Borrower in existence at the time such Subsidiary is acquired pursuant
to a Permitted Acquisition, provided that (i) any Indebted ness that is
secured by such Liens is permitted to exist under Section 8.04(xi) and
(ii) such Liens are not incurred in connection with or anticipation of
such Permitted Acquisition and do not attach to any other asset of
Holdings or any of its Subsidiaries;
(xiv) Liens securing reimbursement obligations in respect of
documentary letters of credit permitted to be issued under Section
8.04, provided that such Liens attach only to the documents, the goods
covered thereby and the proceeds thereof;
(xv) Liens in favor of customs and revenue authorities which
secure payment of customs duties in connection with the importation of
goods;
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(xvi) Liens consisting of rights of set-off of a customary
nature or bankers' liens on amounts on deposit, whether arising by
contract or operation of law, incurred in the ordinary course of
business; and
(xvii) Liens on property and assets of any Foreign Subsidiary
of the Borrower securing Indebtedness permitted to be incurred by such
Foreign Subsidiary pursuant to Section 8.04.
In connection with the granting of Liens of the type described in clauses (vi)
and (vii) of this Section 8.01 by the Borrower or any of its Subsidiaries, the
Administrative Agent and the Collateral Agent shall be authorized to take any
actions deemed appropriate by it in connection therewith (including, without
limitation, by executing appropriate lien releases or lien subordination
agreements in favor of the holder or holders of such Liens, in either case
solely with respect to the item or items of equipment or other assets subject to
such Liens).
8.02 Consolidation, Merger, Purchase or Sale of Assets, etc.
Holdings 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 all or any part of
its property or assets, or enter into any sale-leaseback transactions, or, other
than pursuant to the Merger Agreement, 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 (or agree to do any of the foregoing
at any future time), except that:
(i) Capital Expenditures by the Borrower and its Subsidiaries
shall be permitted to the extent not in violation of Section 8.07;
(ii) each of the Borrower and its Subsidiaries may make sales
of inventory in the ordinary course of business;
(iii) each of the Borrower and its Subsidiaries may sell
obsolete or worn-out equipment or materials;
(iv) each of the Borrower and its Subsidiaries may sell other
assets, provided that the aggregate sale proceeds from all assets
subject to such sales pursuant to this clause (iv) shall not exceed
$75,000 in any fiscal year of the Borrower;
(v) each of the Borrower and its Subsidiaries may sell assets
(other than the capital stock of any Subsidiary Guarantor), so long as
(w) no Default or Event of Default then exists or would result
therefrom, (x) each such sale is in an arm's-length transaction and the
Borrower or the respective Subsidiary receives at least fair market
value (as determined in good faith by the Borrower or such Subsidiary,
as the case may be), (y) at least 75% of the total consideration
received by the Borrower or such Subsidiary is cash
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and is paid at the time of the closing of such sale, and (z) the
aggregate amount of the proceeds received from all assets sold pursuant
to this clause (v) shall not exceed $1,000,000 in any fiscal year of
the Borrower;
(vi) Investments may be made to the extent permitted by
Section 8.05;
(vii) each of the Borrower and its Subsidiaries may lease (as
lessee) or license (as licensee) real or personal property (so long as
any such lease or license does not create a Capital Lease Obligation
except to the extent permitted by Section 8.04(iv));
(viii) each of the Borrower and its Subsidiaries may sell or
discount, in each case without recourse and in the ordinary course of
business, accounts receivable arising in the ordinary course of
business, but only in connection with the compromise or collection
thereof;
(ix) each of the Borrower and its Subsidiaries may grant
licenses, sublicenses, leases or subleases to other Persons in the
ordinary course of business and not materially interfering with the
conduct of the business of the Borrower or any of its Subsidiaries;
(x) the Borrower and its Wholly-Owned Subsidiaries may acquire
all or substantially all of the assets of any Person (or all or
substantially all of the assets of a product line or division of any
Person) or 100% (or at least 75% to the extent provided below) of the
capital stock of any Person (any such acquisition permitted by this
clause (x), as well as any acquisition permitted by clause (xi) of this
Section 8.02, a "Permitted Acquisition", provided, however, that the
Merger shall not constitute a Permitted Acquisition), so long as (i) no
Default or Event of Default then exists or would result therefrom, (ii)
each of the representations and warranties contained in Article VI
shall be true and correct in all material respects both before and
after giving effect to such Permitted Acquisition, (iii) any Liens or
Indebtedness assumed or issued in connection with such acquisition are
otherwise permitted under Section 8.01 or 8.04, as the case may be,
(iv) at least 10 Business Days prior to the consummation of any
Permitted Acquisition, Holdings shall deliver to the Administrative
Agent and each of the Lenders a certificate of Holdings' Chief
Financial Officer certifying (and showing the calculations therefor in
reasonable detail) that Holdings would have been in compliance with
the financial covenants set forth in Sections 8.08, 8.09 and 8.10 for
the Measurement Period then most recently ended prior to the date of
the consummation of such Permitted Acquisition, in each case with such
financial covenants to be determined on a pro forma basis as if such
Permitted Acquisition had been consummated on the first day of such
Measurement Period (and assuming that any Indebtedness incurred, issued
or assumed in connection therewith had been incurred, issued or assumed
on the first day of, and had remained outstanding throughout, such
Measurement Period), (v) the only consideration paid by the Borrower or
any of its Wholly-Owned Subsidiaries in connection with any such
Permitted Acquisition consists solely of cash (including as a result of
any earnout, non-compete or
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deferred compensation arrangements), Indebtedness assumed to the extent
permitted by Section 8.04, Qualified Seller Subordinated Debt, Holdings
Common Stock and/or Holdings Preferred Stock, (vi) on or prior to
December 31, 1999, the aggregate consideration paid in connection with
all such Permitted Acquisitions in any fiscal year of the Borrower
(including, without limitation, any earnout, non-compete or deferred
compensation arrangements, the aggregate principal amount of any
Indebtedness assumed or issued in connection therewith and the fair
market value of any Holdings Common Stock or Holdings Preferred Stock
issued in connection therewith (as determined in good faith by
Holdings)) does not exceed $7,500,000 in each of fiscal years 1998 and
1999, provided, however, if the amount actually expended in respect of
all Permitted Acquisitions in fiscal year 1998 is less than the
aggregate amount of Permitted Acquisitions permitted to be made in
fiscal year 1998, such excess may be carried forward and utilized to
make Permitted Acquisitions in fiscal year 1999, (vii) no more than
$3,000,000 in the aggregate in any fiscal year of the Borrower may be
expended on Permitted Acquisitions in which the Borrower or a
Wholly-Owned Subsidiary thereof acquires less than 100% of the capital
stock of any Person and (viii) after giving effect to any such
Permitted Acquisition, the aggregate unutilized Commitments shall be at
least $5,000,000;
(xi) in addition to the Permitted Acquisitions permitted by
clause (x) of this Section 8.02, the Borrower and its Wholly-Owned
Subsidiaries may make additional Permitted Acquisitions (A) with cash
equity contributions and the net cash proceeds from the sale of capital
stock of Holdings and Holdings Junior Subordinated Notes, in each case
which are received by Holdings after the Effective Date and are
contributed to the Borrower to the extent that such proceeds are not
used (1) to make Capital Expenditures pursuant to Section 8.07(f), (2)
to pay Dividends pursuant to Section 8.03(vi), (3) to make Investments
pursuant to Section 8.05(xvi), (4) to repurchase or redeem outstanding
Borrower Senior Subordinated Notes pursuant to Section 8.11(i) or (5)
to prepay the Loans pursuant to Section 2.07(c) and (B) in any fiscal
year of the Borrower (commencing on January 1, 1999) in an amount not
to exceed 50% of Consolidated Net Income of Holdings for the
immediately preceding fiscal year, in each case so long as each of the
conditions set forth in Section 8.02(x) (other than clause (vi)
thereof) have been satisfied in respect of each such Permitted
Acquisition;
(xii) any Subsidiary of the Borrower may transfer any of its
assets to the Borrower and may be merged, consolidated or liquidated
with or into the Borrower so long as the Borrower is the surviving
corporation of such merger, consolidation or liquidation;
(xiii) any Subsidiary of the Borrower may transfer any of its
assets to a Subsidiary Guarantor and may be merged, consolidated or
liquidated with or into any other Subsidiary of the Borrower so long as
(i) in the case of any such merger, consolidation or liquidation
involving a Subsidiary Guarantor, the Subsidiary Guarantor is the
surviving corporation of such merger, consolidation or liquidation and
(ii) in the case of any such
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merger, consolidation or liquidation involving a Wholly-Owned
Subsidiary of the Borrower, the Wholly-Owned Subsidiary is the
surviving corporation of such merger, consolidation or liquidation;
(xiv) the Borrower and its Subsidiaries may sell or exchange
specific items of equipment, so long as the purpose of each sale or
exchange is to acquire (and results within 90 days of such sale or
exchange in the acquisition of) replacement items of equipment which
are, in the reasonable business judgment of the Borrower and its
Subsidiaries, the functional equivalent of the item of equipment so
sold or exchanged;
(xv) any Foreign Subsidiary of the Borrower may transfer any
of its assets to a Wholly-Owned Foreign Subsidiary of the Borrower or
to a Subsidiary Guarantor;
(xvi) the Borrower and its Subsidiaries may sell inventory to
their respective Subsidiaries in the ordinary course of business and
consistent with past practices for resale by such Subsidiaries in the
ordinary course of their business;
(xvii) the Borrower and the Subsidiary Guarantors may sell or
otherwise transfer equipment to their Subsidiaries in the ordinary
course of business so long as no more than $1,000,000 of equipment is
sold or transferred in any fiscal year of the Borrower pursuant to this
clause (xvii); and
(xviii) any Foreign Subsidiary of the Borrower may enter into
factoring arrangements with respect to its receivables in the ordinary
course of business and consistent with the practices in the region in
which such Foreign Subsidiary operates so long as no more than $500,000
of receivables are subject to such factoring arrangements at any one
time outstanding.
To the extent the Majority Lenders waive the provisions 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 (other than to Holdings or a Subsidiary thereof),
such Collateral shall be sold free and clear of the Liens created by the
Collateral Documents, and the Administrative Agent and the Collateral Agent
shall be authorized to take any actions deemed appropriate in order to effect
the foregoing.
