EXHIBIT 10.1
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June 13, 2000,
among WEIGH-TRONIX, LLC, a Delaware limited liability company ("Holdings"), SWT
FINANCE B.V., a limited liability company organized under the laws of the
Netherlands (the "Borrower"), WEIGH-TRONIX CANADA, ULC, a company incorporated
under the laws of Nova Scotia (the "Canadian Borrower"; and collectively with
the Borrower, the "Borrowers"), the several banks and other financial
institutions or entities from time to time parties to this Agreement (the
"Lenders"), LEHMAN BROTHERS INC., as sole advisor, LEHMAN BROTHERS INC. and
FLEETBOSTON ROBERTSON STEPHENS INC. , as co-arrangers and co-book managers (in
such capacity, the "Arrangers"), LEHMAN COMMERCIAL PAPER INC., as syndication
agent (in such capacity, the "Syndication Agent"), and FLEET NATIONAL BANK, as
administrative agent (in such capacity, the "Administrative Agent") and FLEET
NATIONAL BANK, as security agent pursuant to the terms of a Security Trust Deed
(with respect to the Collateral (as defined below) located in England, Scotland
and the Channel Islands), dated June 13, 2000 (the "English Security Trust
Deed"), between, among others, certain parties to this Agreement, and the terms
of a Security Trust Deed (with respect to the Collateral located in Ireland),
dated June 13, 2000 (the "Irish Security Trust Deed"), between, among others,
certain parties to this Agreement (in such capacities, the "Security Agent")
W I T N E S S E T H:
WHEREAS, the Borrower, the Canadian Borrower, certain of Holdings'
other subsidiaries, the banks parties thereto and Fleet National Bank (formerly
known as BankBoston, N.A.), as Fronting Lender and agent thereunder, are parties
to the Revolving Credit and Term Loan Agreement, dated as of May 1, 1998 (as
amended, supplemented or otherwise modified, the "Existing Credit Agreement");
WHEREAS, Weigh-Tronix UK Limited, a limited liability company
organized under the laws of England and Wales (the "Purchaser"), is party to an
agreement, dated as of March 8, 2000 (the "Acquisition Agreement"), among
Purchaser and Marconi Corporation plc (the "Seller"), pursuant to which the
Purchaser has agreed to acquire from the Seller all of the issued and
outstanding share capital of GEC Avery International Limited ("Avery") and
Maatschappij van Berkel's Patent B.V. ("Berkel" and together with Avery, "Avery
Berkel");
WHEREAS, in order to finance such acquisition, to refinance certain
outstanding indebtedness of Holdings and its subsidiaries and to pay fees and
expenses in connection therewith, Holdings and the Borrowers have requested that
the Existing Credit Agreement be amended and restated and the Lenders, the
Arrangers, the Syndication Agent and the Administrative Agent are willing to so
amend and restate the Existing Credit Agreement upon and subject to the terms
and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the agreements
hereinafter set forth, the parties hereto hereby agree to amend and restate the
Existing Credit Agreement as follows:
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SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms listed
in this Section 1.1 shall have the respective meanings set forth in this
Section 1.1.
"Accounts Receivable": all rights of any Guarantor, Borrower or any
of their Subsidiaries to payment under any contract or otherwise in respect
of goods sold, leased or otherwise marketed in the ordinary course of
business and all rights of any Guarantor, Borrower or any of their
Subsidiaries to payment for services rendered in the ordinary course of
business and all sums of money or other proceeds due thereon pursuant to
transactions with account debtors, except for that portion of the sum of
money or other proceeds due thereon that relate to sales, use or property
taxes in conjunction with such transactions, recorded on books of account
in accordance with generally accepted accounting principles in the country
of domicile of the relevant Person.
"Acquisition": as defined in Section 5.1.
"Acquisition Agreement": as defined in the recitals hereto.
"Acquisition Documentation": collectively, the Acquisition Agreement
and all schedules, exhibits, annexes and amendments thereto and all side
letters and agreements affecting the terms thereof or entered into in
connection therewith, in each case, as amended, supplemented or otherwise
modified from time to time.
"Adjustment Date": as defined in the Pricing Grid.
"Administrative Agent": as defined in the preamble hereto.
"Affiliate": as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person
means the power, directly or indirectly, either to (a) vote 10% or more of
the securities having ordinary voting power for the election of directors
(or persons performing similar functions) of such Person or (b) direct or
cause the direction of the management and policies of such Person, whether
by contract or otherwise.
"Agents": the collective reference to the Syndication Agent, the
Administrative Agent and the Security Agent, which term shall include, for
purposes of Section 9 only, the Issuing Lender.
"Aggregate Exposure": with respect to any Lender at any time, an
amount equal to (a) until the Closing Date, the aggregate amount of such
Lender's Commitments at such time and (b) thereafter, the sum of (i) the
aggregate then unpaid principal amount of such Lender's Term Loans and (ii)
the amount of such Lender's Revolving Credit
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Commitment then in effect or, if the Revolving Credit Commitments have been
terminated, the Dollar Equivalent of the amount of such Lender's Revolving
Extensions of Credit then outstanding.
"Aggregate Exposure Percentage" with respect to any Lender at any
time, the ratio (expressed as a percentage) of such Lender's Aggregate
Exposure at such time to the sum of the Aggregate Exposures of all Lenders
at such time.
"Agreement": this Amended and Restated Credit Agreement, as amended,
supplemented or otherwise modified from time to time.
"Applicable Margin": for each Type of Loan, the rate per annum set
forth opposite such Type of Loan under the relevant column heading below:
Eurocurrency
Base Rate Loans Loans
--------------- ------------
Revolving Credit Loans and
Swing Line Loans 2.25% 3.25%
Tranche A Term Loans 2.25% 3.25%
Tranche B Term Loans 2.75% 3.75%;
provided, that on and after the first Adjustment Date, the Applicable
Margins will be determined pursuant to the Pricing Grid; provided, further,
that prior to the completion of two full fiscal quarters of the Borrower
after the Closing Date, the Applicable Margins shall not be reduced below
the highest point on the Pricing Grid.
"Arrangers": as defined in the preamble hereto.
"Asset Sale": any Disposition of Property or series of related
Dispositions of Property (excluding any such Disposition permitted by
clause (a), (b), (c), (d) or (e) of Section 7.5) which yields gross
proceeds to Holdings or any of its Subsidiaries (valued at the initial
principal amount thereof in the case of non-cash proceeds consisting of
notes or other debt securities and valued at fair market value in the case
of other non-cash proceeds) in excess of $100,000.
"Assignee": as defined in Section 10.6(c).
"Assignor": as defined in Section 10.6(c).
"Available Revolving Credit Commitment": with respect to any
Revolving Credit Lender at any time, an amount equal to the excess, if any,
of (a) such Lender's Revolving Credit Commitment then in effect over (b)
the Dollar Equivalent of such Lender's Revolving Extensions of Credit then
outstanding; provided, that in calculating any Lender's Revolving
Extensions of Credit for the purpose of determining such Lender's
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Available Revolving Credit Commitment pursuant to Section 2.11(a), the
aggregate principal amount of Swing Line Loans then outstanding shall be
deemed to be zero.
"Base Rate": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greatest of (a) the rate of
interest per annum publicly announced by the Reference Lender as its base
rate in effect at its principal office in New York City in effect on such
day (the "Base Reference Rate"), (b) the Base CD Rate in effect on such day
plus 1% and (c) the Federal Funds Effective Rate in effect on such day plus
1/2 of 1%. For purposes hereof: "Base CD Rate" shall mean the sum of (a)
the product of (i) the Three-Month Secondary CD Rate and (ii) a fraction,
the numerator of which is one and the denominator of which is one minus the
C/D Reserve Percentage and (b) the C/D Assessment Rate; and "Three-Month
Secondary CD Rate" shall mean, for any day, the secondary market rate for
three-month certificates of deposit reported as being in effect on such day
(or, if such day shall not be a Business Day, the next preceding Business
Day) by the Board through the public information telephone line of the
Federal Reserve Bank of New York (which rate will, under the current
practices of the Board, be published in Federal Reserve Statistical Release
H.15(519) during the week following such day), or, if such rate shall not
be so reported on such day or such next preceding Business Day, the average
of the secondary market quotations for three-month certificates of deposit
of major money center banks in New York City received at approximately
10:00 A.M., New York City time, on such day (or, if such day shall not be a
Business Day, on the next preceding Business Day) by the Reference Lender
from three New York City negotiable certificate of deposit dealers of
recognized standing selected by it. Any change in the Base Rate due to a
change in the Base Reference Rate, the Base CD Rate or the Federal Funds
Effective Rate shall be effective as of the opening of business on the
effective day of such change in the Base Reference Rate, the Three-Month
Secondary CD Rate or the Federal Funds Effective Rate, respectively.
"Base Rate Loans": Loans for which the applicable rate of interest is
based upon the Base Rate.
"Benefitted Lender": as defined in Section 10.7.
"Board": the Board of Governors of the Federal Reserve System of the
United States (or any successor).
"Borrower" and "Borrowers": as defined in the preamble hereto.
"Borrowing Base": at the relevant time of reference thereto, an
amount determined by the Administrative Agent (absent manifest error) by
reference to the most recent Borrowing Base Report delivered to the Lenders
and the Administrative Agent pursuant to Section 6.2(f), as adjusted
pursuant to the provisions below, which is equal to the sum in Dollars, of:
(a) 80% of Eligible Accounts Receivable for which invoices have been
issued and are payable; plus
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(b) 50% of the net book value (determined on a first-in first-out
basis at lower of cost or market) of Eligible Inventory;
The Administrative Agent may, in its reasonable discretion, from time to
time, upon ten (10) days' prior notice to the Borrowers, (x) reduce the
lending formula with respect to Eligible Accounts Receivable to the extent
that the Administrative Agent reasonably and in good faith determines that:
(i) the dilution with respect of the Accounts Receivable for any period has
increased in any material respect above historical levels, or (ii) the
general creditworthiness of account debtors or other obligors of the
Borrowers, the Guarantors or any Subsidiary has declined or (y) reduce the
lending formula(s) with respect to Eligible Inventory to the extent that
the Administrative Agent determines that: (i) the number of days of the
turnover of the inventory of the Borrowers, the Guarantors or any
Subsidiary for any period has changed in any material adverse respect, (ii)
the liquidation value of the Eligible Inventory, or any category thereof,
has decreased, or (iii) the nature and quality of the inventory of the
Borrowers, the Guarantors or any Subsidiary has deteriorated in any
material respect or the mix of such inventory has changed materially and
adversely. In determining whether to reduce the lending formula(s), the
Administrative Agent may consider events, conditions, contingencies or
risks which are also considered in determining Eligible Accounts Receivable
or Eligible Inventory.
"Borrowing Base Report": a Borrowing Base Report signed by the chief
financial officers of the Borrowers and in substantially the form of
Exhibit H hereto.
"Borrowing Date": any Business Day specified by the relevant Borrower
as a date on which such Borrower requests the relevant Lenders to make
Loans hereunder.
"Business Day": (i) for all purposes other than as covered by clause
(ii) below, a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to
close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, Eurocurrency Loans
denominated in Dollars or Loans denominated in any Optional Currency, any
day which is a Business Day described in clause (i) and which is also (x) a
day for trading by and between banks in deposits in Dollars or such
Optional Currency in the interbank eurodollar or eurocurrency market, as
the case may be, and (y) a day on which commercial banks in the principal
financial center of the country of the applicable currency are located are
not authorized or required by law to close; provided, further, that when
used in connection with a Loan denominated in Euro, the term "Business Day"
shall mean any day on which the Trans-European Automated Real-Time Gross
Settlement Express Transfer System (TARGET) (or, if such clearing system
ceases to be operative, such other clearing system (if any) determined by
the Administrative Agent to be a suitable replacement) is open for
settlement of payment in Euro.
"Canadian Borrower": as defined in the preamble hereto.
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"Capital Expenditures": for any period, with respect to any Person,
the aggregate of all expenditures by such Person for the acquisition or
leasing (pursuant to a capital lease) of fixed or capital assets or
additions to equipment (including replacements, capitalized repairs and
improvements during such period) which are required to be capitalized under
GAAP on a balance sheet of such Person.
"Capital Lease Obligations": with respect to any Person, the
obligations of such Person to pay rent or other amounts under any lease of
(or other arrangement conveying the right to use) real or personal
property, or a combination thereof, which obligations are required to be
classified and accounted for as capital leases on a balance sheet of such
Person under GAAP; and, for the purposes of this Agreement, the amount of
such obligations at any time shall be the capitalized amount thereof at
such time determined in accordance with GAAP.
"Capital Stock": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants, rights or options to purchase any of
the foregoing.
"Cash Equivalents": (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by
any agency thereof and backed by the full faith and credit of the United
States, in each case maturing within one year from the date of acquisition;
(b) certificates of deposit, time deposits, eurodollar time deposits or
overnight bank deposits having maturities of six months or less from the
date of acquisition issued by any Lender or by any commercial bank
organized under the laws of the United States of America or any state
thereof having combined capital and surplus of not less than $500,000,000;
(c) commercial paper of an issuer rated at least A-2 by Standard & Poor's
Ratings Services ("S&P") or P-2 by Moody's Investors Service, Inc.
("Moody's"), or carrying an equivalent rating by a nationally recognized
rating agency, if both of the two named rating agencies cease publishing
ratings of commercial paper issuers generally, and maturing within six
months from the date of acquisition; (d) repurchase obligations of any
Lender or of any commercial bank satisfying the requirements of clause (b)
of this definition, having a term of not more than 30 days with respect to
securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the
date of acquisition issued or fully guaranteed by any state, commonwealth
or territory of the United States, by any political subdivision or taxing
authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth, territory,
political subdivision, taxing authority or foreign government (as the case
may be) are rated at least A by S&P or A2 by Moody's; (f) securities with
maturities of six months or less from the date of acquisition backed by
standby letters of credit issued by any Lender or any commercial bank
satisfying the requirements of clause (b) of this definition; and (g)
shares of money market mutual or similar funds which invest exclusively in
assets satisfying the requirements of clauses (a) through (f) of this
definition.
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"C/D Assessment Rate": for any day, the annual assessment rate in
effect on such day that is payable by a member of the Bank Insurance Fund
maintained by the Federal Deposit Insurance Corporation (the "FDIC")
classified as well-capitalized and within supervisory subgroup "B" (or a
comparable successor assessment risk classification) within the meaning of
12 C.F.R. (S) 327.4 (or any successor provision) to the FDIC (or any
successor) for the FDIC's (or such successor's) insuring time deposits at
offices of such institution in the United States.