8.03 Dividends. Holdings will not, and will not permit any of
its Subsidiaries to, authorize, declare or pay any Dividends with respect to
Holdings or any of its Subsidiaries, except that:
(i) (x) any Subsidiary of the Borrower may pay cash Dividends
to the Borrower or any Wholly-Owned Subsidiary of the Borrower and (y)
so long as no Default or Event of Default then exists or would result
therefrom, any non-Wholly-Owned Subsidiary of the Borrower may pay cash
Dividends to its shareholders generally so long as the Borrower or its
respective Subsidiary which owns the equity interest or interests in
the Subsidiary
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paying such Dividends receives at least its proportionate share thereof
(based upon its relative holdings of equity in interests in the
Subsidiary paying such Dividends and taking into account the relative
preferences, if any, of the various classes of equity interests in such
Subsidiary);
(ii) so long as there shall exist no Default or Event of
Default (both before and after giving effect to the payment thereof),
Holdings may repurchase outstanding shares of its stock (or options to
purchase such stock) following the death, disability, retirement or
termination of employment of employees of Holdings or any of its
Subsidiaries, provided that (x) the only consideration paid by Holdings
in respect of such repurchases shall be cash, forgiveness of debt owed
by such employee to Holdings and/or Holdings Shareholder Subordinated
Notes and (y) the sum of (1) the aggregate amount of cash paid by
Holdings in respect of all such repurchases plus (2) the aggregate
amount of all payments made on all Holdings Shareholder Subordinated
Notes pursuant to Section 8.11(iv) plus (3) the aggregate amount of all
repurchases of all Holdings Junior Subordinated Notes pursuant to
Section 8.11(iii)(x) shall not exceed $350,000 in any fiscal year of
Holdings, provided that any unused amount thereof may be carried
forward and utilized for such purposes in the immediately succeeding
fiscal year of Holdings;
(iii) so long as no Default or Event of Default then exists or
would result there from, the Borrower may pay cash Dividends to
Holdings (x) so long as Holdings promptly uses such proceeds for the
purposes described in clause (ii) of this Section 8.03, Section
8.11(iii)(x) or Section 8.11(iv) and (y) at times, and in the amounts,
necessary to allow Holdings to make payments in respect of Holdings
Junior Subordinated Notes (other than in respect of principal) to the
extent permitted by Section 8.11(iii)(y), provided that the aggregate
amount of cash Dividends paid pursuant to this clause (iii)(y), when
added to the aggregate amount of cash Dividends paid pursuant to clause
(iv) of this Section 8.03, shall not exceed $1,250,000 in any fiscal
year of Holdings;
(iv) the Borrower may pay cash Dividends to Holdings so long
as the proceeds thereof are promptly used by Holdings to pay operating
expenses in the ordinary course of business (including, without
limitation, outside directors and professional fees, expenses and
indemnities) and other similar corporate overhead costs and expenses,
provided that the aggregate amount of cash Dividends paid pursuant to
this clause (iv), when added to the aggregate amount of cash Dividends
paid pursuant to clause (iii)(y) of this Section 8.03, shall not exceed
$1,250,000 in any fiscal year of Holdings;
(v) Holdings may pay regularly scheduled Dividends on the
Holdings Preferred Stock pursuant to the terms thereof solely through
the issuance of additional shares of Holdings Preferred Stock, provided
that in lieu of issuing additional shares of Holdings Preferred Stock
as Dividends, Holdings may increase the liquidation preference of the
shares of the Holdings Preferred Stock in respect of which such
Dividends have accrued;
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(vi) so long as there shall exist no Default or Event of
Default (both before and after giving effect to the payment thereof),
Holdings may repurchase outstanding shares of its stock (or options to
purchase such stock) with the net cash proceeds received by Holdings
from the substantially concurrent sale of Holdings Common Stock,
Holdings Preferred Stock and/or Holdings Junior Subordinated Notes to
the extent that such proceeds are not used to redeem or repurchase
outstanding Holdings Junior Subordinated Notes pursuant to the last
sentence of Section 8.11; and
(vii) the Borrower may pay cash Dividends to Holdings in
connection with amounts owing by it under the Tax Sharing Agreement.
8.04 Indebtedness. Holdings will not, and will not permit any
of its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the
other Loan Documents;
(ii) existing Indebtedness (other than the Holdings Junior
Subordinated Notes and the Borrower Senior Subordinated Notes)
outstanding on the Effective Date and listed on Schedule 8.04, without
giving effect to any subsequent extension, renewal or refinancing
thereof except to the extent set forth on Schedule 8.04, provided that
the aggregate principal amount of the Indebtedness to be extended,
renewed or refinanced does not increase from that amount outstanding at
the time of any such extension, renewal or refinancing;
(iii) Indebtedness under Interest Rate Protection Agreements
entered into with respect to other Indebtedness permitted under this
Section 8.04;
(iv) Indebtedness of the Borrower and its Subsidiaries
evidenced by Capital Lease Obligations to the extent permitted pursuant
to Section 8.07, provided that in no event shall the aggregate
principal amount of Capital Lease Obligations permitted by this clause
(iv), when added to the aggregate principal amount of Indebtedness
outstanding under clause (v) of this Section 8.04, exceed $2,000,000 at
any time outstanding;
(v) Indebtedness subject to Liens permitted under Sections
8.01(vii);
(vi) (x) intercompany Indebtedness among the Borrower and its
Subsidiaries to the extent permitted by Sections 8.05(xi) and 8.05(xii)
and (y) Indebtedness of Holdings to the Borrower to the extent
permitted by Section 8.05(xv);
(vii) Indebtedness of the Borrower and the Subsidiary
Guarantors incurred under the Borrower Senior Subordinated Note
Documents in an aggregate principal amount not to exceed $95,000,000
(as reduced by any repayments of principal thereof); provided,
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however, from and after a Qualified Public Equity Offering, the
Borrower Senior Subordinated Notes may be guaranteed on an unsecured
senior subordinated basis by Holdings so long as (x) the subordination
provisions are no less favorable to the Lenders than the subordination
provisions applicable to the Subsidiary Guarantors and (y) the giving
of such guaranty would allow Holdings and the Borrower to report one
set of consolidated financial statements to the holders of the Borrower
Senior Subordinated Notes and the Securities and Exchange Commission;
(viii) unsecured subordinated Indebtedness of the Borrower and
the Subsidiary Guarantors ("Refinancing Subordinated Indebtedness") the
proceeds of which are used at the time of the incurrence thereof to
refinance or redeem outstanding Borrower Senior Subordinated Notes so
long as (i) no Default or Event of Default then exists or would result
therefrom, (ii) all of the terms and conditions of such Refinancing
Subordinated Indebtedness (including, without limitation, subordination
provisions, covenants, events of default, interest rates, remedies,
amortizations and maturities) are reasonably acceptable to the Majority
Lenders, it being understood that any such Refinancing Subordinated
Indebtedness with terms no more restrictive than the Borrower Senior
Subordinated Note Documents or less favorable to the Lenders than the
Borrower Senior Subordinated Note Documents shall be deemed
satisfactory to the Majority Lenders and that in any event such
Refinancing Subordinated Indebtedness shall not have any scheduled
maturity, amortization or sinking fund payment earlier than the final
maturity of the Borrower Senior Subordinated Notes and (iii) the
aggregate principal amount of such Refinancing Subordinated
Indebtedness does not exceed the aggregate principal amount of the
Borrower Senior Subordinated Notes to be redeemed or refinanced,
together with any prepayment premium associated therewith and all costs
and expenses incurred in connection therewith; provided, however, from
and after a Qualified Public Equity Offering, the Refinancing
Subordinated Indebtedness may be guaranteed on an unsecured senior
subordinated basis by Holdings so long as (x) the subordination
provisions are no less favorable to the Lenders than the subordination
provisions applicable to the Subsidiary Guarantors and (y) the giving
of such guaranty would allow Holdings and the Borrower to report one
set of consolidated financial statements to the holders of the
Refinancing Subordinated Indebtedness and the Securities and Exchange
Commission;
(ix) Indebtedness of Holdings under the Holdings Junior
Subordinated Notes, provided that issuances of Holdings Junior
Subordinated Notes after the Effective Date may not be made other than
in connection with a sale of equity made by Holdings in an aggregate
principal amount not to exceed 150% of the cash price paid for such
related equity and no such additional Holdings Junior Subordinated
Notes may be issued after a Qualified Public Equity Offering;
(x) Indebtedness consisting of guaranties by the Borrower and
its Subsidiaries of each other's Indebtedness and lease and other
obligations permitted under this Agreement;
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(xi) Indebtedness of a Subsidiary acquired pursuant to a
Permitted Acquisition or Indebtedness of the Borrower or a Subsidiary
thereof assumed at the time of a Permitted Acquisition of an asset
securing such Indebtedness, provided that (i) such Indebtedness was not
incurred in connection with or anticipation of such Permitted
Acquisition, and (ii) such Indebtedness does not constitute debt for
borrowed money (other than in connection with industrial revenue or
industrial development bond financing), it being understood and agreed
that Capital Lease Obligations and purchase money Indebtedness shall
not constitute debt for borrowed money for purposes of this clause
(xi);
(xii) Qualified Seller Subordinated Debt issued as
consideration pursuant to a Permitted Acquisition so long as such
Qualified Seller Subordinated Debt is permitted to be issued at such
time pursuant to Section 8.02(x) or (xi) and the aggregate principal
amount of all Qualified Seller Subordinated Debt does not exceed
$10,000,000 at any time outstanding;
(xiii) obligations of the Borrower or any of its Subsidiaries
under incentive, earn-out or other similar arrangements incurred by it
in connection with a Permitted Acquisition to the extent permitted
under Sections 8.02(x) and (xi);
(xiv) Indebtedness of Holdings under Holdings Shareholder
Subordinated Notes in an aggregate principal amount not to exceed
$2,500,000 at any time outstanding;
(xv) Indebtedness in respect of Other Hedging Agreements to
the extent permitted by Section 8.05(xiii);
(xvi) Indebtedness subject to Liens permitted under Section
8.01(xii); and
(xvii) additional Indebtedness incurred by the Borrower or any
of its Subsidiaries in an aggregate principal amount not to exceed
$5,000,000 at any one time outstanding.
8.05 Advances, Investments and Loans. Holdings will not, and
will not permit any of its Subsidiaries to, directly or indirectly, lend money
or credit or make advances to any Per son, 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 purchase or own a futures contract or
otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the nature of a futures contract, or hold any
cash or Cash Equivalents (each of the foregoing an "Investment" and,
collectively, "Investments"), except that the following shall be permitted:
(i) the Borrower and its Subsidiaries may acquire and hold
accounts receivables owing to any of them, if created or acquired in
the ordinary course of business and payable or dischargeable in
accordance with customary trade terms of the Borrower or such
Subsidiary;
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(ii) the Borrower and its Subsidiaries may acquire and hold
cash and Cash Equivalents, provided that during any time that Loans are
outstanding the aggregate amount of cash and Cash Equivalents permitted
to be held by the Borrower and its Subsidiaries shall not exceed
$3,000,000 for any period of fifteen consecutive Business Days, it
being understood and agreed, however, that so long as no Event of
Default shall exist, the Borrower shall not be required to repay any
Eurodollar Loan in the middle of an Interest Period as a result of
complying with this clause (ii) and the failure to make such a payment
will not give rise to an Event of Default;
(iii) the Borrower and its Subsidiaries may hold the
Investments held by them on the Effective Date and described on
Schedule 8.05, provided that any additional Investments made with
respect thereto shall be permitted only if independently justified
under the other provisions of this Section 8.05;
(iv) the Borrower and its Subsidiaries may acquire and own
investments (including debt obligations) received in connection with
the bankruptcy or reorganization of suppliers and customers and in good
faith settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business;
(v) the Borrower and its Subsidiaries may make loans and
advances in the ordinary course of business to their respective
employees so long as the aggregate principal amount thereof at any
time outstanding (determined without regard to any write-downs or
write-offs of such loans and advances) shall not exceed $500,000;
(vi) Holdings may acquire and hold obligations of one or more
officers or other employees of Holdings or any of its Subsidiaries in
connection with such officers' or employees' acquisition of shares of
capital stock of Holdings and/or Holdings Junior Subordinated Notes so
long as no cash is paid by Holdings or any of its Subsidiaries to such
officers or employees in connection with the acquisition of any such
obligations;
(vii) the Borrower and its Subsidiaries may acquire and hold
promissory notes issued by the purchaser of assets in connection with a
sale of such assets to the extent permitted by Section 8.02;
(viii) the Borrower and its Wholly-Owned Subsidiaries may make
Permitted Acquisitions to the extent permitted by Sections 8.02(x) and
(xi);
(ix) the Borrower and its Subsidiaries may enter into Interest
Protection Agreements to the extent permitted by Section 8.04(iii);
(x) Holdings may make cash contributions to the capital of the
Borrower and the Borrower and the Subsidiary Guarantors may make cash
contributions to the capital of their respective Subsidiaries which are
Subsidiary Guarantors;
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(xi) the Borrower and the Subsidiary Guarantors may make
intercompany loans and advances between or among one another
(collectively, "Intercompany Loans"), so long as each Intercompany Loan
shall be evidenced by an Intercompany Note that is pledged to the
Collateral Agent pursuant to the Pledge Agreement;
(xii) the Borrower and the Subsidiary Guarantors may make
additional loans and cash contributions to their respective
Subsidiaries which are not Subsidiary Guarantors in an aggregate amount
not to exceed $2,000,000 at any time outstanding (determined without
regard to any write-downs or write-offs thereof);
(xiii) the Borrower and its Subsidiaries may enter into Other
Hedging Agreements providing protection against fluctuations in
currency values in connection with the Borrower's or any of its
Subsidiaries' operations so long as management of the Borrower or such
Subsidiary, as the case may be, has determined that the entering into
of such Other Hedging Agreements are bona fide hedging activities;
(xiv) Holdings and its Subsidiaries may hold additional
investments in their respective Subsidiaries to the extent that such
investments reflect an increase in the value of such Subsidiaries;
(xv) to the extent that the Borrower may pay cash Dividends to
Holdings pursuant to Sections 8.03(iii) and (iv), the Borrower may, in
lieu of paying such cash Dividends, make an Intercompany Loan to
Holdings for the purposes, and subject to the limitations, set forth in
such Sections 8.03(iii) and (iv), in each case so long as each
Intercompany Loan shall be evidenced by an Intercompany Note that is
pledged to the Collateral Agent pursuant to the Pledge Agreement; and
(xvi) the Borrower and its Subsidiaries may make additional
Investments in an aggregate amount not to exceed $1,000,000 in any
fiscal year of the Borrower (determined without regard to any
write-downs or write-offs thereof) plus the aggregate amount of such
Investments made with cash equity contributions and the net cash
proceeds from the sale of capital stock of Holdings and Holdings Junior
Subordinated Notes, in each case which are received by Holdings after
the Effective Date and are contributed to the Borrower to the extent
that such proceeds are not used (1) to make Permitted Acquisitions
pursuant to Section 8.02(xi), (2) to make Capital Expenditures pursuant
to Section 8.07(f), (3) to pay Dividends pursuant to Section
8.03(viii), (4) to repurchase or redeem outstanding Borrower Senior
Subordinated Notes pursuant to Section 8.11(i) or (5) to prepay the
Loans pursuant to Section 2.07(c), it being understood and agreed,
however, that Holdings may concurrently (or within one Business Day
thereafter) make any Investment pursuant to this clause (xvi) with the
proceeds received from any such equity contribution or sale of capital
stock or Holdings Junior Subordinated Notes without any requirement to
contribute the same to the Borrower.
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8.06 Transactions with Affiliates. Holdings 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 of Holdings or any of its Subsidiaries, other than in the ordinary
course of business and on terms and conditions substantially as favorable to
Holdings or such Subsidiary as would reasonably be obtained by Holdings or such
Subsidiary at that time in a comparable arm's-length transaction with a Person
other than an Affiliate, except that the following in any event shall be
permitted:
(i) Dividends may be paid to the extent provided in Section
8.03;
(ii) loans may be made and other transactions may be entered
into by Holdings and its Subsidiaries to the extent permitted by
Sections 8.02, 8.04 and 8.05;
(iii) customary fees may be paid to non-officer directors of
Holdings and its Subsidiaries;
(iv) so long as no Default under Section 7.01, 7.02(a),
9.01(a), 9.01(f) or 9.01(g) shall exist and no Event of Default shall
exist, the Borrower may pay management fees to CHS Management and its
Affiliates monthly in arrears pursuant to, and in accordance with, the
terms of the CHS Management Agreement (as in effect on the Effective
Date) in an aggregate amount for all such Persons taken together not to
exceed $62,500 per month plus the reasonable out-of-pocket expenses
incurred by CHS Management and its Affiliates in performing management
services for the Borrower pursuant to the CHS Management Agreement (it
being understood and agreed that the reimbursement of such reasonable
out-of-pocket expenses may be made whether or not any Default or Event
of Default exists);
(v) the Borrower may pay a transaction fee to CHS and its
Affiliates on the Effective Date in the aggregate amount of up to
$500,000 for all such Persons taken together plus the reasonable
out-of-pocket expenses incurred by CHS and its Affiliates in connection
with the Transaction;
(vi) the Borrower may pay, in connection with any Permitted
Acquisition, a transaction fee to CHS Management and its Affiliates in
an aggregate amount for all such Persons taken together not to exceed
1% of the aggregate value of any such Permitted Acquisition;
(vii) Holdings and its Subsidiaries may enter into and perform
their obligations under the Holdings Tax Sharing Agreement;
(viii) transactions entered into between or among the Borrower
and its Subsidiaries to the extent otherwise expressly permitted by
this Agreement;
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(ix) Holdings and its Subsidiaries may enter into employment
arrangements (including benefit compensation, bonuses and stock option
and plans) with respect to the procurement of services with their
respective officers and employees in the ordinary course of business;
and
(x) Holdings may issue and sell shares of its capital stock to
its stockholders to the extent otherwise permitted by this Agreement.
8.07 Capital Expenditures.
(a) Holdings will not, and will not permit any of its
Subsidiaries to, make any Capital Expenditures, except that during any
fiscal year of the Borrower set forth below (taken as one accounting
period), the Borrower and its Subsidiaries may make Capital
Expenditures so long as the aggregate amount of all such Capital
Expenditures does not exceed in any period set forth below the amount
set forth opposite such period:
Period Amount
------ ------
Effective Date through December 31, 1998 $2,800,000
January 1, 1999 through December 31, 1999 $4,000,000
January 1, 2000 through December 31, 2000 $4,000,000
January 1, 2001 through December 31, 2001 $4,000,000
January 1, 2002 through December 31, 2002 $4,000,000
January 1, 2003 through December 31, 2003 $4,000,000
(b) In addition to the foregoing, in the event that the amount
of Capital Expenditures permitted to be made by the Borrower and its
Subsidiaries pursuant to clause (a) above in any period (before giving
effect to any increase in such permitted Capital Expenditure amount
pursuant to this clause (b)) is greater than the amount of Capital
Expenditures actually made by the Borrower and its Subsidiaries during
such period, such excess may be carried forward and utilized to make
Capital Expenditures in the immediately succeeding fiscal year,
provided that no amounts once carried forward pursuant to this Section
8.07(b) may be carried forward to any period thereafter and such
amounts may only be utilized after the Borrower and its Subsidiaries
have utilized in full the permitted Capital Expenditure amount for such
period as set forth in the table in clause (a) above (without giving
effect to any increase in such amount by operation of this clause (b)).
(c) In addition to the foregoing, the Borrower and it
Subsidiaries may make Capital Expenditures with the amount of Net Cash
Proceeds received by the Borrower or any of its Subsidiaries from any
Asset Sale so long as such Net Cash Proceeds are reinvested in
replacement assets within 270 days following the date of such Asset
Sale to
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the extent such Net Cash Proceeds are not otherwise required to be
applied to prepay the Loans pursuant to Section 2.07(d).
(d) In addition to the foregoing, the Borrower and its
Subsidiaries may make Capital Expenditures with the amount of Net
Insurance Proceeds received by the Borrower or any of its Subsidiaries
from any Recovery Event so long as such Net Insurance Proceeds are used
to replace or restore any properties or assets in respect of which such
Net Insurance Proceeds were paid within 365 days following the date of
receipt of such Net Insurance Proceeds from such Recovery Event to the
extent such Net Insurance Proceeds are not otherwise required to be
applied to prepay the Loans pursuant to Section 2.07(e).
(e) In addition to the foregoing, the Borrower and its
Wholly-Owned Subsidiaries may consummate Permitted Acquisitions in
accordance with Sections 8.02(x) and (xi).
(f) In addition to the foregoing, the Borrower and its
Subsidiaries may make additional Capital Expenditures with cash equity
contributions and the net cash proceeds from the sale of capital stock
of Holdings and Holdings Junior Subordinated Notes, in each case which
are received by Holdings after the Effective Date and are contributed
to the Borrower to the extent that such proceeds are not used (1) to
make Permitted Acquisitions pursuant to Section 8.02(xi), (2) to pay
Dividends pursuant to Section 8.03(vii), (3) to make Investments
pursuant to Section 8.05(xvi), (4) to repurchase or redeem Borrower
Senior Subordinated Notes pursuant to Section 8.11(i) or (5) to prepay
the Loans pursuant to Section 2.07(c).
8.08 Consolidated Coverage Ratios.
(a) Holdings and the Borrower will not permit the Consolidated
Interest Coverage Ratio for any Measurement Period ending on the last
day of any fiscal quarter ending after October 1, 1998 to be less than
2.00 to 1.00.
(b) Holdings and the Borrower will not permit the Consolidated
Fixed Charge Coverage Ratio for any Measurement Period ending during
any period set forth below to be less than the ratio set forth below
opposite such period:
Period Ratio
------ -----
July 1, 1998 through
September 30, 1998 1.20:1.00
October 1, 1998 through
June 30, 1999 1.25:1.00
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July 1, 1999 through
December 31, 2000 1.35:1.00
January 1, 2001 through
December 31, 2001 1.40:1.00
January 1, 2002 and
thereafter 1.50:1.00.
8.09 Maximum Leverage Ratio. Holdings and the Borrower will
not permit the Consolidated Leverage Ratio at any time during any period set
forth below to be greater than the ratio set forth opposite such period below:
Period Ratio
------ -----
July 1, 1998 through
March 31, 1999 5.50:1.00
April 1, 1999 thorough
December 31, 1999 5.25:1.00
January 1, 2000 through
December 31, 2000 4.50:1.00
January 1, 2001 through
December 31, 2001 4.00:1.00
January 1, 2002 through
December 31, 2002 3.50:1.00
January 1, 2003 and
thereafter 3.00:1.00.
8.10 Minimum Consolidated EBITDA. Holdings and the Borrower
will not permit Consolidated EBITDA for any Measurement Period ending on any of
the dates set forth below to be less than the amount set forth below opposite
such date:
Measurement Period Ending Amount
------------------------- ------
December 31, 1998 $25,000,000
December 31, 1999 $27,000,000
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December 31, 2000 $29,000,000
December 31, 2001 $30,000,000
December 31, 2002 and
thereafter $32,000,000.
8.11 Limitation on Voluntary Payments and Modification of
Indebtedness; Modifications of Certificate of Incorporation, By-Laws and Certain
Other Agreements; etc. Holdings will not, and will not permit any of its
Subsidiaries to:
(i) make (or give any notice in respect of) 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 or any other Person money or securities
before due for the purpose of paying when due) any Borrower Senior
Subordinated Note, provided that so long as no Default or Event of
Default then exists or would result therefrom, the Borrower may
refinance or redeem outstanding Borrower Senior Subordinated Notes with
the proceeds of Refinancing Subordinated Indebtedness and with cash
equity contributions and the net cash proceeds from the sale of capital
stock of Holdings and Holdings Junior Subordinated Notes, in each case
which are received by Holdings after the Effective Date and are
contributed to the Borrower to the extent that such proceeds are not
used (1) to make Permitted Acquisitions pursuant to Section 8.02(xi),
(2) to make Capital Expenditures pursuant to Section 8.07(f), (3) to
pay Dividends pursuant to Section 8.03(vii), (4) to make Investments
pursuant to Section 8.05(xvi) or (5) to prepay the Loans pursuant to
Section 2.07(c);
(ii) make (or give any notice in respect of) any prepayment or
redemption of any Borrower Senior Subordinated Note as a result of any
asset sale, change of control or similar event (including, without
limitation, by way of depositing with the trustee with respect thereto
or any other Person money or securities before due for the purpose of
paying when due any Borrower Senior Subordinated Note);
(iii) make (or give any notice in respect of) any payment,
prepayment, redemption or acquisition for value of (including, without
limitation, by way of depositing with the trustee with respect thereto
or any other Person money or securities before due for the purpose of
paying when due) any Holdings Junior Subordinated Note (whether in
respect of principal, interest or otherwise), provided that so long as
no Default or Event of Default then exists or would result therefrom,
(x) Holdings may purchase or redeem Holdings Junior Subordinated Notes
held by employees of Holdings or any of its Subsidiaries following
their death, disability, retirement or termination of employment so
long as the aggregate amount expended pursuant to this clause (iii)(x),
when added to the sum of the aggregate amount of all Dividends paid or
made pursuant to Section 8.03(ii) and the aggregate amount of all
payments made in respect of all Holdings Shareholder
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Subordinated Notes pursuant to Section 8.11(iv), shall not exceed
$350,000 in any fiscal year of Holdings, provided that any unused
amount thereof may be carried forward and utilized for such purposes in
the immediately succeeding fiscal year of Holdings, and (y) Holdings
may make interest payments in respect of outstanding Holdings Junior
Subordinated Notes so long as (A) such payments are only made on or
after March 15 of each year and before March 31 of such year to pay
income taxes of the holders thereof which are payable as a result of
interest income earned in the immediately preceding year in respect of
such Holdings Junior Subordinated Notes (it being understood, however,
that such payment may not be made in any year until the Compliance
Certificate in respect of the Measurement Period ending on December 31
of the immediately preceding fiscal year has been delivered pursuant to
Section 7.02(a)) and (B) the aggregate amount paid pursuant to this
clause (iii)(y), when added to the aggregate amount of Dividends paid
pursuant to Section 8.03(iv), shall not exceed $1,250,000 in any fiscal
year of Holdings;
(iv) make (or give any notice in respect of) any payment,
prepayment, redemption or acquisition for value of (including, without
limitation, by way of depositing with the trustee with respect thereto
or any other Person money or securities before due for the purpose of
paying when due) any Holdings Shareholder Subordinated Note (whether in
respect of principal, interest or otherwise), provided that so long as
no Default or Event of Default then exists or would result therefrom,
Holdings may make payments on Holdings Shareholder Subordinated Notes
to the extent permitted by Section 8.03(ii);
(v) make (or give any notice in respect of) any payment,
prepayment, redemption or acquisition for value of (including, without
limitation, by way of depositing with the trustee with respect thereto
or any other Person money or securities before due for the purpose of
paying when due) any Qualified Seller Subordinated Debt (whether in
respect of principal, interest or otherwise) at a time when any Default
or Event of Default then exists;
(vi) amend or modify, or permit the amendment or modification
of, any provision of any Borrower Senior Subordinated Note Document,
any Refinancing Subordinated Indebtedness, any Holdings Junior
Subordinated Note, any Holdings Shareholder Subordinated Notes, any
Qualified Seller Subordinated Debt or any Transaction Document;
(vii) amend, modify or change its certificate of incorporation
(including, without limitation, by the filing or modification of any
certificate of designation) or by-laws (or the equivalent
organizational documents) or any agreement entered into by it with
respect to its capital stock, or enter into any new agreement with
respect to its capital stock, unless such amendment, modification,
change or other action contemplated by this clause (vii) could not
reasonably be adverse to the interests of the Lenders in any material
respect; or
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(viii) amend, modify or change any provision of the CHS
Management Agreement or the Holdings Tax Sharing Agreement in a manner
which is adverse to the Lenders.