"C/D Reserve Percentage": for any day, that percentage (expressed as
a decimal) which is in effect on such day, as prescribed by the Board, for
determining the maximum reserve requirement for a Depositary Institution
(as defined in Regulation D of the Board as in effect from time to time) in
respect of new non-personal time deposits in Dollars having a maturity of
30 days or more.
"Closing Date": the date on which the conditions precedent set forth
in Section 5.1 shall have been satisfied, which date shall be not later
than June 30, 2000.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral": all Property of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any
Security Document.
"Commitment": with respect to any Lender, each of the Tranche A Term
Loan Commitment, the Tranche B Term Loan Commitment and the Revolving
Credit Commitment of such Lender.
"Commitment Fee Rate": 1/2 of 1% per annum; provided, that on and
after the first Adjustment Date occurring after the completion of two full
fiscal quarters of the Borrower after the Closing Date, the Commitment Fee
Rate will be determined pursuant to the Pricing Grid.
"Commonly Controlled Entity": an entity, whether or not incorporated,
that is under common control with Holdings within the meaning of Section
4001 of ERISA or is part of a group that includes Holdings and that is
treated as a single employer under Section 414 of the Code.
"Compliance Certificate": a certificate duly executed by a
Responsible Officer substantially in the form of Exhibit B.
"Confidential Information Memorandum": the Confidential Information
Memorandum dated April 2000 and furnished to the initial Lenders in
connection with the syndication of the Facilities.
"Consolidated Current Assets": at any date, all amounts (other than
cash and Cash Equivalents) that would, in conformity with GAAP, be set
forth opposite the
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caption "total current assets" (or any like caption) on a consolidated
balance sheet of Holdings and its Subsidiaries at such date.
"Consolidated Current Liabilities": at any date, all amounts that
would, in conformity with GAAP, be set forth opposite the caption "total
current liabilities" (or any like caption) on a consolidated balance sheet
of Holdings and its Subsidiaries at such date, but excluding (a) the
current portion of any Funded Debt of Holdings and its Subsidiaries and
(b), without duplication, all Indebtedness consisting of Revolving Credit
Loans or Swing Line Loans, to the extent otherwise included therein.
"Consolidated EBITDA": of any Person for any period, Consolidated Net
Income of such Person and its Subsidiaries for such period plus, without
duplication and to the extent reflected as a charge in the statement of
such Consolidated Net Income for such period, the sum of (a) income tax
expense, (b) Consolidated Interest Expense of such Person and its
Subsidiaries, amortization or writeoff of debt discount and debt issuance
costs and commissions, discounts and other fees and charges associated with
Indebtedness, (c) depreciation and amortization expense, (d) amortization
of intangibles (including, but not limited to, goodwill) and organization
costs, (e) any extraordinary, unusual or non-recurring expenses or losses
(including, whether or not otherwise includable as a separate item in the
statement of such Consolidated Net Income for such period, losses on sales
of assets outside of the ordinary course of business) and (f) any other
non-cash charges, and minus, to the extent included in the statement of
such Consolidated Net Income for such period, the sum of (a) interest
income (except to the extent deducted in determining Consolidated Interest
Expense), (b) any extraordinary, unusual or non-recurring income or gains
(including, whether or not otherwise includable as a separate item in the
statement of such Consolidated Net Income for such period, gains on the
sales of assets outside of the ordinary course of business) and (c) any
other non-cash income, all as determined on a consolidated basis; provided
that for purposes of calculating Consolidated EBITDA of Holdings and its
Subsidiaries for any period, (i) the Consolidated EBITDA of any Person
acquired by Holdings or its Subsidiaries during such period shall be
included on a pro forma basis for such period (assuming the consummation of
such acquisition and the incurrence or assumption of any Indebtedness in
connection therewith occurred on the first day of such period and assuming
adequately documented reductions in management compensation, rental
expenses and, with the prior written approval of the Agents (which approval
shall not be unreasonably withheld), other reasonable cost savings,
expenses and other income statement or operating statement adjustments
which are attributable to the change in ownership and/or management
resulting from such acquisition shall be deemed to have been realized on
the first day of such period) if the consolidated balance sheet of such
acquired Person and its consolidated Subsidiaries as at the end of the
period preceding the acquisition of such Person and the related
consolidated statements of income and stockholders' equity and of cash
flows for the period in respect of which Consolidated EBITDA is to be
calculated (x) have been previously provided to the Administrative Agent
and the Lenders and (y) either (1) have been reported on without a
qualification arising out of the scope of the audit by independent
certified public accountants of nationally recognized standing or (2) have
been found acceptable by the Administrative Agent and (ii) the Consolidated
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EBITDA of any Person Disposed of by Holdings or its Subsidiaries during
such period shall be excluded for such period (assuming the consummation of
such Disposition and the repayment of any Indebtedness in connection
therewith occurred on the first day of such period); provided, further,
that for purposes of computing the Consolidated Leverage Ratio,
Consolidated Fixed Charge Coverage Ratio and Consolidate Interest Coverage
Ratio as at September 30, 2000, December 31, 2000, March 31, 2001, June 30,
2001, September 30, 2001, December 31, 2001, March 31, 2002 and June 30,
2002, there shall be added to Consolidated EBITDA $8,000,000, $8,000,000,
$8,000,000, $7,000,000, $6,000,000, $4,000,000, $2,000,000 and $1,000,000,
respectively.
"Consolidated Fixed Charge Coverage Ratio": for any period, the ratio
of (a) Consolidated EBITDA of Holdings and its Subsidiaries for such period
minus the aggregate amount actually paid by Holdings and its Subsidiaries
in cash during such period on account of Capital Expenditures minus the
aggregate amount of taxes paid in cash during such period to (b)
Consolidated Fixed Charges for such period.
"Consolidated Fixed Charges": for any period, the sum (without
duplication) of (a) Consolidated Interest Expense of Holdings and its
Subsidiaries for such period and (b) scheduled payments made during such
period on account of principal of Indebtedness of Holdings or any of its
Subsidiaries (including scheduled principal payments in respect of the Term
Loans), minus non-cash interest expense and amortization in such period or
write-off of fees and expenses in such period relating to financing
activities.
"Consolidated Interest Coverage Ratio": for any period, the ratio of
(a) Consolidated EBITDA of Holdings and its Subsidiaries for such period to
(b) Consolidated Interest Expense of Holdings and its Subsidiaries for such
period.
"Consolidated Interest Expense": of any Person for any period, total
interest expense (including that attributable to Capital Lease Obligations)
of such Person and its Subsidiaries for such period with respect to all
outstanding Indebtedness of such Person and its Subsidiaries (including,
without limitation, all commissions, discounts and other fees and charges
owed by such Person with respect to letters of credit and bankers'
acceptance financing and net costs of such Person under Hedge Agreements in
respect of interest rates to the extent such net costs are allocable to
such period in accordance with GAAP) and including commitment fees, agency
fees, facility fees, balance deficiency fees and similar fees or expenses
in connection with the borrowing of money, plus, in any event, any cash
dividends paid during such period with respect to the PIK Preferred Stock.
"Consolidated Leverage Ratio": as at the last day of any period of
four consecutive fiscal quarters of Holdings, the ratio of (c) Consolidated
Total Debt on such day to (d) Consolidated EBITDA of Holdings and its
Subsidiaries for such period.
"Consolidated Leverage Ratio Stepdown Date": the first date on which
the aggregate Purchase Prices of the type referred to in Section
7.8(j)(iii) expended and/or
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incurred in any fiscal year exceeds $10,000,000 in reliance on the proviso
contained in Section 7.8(j).
"Consolidated Net Income": of any Person for any period, the
consolidated net income (or loss) of such Person and its Subsidiaries for
such period, determined on a consolidated basis in accordance with GAAP;
provided, that in calculating Consolidated Net Income of Holdings and its
consolidated Subsidiaries for any period, there shall be excluded (a) the
income (or deficit) of any Person accrued prior to the date it becomes a
Subsidiary of Holdings or is merged into or consolidated with Holdings or
any of its Subsidiaries, (b) the income (or deficit) of any Person (other
than a Subsidiary of Holdings) in which Holdings or any of its Subsidiaries
has an ownership interest (a "Joint Venture"), except to the extent that
any such income is actually received by Holdings or such Subsidiary in the
form of dividends or similar distributions; provided, that up to $600,000
of the actual income in any fiscal year of all Joint Ventures which would
otherwise be excluded from the determination of Consolidated Net Income of
Holdings and its consolidated Subsidiaries pursuant to this clause (b)
(without giving effect to this proviso) may be included therein,
notwithstanding that such amount may not have been so received by Holdings
or such Subsidiary, to the extent such amount is legally and contractually
capable of being distributed to Holdings or such Subsidiary at the option
of Holdings or such Subsidiary; provided, further, that, if in any
subsequent period all or any portion of such amount ceases to be legally
and contractually capable of being distributed to Holdings or such
Subsidiary at the option of Holdings or such Subsidiary, then there shall
be deducted from the determination of Consolidated Net Income of Holdings
and its consolidated Subsidiaries for such period such amount or portion,
as the case may be, and (c) the undistributed earnings of any Subsidiary of
Holdings to the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary is not at the time permitted by
the terms of any Contractual Obligation (other than under any Loan
Document) or Requirement of Law applicable to such Subsidiary.
"Consolidated Tangible Net Worth": at any date, all amounts that
would, in conformity with GAAP, be included on a consolidated balance sheet
of Holdings and its Subsidiaries under stockholders' equity at such date,
after deducting therefrom: (i) any surplus resulting from the write-up of
assets subsequent to March 31, 2000, (ii) goodwill, including any amounts
(however designated on the balance sheet) representing the cost of
acquisitions of Subsidiaries in excess of underlying tangible assets, (iii)
patents, trademarks, copyrights, (iv) leasehold improvements not
recoverable at the expiration of a lease, and (v) deferred charges
(including, but not limited to, unamortized debt discount and expense,
organization expenses and experimental and development expenses, but
excluding prepaid expenses).
"Consolidated Total Debt": at any date, the aggregate principal
amount of all Indebtedness of Holdings and its Subsidiaries at such date,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Working Capital": at any date, the difference of (a)
Consolidated Current Assets on such date less (b) Consolidated Current
Liabilities on such date.
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"Continuing Directors": the directors of Holdings on the Closing
Date, after giving effect to the Acquisition and the other transactions
contemplated hereby, and each other director of Holdings, if, in each case,
such other director's nomination for election to the board of directors of
Holdings is recommended by at least 66-2/3% of the then Continuing
Directors or such other director receives the vote of the Permitted
Investors in his or her election by the shareholders of Holdings.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
Property is bound.
"Control Investment Affiliate": as to any Person, any other Person
that (a) directly or indirectly, is in control of, is controlled by, or is
under common control with, such Person and (b) is organized by such Person
primarily for the purpose of making equity or debt investments in one or
more companies. For purposes of this definition, "control" of a Person
means the power, directly or indirectly, to direct or cause the direction
of the management and policies of such Person, whether by contract or
otherwise.
"Conversion Date": the date on which all or any portion of the PIK
Preferred Stock is converted into the Seller Subordinated Notes in
compliance with Section 7.6(g).
"Default": any of the events specified in Section 8, whether or not
any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"Derivatives Counterparty": as defined in Section 7.6.
"Disposition": with respect to any Property, any sale, lease, sale
and leaseback, assignment, conveyance, transfer or other disposition
thereof; and the terms "Dispose" and "Disposed of" shall have correlative
meanings.
"Dollar Equivalent": on any particular date, with respect to any
amount denominated in Dollars, such amount of Dollars, and with respect to
any amount denominated in a currency other than Dollars, the amount (as
conclusively ascertained by the Administrative Agent absent manifest error)
of Dollars which could be purchased by the Administrative Agent (in
accordance with its normal banking practices) in the London foreign
currency markets with such amount of such currency at the spot rate of
exchange prevailing at or about 11:00 a.m. (London time) on such date.
"Dollars" and "$": lawful currency of the United States of America.
"Domestic Subsidiary": any Subsidiary of Holdings organized under the
laws of any jurisdiction within the United States of America.
"Domestic Guarantor": any of Holdings and any Domestic Subsidiary
which is or becomes a party to the Guarantee and Collateral Agreement.
12
"ECF Percentage": with respect to any fiscal year of Holdings, 75%;
provided, that, with respect to any fiscal year of Holdings ending on or
after March 31, 2002, the ECF Percentage shall be 50% if the Consolidated
Leverage Ratio as of the last day of such fiscal year is not greater than
3.75 to 1.0.
"Eligible Accounts Receivable": the aggregate of the unpaid portions
of Accounts Receivable of the Borrowers or Guarantors (net of any credits,
rebates, offsets, holdbacks or other adjustments or commissions payable to
third parties that are adjustments to such Accounts Receivable):
(i) that the Guarantors and Borrowers reasonably and in good faith
determine to be collectible;
(ii) that are with account debtors or other obligors that (A) are not
Affiliates of the Borrowers or Guarantors, (B) purchased the goods or
services giving rise to the relevant Account Receivable in an arm's length
transaction, and (C) are not insolvent or involved as debtors in any case
or proceeding, whether voluntary or involuntary, under any bankruptcy,
reorganization, arrangement, insolvency, adjustment of debt, dissolution,
liquidation or similar law of any jurisdiction and (D) are, in the
Administrative Agent's reasonable judgment, creditworthy;
(iii) that are in payment of obligations that have been fully
performed, do not consist of progress billings or bill and hold invoices
and are not subject to dispute or any other similar claims that would
reduce the cash amount payable therefor;
(iv) that are not subject to any Lien other than those created by the
Loan Documents;
(v) in which the Administrative Agent has a valid and perfected first
priority security interest;
(vi) that are not outstanding for more than ninety (90) days past the
date of the respective invoices therefor in the case of goods or ninety
(90) days past the end of the calendar month following the provision
thereof in the case of services;
(vii) that are not due from an account debtor or other obligor
located in Minnesota unless the applicable Borrower or Guarantor (A) has
received a certificate of authority to do business and is in good standing
in such state or (B) has filed a notice of business activities report with
the appropriate office or agency of such state for the current year;
(viii) to the extent that the Accounts Receivable owing from any
single account debtor or other obligor do not exceed fifteen percent (15%)
of the aggregate amount of all Accounts Receivable of the Borrowers and
Guarantors owing from all account debtors and other obligors;
13
(ix) that are payable in Dollars, Canadian Dollars, Australian
Dollars, Sterling, Dutch Guilders, German Marks, French Francs, Swiss
Francs, Belgian Francs, Italian Lira, Austrian Schillings, Spanish Pesetas,
or Euro;
(x) that are not payable from an office located in any country listed
on Schedule C hereto; and
(xi) that are not secured by a letter of credit, bank guarantee,
indemnity or other similar instrument unless the Administrative Agent has a
prior, perfected security interest in such instrument.