In addition to the payments permitted by clause (iv) of this Section 8.11, so
long as there shall exist no Default of Event of Default (both before and after
giving effect to the payment thereof), Holdings may redeem or repurchase
outstanding Holdings Junior Subordinated Notes with the net cash proceeds
received by Holdings from the substantially concurrent sale of Holdings Common
Stock, Holdings Preferred Stock and/or new Holdings Junior Subordinated Notes to
the extent that such proceeds are not used to repurchase outstanding shares of
capital stock of Holdings (or options to purchase such stock) pursuant to
Section 8.03(vii).
8.12 Limitation on Certain Restrictions on Subsidiaries.
Holdings 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 any such Subsidiary to (a) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by Holdings or any Subsidiary of
Holdings, or pay any Indebtedness owed to Holdings or any Subsidiary of
Holdings, (b) make loans or advances to Holdings or any Subsidiary of Holdings
or (c) transfer any of its properties or assets to Holdings or any Subsidiary of
Holdings, except for such encumbrances or restrictions existing under or by
reason of (i) applicable law, (ii) this Agreement and the other Loan Documents,
(iii) the Borrower Senior Subordinated Note Documents and any Refinancing
Subordinated Indebtedness, (iv) customary provisions restricting subletting or
assignment of any lease governing a leasehold interest of Holdings or any
Subsidiary of Holdings, (v) customary provisions restricting assignment of any
licensing agreement entered into by Holdings or any Subsidiary of Holdings in
the ordinary course of business, (vi) restrictions on the transfer of any asset
subject to a Lien permitted by Sections 8.01(vi), (vii) and (xiii), (vii)
restrictions which are imposed on any Subsidiary of the Borrower acquired
pursuant to a Permitted Acquisition to the extent such restrictions are set
forth in any Indebtedness assumed in connection with such Permitted Acquisition
so long as such restrictions are not applicable to any Subsidiary of the
Borrower other than the Subsidiary being acquired, such restrictions were not
created or imposed in connection with or in contemplation of such Permitted
Acquisition, (viii) restrictions on the transfer of any asset pending the close
of the sale of such asset, (ix) restrictions which are imposed on any Foreign
Subsidiary of the Borrower to the extent such restrictions are set forth in any
Indebtedness incurred by such Foreign Subsidiary pursuant to Section 8.04(xvii)
so long as such restrictions are not applicable to any Subsidiary of the
Borrower other than the Foreign Subsidiary that has incurred such Indebtedness
and (x) customary restrictions set forth in any joint venture agreement entered
in connection with an Investment made pursuant to Section 8.05(xvi).
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8.13 Limitation on Issuance of Capital Stock.
(a) Holdings will not, and will not permit any of its
Subsidiaries to, issue (i) any preferred stock other than Holdings
Preferred Stock issued by Holdings or (ii) any redeemable common stock
(other than common stock that is redeemable at the sole option of
Holdings or such Subsidiary).
(b) Holdings will 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 (i) for transfers and replacements of then
outstanding shares of capital stock, (ii) for stock splits, stock
dividends and issuances which do not decrease the percentage ownership
of Holdings or any of its Subsidiaries in any class of the capital
stock of such Subsidiary, (iii) to qualify directors to the extent
required by applicable law or (iv) for issuances by newly created or
acquired Subsidiaries in accordance with the terms of this Agreement.
8.14 Business.
(a) Holdings and its Subsidiaries will not engage in any
business other than the businesses engaged in by the Borrower and its
Subsidiaries as of the Effective Date and reasonable extensions thereof
and activities incidental thereto.
(b) Notwithstanding the foregoing, Holdings will not engage in
any business and will not own any significant assets or have any
material liabilities other than its ownership of the capital stock of
the Borrower and having those liabilities which it is responsible for
under this Agreement and the other Transaction Documents to which it is
a party, provided that Holdings may engage in those activities that are
incidental to (x) the maintenance of its corporate existence in
compliance with applicable law, (y) legal, tax and accounting matters
in connection with any of the foregoing activities and (z) the entering
into, and performing its obligations under, this Agreement and the
other Transaction Documents to which it is a party.
8.15 Limitation on Creation of Subsidiaries. Notwithstanding
anything to the contrary contained in this Agreement, Holdings will not, and
will not permit any of its Subsidiaries to, establish, create or acquire after
the Effective Date any Subsidiary, provided that the Borrower and its
Wholly-Owned Subsidiaries shall be permitted to establish or create Wholly-Owned
Subsidiaries and, to the extent permitted by Sections 8.02(x), 8.02(xi) and
8.05(xvi), non-Wholly-Owned Subsidiaries, so long as (i) the capital stock of
each such new Domestic Subsidiary (and to the extent required by Section 7.12,
each new Foreign Subsidiary) is pledged pursuant to, and to the extent required
by, the Pledge Agreement and the certificates representing such stock, together
with stock powers duly executed in blank, are delivered to the Collateral Agent
for the benefit of the Lenders, and (ii) each such new Domestic Subsidiary, and
to the extent required by Section 7.12, each such new Foreign Subsidiary,
executes a Guarantor Supplement. In addition,
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each new Domestic Subsidiary, and to the extent required by Section 7.12, each
such new Foreign Subsidiary, shall execute and deliver, or cause to be executed
and delivered, all other relevant documentation of the type described in Article
V as such new Subsidiary would have had to deliver if such new Subsidiary were a
Credit Party on the Effective Date.
ARTICLE IX
EVENTS OF DEFAULT
9.01 Event of Default. Any of the following shall constitute
an "Event of Default":
(a) Non-Payment. The Borrower fails to pay, (i) when and as
required to be paid herein, any amount of principal of any Loan or any
amount of any Letter of Credit Obligation, or (ii) within three
Business Days after the same shall become due, any inter est, fee or
any other amount payable hereunder or pursuant to any other Loan
Document; or
(b) Representation or Warranty. Any representation or warranty
by Holdings or any of its Subsidiaries made or deemed made herein or in
any other Loan Document, or which is contained in any certificate,
document or financial or other statement furnished by Holdings or any
of its Subsidiaries at any time under this Agreement or under any other
Loan Document, shall prove to have been incorrect in any material
respect on or as of the date made or deemed made; or
(c) Specific Defaults. Holdings or any of its Subsidiaries
fails to perform or observe any term, covenant or agreement contained
in Sections 7.03(a), 7.10, 7.14, 7.15 or Article VIII; or
(d) Other Defaults. Holdings or any of its Subsidiaries fails
to perform or observe any other term or covenant contained in this
Agreement or in any other Loan Document, and such default shall
continue unremedied for a period of 30 days after the date upon which
written notice thereof is given to the Borrower by the Administrative
Agent or any Lender; or
(e) Cross-Default. Holdings or any of its Subsidiaries (i)
fails to make any payment in respect of any Indebtedness having an
aggregate principal amount of $2,500,000 or more when due (whether by
scheduled maturity, required prepayment, acceleration, demand, or
otherwise) and such failure continues after the applicable grace or
notice period, if any, specified in the document relating thereto on
the date of such failure; or (ii) fails to perform or observe any
other condition or covenant, or any other event shall occur or
condition exist, under any agreement or instrument relating to any such
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Indebtedness, and such failure continues after the applicable grace or
notice period, if any, specified in the document relating thereto on
the date of such failure if the effect of such failure, event or
condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause such Indebtedness to be declared to be due and
payable prior to its stated maturity; or
(f) Insolvency; Voluntary Proceedings. Holdings or any of its
Subsidiaries (i) generally fails to pay its debts as they become due;
(ii) commences any Insolvency Proceeding with respect to itself; or
(iii) takes any action to effectuate or authorize any of the foregoing;
or
(g) Involuntary Proceedings. (i) Any involuntary Insolvency
Proceeding is commenced or filed against Holdings or any of its
Subsidiaries, or any writ, judgment, warrant of attachment, execution
or similar process, is issued or levied against a substantial part of
Holdings' or any of its Subsidiaries' properties, and any such
proceeding or petition shall not be dismissed, or such writ, judgment,
warrant of attachment, execution or similar process shall not be
released, vacated or fully bonded within 60 days after commencement,
filing or levy; (ii) Holdings or any of its Subsidiaries admits the
material allegations of a petition against it in any Insolvency
Proceeding, or an order for relief (or similar order under non-U.S.
law) is ordered in any Insolvency Proceeding; or (iii) Holdings or any
of its Subsidiaries acquiesces in the appointment of a receiver,
trustee, custodian, conservator, liquidator, mortgagee in possession
(or agent therefor), or other similar Person for itself or a
substantial portion of its property or business; or
(h) ERISA. (a) Any Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof under
Section 412 of the Code or Section 302 of ERISA or a waiver of such
standard or extension of any amortization period is sought or granted
under Section 412 of the Code or Section 303 or 304 of ERISA, a
Reportable Event shall have occurred, a contributing sponsor (as
defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title IV
of ERISA shall be subject to the advance reporting requirement of PBGC
Regulation Section 4043.61 (without regard to subparagraph (b)(i)
thereof) and an event described in subsection .62, .63, .64, .65, .66,
.67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected
to occur with respect to such Plan within the following 30 days, any
Plan shall have had or is likely to have a trustee appointed to
administer such Plan, any Plan is, shall have been or is likely to be
terminated or the subject of termination proceedings under ERISA, any
Plan shall have an Unfunded Current Liability, a contribution required
to be made to a Plan has not been timely made, Holdings or any
Subsidiary of Holdings or any ERISA Affiliate has incurred or is likely
to incur a liability to or on account of a Plan under Section 409,
502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of
ERISA or Section 401(a)(29), 4971, or 4975 of the Code, or on account
of a group health plan (as defined in Section 607(i) of ERISA or
Section 4980B(g)(2) of the Code) under Section 4980B of the Code, or
Holdings or any
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Subsidiary of Holdings has incurred or is likely to incur liabilities
pursuant to one or more employee welfare benefit plans (as defined in
Section 3(1) of ERISA) with respect to providing benefits to retired
employees or other former employees (other than as required by Section
601 of ERISA or Section 4980B of the Code) or employee pension benefit
plans (as defined in Section 3(2) of ERISA); (b) there shall result
from any such event or events the imposition of a lien, the granting of
a security interest, or a liability or a material risk of incurring a
liability; and (c) which lien, security interest or liability,
individually, and/or in the aggregate, which arises from such event or
events could reasonably be expected to have a Material Adverse Effect;
or
(i) Judgments. One or more judgments or decrees shall be
entered against Holdings or any of its Subsidiaries involving a
liability (not paid or not covered by a reputable and solvent insurance
company) of $2,500,000 or more for all such judgments and decrees and
all such judgments or decrees shall not have been vacated, discharged
or stayed or bonded pending appeal within 30 days from the entry
thereof; or
(j) Change of Control. Any Change of Control shall occur; or
(k) Collateral; Guaranties.