"Eligible Inventory": with respect to the Guarantors and Borrowers,
finished goods and raw materials and component parts inventory owned by
such Person; provided that Eligible Inventory shall not include any
inventory:
(i) held on consignment, or not otherwise owned by such Person, or of
a type no longer sold by such Person;
(ii) which has been returned by a customer and is unavailable for sale
to another customer or is damaged or is held under any title retention
arrangements or subject to any legal encumbrance other than Liens permitted
by Section 7.3;
(iii) which is not in the possession of such Person unless the
Administrative Agent has received a waiver from the party in possession of
such inventory in form and substance satisfactory to the Administrative
Agent;
(iv) which is held by such Person on property leased by such Person,
unless the Administrative Agent has received a waiver from the lessor of
such leased property and, if any, sublessor thereof in form and substance
satisfactory to the Administrative Agent; provided, however, the Borrowers
shall not be required to satisfy the requirements of this paragraph (iv)
until the date which is 60 days after the Closing Date or such later date
as approved by the Administrative Agent;
(v) as to which appropriate Uniform Commercial Code financing
statements showing such Guarantor or Borrower as debtor and the
Administrative Agent as secured party have not been filed in the proper
filing office or offices (or other appropriate steps under applicable law
have not been taken) in order to perfect the Administrative Agent's
security interest therein;
(vi) which has been shipped to a customer of such Guarantor or
Borrower regardless of whether such shipment is on a consignment basis;
(vii) which is not located within the United States of America, the
United Kingdom, the Netherlands, Canada or Australia; or
14
(viii) which the Administrative Agent reasonably deems to be obsolete
or not marketable.
"EMU": the Economic and Monetary Union as contemplated in the Treaty.
"EMU Legislation": legislative measures of the European Council
(including without limitation European Council regulations) for the
introduction of, changeover to or operation of the Euro in one or more
member states.
"English Security Trust Deed": as defined in the preamble hereto.
"Environmental Laws": any and all laws, rules, orders, regulations,
statutes, ordinances, guidelines, codes, decrees, or other legally
enforceable requirements (including, without limitation, common law) of any
international authority, foreign government, the United States, or any
state, local, municipal or other governmental authority, regulating,
relating to or imposing liability or standards of conduct concerning
protection of the environment or of human health, or employee health and
safety, as has been, is now, or may at any time hereafter be, in effect.
"Environmental Permits": any and all permits, licenses, approvals,
registrations, notifications, exemptions and other authorizations required
under any Environmental Law.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Euro" and "(EURODOLLAR)": the single currency of Participating
Member States introduced in accordance with the provisions of Article 123
of the Treaty and, in respect of all payments to be made under this
Agreement in Euro, means immediately available, freely transferable funds.
"Eurocurrency Base Rate": with respect to each day during each
Interest Period pertaining to a Loan denominated in Dollars or any Optional
Currency, the rate per annum equal to the rate at which the Reference
Lender is offered deposits in Dollars or such Optional Currency, as the
case may be, at or about 11:00 A.M., London time, two Business Days prior
to the beginning of such Interest Period in the interbank eurocurrency
market where its eurocurrency and foreign currency and exchange operations
are then being conducted with respect to the relevant currency for delivery
on the first day of such Interest Period for the number of days comprised
therein, plus the Mandatory Cost.
"Eurocurrency Loans": Loans for which the applicable rate of interest
is based upon the Eurocurrency Rate.
15
"Eurocurrency Rate": with respect to each day during each Interest
Period, a rate per annum determined for such day in accordance with the
following formula (rounded upward to the nearest 1/100th of 1%):
Eurocurrency Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurocurrency Reserve Requirements": for any day, the aggregate
(without duplication) of the maximum rates (expressed as a decimal
fraction) of reserve requirements in effect on such day (including, without
limitation, basic, supplemental, marginal and emergency reserves) under any
regulations of the Board or other Governmental Authority having
jurisdiction with respect thereto dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of the Board) maintained by a member bank of
the Federal Reserve System.
"Eurocurrency Tranche": the collective reference to Eurocurrency
Loans the then current Interest Periods with respect to all of which begin
on the same date and end on the same later date (whether or not such Loans
shall originally have been made on the same day).
"Event of Default": any of the events specified in Section 8,
provided that any requirement for the giving of notice, the lapse of time,
or both, has been satisfied.
"Excepted UK Subsidiaries": the collective reference to Hallamshire
Ltd., Deben Systems Ltd. and G.W.S. Weighing Systems Limited.
"Excess Cash Flow": for any fiscal year of Holdings, the difference,
if any, of (a) the sum, without duplication, of (i) Consolidated Net Income
for such fiscal year, (ii) the amount of all non-cash charges (including
depreciation and amortization) deducted in arriving at such Consolidated
Net Income, (iii) the amount of the decrease, if any, in Consolidated
Working Capital for such fiscal year, (iv) the aggregate net amount of
non-cash loss on the Disposition of Property by Holdings and its
Subsidiaries during such fiscal year (other than sales of inventory in the
ordinary course of business), to the extent deducted in arriving at such
Consolidated Net Income and (v) the net increase during such fiscal year
(if any) in deferred tax accounts of Holdings minus (b) the sum, without
duplication, of (i) the amount of all non-cash credits included in arriving
at such Consolidated Net Income, (ii) the aggregate amount actually paid by
Holdings and its Subsidiaries in cash during such fiscal year on account of
Capital Expenditures (excluding the principal amount of Indebtedness
incurred in connection with such expenditures and any such expenditures
financed with the proceeds of any Reinvestment Deferred Amount), (iii) the
aggregate amount of all prepayments of Revolving Credit Loans and Swing
Line Loans during such fiscal year to the extent accompanying permanent
optional reductions of the Revolving Credit Commitments and all optional
prepayments of the Term Loans during such fiscal year, (iv) the aggregate
amount of all regularly scheduled principal payments of Funded Debt
(including, without limitation,
16
the Term Loans) of Holdings and its Subsidiaries made during such fiscal
year (other than in respect of any revolving credit facility to the extent
there is not an equivalent permanent reduction in commitments thereunder),
(v) the amount of the increase, if any, in Consolidated Working Capital for
such fiscal year, (vi) the aggregate net amount of non-cash gain on the
Disposition of Property by Holdings and its Subsidiaries during such fiscal
year (other than sales of inventory in the ordinary course of business), to
the extent included in arriving at such Consolidated Net Income, and (vii)
the net decrease during such fiscal year (if any) in deferred tax accounts
of Holdings; provided, that the determination of Excess Cash Flow for the
fiscal year ended March 31, 2001 shall be made for the period from July 1,
2000 through and including March 31, 2001.
"Excess Cash Flow Application Date": as defined in Section 2.14(c).
"Excluded Subsidiaries": any Foreign Subsidiary in respect of which
the guaranteeing by such Subsidiary of the Obligations or the provision of
other credit support by such Subsidiary for the Obligations, would, in the
good faith judgment of Holdings, be legally prohibited without the
following of certain procedures which are, in the opinion of the Agents,
not reasonably available to Holdings or any of its Subsidiaries.
"Existing Credit Agreement": as defined in the recitals hereto.
"Facility": each of (a) the Tranche A Term Loan Commitments and the
Tranche A Term Loans made thereunder (the "Tranche A Term Loan Facility"),
(b) the Tranche B Term Loan Commitments and the Tranche B Term Loans made
thereunder (the "Tranche B Term Loan Facility") and (c) the Revolving
Credit Commitments and the extensions of credit made thereunder (the
"Revolving Credit Facility").
"Federal Funds Effective Rate": for any day, the weighted average of
the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published on
the next succeeding Business Day by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a Business Day,
the average of the quotations for the day of such transactions received by
the Reference Lender from three federal funds brokers of recognized
standing selected by it.
"Foreign Collateral Documents": the documents set forth on Schedule A
hereto, together with any further security documents executed by any
Foreign Guarantor or by any Domestic Guarantor which owns the Capital
Stock of a Foreign Subsidiary pursuant to Section 6.9.
"Foreign Guarantees": the documents set forth on Schedule B hereto,
together with any document, instrument or agreement entered into after the
Closing Date pursuant to 6.9 providing for the guarantee of all or any part
of the Obligations by any Foreign Subsidiary.
17
"Foreign Guarantor": any Foreign Subsidiary that is a party to a
Foreign Guarantee.
"Foreign Subsidiary": any Subsidiary of Holdings that is not a
Domestic Subsidiary.
"FQ1", "FQ2 ", "FQ3", and "FQ4": when used with a numerical year
designation, means the first, second, third or fourth fiscal quarters,
respectively, of such fiscal year of Holdings (e.g., FQ1 2001 means the
first fiscal quarter of Holdings' 2001 fiscal year, which ends June 30,
2001).
"Fronted Loans": that portion of the Revolving Credit Loans which is
funded by the Fronting Lender and is not funded directly by another Lender.
"Fronting Fee": as defined in Section 2.11(b).
"Fronting Lender": Fleet National Bank, acting through its London
branch, as Fronting Lender and any other Person who replaces Fleet National
Bank as Fronting Lender pursuant to the provisions of Sections 2.6 and 2.7;
provided, that for purposes of this Agreement, in the event the Fronting
Lender is also a Lender, such Person's funding requirements in its capacity
as Fronting Lender shall not include its independent requirement in its
individual capacity to fund as a Lender.
"Fronting Loan Event": a "Fronting Loan Event" shall be deemed to
occur if at any time it should become illegal or would violate any law,
order, regulation or policy (including without limitation any internal
banking or other lending policy of the Fronting Lender) or would otherwise
not be practicable for the Fronting Lender to hold the Fronted Loans.
"Funded Debt": with respect to any Person, all Indebtedness of such
Person of the types described in clauses (a) through (e) of the definition
of "Indebtedness" in this Section.
"Funding Office": the office specified from time to time by the
Administrative Agent as its funding office by notice to the Borrowers and
the Lenders.
"GAAP": generally accepted accounting principles in the United States
of America as in effect from time to time, except that for purposes of
Section 7.1, GAAP shall be determined on the basis of such principles in
effect on the date hereof and consistent with those used in the preparation
of the most recent audited financial statements referred to in Section
4.1(b).
"Governmental Authority": any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
18
"Guarantee and Collateral Agreement": the Guarantee and Collateral
Agreement to be executed and delivered by each Domestic Guarantor,
substantially in the form of Exhibit A, as the same may be amended,
supplemented or otherwise modified from time to time.
"Guarantee Obligation": as to any Person (the "guaranteeing person"),
any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to
induce the creation of which the guaranteeing person has issued a
reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends
or other obligations (the "primary obligations") of any other third Person
(the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or
any Property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such primary
obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase Property, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the owner
of any such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include endorsements
of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing
person shall be deemed to be the lower of (a) an amount equal to the stated
or determinable amount of the primary obligation in respect of which such
Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the instrument
embodying such Guarantee Obligation, unless such primary obligation and the
maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee
Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the Borrower in
good faith.
"Guarantors": the collective reference to each Domestic Guarantor and
each Foreign Guarantor.
"Hedge Agreements": all interest rate swaps, caps or collar
agreements or similar arrangements entered into by Holdings or its
Subsidiaries providing for protection against fluctuations in interest
rates or currency exchange rates or the exchange of nominal interest
obligations, either generally or under specific contingencies.
"Indebtedness": of any Person at any date, without duplication, (a)
all indebtedness of such Person for borrowed money, (b) all obligations of
such Person for the deferred purchase price of Property or services (other
than trade payables incurred in the ordinary course of such Person's
business), (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all indebtedness
19
created or arising under any conditional sale or other title retention
agreement with respect to Property acquired by such Person (even though the
rights and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such Property), (e)
all Capital Lease Obligations of such Person, (f) all obligations of such
Person, contingent or otherwise, as an account party or applicant under
acceptance, letter of credit or similar facilities, (g) all obligations of
such Person, contingent or otherwise, to purchase, redeem, retire or
otherwise acquire for value any Capital Stock of such Person, (h) all
Guarantee Obligations of such Person in respect of obligations of the kind
referred to in clauses (a) through (g) above; (i) all obligations of the
kind referred to in clauses (a) through (h) above secured by (or for which
the holder of such obligation has an existing right, contingent or
otherwise, to be secured by) any Lien on Property (including, without
limitation, accounts and contract rights) owned by such Person, whether or
not such Person has assumed or become liable for the payment of such
obligation, (j) for the purposes of Section 8(e) only, all obligations of
such Person in respect of Hedge Agreements and (k) the liquidation value of
any preferred Capital Stock of such Person or its Subsidiaries that (1) is
mandatorily redeemable on any date prior to the date which is six months
after the final maturity date of the Term Loans and (2) is held by any
Person other than the issuer thereof and its Wholly Owned Subsidiaries.
"Indemnified Liabilities": as defined in Section 10.5.
"Indemnitee": as defined in Section 10.5.
"Initial Public Offering": an underwritten public offering by
Holdings of Capital Stock of Holdings or any Subsidiary or parent thereof
pursuant to a registration statement filed with the Securities and Exchange
Commission in accordance with the Securities Act of 1933, as amended.
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including, without limitation, copyrights, copyright licenses, patents,
patent licenses, trademarks, trademark licenses, technology, know-how and
processes, and all rights to sue at law or in equity for any infringement
or other impairment thereof, including the right to receive all proceeds
and damages therefrom.
"Interest Payment Date": (a) as to any Base Rate Loan, the last day
of each March, June, September and December to occur while such Loan is
outstanding and the final maturity date of such Loan, (b) as to any
Eurocurrency Loan having an Interest Period of three months or shorter, the
last day of such Interest Period, (c) as to any Eurocurrency Loan having an
Interest Period longer than three months, each day that is
20
three months, or a whole multiple thereof, after the first day of such
Interest Period and the last day of such Interest Period and (d) as to any
Loan (other than any Revolving Credit Loan that is a Base Rate Loan and any
Swing Line Loan), the date of any repayment or prepayment made in respect
thereof.
"Interest Period": as to any Eurocurrency Loan, (a) initially, the
period commencing on the borrowing or conversion date, as the case may be,
with respect to such Eurocurrency Loan and ending one, two, three or six
months thereafter, as selected by the relevant Borrower in its notice of
borrowing or notice of conversion, as the case may be, given with respect
thereto; and (b) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Eurocurrency Loan and
ending one, two, three or six months thereafter, as selected by the
relevant Borrower by irrevocable notice to the Administrative Agent not
less than three Business Days prior to the last day of the then current
Interest Period with respect thereto; provided that, all of the foregoing
provisions relating to Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day
that 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 would otherwise extend
beyond the Revolving Credit Termination Date or beyond the date final
payment is due on the Tranche A Term Loans or the Tranche B Term
Loans, as the case may be, shall end on the Revolving Credit
Termination Date or such due date, as applicable; and
(iii) 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 at the end of such Interest Period.
"Investments": as defined in Section 7.8.
"Irish Security Trust Deed": as defined in the preamble hereto.
"Issuing Lender": Fleet National Bank.
"L/C Commitment": $10,000,000.
"L/C Obligations": at any time, an amount equal to the sum of (a) the
Dollar Equivalent of the aggregate then undrawn and unexpired amount of the
then outstanding Letters of Credit and (b) the Dollar Equivalent of the
aggregate amount of drawings under Letters of Credit that have not then
been reimbursed pursuant to Section 3.5.
21
"Lehman Entity": any of Lehman Commercial Paper Inc. or any of its
affiliates (including Syndicated Loan Funding Trust).
"Lender Addendum": with respect to any initial Lender, a Lender
Addendum, substantially in the form of Exhibit J, to be executed and
delivered by such Lender on the Closing Date as provided in Section 10.17.
"Lenders": as defined in the preamble hereto, and, in any event, to
include, unless the context otherwise requires, the Fronting Lender.
"Letter of Credit Application": as defined in Section 3.1(a).
"Letter of Credit Fee": as defined in Section 3.6.
"Letter of Credit Participation": as defined in Section 3.1(d).
"Letters of Credit": as defined in Section 3.1(a).
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention agreement
and any capital lease having substantially the same economic effect as any
of the foregoing).
"Loan": any loan made by any Lender pursuant to this Agreement.
"Loan Documents": this Agreement, the Security Documents, the Letter
of Credit Applications and the Notes.
"Loan Parties": Holdings, the Borrowers and each Subsidiary of
Holdings that is a party to a Loan Document.
"Majority Facility Lenders": with respect to any Facility, the
holders of more than 50% of the aggregate unpaid principal amount of the
Term Loans or the Total Revolving Extensions of Credit, as the case may be,
outstanding under such Facility (or, in the case of the Revolving Credit
Facility, prior to any termination of the Revolving Credit Commitments, the
holders of more than 50% of the Total Revolving Credit Commitments).
"Majority Revolving Credit Facility Lenders": the Majority Facility
Lenders in respect of the Revolving Credit Facility.
"Mandatory Cost" means, with respect to any Lender, the cost imputed
to such Lender of compliance with the requirements of the Bank of England,
the Financial
22
Services Authority and/or the European Central Bank during the relevant
Interest Period, determined in accordance with Schedule C.
"Material Adverse Effect": (i) when used on the Closing Date, shall
mean a material adverse condition or material adverse change in or
affecting (a) the Acquisition, (b) the condition (financial or otherwise),
results of operation, assets, liabilities or management (collectively, the
"Business") of Avery Berkel and their Subsidiaries, taken as a whole, or
that calls into question in any material respect the accuracy of the
Projections or any of the material assumptions on which the Projections
were prepared to the extent that, as the Projections relate to Avery Berkel
and their Subsidiaries, they present a no more favorable picture of Avery
Berkel and their Subsidiaries, taken as a whole, than the projections
provided to Holdings by the Seller, (c) the Business of Holdings and its
Subsidiaries, taken as a whole, which could reasonably be determined to
constitute a material adverse condition or material adverse change in or
affecting the Business of the Company and Avery Berkel and their respective
Subsidiaries, taken as a whole, or (d) the validity or enforceability of
this Agreement or any of the other Loan Documents or the rights or remedies
of the Agents or the Lenders hereunder or thereunder, and (ii) when used at
any time after the Closing Date, shall mean a material adverse effect on
(c) the Acquisition, (d) the business, assets, property or condition
(financial or otherwise) of Holdings and its Subsidiaries taken as a whole
or (e) the validity or enforceability of this Agreement or any of the other
Loan Documents or the rights or remedies of the Agents or the Lenders
hereunder or thereunder.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products,
polychlorinated biphenyls, urea-formaldehyde insulation, asbestos,
pollutants, contaminants, radioactivity, and any other substances or forces
of any kind, whether or not any such substance or force is defined as
hazardous or toxic under any Environmental Law, that is regulated pursuant
to or could give rise to liability under any Environmental Law.
"Mortgaged Properties": the real properties listed on Schedule 1.1,
as to which the Administrative Agent for the benefit of the Lenders shall
be granted a Lien pursuant to the Mortgages.
"Mortgages": each of the mortgages and deeds of trust made by any
Loan Party in favor of, or for the benefit of, the Administrative Agent for
the benefit of the Lenders, as the same may be amended, supplemented or
otherwise modified from time to time.
"Multiemployer Plan": a Plan that is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"National Currency Unit": the unit of currency (other than the Euro)
of a Participating Member State.
"Net Cash Proceeds": (a) in connection with any Asset Sale or any
Recovery Event, the proceeds thereof in the form of cash and Cash
Equivalents (including any such
23
proceeds received by way of deferred payment of principal pursuant to a
note or installment receivable or purchase price adjustment receivable or
otherwise, but only as and when received) of such Asset Sale or Recovery
Event, net of attorneys' fees, accountants' fees, investment banking fees,
amounts required to be applied to the repayment of Indebtedness secured by
a Lien expressly permitted hereunder on any asset which is the subject of
such Asset Sale or Recovery Event (other than any Lien pursuant to a
Security Document) and other customary fees and expenses actually incurred
in connection therewith and net of taxes paid or reasonably estimated to be
payable as a result thereof (after taking into account any available tax
credits or deductions and any tax sharing arrangements), (b) in connection
with any issuance or sale of equity securities or debt securities or
instruments or the incurrence of loans, the cash proceeds received from
such issuance or incurrence, net of attorneys' fees, investment banking
fees, accountants' fees, underwriting discounts and commissions and other
customary fees and expenses actually incurred in connection therewith and
(c) in connection with any Purchase Price Refund, the cash amount thereof,
net of any expenses incurred in the collection thereof.
"Non-Excluded Taxes": as defined in Section 2.22(a).
"Non-U.S. Lender": as defined in Section 2.22(d).
"Note": any promissory note evidencing any Loan.
"Obligations": the unpaid principal of and interest on (including,
without limitation, interest accruing after the maturity of the Loans and
Reimbursement Obligations and interest accruing after the filing of any
petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to either Borrower, whether or
not a claim for post-filing or post-petition interest is allowed in such
proceeding) the Loans, the Reimbursement Obligations and all other
obligations and liabilities of the Borrowers to an Agent or to any Lender
(or, in the case of Specified Hedge Agreements, any affiliate of any
Lender), whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under,
out of, or in connection with, this Agreement, any other Loan Document, the
Letters of Credit, any Specified Hedge Agreement or any other document
made, delivered or given in connection herewith or therewith, whether on
account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses (including, without limitation, all fees,
charges and disbursements of counsel to the Administrative Agent or to any
Lender that are required to be paid by the Borrowers pursuant hereto) or
otherwise; provided, that (i) obligations of the Borrowers or any
Subsidiary under any Specified Hedge Agreement shall be secured and
guaranteed pursuant to the Security Documents only to the extent that, and
for so long as, the other Obligations are so secured and guaranteed and
(ii) any release of Collateral or Guarantors effected in the manner
permitted by this Agreement shall not require the consent of holders of
obligations under Specified Hedge Agreements.
24
"Optional Currency": Sterling and Euro, so long as such currency is
freely convertible into Dollars and is traded on any recognized
eurocurrency interbank market selected by the Administrative Agent in good
faith.
"Optional Currency Sublimit": $25,000,000.
"Other Taxes": any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies
arising from any payment made hereunder or from the execution, delivery or
enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.
"Overnight Rate": for any day, (a) as to Loans or Letters of Credit
denominated in Dollars, the weighted average interest rate paid by the
Administrative Agent for federal funds acquired by the Administrative
Agent, and (b) as to Loans or Letters of Credit denominated in an Optional
Currency, the rate of interest per annum at which overnight deposits in the
applicable Optional Currency, in an amount approximately equal to the
amount with respect to which such rate is being determined, would be
offered for such day by the Administrative Agent to major banks in the
London interbank market.
"Participant": as defined in Section 10.6(b).
"Participating Member State": a member state of the European
Communities that adopts the Euro as its currency in accordance with EMU
Legislation.
"Payment Office": the office specified from time to time by the
Administrative Agent as its payment office by notice to the Borrowers and
the Lenders.
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA (or any successor).
"Permitted Investors": the collective reference to the Sponsor and
its Control Investment Affiliates.
"Person": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of
whatever nature.
"PIK Preferred Stock": the 12% Senior Exchangeable PIK Preferred
Stock of Holdings.
"Plan": at a particular time, any employee benefit plan that is
covered by ERISA and in respect of which Holdings or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section
3(5) of ERISA.
"Pricing Grid": the pricing grid attached hereto as Annex A.
25
"Pro Forma Balance Sheet": as defined in Section 4.1(a).
"Projections": as defined in Section 6.2(c).
"Property": any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or
intangible, including, without limitation, Capital Stock.
"Purchase": any acquisition, whether in a single transaction or
series of related transactions, by Holdings or any one or more of its
Subsidiaries of (a) all or a substantial part of the assets, or of a
business, unit or division, of any Person, whether through purchase of
assets or securities, by merger or otherwise; (b) any Person that becomes a
Subsidiary after giving effect to such acquisition; or (c) control (as
defined in clause (b) of the definition of "Affiliate") of a partnership,
joint venture or other Person.
"Purchase Price": with respect to any Purchase, the sum (without
duplication) of (a) the amount of cash paid by Holdings and its
Subsidiaries in connection with such Purchase, (b) the sum of (i) the value
(as determined for purposes of such Purchase in accordance with the
applicable acquisition agreement) of all Capital Stock of Holdings issued
or given as consideration in connection with such Purchase and (ii) the
Qualified Net Cash Equity Proceeds applied to finance such Purchase, (c)
the principal amount (or, if less, the accreted value) at the time of such
Purchase of all Indebtedness incurred, assumed or acquired by Holdings and
its Subsidiaries in connection with such Purchase, (d) all additional
purchase price amounts in connection with such Purchase in the form of
earnouts, deferred purchase price and other contingent obligations that
should be recorded as a liability on the balance sheet of Holdings and its
Subsidiaries in accordance with GAAP, Regulation S-X under the Securities
Act of 1933, as amended, or any other rule or regulation of the United
States Securities and Exchange Commission, (e) all amounts paid by Holdings
and its Subsidiaries in respect of covenants not to compete, consulting
agreements and other affiliated contracts in connection with such Purchase,
and (f) the aggregate fair market value of all other consideration given by
Holdings and its Subsidiaries in connection with such Purchase.
"Purchase Price Refund": any amount received by Holdings or any
Subsidiary as a result of a purchase price adjustment or similar event in
connection with any acquisition of Property by Holdings or any Subsidiary.
"Qualified Net Cash Equity Proceeds": the Net Cash Proceeds of any
offering of Capital Stock of Holdings so long as (a) such offering was made
in express contemplation of a Purchase, (b) such Capital Stock is not
mandatorily redeemable and (c) such Purchase is consummated within 90 days
after receipt by Holdings of such Net Cash Proceeds.
"Recovery Event": any settlement of or payment in respect of any
property or casualty insurance claim or any condemnation proceeding
relating to any asset of Holdings or any of its Subsidiaries.
26
"Reference Lender": Fleet National Bank.
"Refunded Swing Line Loans": as defined in Section 2.9.
"Refunding Date": as defined in Section 2.9.
"Register": as defined in Section 10.6(d).
"Regulation H": Regulation H of the Board as in effect from time to
time.
"Regulation U": Regulation U of the Board as in effect from time to
time.
"Reimbursement Obligation": the obligation of the Borrower to
reimburse the Issuing Lender pursuant to Section 3.2 for amounts drawn
under Letters of Credit issued by the Issuing Lender.
"Reinvestment Deferred Amount": with respect to any Reinvestment
Event, the aggregate Net Cash Proceeds received by Holdings or any of its
Subsidiaries in connection therewith that are not applied to prepay the
Term Loans pursuant to Section 2.14(b) as a result of the delivery of a
Reinvestment Notice.
"Reinvestment Event": any Asset Sale, Purchase Price Refund or
Recovery Event in respect of which Holdings has delivered a Reinvestment
Notice.
"Reinvestment Notice": a written notice executed by a Responsible
Officer stating that no Default or Event of Default has occurred and is
continuing and that Holdings (through a Subsidiary) intends and expects to
use all or a specified portion of the Net Cash Proceeds of an Asset Sale,
Purchase Price Refund or Recovery Event to acquire assets useful in its
business.
"Reinvestment Prepayment Amount": with respect to any Reinvestment
Event, the Reinvestment Deferred Amount relating thereto less any amount
with respect to which a binding, irrevocable commitment to make a
particular expenditure to acquire assets useful in Holdings' business has
been entered into prior to the relevant Reinvestment Prepayment Date and
which are actually expended by the date which is the later to occur of (a)
one year after such Reinvestment Event and (b) 90 days after the entry into
such commitment.
"Reinvestment Prepayment Date": with respect to any Reinvestment
Event, the earlier of (a) the date occurring one year after such
Reinvestment Event and (b) the date on which Holdings shall have determined
not to, or shall have otherwise ceased to, acquire assets useful in
Holdings' business with all or any portion of the relevant Reinvestment
Deferred Amount.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.
27
"Reportable Event": any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC
Reg. (S) 4043.
"Required Lenders": at any time, the holders of more than 50% of (a)
until the Closing Date, the Commitments and (b) thereafter, the sum of (i)
the Dollar Equivalent of the aggregate unpaid principal amount of the Term
Loans then outstanding and (ii) the Total Revolving Credit Commitments then
in effect or, if the Revolving Credit Commitments have been terminated, the
Dollar Equivalent of the Total Revolving Extensions of Credit then
outstanding.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its Property or to
which such Person or any of its Property is subject.