(i) Except in each case to the extent resulting from
the failure of the Collateral Agent to retain possession of
the applicable Pledged Securities, any Collateral Document
(other than the Guaranties) 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; or
(ii) any Guaranty or any provision thereof shall
cease to be in full force and effect, or any Guarantor or any
Person acting by or on behalf of such Guarantor shall deny or
disaffirm such Guarantor's obligations under its Guaranty.
9.02 Remedies. If any Event of Default occurs and is
continuing, the Administrative Agent shall, at the request of, or may, with the
consent of, the Majority Lenders,
(a) declare the Commitment of each Lender and any obligation
of the Issuing Lenders to issue Letters of Credit to be terminated,
whereupon such Commitments and obligation shall forthwith be
terminated;
(b) declare the unpaid principal amount of all outstanding
Loans, all interest accrued and unpaid thereon, and all other amounts
owing or payable hereunder or under any other Loan Document to be
immediately due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived by
the Borrower and Holdings;
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(c) demand that the Borrower Cash Collateralize Letter of
Credit Obligations to the extent of outstanding and wholly or partially
undrawn Letters of Credit, whereupon the Borrower shall so Cash
Collateralize;
(d) exercise on behalf of itself, the Issuing Lenders and the
Lenders all rights and remedies available to it and the Lenders under
the Loan Documents or applicable law; and
(e) apply any cash collateral as provided in Section 3.07 to
the payment of outstanding Obligations;
provided, however, that upon the occurrence of any event specified above in
paragraph (f) or (g) of Section 9.01 with respect to the Borrower, the
obligation of each Lender to make Loans and any obligation of the Issuing Lender
to issue Letters of Credit shall automatically terminate, and all reimbursement
obligations under Letters of Credit and the unpaid principal amount of all
outstanding Loans and all interest and other amounts as aforesaid shall
automatically become due and payable without further act or notice by the
Administrative Agent, the Issuing Lenders or any Lender, which are hereby
expressly waived by the Borrower and Holdings.
9.03 Rights Not Exclusive. The rights provided for in this
Agreement and the other Loan Documents are cumulative and are not exclusive of
any other rights, powers, privileges or remedies provided by law or in equity,
or under any other instrument, document or agreement now existing or hereafter
arising.
ARTICLE X.
THE GUARANTY
10.01 Guaranty from Holdings.
(a) In order to induce the Lenders to make Loans to the
Borrower under this Agreement and to induce the Issuing Lenders to
issue Letters of Credit and to induce the Guaranteed Creditors to enter
into the Interest Rate Protection Agreements and Other Hedging
Agreements, Holdings hereby unconditionally and irrevocably guarantees
the prompt payment and performance in full by the Borrower when due
(whether at stated maturity, by acceleration or otherwise) of all
Guaranteed Obligations of the Borrower. The obligations of Holdings
hereunder are those of a primary obligor, and not merely a surety, and
are independent of the Guaranteed Obligations of the Borrower. A
separate action or actions may be brought against Holdings whether or
not an action is brought against the Borrower, any other guarantor or
other obligor in respect of the Guaranteed Obligations or whether the
Borrower, any other guarantor or any other obligor in respect of the
Guaranteed Obligations is joined in any such action or actions.
Holdings waives, to the fullest extent permitted by applicable law, the
benefit of any statute of limitation
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affecting its liability hereunder and agrees that its liability
hereunder shall not be subject to any right of set-off, counterclaim or
recoupment (each of which rights is hereby waived to the fullest extent
permitted by applicable law).
(b) Holdings guarantees that the obligations guaranteed by it
hereby will be paid and performed strictly in accordance with the terms
of this Agreement, the other Loan Documents and the applicable Interest
Rate Protection Agreements and Other Hedging Agreements regardless of
any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of the
Administrative Agent, the Collateral Agent, the Issuing Lenders, the
Lenders or the other Guaranteed Creditors with respect thereto. The
liability of Holdings under this guaranty shall be absolute and
unconditional irrespective of, and Holdings hereby irrevocably waives
(to the fullest extent permitted by applicable law) any defenses it may
now or hereafter have in any way relating to, any and all of the
following:
(i) any lack of genuineness, validity, legality or
enforceability against the Borrower or any other guarantor of
this Agreement, any other Loan Document, any Interest Rate
Protection Agreement or Other Hedging Agreement or any
document, agreement or instrument relating hereto or any
assignment or transfer of this Agreement, any other Loan
Document or any Interest Rate Protection Agreement or Other
Hedging Agreement or any defense that the Borrower may have
with respect to its liability hereunder or thereunder;
(ii) any change in the time, manner or place of
payment of, or in any other term of, all or any of the
Guaranteed Obligations, or any waiver, indulgence, compromise,
renewal, extension, assignment, amendment, modification of, or
addition, consent, supplement to, or consent to departure
from, or any other action or inaction under or in respect of,
this Agreement, any other Loan Document, any Interest Rate
Protection Agreement or Other Hedging Agreement or any
document, instrument or agreement relating to the Guaranteed
Obligations or any other instrument or agreement referred to
herein or any assignment or transfer of this Agreement or any
Interest Rate Protection Agreement or Other Hedging Agreement;
(iii) any release or partial release of any other
guarantor or other obligor in respect of the Guaranteed
Obligations;
(iv) any exchange, impairment, release or
non-perfection of any collateral for all or any of the
Guaranteed Obligations, or any release, or amendment or waiver
of, or consent to departure from, any guaranty or security,
for any or all of the Guaranteed Obligations;
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(v) any furnishing of any additional security for
any of the Guaranteed Obligations;
(vi) the liquidation, bankruptcy, insolvency or
reorganization of the Borrower, any other guarantor or other
obligor in respect of the Guaranteed Obligations or any action
taken with respect to this guaranty or otherwise by any
trustee or receiver, or by any court, in any such proceeding;
(vii) any modification or termination of any
intercreditor or subordination agreement pursuant to which the
claims of other creditors of the Borrower or any guarantor are
subordinated to those of the Lenders, the Issuing Lender, the
Administrative Agent, the Collateral Agent or the other
Guaranteed Creditors; or
(viii) any other circumstance which might otherwise
constitute a defense available to, or a legal or equitable
discharge of, the Borrower or Holdings.
(c) This guaranty shall continue to be effective or be
reinstated, as the case may be, if at any time payment or performance
of the Guaranteed Obligations, or any part thereof, is, upon the
insolvency, bankruptcy or reorganization of the Borrower or otherwise
pursuant to applicable law, rescinded or reduced in amount or must
otherwise be restored or returned by any of the Administrative Agent,
the Issuing Lender, any Lender, the Collateral Agent or the other
Guaranteed Creditors, all as though such payment or performance had not
been made.
(d) If an event permitting the acceleration of any of the
Guaranteed Obligations shall at any time have occurred and be
continuing and such acceleration shall at such time be prevented by
reason of the pendency against the Borrower of a case or proceeding
under any bankruptcy or insolvency law, Holdings agrees that, for
purposes of this guaranty and its obligations hereunder, the Guaranteed
Obligations shall be deemed to have been accelerated and Holdings shall
forthwith pay such Guaranteed Obligations (including interest which but
for the filing of a petition in bankruptcy with respect to the Borrower
would accrue on such Guaranteed Obligations, whether or not interest is
an allowed claim under applicable law), and the other obligations
hereunder, forthwith upon demand.
(e) Holdings hereby waives (i) promptness, diligence,
presentment, notice of nonperformance, protest or dishonor, notice of
acceptance and any and all other notices with respect to any of the
Guaranteed Obligations or this Agreement, any other Loan Document or
any Interest Rate Protection Agreement or Other Hedging Agreement, and
(ii) to the extent permitted by applicable law, any right to require
that any Administrative Agent, the Collateral Agent, the Issuing
Lender, any Lender or any other Guaranteed Creditor protect, secure,
perfect or insure any Lien in or any Lien on any property subject
thereto or exhaust any right or pursue any remedy or take any action
against the
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Borrower, any other guarantor or any other Person or any collateral or
security or to any balance of any deposit accounts or credit on the
books of the Administrative Agent, the Collateral Agent, the Issuing
Lender, any Lender or any other Guaranteed Creditor in favor of the
Borrower.
(f) Holdings expressly waives until the Guaranteed Obligations
are irrevocably paid in full in cash any and all rights of subrogation,
reimbursement, contribution and indemnity (contractual, statutory or
otherwise), including any claim or right of subrogation under the
Bankruptcy Code or any successor statute, arising from the existence or
performance of this guaranty and Holdings irrevocably waives until the
Guaranteed Obligations are irrevocably paid in full in cash any right
to enforce any remedy which the Administrative Agent, the Collateral
Agent, the Issuing Lender, the Lenders or the other Guaranteed
Creditors now have or may hereafter have against the Borrower, and
waives, to the fullest extent permitted by law, until the Guaranteed
Obligations are irrevocably paid in full in cash any benefit of, and
any right to participate in, any security now or hereafter held by the
Administrative Agent, the Collateral Agent, the Issuing Lender, any
Lender or any other Guaranteed Creditor.
(g) If, in the exercise of any of its rights and remedies, the
Administrative Agent, the Collateral Agent, the Issuing Lender, any
Lender or any other Guaranteed Creditor shall forfeit any of its rights
or remedies, including its right to enter a deficiency judgment against
the Borrower or any other Person, whether because of any applicable
laws pertaining to "election of remedies" or the like, Holdings hereby
consents to such action and waives any claim based upon such action (to
the extent permitted by applicable law). Any election of remedies which
results in the denial or impairment of the right of the Administrative
Agent, the Collateral Agent, the Issuing Lender, any Lender or any
other Guaranteed Creditor to seek a deficiency judgment against any
Credit Party shall not impair Holdings' obligation to pay the full
amount of the Guaranteed Obligations.
(h) This guaranty is a continuing guaranty and shall (i)
remain in full force and effect until payment in full of the Guaranteed
Obligations and all other amounts payable under this guaranty and the
termination of the Commitments; (ii) be binding upon Holdings, its
successors and assigns; and (iii) inure, together with the rights and
remedies hereunder, to the benefit of the Guaranteed Creditors and
their respective successors, transferees and assigns. Without limiting
the generality of the foregoing clause (iii), any Guaranteed Creditor
may, subject to the terms of this Agreement or the applicable Interest
Rate Protection Agreement or Other Hedging Agreement, assign or
otherwise transfer its rights and obligations under this Agreement to
any other Person, and such other Person shall thereupon become vested
with all the benefits in respect hereof granted to such Lender pursuant
to this guaranty or otherwise, all as provided in, and to the extent
set forth in, this Agreement.
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(i) Any obligations of the Borrower to Holdings, now or
hereafter existing, are hereby subordinated to the Guaranteed
Obligations. Such obligations of the Borrower to Holdings, if the
Administrative Agent or the Majority Lenders so request, shall be
enforced and amounts recovered shall be received by Holdings as trustee
for the Guaranteed Creditors and the proceeds thereof shall be paid
over to the Lenders on account of the Guaranteed Obligations, but
without reducing or affecting in any manner the liability of Holdings
under the provisions of this guaranty.
(j) Upon failure of the Borrower to pay any Guaranteed
Obligation when and as the same shall become due, whether at maturity,
by acceleration or otherwise, Holdings hereby agrees immediately on
demand by any of the Guaranteed Creditors to pay or cause to be paid in
accordance with the terms hereof an amount equal to the full unpaid
amount of the Guaranteed Obligations then due in Dollars.
(k) All payments by Holdings hereunder shall be made free and
clear of, and without deduction or withholding for or on account of,
any Taxes, unless such deduction or withholding is required by law. If
Holdings shall be required by law to make any such deduction or
withholding, then Holdings shall pay such additional amounts as may be
necessary in order that the net amount received by the applicable
Lenders, the Issuing Lenders or the Administrative Agent, as the case
may be, after all deductions and withholdings, shall be equal to the
full amount that such Person would have received, after all deductions
and withholdings, had the Borrower discharged its obligations
(including its tax gross-up obligations) pursuant to Section 4.01.
Any amounts deducted or withheld by Holdings for or on account
of Taxes shall be paid over to the government or taxing authority
imposing such Taxes on a timely basis, and Holdings shall provide the
applicable Lender, the Issuing Lenders or the Administrative Agent, as
the case may be, as soon as practicable with such tax receipts or other
official documentation (and such other certificates, receipts and other
documents as may reasonably be requested by such Person) with respect
to the payment of such Taxes as may be available.
ARTICLE XI.
THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, THE ISSUING
LENDERS AND THE ARRANGER
11.01 Appointment and Authorization.
(a) Each of the Lenders, the Issuing Lenders and the Swingline
Lender hereby irrevocably appoints, designates and authorizes Lender of
America as Administrative Agent and as Collateral Agent (for purposes
of this Article XI, the term "Agent" shall
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mean Bank of America in its capacity as Administrative Agent and as
Collateral Agent) to take such action on its behalf under the
provisions of this Agreement and each other Loan Document and to
exercise such powers and perform such duties as are expressly delegated
to it by the terms of this Agreement or any other Loan Document,
together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in
this Agreement or in any other Loan Document, the Agent shall not have
any duties or responsibilities, except those expressly set forth
herein, nor shall the Agent have or be deemed to have any fiduciary
relationship with any Lender, the Issuing Lenders or the Swingline
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any
other Loan Document or otherwise exist against the Agent.
(b) Each Issuing Lender shall have all of the benefits and
immunities (i) provided to the Agent in this Article XI with respect to
any acts taken or omissions suffered by such Issuing Lender in
connection with Letters of Credit issued by it or proposed to be issued
by it and the Letter of Credit Applications pertaining to the Letters
of Credit as fully as if the term "Agent", as used in this Article XI,
included such Issuing Lender with respect to such acts or omissions,
and (ii) as additionally provided in this Agreement with respect to
such Issuing Lender.
11.02 Delegation of Duties. The Agent may execute any of its
duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agent or attorney-in-fact
that it selects with reasonable care.
11.03 Liability of Agent. None of the Agent, its Affiliates or
any of their officers, directors, employees, agents or attorneys-in-fact
(collectively, the "Agent-Related Persons") shall (a) be liable for any action
taken or omitted to be taken by any of them under or in connection with this
Agreement or any other Loan Document (except for their own gross negligence or
willful misconduct), or (b) be responsible in any manner to any of the Lenders
for any recital, statement, representation or warranty made by Holdings, the
Borrower or any Subsidiary or Affiliate thereof, or any officer thereof,
contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this Agreement or any
other Loan Document, or the validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document, or for any failure
of the Borrower, Holdings or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of the Borrower, Holdings or any of their respective Subsidiaries or
Affiliates.
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11.04 Reliance by Agent.
(a) The Lenders agree that the Agent shall be entitled to
rely, and shall be fully protected in relying, upon any writing,
resolution, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, statement or other document or
conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel to the Borrower,
Holdings or any Subsidiary Guarantor), independent accountants and
other experts selected by the Agent. The Lenders agree that the Agent
shall be fully justified in failing or refusing to take any action
under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Majority Lenders or, as
required by Section 12.01, all the Lenders as it deems appropriate and,
if it so requests, it shall first be indemnified to its satisfaction by
the Lenders against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such
action. The Agent shall in all cases be fully protected in acting, or
in refraining from acting, under this Agreement or any other Loan
Document in accordance with a request or consent of the Majority
Lenders or, as required by Section 12.01 all the Lenders, and such
request and any action taken or failure to act pursuant thereto shall
be binding upon all of the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 5.01 as it relates to the initial Borrowing and
issuances of Letters of Credit on the Effective Date, each Lender that
has executed this Agreement shall be deemed to have consented to,
approved or accepted or to be satisfied with each document or other
matter either sent by the Agent to such Lender for consent, approval,
acceptance or satisfaction, or required thereunder to be consented to
or approved by or acceptable or satisfactory to such Lender, unless an
officer of the Agent responsible for the transactions contemplated by
the Loan Documents shall have received notice from such Lender prior to
the initial Borrowing and issuances of Letters of Credit on the
Effective Date specifying in reasonable detail its objection thereto
and either such objection shall not have been withdrawn by notice to
the Agent to that effect or such Lender shall not have made available
to the Agent such Lender's ratable portion of such Borrowing.
11.05 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of principal, interest and fees required
to be paid to the Agent for the account of the Lenders or the Issuing Lenders,
unless the Agent shall have received written notice from a Lender or the
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Agent receives such a notice, the Agent shall give notice thereof to the
Lenders and the Issuing Lenders. The Agent shall take such action with respect
to such Default or Event of Default as shall be requested by the Majority
Lenders in accordance with Article IX; provided, however, that unless and until
the Agent shall have received any such request, the Agent may (but shall not be
obligated to) take such action, or
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refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable or in the best interest of the Lenders.
11.06 Credit Decision. Each Lender expressly acknowledges that
none of the Agent-Related Persons has made any representation or warranty to it
and that no act by the Agent hereinafter taken, including any review of the
affairs of Holdings and its Subsidiaries, shall be deemed to constitute any
representation or warranty by the Agent to any Lender. Each Lender represents to
the Agent that it has, independently and without reliance upon the Agent and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of Holdings and its
Subsidiaries, and all applicable bank regulatory laws relating to the
transactions contemplated thereby, and made its own decision to enter into this
Agreement and extend credit to the Borrower hereunder. Each Lender also
represents that it will, independently and without reliance upon the Agent and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of Holdings and its Subsidiaries. Except for notices, reports
and other documents expressly herein required to be furnished to the Lenders by
the Agent, the Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of the
Borrower, Holdings and their Subsidiaries which may come into the possession of
any of the Agent-Related Persons.
11.07 Indemnification. Whether or not the transactions
contemplated hereby shall be consummated, the Lenders shall indemnify, upon
demand, each of the Agent-Related Persons (to the extent not reimbursed by or on
behalf of the Borrower and without limiting the obligation of the Borrower to do
so), ratably from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses and disbursements
of any kind whatsoever which may at any time (including at any time following
the expiration of the Letters of Credit and the repayment of the Loans and the
termination or resignation of the Agent) be imposed on, incurred by or asserted
against any such Person in any way relating to or arising out of this Agreement,
any other Loan Document or any document contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by any such Person under or in connection with any of the foregoing;
provided, however, that no Lender shall be liable for the payment to any of the
Agent-Related Persons of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from such Person's gross negligence or willful misconduct.
Without limitation of the foregoing, each Lender shall reimburse the Agent upon
demand for its ratable share of any costs or out-of-pocket expenses (including
Attorney Costs) incurred by the Agent in connection with the administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any
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document contemplated by or referred to herein to the extent that the Agent is
not reimbursed for such expenses by or on behalf of the Borrower. Without
limiting the generality of the foregoing, if the Internal Revenue Service or any
other Governmental Authority of the United States or other jurisdiction asserts
a claim that the Agent did not properly withhold tax from amounts paid to or for
the account of any Lender (because the appropriate form was not delivered, was
not properly executed, or because such Lender failed to notify the Agent of a
change in circumstances which rendered the exemption from, or reduction of,
withholding tax ineffective, or for any other reason) such Lender shall
indemnify the Agent fully for all amounts paid as a result thereof, directly or
indirectly, by the Agent as tax or otherwise, including penalties and interest,
and including any taxes imposed by any jurisdiction on the amounts payable to
the Agent under this Section 11.07, together with all costs and expenses
(including Attorney Costs). The obligation of the Lenders in this Section shall
survive the payment of all Obligations hereunder.
11.08 Agent in Individual Capacity. Bank of America and its
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory or other business with Holdings and its
Subsidiaries and Affiliates as though Bank of America were not the Agent or an
Issuing Lender hereunder and without notice to or consent of the Lenders. With
respect to its Loans and participation in Letters of Credit, Bank of America
shall have the same rights and powers under this Agreement and the other Loan
Documents as any other Lender and may exercise the same as though it were not
the Agent or an Issuing Lender, and the terms "Lender" and "Lenders" shall
include Bank of America in its individual capacity.
11.09 Successor Agent. The Agent may resign as Agent upon 30
days' notice to the Lenders and the Borrower. If the Agent shall resign as Agent
under this Agreement, the Majority Lenders shall appoint from among the Lenders
a successor agent for the Lenders which successor agent shall be subject to the
approval of the Borrower if no Event of Default has occurred and is continuing,
such approval not to be unreasonably withheld or delayed. If no successor agent
is appointed prior to the effective date of the resignation of the Agent, the
Agent may appoint, after consulting with the Lenders and subject to the approval
of the Borrower if no Event of Default has occurred and is continuing, such
approval not to be unreasonably withheld or delayed, a successor agent from
among the Lenders or any Lender Affiliate. Any successor Agent appointed under
this Section 11.09 shall be a commercial bank organized under the laws of the
United States or any State thereof, and having a combined capital and surplus of
at least $500,000,000. Upon the acceptance of its appointment as successor agent
hereunder, such successor agent shall succeed to all the rights, powers and
duties of the retiring Agent and the term "Agent" shall mean such successor
agent and the retiring Agent's appointment, powers and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article XI and Sections 12.04 and 12.05 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement. If no successor agent has accepted appointment as Agent by
the date which is 30 days following a retiring Agent's notice of resignation,
the retiring Agent's resignation shall nevertheless thereupon
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become effective and the Lenders shall perform all of the duties of the Agent
hereunder until such time, if any, as the Majority Lenders appoint a successor
agent as provided for above.
11.10 The Arranger. The Arranger, in such capacity, shall have
no duties or responsibilities, and shall incur no obligations or liabilities,
under this Agreement. Each Lender acknowledges that it has not relied, and will
not rely, on the Arranger in deciding to enter into this Agreement.
ARTICLE XII.
MISCELLANEOUS
12.01 Amendments and Waivers.
(a) No amendment or waiver of any provision of this Agreement
or any other Loan Document and no consent with respect to any departure
by the Borrower, Holdings or any Subsidiary Guarantor therefrom, shall
be effective unless the same shall be in writing and signed by
Holdings, the Borrower and the Majority Lenders and acknowledged by
the Agent, and then such amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose
for which given; provided, however, that no such waiver, amendment or
consent shall, unless in writing and signed by all the Lenders directly
affected thereby and acknowledged by the Agent, do any of the
following:
(i) increase or extend the Revolving Commitment or
Term Commitment of such Lender (or reinstate any such
Commitment terminated pursuant to Section 9.02(a)) (except as
provided in Section 12.07);
(ii) postpone or delay any date for any scheduled
Term Loan principal payment provided in Section 2.08(c), or
any payment of interest or fees due to the Lenders (or any of
them) hereunder or under any other Loan Document, or extend
the Termination Date;
(iii) reduce the principal of, or the rate of
interest specified herein on any Loan or Letter of Credit
Borrowing (other than with respect to post-default rates), or
of any fees or other amounts payable hereunder or under any
other Loan Document or reduce the Applicable Margin provided
for herein (it being understood that any amendment or
modification to the financial definitions in this Agreement
shall not constitute a reduction in the rate of interest or
fees for the purposes of this clause (iii));
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(iv) reduce the percentage of the Commitments or of
the aggregate unpaid principal amount of the Loans which shall
be required for the Lenders or any of them to take any action
hereunder;
(v) amend this Section 12.01, the definition of the
term "Majority Lenders" or any provision of this Agreement
expressly requiring the consent of all the Lenders in order to
take or refrain from taking any action; or
(vi) release the guaranty of Holdings under its
guaranty pursuant to Article X or discharge any Subsidiary
Guarantor from its obligations under any Subsidiary Guaranty,
or release all or substantially all of the Collateral except,
in all such cases, in accordance with the express provisions
thereof;
and, provided further, that (A) no amendment, waiver or consent shall,
unless in writing and signed by each Issuing Lender in addition to the
Majority Lenders or all the Lenders, as the case may be, affect the
rights or duties of the Issuing Lenders under this Agreement or any
Letter of Credit Related Document to which such Issuing Lender is a
party, (B) no amendment, waiver or consent shall, unless in writing and
signed by the Swingline Lender in addition to the Majority Lenders or
all the Lenders, as the case may be, affect the rights and duties of
the Swingline Lender under this Agreement and (C) no amendment, waiver
or consent shall, unless in writing and signed by the Agent in addition
to the Majority Lenders or all the Lenders, as the case may be, affect
the rights or duties of the Agent under this Agreement or any other
Loan Document.