"Responsible Officer": the chief executive officer, president or
chief financial officer of Holdings.
"Restricted Payments": as defined in Section 7.6.
"Revolving Credit Commitment": as to any Lender, the obligation of
such Lender, if any, to make Revolving Credit Loans (or, in the case of
Revolving Credit Loans denominated in any Optional Currency, to purchase a
risk participation from the Fronting Lender in such Revolving Credit Loans
made to the Borrower by the Fronting Lender pursuant to Section 2.6) and
participate in Swing Line Loans and Letters of Credit, the Dollar
Equivalent of which is in an aggregate principal and/or face amount not to
exceed the amount set forth under the heading "Revolving Credit Commitment"
opposite such Lender's name on Schedule 1 to the Lender Addendum delivered
by such Lender, or, as the case may be, in the Assignment and Acceptance
pursuant to which such Lender became a party hereto, as the same may be
changed from time to time pursuant to the terms hereof. The original
aggregate amount of the Total Revolving Credit Commitments is $50,000,000.
"Revolving Credit Commitment Period": the period from and including
the Closing Date to the Revolving Credit Termination Date.
"Revolving Credit Lender": each Lender that has a Revolving Credit
Commitment or that is the holder of Revolving Credit Loans.
"Revolving Credit Loans": as defined in Section 2.4.
"Revolving Credit Percentage": as to any Revolving Credit Lender at
any time, the percentage which such Lender's Revolving Credit Commitment
then constitutes of the Total Revolving Credit Commitments (or, at any time
after the Revolving Credit Commitments shall have expired or terminated,
the percentage which the aggregate
28
amount of such Lender's Revolving Extensions of Credit then outstanding
constitutes the amount of the Total Revolving Extensions of Credit then
outstanding).
"Revolving Credit Termination Date": June 30, 2005.
"Revolving Extensions of Credit": as to any Revolving Credit Lender
at any time, an amount equal to the sum of (a) the Dollar Equivalent of the
aggregate principal amount of all Revolving Credit Loans made by such
Lender then outstanding, (b) such Lender's Revolving Credit Percentage of
the Dollar Equivalent of the L/C Obligations then outstanding and (c) such
Lender's Revolving Credit Percentage of the Dollar Equivalent of the
aggregate principal amount of Swing Line Loans then outstanding.
"SEC": the Securities and Exchange Commission (or successors thereto
or an analogous Governmental Authority).
"Security Agent": as defined in the preamble hereto.
"Security Documents": the collective reference to the Guarantee and
Collateral Agreement, the Mortgages, the Foreign Collateral Documents, the
Foreign Guarantees and all other security documents hereafter delivered to
the Administrative Agent granting a Lien on any Property of any Person to
secure the obligations and liabilities of any Loan Party under any Loan
Document or under any Specified Hedge Agreement.
"Seller": as defined in the recitals hereto.
"Seller Subordinated Notes": as defined in Section 7.6(g).
"Senior Subordinated Note Indenture": the Indenture entered into by
the Borrower and the Guarantors in connection with the issuance of the
Senior Subordinated Notes, together with all instruments and other
agreements entered into by the Borrower or the Guarantors in connection
therewith, as the same may be amended, supplemented or otherwise modified
from time to time in accordance with Section 7.9.
"Senior Subordinated Notes": the subordinated notes of the Borrower
issued on the Closing Date pursuant to the Senior Subordinated Note
Indenture.
"Single Employer Plan": any Plan that is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"Solvent": with respect to any Person, as of any date of
determination, (a) the amount of the "present fair saleable value" of the
assets of such Person will, as of such date, exceed the amount of all
"liabilities of such Person, contingent or otherwise", as of such date, as
such quoted terms are determined in accordance with applicable federal and
state laws governing determinations of the insolvency of debtors, (b) the
present fair saleable value of the assets of such Person will, as of such
date, be greater than the amount that will be required to pay the liability
of such Person on its debts as such debts become absolute and matured, (c)
such Person will not have, as of such date, an unreasonably small amount of
capital with which to conduct its business, and (d) such
29
Person will be able to pay its debts as they mature. For purposes of this
definition, (i) "debt" means liability on a "claim", and (ii) "claim" means
any (x) right to payment, whether or not such a right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured or (y) right
to an equitable remedy for breach of performance if such breach gives rise
to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.
"Specified Change of Control": a "Change of Control", or like event,
as defined in the Senior Subordinated Note Indenture.
"Specified Hedge Agreement": any Hedge Agreement (a) entered into by
(i) Holdings or any of its Subsidiaries and (ii) any Lender or any
affiliate thereof, as counterparty and (b) that has been designated by such
Lender and Holdings, by notice to the Administrative Agent and the
Syndication Agent, as a Specified Hedge Agreement. The designation of any
Hedge Agreement as a Specified Hedge shall not create in favor of the
Lender or affiliate thereof that is a party thereto any rights in
connection with the management or release of any Collateral or of the
obligations of any Guarantor under the Guarantee and Collateral Agreement,
any Foreign Guarantee or any Foreign Collateral Document.
"Sponsor": Berkshire Partners, LLC, a Massachusetts limited liability
company.
"Sterling" and "(Pounds)": pounds sterling in lawful currency of the
United Kingdom.
"Subsequent Participant": any member state that adopts the Euro as
its lawful currency after the date hereof.
"Subsidiary": as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such
other ownership interests having such power only by reason of the happening
of a contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the time
owned, or the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries, or both, by such Person.
Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or
Subsidiaries of Holdings.
"Swing Line Commitment": the obligation of the Swing Line Lender to
make Swing Line Loans pursuant to Section 2.8 in an aggregate principal
amount at any one time outstanding not to exceed $7,000,000.
"Swing Line Lender": Fleet National Bank, in its capacity as the
lender of Swing Line Loans.
"Swing Line Loans": as defined in Section 2.8.
30
"Swing Line Participation Amount": as defined in Section 2.9.
"Term Loan Facilities": the collective reference to the Tranche A
Term Loan Facility and the Tranche B Term Loan Facility.
"Term Loan Lenders": the collective reference to the Tranche A Term
Loan Lenders and the Tranche B Term Loan Lenders.
"Term Loans": the collective reference to the Tranche A Term Loans
and the Tranche B Term Loans.
"Total Net Assets": of any Person at any time, the book value of all
assets of such Person at such time determined on a consolidated basis in
accordance with GAAP.
"Total Revolving Credit Commitments": at any time, the aggregate
amount of the Revolving Credit Commitments then in effect.
"Total Revolving Extensions of Credit": at any time, the aggregate
amount of the Revolving Extensions of Credit of the Revolving Credit
Lenders outstanding at such time.
"Tranche A Term Loan": as defined in Section 2.1.
"Tranche A Term Loan Commitment": as to any Tranche A Term Loan
Lender, the obligation of such Lender to make Tranche A Term Loans to the
Borrower hereunder in Dollars and Sterling, the Dollar Equivalent of the
principal amounts of which shall not exceed the amount set forth under the
heading "Tranche A Term Loan Commitment" opposite such Tranche A Term Loan
Lender's name on Schedule 1 to the Lender Addendum delivered by such
Tranche A Term Loan Lender, or, as the case may be, in the Assignment and
Acceptance pursuant to which such Lender became a party hereto, as the same
may be changed from time to time pursuant to the terms hereof. The
original aggregate principal amount of the Tranche A Term Loan Commitments
is $30,000,000.
"Tranche A Term Loan Facility": as defined in the definition of
"Facility" in this Section 1.1.
"Tranche A Term Loan Lender": each Lender that has a Tranche A Term
Loan Commitment or is the holder a Tranche A Term Loan.
"Tranche A Term Loan Percentage": as to Tranche A Term Loan Lender at
any time, the percentage which such Lender's aggregate Tranche A Term Loan
Commitment then constitutes of the aggregate Tranche A Term Loan
Commitments of all of the Tranche A Term Loan Lenders (or, at any time
after the Closing Date, the percentage which the aggregate principal amount
of such Lender's Tranche A Term Loans then outstanding constitutes of the
aggregate principal amount of the Tranche A Term Loans of all the Tranche A
Term Loan Lenders then outstanding).
31
"Tranche B Term Loan": as defined in Section 2.1.
"Tranche B Term Loan Commitment": as to any Tranche B Term Loan
Lender, the obligation of such Lender to make Tranche A Term Loans to the
Borrower and the Canadian Borrower hereunder in Dollars and Sterling, the
Dollar Equivalent of the principal amounts of which shall not exceed the
amount set forth under the heading "Tranche B Term Loan Commitment"
opposite such Lender's name on Schedule 1 to the Lender Addendum delivered
by such Lender, or, as the case may be, in the Assignment and Acceptance
pursuant to which such Lender became a party hereto, as the same may be
changed from time to time pursuant to the terms hereof. The original
aggregate amount of the Tranche B Term Loan Commitments is $40,000,000.
"Tranche B Term Loan Facility": as defined in the definition of
"Facility" in this Section 1.1.
"Tranche B Term Loan Lender": each Lender that has a Tranche B Term
Loan Commitment or is the holder of a Tranche B Term Loan.
"Tranche B Term Loan Percentage": as to any Lender at any time, the
percentage which such Lender's aggregate Tranche B Term Loan Commitment
then constitutes of the aggregate Tranche B Term Loan Commitments of all
the Tranche B Term Loan Lenders (or, at any time after the Closing Date,
the percentage which the aggregate principal amount of such Lender's
Tranche B Term Loans then outstanding constitutes of the aggregate
principal amount of the Tranche B Term Loans of all of the Tranche B Term
Loan Lenders then outstanding).
"Transferee": as defined in Section 10.15.
"Treaty": the Treaty establishing the European Economic Community,
being the Treaty of Rome of March 25, 1957 as amended by the Single
European Act 1987, the Maastricht Treaty (the Treaty on European Union)
(which was signed on February 7, 1992 and came into force on November 1,
1993) and the Treaty of Amsterdam (which was signed on October 2, 1997) and
as may, from time to time, be further amended, supplemented or otherwise
modified.
"Type": as to any Loan, its nature as a Base Rate Loan or a
Eurocurrency Loan.
"Wholly Owned Guarantor": any Guarantor that is a Wholly Owned
Subsidiary of Holdings.
"Wholly Owned Subsidiary": as to any Person, any other Person all of
the Capital Stock of which (other than directors' qualifying shares
required by law) is owned by such Person directly and/or through other
Wholly Owned Subsidiaries.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the other Loan Documents or any certificate or other document made
or delivered pursuant hereto or thereto.
32
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to Holdings, the Borrower and its Subsidiaries not
defined in Section 1.1 and accounting terms partly defined in Section 1.1, to
the extent not defined, shall have the respective meanings given to them under
GAAP.
(c) The words "hereof", "herein" and "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, Schedule and
Exhibit references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Term Loan Commitments. Subject to the terms and conditions
hereof, (a) the Tranche A Term Loan Lenders severally agree to make term loans
in Dollars and Sterling (each, a "Tranche A Term Loan") to the Borrower on the
Closing Date in an amount for each Tranche A Term Loan Lender not to exceed the
amount of the Tranche A Term Loan Commitment of such Lender and (b) the Tranche
B Term Loan Lenders severally agree to make term loans in Dollars and Sterling
(each, a "Tranche B Term Loan") to the Borrower and the Canadian Borrower on the
Closing Date in an amount for each Tranche B Term Loan Lender not to exceed the
amount of the Tranche B Term Loan Commitment of such Lender; provided, that the
Canadian Borrower may only borrow up to $5,000,000 under the Tranche B Term Loan
Commitment. The Term Loans made in Dollars may from time to time be
Eurocurrency Loans or Base Rate Loans and the Term Loans made in Sterling shall
be made and maintained as Eurocurrency Loans, in each case as determined by the
relevant Borrower and notified to the Administrative Agent in accordance with
Sections 2.2 and 2.15.
2.2 Procedure for Term Loan Borrowing. The Borrowers shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent (i) prior to 10:00 A.M., New York City time, three Business
Days prior to the anticipated Closing Date, in the case of Eurocurrency Loans
denominated in Dollars, (ii) prior to 10:00 A.M., New York City time, one
Business Day prior to the anticipated Closing Date, in the case of Base Rate
Loans and (iii) prior to 10:00 A.M., London time, three Business Days prior to
the anticipated Closing Date, in the case of Eurocurrency Loans denominated in
Sterling), in each case, requesting that the Term Loan Lenders make the Term
Loans on the Closing Date and specifying the amount and currency to be borrowed.
Upon receipt of such notice the Administrative Agent shall promptly notify each
Term Loan Lender thereof. Not later than 11:00 A.M., New York time, on the
Closing Date each Term Loan Lender shall make available to the Administrative
Agent at the Funding Office an amount in immediately available funds equal to
the Term Loan or Term Loans to be made by such Lender. The Administrative Agent
shall make available to the Borrowers the aggregate of the amounts made
available to the Administrative Agent by the Term Loan Lenders, in like funds as
received by the Administrative Agent.
33
2.3 Repayment of Term Loans. (a) The Tranche A Term Loan of each
Tranche A Lender shall mature in 20 consecutive quarterly installments,
commencing on September 30, 2000, each of which shall be in an amount equal to
such Lender's Tranche A Term Loan Percentage multiplied by the percentage set
forth below opposite such installment of the initial aggregate principal amount
of Tranche A Term Loans (ratably between the Tranche A Term Loans made in
Dollars and the Tranche A Term Loans made in Sterling):
Installment Percentage
----------- ----------
September 30, 2000 1.25%
December 31, 2000 1.25%
March 31, 2001 1.25%
June 30, 2001 1.25%
September 30, 2001 2.50%
December 31, 2001 2.50%
March 31, 2002 2.50%
June 30, 2002 2.50%
September 30, 2002 3.75%
December 31, 2002 3.75%
March 31, 2003 3.75%
June 30, 2003 3.75%
September 30, 2003 5.00%
December 31, 2003 5.00%
March 31, 2004 5.00%
June 30, 2004 5.00%
September 30, 2004 12.50%
December 31, 2004 12.50%
March 31, 2005 12.50%
June 30, 2005 12.50%
(b) The Tranche B Term Loan of each Tranche B Lender shall mature in
28 consecutive quarterly installments, commencing on September 30, 2000, each of
which shall be in an amount equal to such Lender's Tranche B Term Loan
Percentage multiplied by the percentage set forth below opposite such
installment of the initial aggregate principal amount of Tranche B Term Loans
(ratably between the Tranche B Term Loans made in Dollars and the Tranche B Term
Loans made in Sterling and ratably between the Tranche B Term Loans made to the
Borrower and the Tranche B Term Loans made to the Canadian Borrower):
Installment Percentage
----------- ----------
September 30, 2000 0.1875%
December 31, 2000 0.1875%
March 31, 2001 0.1875%
June 30, 2001 0.1875%
September 30, 2001 0.25%
December 31, 2001 0.25%
34
March 31, 2002 0.25%
June 30, 2002 0.25%
September 30, 2002 0.25%
December 31, 2002 0.25%
March 31, 2003 0.25%
June 30, 2003 0.25%
September 30, 2003 0.25%
December 31, 2003 0.25%
March 31, 2004 0.25%
June 30, 2004 0.25%
September 30, 2004 0.3125%
December 31, 2004 0.3125%
March 31, 2005 0.3125%
June 30, 2005 0.3125%
September 30, 2005 11.25%
December 31, 2005 11.25%
March 31, 2006 11.25%
June 30, 2006 11.25%
September 30, 2006 12.50%
December 31, 2006 12.50%
March 31, 2007 12.50%
June 30, 2007 12.50%
2.4 Revolving Credit Commitments. (a) Subject to the terms and
conditions hereof, the Revolving Credit Lenders severally agree to make
revolving credit loans ("Revolving Credit Loans") to the Borrower in Dollars and
any Optional Currency from time to time during the Revolving Credit Commitment
Period so long as, after giving effect thereto, (A) the Available Revolving
Credit Commitment of each Revolving Credit Lender would be equal to or greater
than zero, (B) the Total Revolving Extensions of Credit denominated in any
Optional Currency would not exceed the Optional Currency Sublimit and (C) the
Total Revolving Extensions of Credit would not exceed the Borrowing Base.
During the Revolving Credit Commitment Period the Borrower may use the Revolving
Credit Commitments by borrowing, prepaying the Revolving Credit Loans in whole
or in part, and reborrowing, all in accordance with the terms and conditions
hereof; provided, that notwithstanding anything to the contrary contained
herein, with respect to any Revolving Credit Loan denominated in any Optional
Currency, each Lender's Revolving Credit Percentage of the amount of such
Revolving Credit Loan shall be fronted by the Fronting Lender (with each
Revolving Credit Lender hereby agreeing to participate in the risk associated
with such Revolving Credit Loan in accordance with Section 2.6). The Revolving
Credit Loans made in Dollars may from time to time be Eurocurrency Loans or Base
Rate Loans and the Revolving Credit Loans made in Sterling and Euro shall be
made and maintained as Eurocurrency Loans, in each case, as determined by the
Borrower and notified to the Administrative Agent in accordance with Sections
2.5 and 2.15, provided that no Revolving Credit Loan shall be made as a
Eurocurrency Loan after the day that is one month prior to the Revolving Credit
Termination Date.
(b) The Borrower shall repay all outstanding Revolving Credit Loans
on the Revolving Credit Termination Date.
35
2.5 Procedure for Revolving Credit Borrowing. The Borrower may
borrow under the Revolving Credit Commitments on any Business Day during the
Revolving Credit Commitment Period, provided that the Borrower shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent (i) prior to 12:00 Noon, New York City time, three Business
Days prior to the requested Borrowing Date, in the case of Eurocurrency Loans
denominated in Dollars, (ii) prior to 12:00 Noon, New York City time, one
Business Day prior to the requested Borrowing Date, in the case of Base Rate
Loans and (iii) prior to 12:00 Noon, London time, three Business Days prior to
the requested Borrowing Date, in the case of Eurocurrency Loans denominated in
Sterling or Euro), specifying (x) the amount, currency and Type of Revolving
Credit Loans to be borrowed, (y) the requested Borrowing Date and (z) in the
case of Eurocurrency Loans, the length of the initial Interest Period therefor.
Each borrowing of Revolving Credit Loans under the Revolving Credit Commitments
shall be in an amount equal to (x) in the case of Base Rate Loans, $500,000 or a
whole multiple thereof (or, if the then aggregate Available Revolving Credit
Commitments are less than $500,000, such lesser amount) and (y) in the case of
Eurocurrency Loans, 1,000,000 units of the relevant currency or a whole multiple
of 500,000 units in excess thereof; provided, that the Swing Line Lender may
request, on behalf of the Borrower, borrowings of Base Rate Loans under the
Revolving Credit Commitments in other amounts pursuant to Section 2.9. Upon
receipt of any such notice from the Borrower, the Administrative Agent shall
promptly notify each Revolving Credit Lender and the Fronting Lender thereof.
Each Revolving Credit Lender will make its Revolving Credit Percentage of the
amount of each borrowing of Revolving Credit Loans available to the
Administrative Agent for the account of the Borrower at the Funding Office (i)
prior to 12:00 Noon, New York City time, in the case of Loans denominated in
Dollars, and (ii) prior to 12:00 Noon, London time, in the case of Loans
denominated in Sterling or Euro in each case, on the Borrowing Date requested by
the Borrower in funds immediately available to the Administrative Agent;
provided, that, to the extent such Revolving Credit Loan is to be made in any
Optional Currency, the Revolving Credit Lenders shall not be required to so make
available its Revolving Credit Percentage of such Revolving Credit Loan, and, in
reliance on the agreement of each Revolving Credit Lender to participate in the
risk associated with such Revolving Credit Loan in accordance with Section 2.6,
such Revolving Credit Loan will be provided entirely by the Fronting Lender to
the Administrative Agent in the manner described above. Such borrowing will
then be made available to the Borrower by the Administrative Agent in like funds
as received by the Administrative Agent.
2.6 Fronting Provisions for Revolving Credit Loans. As promptly as
practicable following each date upon which the Administrative Agent receives a
payment of interest hereunder on account of a Revolving Credit Loans denominated
in any Optional Currency, the Administrative Agent shall distribute to the
Fronting Lender such amount. Promptly upon receipt of such amount, the Fronting
Lender shall convert into Dollars (based upon the actual exchange rate then
applicable to the Fronting Lender) the amount equal to the portion of such
interest payment which constitutes the Applicable Margin thereof (or, with
respect to each Revolving Credit Lender which funded the purchase of a
participating interest in such Revolving Credit Loan pursuant to Section 2.7,
such Revolving Credit Lender's applicable Revolving Credit Percentage of the
full amount of such interest payment applicable to the period commencing upon
such funding). In consideration of the agreement of the Revolving Credit
Lenders to purchase participating interests in the Revolving Credit Loans
denominated in any
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Optional Currency, the Fronting Lender hereby agrees to pay to the
Administrative Agent, for the ratable accounts of each Revolving Credit Lender,
a risk participation fee in an amount equal to the proceeds received by the
Fronting Lender from such conversion into Dollars; provided, however, that with
respect to each Revolving Credit Lender which has funded the purchase of
participating interests in the Revolving Credit Loans on account of which such
interest was paid pursuant to Section 2.7, the Fronting Lender shall instead pay
to the Administrative Agent, for the account of such Revolving Credit Lender
which has so funded such purchase, the amount equal to such Revolving Credit
Lender's applicable Revolving Credit Percentage of the proceeds received by the
Fronting Lender from such conversion. Such amount shall be payable in Dollars on
the date upon which the Fronting Lender receives the proceeds of such
conversion.
2.7 Contingent Funding Arrangements. (a) Each of the Revolving
Credit Lenders hereby unconditionally and irrevocably agrees to purchase (in
Dollars) an undivided participating interest in its ratable share, determined by
reference to its Revolving Credit Percentage, of all Revolving Credit Loans
denominated in an Optional Currency made by the Fronting Lender as the
Administrative Agent may at any time request, provided that:
(i) the Administrative Agent and the Fronting Lender hereby agree
that, unless an Event of Default has occurred and is continuing or a
Fronting Loan Event has occurred, such Persons will not request any such
purchase of participating interests; and
(ii) in the event that any Event of Default specified in Section 8(f)
shall have occurred with respect to the Borrower, each Lender shall be
deemed to have purchased, automatically and without request, such
participating interest in the Revolving Credit Loans denominated in an
Optional Currency made by the Fronting Lender to the Borrower.
(b) Any such request shall be made in writing to each Revolving Credit
Lender and shall specify the amount of Dollars (based upon the actual exchange
rate at which the Administrative Agent anticipates being able to obtain the
relevant Optional Currency on the relevant date, with any excess payment being
refunded to the Revolving Credit Lenders and any deficiency remaining payable by
the Revolving Credit Lenders) required from such Revolving Credit Lender in
order to effect the purchase by such Revolving Credit Lender of a participating
interest in the amount equal to its applicable Revolving Credit Percentage times
the aggregate then outstanding principal amount (in the applicable Optional
Currency) of the Revolving Credit Loans denominated in an Optional Currency
which have been fronted by the Fronting Lender. Promptly upon receipt of such
request, each Revolving Credit Lender shall deliver to the Administrative Agent
(in immediately available funds) the amount so specified by the Administrative
Agent. The Administrative Agent shall convert such amounts into the relevant
Optional Currency and shall promptly deliver the proceeds of such conversion to
the Fronting Lender in immediately available funds. Promptly following receipt
thereof, the Fronting Lender will deliver to each Revolving Credit Lender
(through the Administrative Agent) a certificate setting forth the amount of the
Revolving Credit Loans purchased by such Revolving Credit Lender, dated the date
of receipt of such funds and in such amount.
(c) From and after such purchase, (i) all outstanding Revolving
Credit Loans (whether denominated in Dollars or the relevant Optional Currency
and including those
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Revolving Credit Loans advanced by the Fronting Lender) shall be deemed to have
been converted into Base Rate Loans denominated in Dollars (with such conversion
constituting, for purposes of Section 2.23, a conversion of a Revolving Credit
Loan of one Type into a Revolving Credit Loan of another Type prior to the
expiration of the relevant Interest Period), (ii) any further Revolving Credit
Loans to be made to the Borrower shall be made in Dollars by each Revolving
Credit Lender in accordance with each such Revolving Credit Lender's applicable
Revolving Credit Percentage, (iii) all amounts from time to time accruing, and
all amounts from time to time payable, on account of such Revolving Credit Loans
(including any interest and other amounts which were accrued but unpaid on the
date of such purchase) shall be payable in Dollars as if such Revolving Credit
Loans had originally been made in Dollars and shall be distributed by the
Administrative Agent to the Revolving Credit Lenders, on account of such
participating interests.
(d) Notwithstanding anything to the contrary contained in this
Section 2.7, the failure of any Revolving Credit Lender to purchase its
participating interest in any Revolving Credit Loans shall not relieve any other
Revolving Credit Lender of its obligations hereunder to purchase its
participating interest in a timely manner, but no Revolving Credit Lender shall
be responsible for the failure of any other Revolving Credit Lender to purchase
the participating interest to be purchased by such other Revolving Credit
Lenders on any date.
(e) If any amount required to be paid by any Revolving Credit Lender
pursuant to Section 2.7(a) is not paid to the Administrative Agent within one
Business Day following the date upon which such Revolving Credit Lender receives
a request from the Administrative Agent that such Revolving Credit Lender fund
its participating interest relating to such Revolving Credit Loan, such
Revolving Credit Lender shall pay to the Administrative Agent on demand an
amount equal to the product of (i) such amount, times (ii) the daily average
Federal Funds Effective Rate, as quoted by the Administrative Agent, during the
period from and including the date such payment is required to be made to the
date on which such payment is immediately available to the Administrative Agent,
times (iii) a fraction the numerator of which is the number of days that elapse
during such period and the denominator of which is 360. If any such amount
required to be paid by any Revolving Credit Lender pursuant to Section 2.7(a) is
not in fact made available to the Administrative Agent within three Business
Days following the date upon which such Revolving Credit Lender receives a
request from the Administrative Agent that such Revolving Credit Lender fund its
participating interest relating to such Revolving Credit Loan, the
Administrative Agent shall be entitled to recover from the Borrower, on demand,
such amount with interest thereon calculated from such due date at the rate per
annum applicable to Revolving Credit Loans which are Base Rate Loans. A
certificate from the Administrative Agent submitted to any Revolving Credit
Lender with respect to any amounts owing under this Section 2.7(e) shall be
conclusive in the absence of manifest error. Amounts payable by any Revolving
Credit Lender pursuant to this Section 2.7(e) shall be paid to the
Administrative Agent, for the account of the Fronting Lender; provided that, if
the Administrative Agent (in its sole discretion) has elected to fund on behalf
of such Revolving Credit Lender the amounts owing to the Fronting Lender, then
the amounts shall be paid to the Administrative Agent, for its own account.
(f) Whenever, at any time after the Fronting Lender has received from
any Revolving Credit Lender such Revolving Credit Lender's participating
interest in a Revolving
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Credit Loan pursuant to Section 2.7(e) above, the Fronting Lender receives any
payment on account thereof, such Fronting Lender will distribute to the
Administrative Agent, for the account of such Revolving Credit Lender, such
Revolving Credit Lender's participating interest in such amount (appropriately
adjusted, in the case of interest payments, to reflect the period of time during
which such Revolving Credit Lender's participating interest was outstanding and
funded) in like funds received; provided, however, that in the event that any
such payment received by the Fronting Lender is required to be returned, such
Revolving Credit Lender will return to the Fronting Lender any portion thereof
previously distributed by the Fronting Lender to the Revolving Credit Lender in
like funds as such payment is required to be returned by the Fronting Lender.
(g) Each Revolving Credit Lender's obligation to purchase
participating interests pursuant to this Section 2.7 shall be absolute and
unconditional and shall not be affected by any circumstance, including (i) any
set-off, counterclaim, recoupment, defense or other right which such Revolving
Credit Lender may have against the Fronting Lender, the Borrower or any other
Person for any reason whatsoever; (ii) the occurrence and continuation of any
Default or Event of Default; (iii) any adverse change in the condition
(financial or otherwise) of any Person party hereto; (iv) any breach of any of
the Loan Documents by any Person; or (v) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing.
(h) The Fronting Lender may resign at any time by giving sixty days'
prior written notice thereof to the Revolving Credit Lenders and the Borrower.