(b) If, in connection with any proposed change, waiver,
discharge or any termination to any of the provisions of this Agreement
as contemplated by clauses (ii) through (vi), inclusive, of the first
proviso to Section 12.01(a), the consent of the Majority Lenders is
obtained but the consent of one or more other Lenders whose consent is
required is not obtained, then the Borrower shall have the right, so
long as all nonconsenting Lenders whose individual consent is required
are treated the same, to replace each such non-consenting Lender or
Lenders with one or more Replacement Lenders pursuant to Section
4.08(b) so long as at such time of such replacement, each such
Replacement Lender consents to the proposed change, waiver, discharge
or termination.
12.02 Notices.
(a) All notices, requests and other communications provided
for hereunder shall be in writing (including, unless the context
expressly otherwise provides, facsimile trans mission) and mailed,
transmitted by facsimile or delivered, (A) if to the Borrower,
Holdings, the Agent, an Issuing Lender or the Swingline Lender, to the
address or facsimile number specified for notices on the applicable
signature page hereof; (B) if to any Lender, to the notice address of
such Lender set forth on Schedule 1.01(a); or (C) as directed to the
Borrower or the Agent, to such other address as shall be designated by
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such party in a written notice to the other parties, and as directed to
each other party, at such other address as shall be designated by such
party in a written notice to the Borrower and the Agent.
(b) All such notices, requests and communications shall be
effective when delivered or transmitted by facsimile machine,
respectively, provided that any matter transmitted by the Borrower by
facsimile (i) shall be immediately confirmed by a telephone call to the
recipient at the number specified on the applicable signature page
hereof or on Schedule 1.01(a), and (ii) shall be followed promptly by a
hard copy original thereof; except that notices to the Agent shall not
be effective until actually received by the Agent, notices to the
Swingline Lender pursuant to Section 2.03 shall not be effective until
received by the Swingline Lender, and notices pursuant to Article III
to the Issuing Lender shall not be effective until actually received by
the Issuing Lender.
(c) The Borrower acknowledges and agrees that any agreement of
the Agent, the Issuing Lenders, the Swingline Lender and the Lenders in
Articles II and III herein to receive certain notices by telephone and
facsimile is solely for the convenience and at the request of the
Borrower. The Agent, the Issuing Lenders, the Swingline Lender and the
Lenders shall be entitled to rely on the authority of any Person
purporting to be a Person authorized by the Borrower to give such
notice and the Agent, the Issuing Lenders, the Swingline Lender and the
Lenders shall not have any liability to such Borrower or any other
Person on account of any action taken or not taken by the Agent, the
Issuing Lenders, the Swingline Lender or the Lenders in reliance upon
such telephonic or facsimile notice. The obligation of the Borrower to
repay the Loans and drawings under Letters of Credit shall not be
affected in any way or to any extent by any failure by the Agent, the
Issuing Lenders, the Swingline Lender and the Lenders to receive
written confirmation of any telephonic or facsimile notice or the
receipt by the Agent, the Issuing Lenders, the Swingline Lender and the
Lenders of a confirmation which is at variance with the terms
understood by the Agent, the Issuing Lenders, the Swingline Lender or
the Lenders to be contained in the telephonic or facsimile notice.
12.03 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Agent, any Issuing Lender, the
Swingline Lender or any Lender, any right, remedy, power or privilege hereunder,
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
12.04 Costs and Expenses. The Borrower shall, whether or not
the transactions contemplated hereby shall be consummated:
(a) pay or reimburse on demand for all reasonable costs and
expenses incurred by the Agent, in connection with the development,
preparation, delivery, administration, syndication of the Commitments
under and execution of, and any amendment, supplement,
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waiver or modification to (in each case, whether or not consummated),
this Agreement, any other Loan Document and any other documents
prepared in connection herewith or therewith, and the consummation of
the transactions contemplated hereby and thereby, including the
Attorney Costs incurred by the Agent with respect thereto;
(b) pay or reimburse each Lender, each Issuing Lender and the
Agent on demand for all reasonable costs and expenses incurred by them
in connection with the enforcement, attempted enforcement, or
preservation of any rights or remedies (including in connection with
any "workout" or restructuring regarding the Loans, and including in
any Insolvency Proceeding) under this Agreement (including the guaranty
contained in Article X), any other Loan Document, and any such other
documents, including Attorney Costs incurred by the Agent and any
Lender and any cost of any consultants retained by the Agent; and
(c) pay or reimburse the Agent and each Issuing Lender on
demand for all appraisal (including, without duplication, the
allocated cost of internal appraisal services), audit, environmental
inspection and review (but, in the case of any such environmental
inspection or review, only to the extent that a notice has been
delivered pursuant to Section 7.03(c) or Holdings or any of its
Subsidiaries shall be in violation of Section 7.07 to the extent that
such violation relates to any Environmental Law or Environmental Claim)
(including, without duplication, the allocated cost of such internal
services), search and filing costs, fees and expenses, incurred or
sustained by the Agent in connection with the matters referred to under
paragraph (b) of this Section 12.04.
12.05 Indemnity. Whether or not the transactions contemplated
hereby shall be consummated, the Borrower shall pay, indemnify, and hold each
Lender, each Issuing Lender, the Swingline Lender, the Agent and each of their
respective officers, directors, employees, counsel, agents and attorneys-
in-fact (each, an "Indemnified Person") harmless from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, charges, expenses or disbursements (including Attorney Costs) of any kind
or nature whatsoever with respect to (a) any investigation, litigation or
proceeding (including any Insolvency Proceeding) related to this Agreement or
the Loan Documents or the Loans or the Letters of Credit, or the use of the
proceeds thereof, whether or not any Indemnified Person is a party thereto and
(b) the actual or alleged presence of Hazardous Materials in the air, surface
water or groundwater or on the surface or subsurface of any property owned or at
any time operated by Holdings or any of its Subsidiaries, the generation,
storage, transportation, handling or disposal of Hazardous Materials at any
location by Holdings or any of its Subsidiaries, whether or not owned or
operated by Holdings or any of its Subsidiaries, the noncompliance of any
property owned or operated by Holdings or any of its Subsidiaries with
Environmental Laws (including applicable permits there under) applicable to any
such property, or any Environmental Claim asserted against Holdings, any of its
Subsidiaries or any property owned or at any time operated by Holdings or any of
its Subsidiaries, (all the foregoing described in (a) and (b) above,
collectively, the "Indemnified Liabilities"); provided, however, that the
Borrower shall have no obligation hereunder to any
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Indemnified Person with respect to Indemnified Liabilities arising from the
gross negligence or willful misconduct of such Indemnified Person as the same is
determined by a final judgment of a court of competent jurisdiction. The
obligations in this Section 12.05 shall survive payment of all other
Obligations.
12.06 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that neither the Borrower nor Holdings
may assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of the Agent and each Lender.
12.07 Assignments, Participations, etc.
(a) Any Lender may, with the written consent of the Borrower,
the Agent, the Swingline Lender and each Issuing Lender, which consents
shall not be unreasonably withheld, at any time assign and delegate to
one or more Eligible Assignees (provided that no written consent of the
Borrower shall be required either in connection with any assignment and
delegation by a Lender to an Eligible Assignee that is a Lender
Affiliate of such Lender or at any time that an Event of Default shall
exist) (each an "Assignee") all, or any ratable part of all, of the
Loans, Revolving Commitment and Term Commitment and the other rights
and obligations of such Lender hereunder; provided, however, that any
such assignment to an Eligible Assignee which is not a Lender shall be
in a minimum amount equal to the lesser of $5,000,000 or the full
amount of the assignor Lender's Commitment; and provided, still
further, that the Borrower, the Issuing Lenders, the Swingline Lender
and the Agent may continue to deal solely and directly with such Lender
in connection with the interest so assigned to an Assignee until (i)
written notice of such assignment, together with payment instructions,
addresses and related information with respect to the Assignee, shall
have been given to the Borrower and the Agent by such Lender and the
Assignee; (ii) such Lender and its Assignee shall have delivered to the
Borrower and the Agent an Assignment and Acceptance in the form of
Exhibit L ("Assignment and Acceptance"); and (iii) in the case of any
assignment to an Assignee which is not already a Lender, the assignor
Lender or Assignee has paid to the Agent a processing fee in the amount
of $3,500; and provided, still further, that any assignment hereunder
must include an equal percentage of the assignor Lender's Revolving
Commitment, Term Commitment, Revolving Loans, Letter of Credit
Obligations and Term Loans.
(b) From and after the date that the Agent notifies the
assignor Lender that the requirements of paragraph (a) above are
satisfied, (i) the Assignee thereunder shall be a party hereto and, to
the extent that rights and obligations hereunder have been assigned to
it pursuant to such Assignment and Acceptance, shall have the rights
and obligations of a Lender under the Loan Documents, and (ii) the
assignor Lender shall, to the extent that rights and obligations
hereunder and under the other Loan Documents have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights and
be released
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from its obligations under the Loan Documents. Anything herein to the
contrary notwithstanding, any Lender assigning all of its Loans,
Commitments and other rights and obligations hereunder to an Assignee
shall continue to have the benefit of all indemnities hereunder
following such assignment.
(c) Immediately upon each Assignee's making its payment under
the Assignment and Acceptance, this Agreement, shall be deemed to be
amended to the extent, but only to the extent, necessary to reflect the
addition of the Assignee and the resulting adjustment of the Aggregate
Commitment, the Aggregate Revolving Commitment and Aggregate Term
Commitment arising therefrom. The Revolving Commitment and Term
Commitment allocated to an Assignee shall reduce the Revolving
Commitment of the assigning Lender pro tanto.
(d) Any Lender may at any time sell to one or more banks or
other Persons not Affiliates of the Borrower (a "Participant")
participating interests in any Loans, the Commitment of such Lender and
the other interests of such Lender (the "Originating Lender") hereunder
and under the other Loan Documents; provided, however, that (i) the
Originating Lender's obligations under this Agreement shall remain
unchanged, (ii) the Originating Lender shall remain solely responsible
for the performance of such obligations, (iii) the Borrower, the
Issuing Lenders, the Swingline Lender and the Agent shall continue to
deal solely and directly with the Originating Lender in connection with
the Originating Lender's rights and obligations under this Agreement
and the other Loan Documents, and (iv) no Lender shall transfer or
grant any participating interest under which the Participant shall have
rights to approve any amendment to, or any consent or waiver with
respect to, this Agreement or any other Loan Document, provided that
such Participant shall have the right to approve any amendment, consent
or waiver described in clauses (ii) and (iii) of the first proviso to
Section 12.01. In the case of any such participation, the Participant
shall be entitled to the benefit of Sections 4.01, 4.03 and 12.05,
subject to the same limitations, as though it were also a Lender
hereunder, subject to clause (f) below, and if amounts out standing
under this Agreement are due and unpaid, or shall have been declared or
shall have become due and payable upon the occurrence of an Event of
Default, each Participant shall, to the extent permitted under
applicable law, be deemed to have the right of set-off in respect of
its participating interest in amounts owing under this Agreement to the
same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement.
(e) Notwithstanding any other provision contained in this
Agreement or any other Loan Document to the contrary, any Lender may
assign all or any portion of the Loans held by it to any Federal
Reserve Bank or the United States Treasury as collateral security
pursuant to Regulation A of the Federal Reserve Board and any Operating
Circular issued by such Federal Reserve Bank, provided that any payment
in respect of such assigned Loans made by the Borrower or Holdings to
or for the account of the assigning or pledging Lender in accordance
with the terms of this Agreement shall satisfy the Borrower's
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or Holdings' obligations hereunder in respect to such assigned Loans to
the extent of such payment. No such assignment shall release the
assigning Lender from its obligations hereunder.
(f) No Participant shall be entitled to receive any greater
payment under Sections 4.01 or 4.03 than such Originating Lender would
have been entitled to receive with respect to the rights transferred
unless such transfer is made with the Borrower's prior written consent.
12.08 Confidentiality. Each Lender agrees to take normal and
reasonable precautions and exercise due care to maintain the confidentiality of
all information provided to it by Holdings, the Borrower or any Subsidiary of
Holdings, or by the Agent on Holdings', the Borrower's or such Subsidiary's
behalf, in connection with this Agreement or any other Loan Document, and
neither it nor any of its Affiliates shall use any such information for any
purpose or in any manner other than pursuant to the terms contemplated by this
Agreement; except to the extent such information (a) was or becomes generally
available to the public other than as a result of a disclosure by the Lender, or
(b) was or becomes available on a non-confidential basis from a source other
than the Borrower or Holdings, provided that such source is not bound by a
confidentiality agreement with the Borrower or Holdings, known to the Lender;
provided further, however, that any Lender may disclose such information (i) at
the request or pursuant to any requirement of any Governmental Authority to
which the Lender is subject or in connection with an examination of such Lender
by any such authority; (ii) pursuant to subpoena or other court process; (iii)
when required to do so in accordance with the provisions of any applicable
Requirement of Law; (iv) to the extent reasonably required in connection with
any litigation or proceeding to which the Agent, such Lender or their respective
Affiliates may be party; (v) to the extent reasonably required in connection
with the exercise of any remedy hereunder or under any other Loan Document; and
(vi) to such Lender's independent auditors, other professional advisors and
employees of such Lender's Lender Affiliates (or any Affiliate of such Lender
engaged in capital market transactions generally) retained by such Lender in
connection with this Agreement so long as such Persons agree to maintain the
confidentiality of all such information disclosed to them. Notwithstanding the
foregoing, the Borrower authorizes each Lender to disclose to any Participant or
Assignee (each, a "Transferee") and to any prospective Transferee, such
financial and other information in such Lender's possession concerning the
Borrower or its Subsidiaries or Holdings which has been delivered to Agent or
the Lenders pursuant to this Agreement or which has been delivered to the Agent
or the Lenders by the Borrower or Holdings in connection with the Lenders'
credit evaluation of the Borrower prior to entering into this Agreement;
provided that, unless otherwise agreed by the Borrower or Holdings, such
Transferee agrees in writing to such Lender to keep such information
confidential to the same extent required of the Lenders hereunder.
12.09 Set-off. In addition to any rights and remedies of the
Lenders provided by law, if an Event of Default occurs and is continuing, each
Lender is authorized at any time and from time to time, without prior notice to
the Borrower or Holdings, any such notice being
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waived by the Borrower and Holdings to the fullest extent permitted by law, to
set off and apply, to the extent permitted by applicable law, any and all
deposits (general or special, time or demand, provisional or final) at any time
held by, and other indebtedness at any time owing to, such Lender to or for the
credit or the account of the Borrower or Holdings against any and all
Obligations owing to such Lender, now or hereafter existing, irrespective of
whether or not the Agent or such Lender shall have made demand under this
Agreement or any other Loan Document and although such Obligations may be
contingent or unmatured. Each Lender agrees promptly to notify the Borrower or
Holdings and the Agent after any such set-off and application made by such
Lender; provided, however, that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of each Lender under
this Section 12.09 are in addition to the other rights and remedies (including
other rights of set-off) which the Lender may have.
12.10 Notification of Addresses, Lending Offices, etc. Each
Lender shall notify the Agent in writing of any changes in the address to which
notices to the Lender should be directed, of addresses of its Lending Office, of
payment instructions in respect of all payments to be made to it hereunder and
of such other administrative information as the Agent shall reasonably request.
12.11 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement in any number of separate counterparts,
each of which, when so executed, shall be deemed an original, and all of said
counterparts taken together shall be deemed to constitute but one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Borrower and the Agent.
12.12 Severability. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.
12.13 No Third Parties Benefited. This Agreement is made and
entered into for the sole protection and legal benefit of the parties hereto and
their permitted successors and assigns, and no other Person shall be a direct or
indirect legal beneficiary of, or have any direct or indirect cause of action or
claim in connection with, this Agreement or any of the other Loan Documents.
None of the Agent, any Issuing Lender, the Swingline Lender or any Lender shall
have any obligation to any Person not a party to this Agreement or any other
Loan Document.
12.14 Governing Law and Jurisdiction.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF ILLINOIS (INCLUDING, WITHOUT
LIMITATION, S.H.A. 735 ILCS 105/5-1 et. seq., BUT WITHOUT GIVING EFFECT
TO ANY OTHER CONFLICTS OF LAW PROVISIONS).
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(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT AND ANY OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF
THE STATE OF ILLINOIS OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT
OF ILLINOIS, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF
THE PARTIES HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THOSE COURTS. TO THE
EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING
OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN
SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED
HERETO. THE PARTIES HERETO EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY ILLINOIS LAW.
12.15 Waiver of Jury Trial. THE PARTIES HERETO EACH WAIVE
THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS,
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR
OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER
PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR
OTHERWISE. THE PARTIES HERETO EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION
SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING,
THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS
WAIVED BY OPERATION OF THIS SECTION 12.15 AS TO ANY ACTION, COUNTERCLAIM OR
OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION
HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
12.16 Domicile of Loans. Each Lender may transfer and carry
its Loans at, to or for the account of any office, Subsidiary or Affiliate of
such Lender. Notwithstanding anything to the contrary contained herein, to the
extent that a transfer of Loans pursuant to this Section 12.16 would, at the
time of such transfer, result in increased costs under Sections 4.01, 4.03 or
4.06 from those being charged by the respective Lender prior to such transfer,
then the Borrower shall not be obligated to pay such increased costs (although
the Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
transfer).
* * * *
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
CII TECHNOLOGIES, INC.
By: /s/ David Henning
---------------------------------
Name: David Henning
----------------------------
Title: CFO
---------------------------
Address for notices:
1396 Charlotte Highway
Fairview, North Carolina 29730
Attn: David Henning
Facsimile: (704) 628-1439
Tel: (704) 628-1711
COMMUNICATIONS INSTRUMENTS, INC.
By: /s/ David Henning
---------------------------------
Name: David Henning
----------------------------
Title: CFO
---------------------------
Address for notices:
1396 Charlotte Highway
Fairview, North Carolina 29730
Attn: David Henning
Facsimile: (704) 628-1439
Tel: (704) 628-1711
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as the
Administrative Agent
By: /s/ David A. Johanson
---------------------------------
Name: David A. Johanson
----------------------------
Title: Vice President
---------------------------
Address for notices of
borrowing, prepayments and
other administrative
matters and notices:
231 South LaSalle Street
8th Floor, Agency Management Services
Chicago, Illinois 60697
Attn: Senior Agency Officer
Facsimile: 312-974-9102
Tel: 312-828-7933
S-2
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as an Issuing Lender
By: /s/ Peter Gates, Jr.
---------------------------------
Name: Peter Gates, Jr.
----------------------------
Title: Vice President
---------------------------
Address for notices:
231 South LaSalle Street
8th Floor, Agency Management Services
Chicago, Illinois 60697
Attn: Senior Agency Officer
Facsimile: 312-974-9102
Tel: 312-828-7933
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as the Swingline
Lender
By: /s/ Peter Gates, Jr.
---------------------------------
Name: Peter Gates, Jr.
----------------------------
Title: Vice President
---------------------------
Address for notices:
231 South LaSalle Street
8th Floor, Agency Management Services
Chicago, Illinois 60697
Attn: Senior Agency Officer
Facsimile: 312-974-9102
Tel: 312-828-7933
S-3
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as a Lender
By: /s/ Peter Gates, Jr.
---------------------------------
Name: Peter Gates, Jr.
----------------------------
Title: Vice President
---------------------------
Address for notices:
231 South LaSalle Street
Chicago, Illinois 60697
Attn: Peter J. Gates, Jr.
Facsimile: 312-828-1974
Tel: 312-828-5893
S-4
ANTARES LEVERAGED CAPITAL CORP.,
as a Lender
By: /s/ Daniel L. Barry
---------------------------------
Name: Daniel L. Barry
----------------------------
Title: Director
---------------------------
Address for notices:
311 South Wacker Drive
Suite 2725
Chicago, Illinois 60606
Attn: Stefano Robertson
Facsimile: 312-697-3998
Tel: 312-697-3967
S-5
FIRST SOURCE FINANCIAL LLP
By: FIRST SOURCE FINANCIAL, INC.,
its Agent/Manager
By: /s/ James W. Wilson
---------------------------------
Name: James W. Wilson
----------------------------
Title: Senior Vice President
---------------------------
Addresses for notices:
2850 West Golf Road
5th Floor
Rolling Meadows, Illinois 60008
Attn: Robert Mangers
Facsimile: 847-734-7910
Tel: 847-734-2068
S-6
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Rose M. Crump
---------------------------------
Name: Rose M. Crump
----------------------------
Title: Vice President
---------------------------
Addresses for notices:
249 Fifth Avenue
Pittsburgh, Pennsylvania 15222
Attn: Rose M. Crump
Facsimile: 412-762-6484
Tel: 412-762-2539
S-7
SCHEDULE 1.01(a)
LENDING OFFICES
Bank of America National Trust
and Savings Association
231 South LaSalle Street
Chicago, IL 60697
Attn: Peter J. Gates, Jr.
Facsimile: 312-828-1974
Tel: 312-828-5893
Antares Leveraged Capital Corp.
311 South Wacker Drive
Suite 2725
Chicago, Illinois 60606
Attn: Stefano Robertson
Facsimile: 312-697-3998
Tel: 312-697-3967
First Source Financial LLP
2850 West Golf Road
5th Floor
Rolling Meadows, Illinois 60008
Attn: Robert Mangers
Facsimile: 847-734-7910
Tel: 847-734-2068
PNC Bank, National Association
249 Fifth Avenue
Pittsburgh, Pennsylvania 15222
Attn: Rosa M. Crump
Facsimile: 412-762-6484
Tel: 412-762-2539
S-1
SCHEDULE 1.01(b)
COMMITMENTS
Revolving Term Total
Lender Commitment Commitment Commitment
------ ---------- ---------- ----------
Bank of America National $8,333,333.33 $11,666,666.67 $20,000,000.00
Trust and Savings Association
Antares Leveraged Capital Corp. $6,250,000.00 $ 8,750,000.00 $15,000,000.00
First Source Financial LLP $6,250,000.00 $ 8,750,000.00 $15,000,000.00
PNC Bank, National Association $4,166,666.67 $ 5,833,333.33 $10,000,000.00
- --------------------------------------------------------------------------------------
$25,000,000.00 $35,000,000.00 $60,000,000.00
S-2
SCHEDULE 3.10
EXISTING L/Cs
Expiration
Issuing Lender L/C Beneficiary Amount Date
-------------- --- ----------- ------ ----
Bank of America National 7338360 First Union National Bank US$850,000.00 11/21/99
Trust and Savings Association
Bank of America National 7354610 City of Mansfield, OH US$100,000.00 5/22/02
Trust and Savings Association
S-3