Upon any such resignation, the Majority Facility Lenders in respect of the
Revolving Credit Facility shall have the right to appoint a successor Fronting
Lender. Unless a Default or Event of Default shall have occurred and be
continuing, such successor Fronting Lender shall be reasonably acceptable to the
Borrower. If no successor Fronting Lender shall have been so appointed by the
Majority Facility Lenders in respect of the Revolving Credit Facility and shall
have accepted such appointment within thirty days after the retiring Fronting
Lender's giving of notice of resignation, then the retiring Fronting Lender may,
on behalf of the Revolving Credit Lenders, appoint a successor Fronting Lender,
which shall be a financial institution having a rating of not less than A or its
equivalent by Standard & Poor's Ratings Group. Upon the acceptance of any
appointment as Fronting Lender hereunder by a successor Fronting Lender, such
successor Fronting Lender shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring Fronting Lender, and
the retiring Fronting Lender shall be discharged from its duties and obligations
hereunder. After any retiring Fronting Lender's resignation, the provisions of
this Agreement and the other Loan Documents shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Fronting Lender.
2.8 Swing Line Commitment. (a) Subject to the terms and conditions
hereof, the Swing Line Lender agrees that, during the Revolving Credit
Commitment Period, it will make available to the Borrower in the form of swing
line loans in Dollars ("Swing Line Loans") a portion of the credit otherwise
available to the Borrower under the Revolving Credit Commitments; provided that
(i) the aggregate principal amount of Swing Line Loans outstanding at any time
shall not exceed the Swing Line Commitment then in effect (notwithstanding that
the Swing Line Loans outstanding at any time, when aggregated with the Swing
Line Lender's other outstanding Revolving Credit Loans hereunder, may exceed the
Swing Line Commitment then in effect or such Swing Line Lender's Revolving
Credit Commitment then in effect), (ii) the
39
Borrower shall not request, and the Swing Line Lender shall not make, any Swing
Line Loan if, after giving effect to the making of such Swing Line Loan, the
aggregate amount of the Available Revolving Credit Commitments would be less
than zero and (iii) the Borrower shall not request, and the Swing Line Lender
shall not make, any Swing Line Loan if, after giving effect to the making of
such Swing Line Loan, the Total Revolving Extensions of Credit would exceed the
Borrowing Base. During the Revolving Credit Commitment Period, the Borrower may
use the Swing Line Commitment by borrowing, repaying and reborrowing, all in
accordance with the terms and conditions hereof. Swing Line Loans shall be Base
Rate Loans only.
(b) The Borrower shall repay all outstanding Swing Line Loans on the
Revolving Credit Termination Date.
2.9 Procedure for Swing Line Borrowing; Refunding of Swing Line
Loans. (a) The Borrower may borrow under the Swing Line Commitment on any
Business Day during the Revolving Credit Commitment Period, provided, the
Borrower shall give the Swing Line Lender irrevocable telephonic notice
confirmed promptly in writing (which telephonic notice must be received by the
Swing Line Lender not later than 11:00 A.M., New York City time, on the proposed
Borrowing Date), specifying (i) the amount to be borrowed and (ii) the requested
Borrowing Date. Each borrowing under the Swing Line Commitment shall be in an
amount equal to $250,000 or a whole multiple of $100,000 in excess thereof. Not
later than the close of business in New York City on the Borrowing Date
specified in the borrowing notice in respect of any Swing Line Loan, the Swing
Line Lender shall make available to the Administrative Agent at the Funding
Office an amount in immediately available funds equal to the amount of such
Swing Line Loan. The Administrative Agent shall make the proceeds of such Swing
Line Loan available to the Borrower on such Borrowing Date in like funds as
received by the Administrative Agent.
(b) The Swing Line Lender, at any time and from time to time in its
sole and absolute discretion may, on behalf of the Borrower (which hereby
irrevocably directs the Swing Line Lender to act on its behalf), on one Business
Day's notice given by the Swing Line Lender no later than 12:00 Noon, New York
City time, request each Revolving Credit Lender to make, and each Revolving
Credit Lender hereby agrees to make, a Revolving Credit Loan in Dollars, in an
amount equal to such Revolving Credit Lender's Revolving Credit Percentage of
the aggregate amount of the Swing Line Loans (the "Refunded Swing Line Loans")
outstanding on the date of such notice, to repay the Swing Line Lender. Each
Revolving Credit Lender shall make the amount of such Revolving Credit Loan
available to the Administrative Agent at the Funding Office in immediately
available funds, not later than 10:00 A.M., New York City time, one Business Day
after the date of such notice. The proceeds of such Revolving Credit Loans
shall be made immediately available by the Administrative Agent to the Swing
Line Lender for application by the Swing Line Lender to the repayment of the
Refunded Swing Line Loans.
(c) If prior to the time a Revolving Credit Loan would have otherwise
been made pursuant to Section 2.9(b), one of the events described in Section
8(f) shall have occurred and be continuing with respect to the Borrower, or if
for any other reason, as determined by the Swing Line Lender in its sole
discretion, Revolving Credit Loans may not be made as contemplated by Section
2.9(b), each Revolving Credit Lender shall, on the date such Revolving Credit
Loan was to have been made pursuant to the notice referred to in Section 2.9(b)
(the "Refunding Date"),
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purchase for cash an undivided participating interest in the then outstanding
Swing Line Loans by paying to the Swing Line Lender an amount (the "Swing Line
Participation Amount") equal to (i) such Revolving Credit Lender's Revolving
Credit Percentage times (ii) the sum of the aggregate principal amount of Swing
Line Loans then outstanding which were to have been repaid with such Revolving
Credit Loans.
(d) Whenever, at any time after the Swing Line Lender has received
from any Revolving Credit Lender such Lender's Swing Line Participation Amount,
the Swing Line Lender receives any payment on account of the Swing Line Loans,
the Swing Line Lender will distribute to such Lender its Swing Line
Participation Amount (appropriately adjusted, in the case of interest payments,
to reflect the period of time during which such Lender's participating interest
was outstanding and funded and, in the case of principal and interest payments,
to reflect such Lender's pro rata portion of such payment if such payment is not
sufficient to pay the principal of and interest on all Swing Line Loans then
due); provided, however, that in the event that such payment received by the
Swing Line Lender is required to be returned, such Revolving Credit Lender will
return to the Swing Line Lender any portion thereof previously distributed to it
by the Swing Line Lender.
(e) Each Revolving Credit Lender's obligation to make the Loans
referred to in Section 2.9(b) and to purchase participating interests pursuant
to Section 2.9(c) shall be absolute and unconditional and shall not be affected
by any circumstance, including, without limitation, (i) any setoff,
counterclaim, recoupment, defense or other right which such Revolving Credit
Lender or the Borrower may have against the Swing Line Lender, the Borrower or
any other Person for any reason whatsoever; (ii) the occurrence or continuance
of a Default or an Event of Default or the failure to satisfy any of the other
conditions specified in Section 5; (iii) any adverse change in the condition
(financial or otherwise) of the Borrower; (iv) any breach of this Agreement or
any other Loan Document by the Borrower, any other Loan Party or any other
Revolving Credit Lender; or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
2.10 Repayment of Loans; Evidence of Debt. (a) Each Borrower (or,
in the case of clauses (ii) and (iii) below, the Borrower) hereby
unconditionally promises to pay to the Administrative Agent for the account of
the appropriate Revolving Credit Lender or Term Loan Lender, as the case may be,
(i) the then unpaid principal amount of each Revolving Credit Loan of such
Revolving Credit Lender, on the Revolving Credit Termination Date (or on such
earlier date on which the Loans become due and payable pursuant to Section 8),
(ii) the then unpaid principal amount of each Swing Line Loan of such Swing Line
Lender on the Revolving Credit Termination Date (or on such earlier date on
which the Loans become due and payable pursuant to Section 8) and (iii) the
principal amount of each Term Loan of such Term Loan Lender made to such
Borrower, in installments according to the amortization schedule set forth in
Section 2.3 (or on such earlier date on which the Loans become due and payable
pursuant to Section 8). Each Borrower hereby further agrees to pay interest on
the unpaid principal amount of the Loans made to it from time to time
outstanding from the date hereof until payment in full thereof at the rates per
annum, and on the dates, set forth in Section 2.17. Except as otherwise
provided herein, the principal amount of each Loan (and any interest thereon)
shall be repayable in the currency in which such Loan was made.
41
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of the Borrowers to such Lender
resulting from each Loan of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
(c) The Administrative Agent, on behalf of the Borrowers, shall
maintain the Register pursuant to Section 10.6(e), and a subaccount therein for
each Lender, in which shall be recorded (i) the amount and currency of each Loan
made hereunder and any Note evidencing such Loan, the Type of such Loan and each
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the relevant Borrower to each
Lender hereunder and (iii) both the amount of any sum received by the
Administrative Agent hereunder from the relevant Borrower and each Lender's
share thereof.
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to Section 2.10(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrowers therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrowers to repay (with applicable interest) the Loans made
to the Borrowers by such Lender in accordance with the terms of this Agreement.
(e) The Borrowers agree that, upon the request to the Administrative
Agent by any Lender, the relevant Borrower will execute and deliver to such
Lender a promissory note of such Borrower evidencing any Term Loans, Revolving
Credit Loans or Swing Line Loans, as the case may be, of such Lender,
substantially in the forms of Exhibit G-1, G-2 or G-3, respectively, with
appropriate insertions as to date and principal amount.
2.11 Commitment Fees, Fronting Fees, etc. (a) The Borrower agrees
to pay to the Administrative Agent for the account of each Revolving Credit
Lender a commitment fee for the period from and including the Closing Date to
the last day of the Revolving Credit Commitment Period, computed at the
Commitment Fee Rate on the average daily amount of the Available Revolving
Credit Commitment of such Lender during the period for which payment is made,
payable quarterly in arrears on the last day of each March, June, September and
December and on the Revolving Credit Termination Date, commencing on the first
of such dates to occur after the date hereof.
(b) The Borrower agrees to pay to the Fronting Lender for the account
of the Fronting Lender a fronting fee (the "Fronting Fee") calculated at the
rate of 1/8 of 1% per annum on the average principal amount of Fronted Loans
outstanding (including amounts requested) during each calendar quarter or
portion thereof from the Closing Date to the date of repayment of such Fronted
Loans. The Fronting Fee shall be payable in arrears on each Interest Payment
Date pertaining to such Fronted Loans for the immediately preceding Interest
Period.
(c) The Borrower agrees to pay to the Syndication Agent the fees in
the amounts and on the dates previously agreed to in writing by the Borrower (or
any of its affiliates) and the Syndication Agent.
42
(d) The Borrower agrees to pay to the Administrative Agent the fees
in the amounts and on the dates from time to time agreed to in writing by the
Borrower (or any of its affiliates) and the Administrative Agent.
2.12 Termination or Reduction of Revolving Credit Commitments. The
Borrower shall have the right, upon not less than three Business Days' notice to
the Administrative Agent, to terminate the Revolving Credit Commitments or, from
time to time, to reduce the aggregate amount of the Revolving Credit
Commitments; provided that no such termination or reduction of Revolving Credit
Commitments shall be permitted if, after giving effect thereto and to any
prepayments of the Revolving Credit Loans and Swing Line Loans made on the
effective date thereof, the Total Revolving Extensions of Credit would exceed
the Total Revolving Credit Commitments. Any such reduction shall be in an
amount equal to $1,000,000, or a whole multiple thereof, and shall reduce
permanently the Revolving Credit Commitments then in effect.
2.13 Optional Prepayments. (a) The Borrowers may at any time and
from time to time prepay the Loans, in whole or in part, without premium or
penalty (except as otherwise provided herein), upon irrevocable notice delivered
to the Administrative Agent at least three Business Days prior thereto in the
case of Eurocurrency Loans and at least one Business Day prior thereto in the
case of Base Rate Loans, which notice shall specify the date and amount of
prepayment and whether the prepayment is of Eurocurrency Loans or Base Rate
Loans; provided, that (i) if a Eurocurrency Loan is prepaid on any day other
than the last day of the Interest Period applicable thereto, the Borrower shall
also pay any amounts owing pursuant to Section 2.23 and (ii) no prior notice is
required for the prepayment of Swing Line Loans. Upon receipt of any such
notice the Administrative Agent shall promptly notify each relevant Lender
thereof. If any such notice is given, the amount specified in such notice shall
be due and payable on the date specified therein, together with (except in the
case of Revolving Credit Loans that are Base Rate Loans and Swing Line Loans)
accrued interest to such date on the amount prepaid. Partial prepayments of
Term Loans and Revolving Credit Loans shall be in an aggregate principal amount
of 500,000 units of the relevant currency or a whole multiple thereof. Partial
prepayments of Swing Line Loans shall be in an aggregate principal amount of
$100,000 or a whole multiple thereof.
2.14 Mandatory Prepayments and Commitment Reductions. (a) If any
Capital Stock (other than Capital Stock issued to (i) any Permitted Investor or
other shareholder of Holdings which was a shareholder on the Closing Date, (ii)
employees of Holdings or any of its Subsidiaries within seven months following
the Closing Date for an aggregate amount of Net Cash Proceeds not to exceed
$650,000 or (iii) any employee or director of Holdings or any Subsidiary
pursuant to any stock option plan approved by the Board of Directors of Holdings
in the ordinary course of business and consistent with past practices for an
aggregate amount of Net Cash Proceeds not to exceed $500,000 during any
consecutive 12-month period) shall be issued, or Indebtedness (excluding any
Indebtedness incurred in accordance with Section 7.2) incurred, by Holdings or
any of its Subsidiaries, on the date of such issuance or incurrence, the Term
Loans shall be prepaid by an amount equal to the amount of such Net Cash
Proceeds, as set forth in Section 2.14(e).
43
(b) If on any date Holdings or any of its Subsidiaries shall receive
Net Cash Proceeds from any Asset Sale, Purchase Price Refund or Recovery Event
then, unless a Reinvestment Notice shall be delivered in respect thereof, on
such date the Term Loans shall be prepaid by an amount equal to the amount of
such Net Cash Proceeds, as set forth in Section 2.14(e); provided, that,
notwithstanding the foregoing, on each Reinvestment Prepayment Date the Term
Loans shall be prepaid by an amount equal to the Reinvestment Prepayment Amount
with respect to the relevant Reinvestment Event, as set forth in Section
2.14(e).
(c) If, for any fiscal year of Holdings commencing with the fiscal
year ending March 31, 2001, there shall be Excess Cash Flow, on the relevant
Excess Cash Flow Application Date, the Term Loans shall be prepaid by an amount
equal to the ECF Percentage of such Excess Cash Flow, as set forth in Section
2.14(e). Each such prepayment and commitment reduction shall be made on a date
(an "Excess Cash Flow Application Date") no later than five days after the
earlier of (i) the date on which the financial statements of Holdings referred
to in Section 6.1(a), for the fiscal year with respect to which such prepayment
is made, are required to be delivered to the Lenders and (ii) the date such
financial statements are actually delivered.
(d) If, other than as a result of the circumstances described in
Section 2.27, the Total Revolving Extensions of Credit shall at any time exceed
the lesser of (i) the Total Revolving Credit Commitments then in effect and (ii)
the Borrowing Base then in effect, the Borrower shall immediately repay
outstanding Revolving Extensions of Credit by at least the amount equal to such
excess, as set forth in Section 2.14(e), with any such repayment being applied,
first, to repay any then outstanding Swing Line Loans, second, to repay any then
outstanding Revolving Credit Loans and, third, to cash collateralize the L/C
Obligations in a manner reasonably satisfactory to the Administrative Agent.
(e) The application of any prepayment of Loans under any Facility
pursuant to this Section shall be made, first, to Base Rate Loans under such
Facility and, second, to Eurocurrency Loans under such Facility. Each
prepayment of the Loans under this Section shall be accompanied by accrued
interest to the date of such prepayment on the amount prepaid.
(f) Notwithstanding anything contained in this Agreement, in no event
shall the aggregate of (x) the mandatory prepayments with respect to the Loans
made to the Canadian Borrower made on or before the fifth anniversary of the
Closing Date (the "Fifth Anniversary") pursuant to this Section 2.14 and (y) the
scheduled repayments with respect to such Loans made on or before the Fifth
Anniversary pursuant to Section 2.3(b) exceed 25% of the principal amount of
such Loans made on the Closing Date (the "Threshold Amount"). Any amount
otherwise required to be paid in respect of such Loans pursuant to Sections
2.3(b) and 2.14 in excess of the Threshold Amount (the "Excess Amount") shall
not be required to be paid under such Sections at the times prescribed therein.
The Excess Amount will instead be paid on the First Business Day after the Fifth
Anniversary or upon an Event of Default pursuant to Section 8.
2.15 Conversion and Continuation Options. (a) The Borrowers may
elect from time to time to convert Eurocurrency Loans denominated in Dollars to
Base Rate Loans by giving the Administrative Agent at least two Business Days'
prior irrevocable notice of such election, provided that any such conversion of
Eurocurrency Loans may be made only on the last day of an Interest Period with
respect thereto. The Borrowers may elect from time to time to
44
convert Base Rate Loans to Eurocurrency Loans denominated in Dollars by giving
the Administrative Agent at least three Business Days' prior irrevocable notice
of such election (which notice shall specify the length of the initial Interest
Period therefor), provided that no Base Rate Loan under a particular Facility
may be converted into a Eurocurrency Loan (i) when any Event of Default has
occurred and is continuing and the Administrative Agent has, or the Majority
Facility Lenders in respect of such Facility have, determined in its or their
sole discretion not to permit such conversions or (ii) after the date that is
one month prior to the final scheduled termination or maturity date of such
Facility. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof.
(b) The Borrowers may elect to continue any Eurocurrency Loan as such
upon the expiration of the then current Interest Period with respect thereto by
giving irrevocable notice to the Administrative Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in Section 1.1, of
the length of the next Interest Period to be applicable to such Loans, provided
that no Eurocurrency Loan under a particular Facility may be continued as such
(i) when any Event of Default has occurred and is continuing and the
Administrative Agent has, or the Majority Facility Lenders in respect of such
Facility have, determined in its or their sole discretion not to permit such
continuations or (ii) after the date that is one month prior to the final
scheduled termination or maturity date of such Facility, and provided, further,
that if the Borrowers shall fail to give any required notice as described above
in this paragraph or if such continuation is not permitted pursuant to the
preceding proviso, any such Eurocurrency Loans denominated in Dollars shall be
automatically converted to Base Rate Loans on the last day of such then expiring
Interest Period and any such Eurocurrency Loans denominated in any Optional
Currency shall be automatically continued as Eurocurrency Loans on the last day
of such then expiring Interest Period with a new Interest Period of one month.
Upon receipt of any such notice the Administrative Agent shall promptly notify
each relevant Lender thereof.
2.16 Minimum Amounts and Maximum Number of Eurocurrency Tranches.
Notwithstanding anything to the contrary in this Agreement, all borrowings,
conversions, continuations and optional prepayments of Eurocurrency Loans and
all selections of Interest Periods shall be in such amounts and be made pursuant
to such elections so that, (a) after giving effect thereto, the aggregate
principal amount of the Eurocurrency Loans comprising each Eurocurrency Tranche
shall be equal to approximately the Dollar Equivalent of $5,000,000 or a whole
multiple of approximately the Dollar Equivalent of $1,000,000 in excess thereof
and (b) no more than ten Eurocurrency Tranches shall be outstanding at any one
time.
2.17 Interest Rates and Payment Dates. (a) Each Eurocurrency Loan
shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurocurrency Rate determined for such
day plus the Applicable Margin.
(b) Each Base Rate Loan shall bear interest at a rate per annum equal
to the Base Rate plus the Applicable Margin.
(c) (i) If all or a portion of the principal amount of any Loan or
Reimbursement Obligation shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise) or if at any time any other Event of
Default shall have occurred and be continuing, all outstanding Loans and
Reimbursement Obligations (whether or not overdue) shall bear interest at
45
a rate per annum that is equal to (x) in the case of the Loans, the rate that
would otherwise be applicable thereto pursuant to the foregoing provisions of
this Section plus 2% or (y) in the case of Reimbursement Obligations denominated
in Dollars, the rate applicable to Base Rate Loans under the Revolving Credit
Facility plus 2% and in the case of Reimbursement Obligations denominated in
Sterling or Euro, the rate applicable to Eurocurrency Loans under the Revolving
Credit Facility plus 2%, and (ii) if all or a portion of any interest payable on
any Loan or Reimbursement Obligation or any commitment fee or other amount
payable hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum equal to the rate then applicable to Base Rate Loans, in the case of
amounts due in Dollars, and Eurocurrency Loans, in the case of amounts due in
Sterling or Euro, in each case, under the relevant Facility plus 2% (or, in the
case of any such other amounts that do not relate to a particular Facility, the
rate then applicable to Base Rate Loans, in the case of amounts due in Dollars,
and Eurocurrency Loans, in the case of amounts due in Sterling or Euro, in each
case, under the Revolving Credit Facility plus 2%), in each case, with respect
to clauses (i) and (ii) above, from the date of such non-payment until such
amount is paid in full (after as well as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to paragraph (c) of this Section
shall be payable from time to time on demand.
2.18 Computation of Interest and Fees. (a) Interest, fees,
commissions payable pursuant hereto shall be calculated on the basis of a 360-
day year for the actual days elapsed, except that, (i) with respect to Base Rate
Loans on which interest is calculated on the basis of the Base Reference Rate,
the interest thereon shall be calculated on the basis of a 365- (or 366-, as the
case may be) day year for the actual days elapsed and (ii) with respect to Loans
denominated in Sterling, the interest rate thereon shall be calculated on the
basis of a 365-day year for the actual days elapsed. The Administrative Agent
shall as soon as practicable notify the Borrower and the relevant Lenders of
each determination of a Eurocurrency Rate. Any change in the interest rate on a
Loan resulting from a change in the Base Rate or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the day on
which such change becomes effective. The Administrative Agent shall as soon as
practicable notify the relevant Borrower and the relevant Lenders of the
effective date and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrowers and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 2.17(a).
(c) For the purposes of the Interest Act (Canada), whenever any
interest, fee or commission payable under this Agreement is calculated using a
rate based on a year of 360 days or 365 days, as the case may be, the rate
determined pursuant to such calculation, when expressed as an annual rate, is
equivalent to (x) the applicable rate based on a year of 360 days or 365 days,
as the case may be, (y) multiplied by the actual number of days in the calendar
year in which the period for which such interest or fee is payable (or
compounded) ends, and (z) divided
46
by 360 or 365, as the case may be, the principle of deemed reinvestment of
interest does not apply to any interest calculation under this Agreement, and
the rates of interest stipulated in this Agreement are intended to be nominal
rates and not effective rates or yields.
2.19 Inability to Determine Interest Rate. If prior to the first day
of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrowers) that, by
reason of circumstances affecting the relevant market, adequate and reasonable
means do not exist for ascertaining the Eurocurrency Rate with respect to the
currency in which a Loan or a requested Loan is denominated (the "Affected
Currency") for such Interest Period, or
(b) the Administrative Agent shall have received notice from the
Majority Facility Lenders in respect of the relevant Facility that the
Eurocurrency Rate determined or to be determined with respect to the Affected
Currency for such 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 Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (w) any Eurocurrency Loans under the relevant Facility requested
to be made on the first day of such Interest Period shall be made as Base Rate
Loans in Dollars, (x) any Loans under the relevant Facility denominated in
Dollars that were to have been converted on the first day of such Interest
Period to Eurocurrency Loans shall be continued as Base Rate Loans, (y) any
outstanding Eurocurrency Loans under the relevant Facility denominated in
Dollars shall be converted, on the last day of the then current Interest Period
with respect thereto, to Base Rate Loans and (z) any outstanding Eurocurrency
Loans under the relevant Facility denominated in any Optional Currency shall be
repaid on the first day of such Interest Period. Until such notice has been
withdrawn by the Administrative Agent, no further Eurocurrency Loans under the
relevant Facility shall be made or continued as such, nor shall the Borrower
have the right to convert Loans under the relevant Facility to Eurocurrency
Loans.
2.20 Pro Rata Treatment and Payments. (a) Each borrowing by the
Borrowers from the Lenders hereunder, each payment by the Borrowers on account
of any commitment fee or Letter of Credit Fee, and any reduction of the
Commitments of the Lenders, shall be made pro rata according to the respective
Tranche A Term Loan Percentages, Tranche B Term Loan Percentages or Revolving
Credit Percentages, as the case may be, of the relevant Lenders. Each payment
(other than prepayments) in respect of principal or interest in respect of the
Term Loans and each payment in respect of fees payable hereunder shall be
applied to the amounts of such obligations owing to the Lenders pro rata
according to the respective amounts then due and owing to the Lenders.
(b) Each mandatory prepayment required by Section 2.14 to be applied
to Term Loans shall be allocated among the Term Loan Facilities pro rata
according to the respective outstanding principal amounts of Term Loans under
such Facilities. Subject to Section 2.14(f), each mandatory prepayment to be
applied to the Tranche B Term Loans shall be allocated among
47
the Tranche B Term Loans outstanding to the Borrower and the Tranche B Term
Loans outstanding to the Canadian Borrower pro rata according to the respective
outstanding principal amounts of such Tranche B Term Loans. Each optional
prepayment in respect of the Term Loans shall be allocated among the Term Loan
Facilities pro rata according to the respective outstanding principal amounts of
Term Loans under such Facilities. Each payment (including each prepayment) of
the Term Loans outstanding under any Term Loan Facility shall be allocated among
the Term Loan Lenders holding such Term Loans pro rata based on the principal
amount of such Term Loans held by such Term Loan Lenders, and shall be applied
to the installments of such Term Loans pro rata based on the remaining
outstanding principal amount of such installments. Amounts prepaid on account of
the Term Loans may not be reborrowed.
(c) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Revolving Credit Loans shall be made
pro rata according to the respective outstanding principal amounts of the
Revolving Credit Loans then held by the Revolving Credit Lenders. Each payment
in respect of Reimbursement Obligations in respect of any Letter of Credit shall
be made to the Issuing Lender.
(d) All payments (including prepayments) to be made by the Borrowers
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 12:00 Noon,
New York City time, in the case of payments made in Dollars, and 12:00 Noon,
London time, in the case of payments made in Sterling and Euro, in each case, on
the due date thereof to the Administrative Agent, for the account of the
relevant Lenders, at the Payment Office, in immediately available funds. Any
payment made by the Borrowers after 12:00 Noon, local time, on any Business Day
shall be deemed to have been made on the next following Business Day. The
Administrative Agent shall distribute such payments to the relevant Lenders
promptly upon receipt in like funds as received. If any payment hereunder
(other than payments on the Eurocurrency Loans) becomes due and payable on a day
other than a Business Day, such payment shall be extended to the next succeeding
Business Day. If any payment on a Eurocurrency Loan becomes due and payable on
a day other than a Business Day, the maturity thereof shall be extended to the
next succeeding Business Day unless the result of such extension would be to
extend such payment into another calendar month, in which event such payment
shall be made on the immediately preceding Business Day. In the case of any
extension of any payment of principal pursuant to the preceding two sentences,
interest thereon shall be payable at the then applicable rate during such
extension.
(e) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the relevant
Borrower a corresponding amount. If such amount is not made available to the
Administrative Agent by the required time on the Borrowing Date therefor, such
Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to (i) the daily average Federal Funds
Effective Rate, in the case of Loans denominated in Dollars, and (ii) the
Administrative Agent's reasonable estimate of its average daily cost of funds,
in the case of
48
Loans denominated in any Optional Currency, in each case, for the period until
such Lender makes such amount immediately available to the Administrative Agent.
A certificate of the Administrative Agent submitted to any Lender with respect
to any amounts owing under this paragraph shall be conclusive in the absence of
manifest error. If such Lender's share of such borrowing is not made available
to the Administrative Agent by such Lender within three Business Days after such
Borrowing Date, the Administrative Agent shall also be entitled to recover on
demand from the relevant Borrower such amount with interest thereon at (i) the
rate per annum applicable to Base Rate Loans under the relevant Facility, in the
case of Loans denominated in Dollars, or (ii) the Administrative Agent's
reasonable estimate of its average daily cost of funds plus the Applicable
Margin applicable to Eurocurrency Loans under the Revolving Credit Facility, in
the case of Loans denominated in Sterling or Euro.
(f) Unless the Administrative Agent shall have been notified in
writing by a Borrower prior to the date of any payment due to be made by such
Borrower hereunder that such Borrower will not make such payment to the
Administrative Agent, the Administrative Agent may assume that such Borrower is
making such payment, and the Administrative Agent may, but shall not be required
to, in reliance upon such assumption, make available to the Lenders their
respective pro rata shares of a corresponding amount. If such payment is not
made to the Administrative Agent by such Borrower within three Business Days
after such due date, the Administrative Agent shall be entitled to recover, on
demand, from each Lender to which any amount which was made available pursuant
to the preceding sentence, such amount with interest thereon at the rate per
annum equal to (i) the daily average Federal Funds Effective Rate, in the case
of Loans denominated in Dollars, and (ii) the Administrative Agent's reasonable
estimate of its average daily cost of funds, in the case of Loans denominated in
any Optional Currency. Nothing herein shall be deemed to limit the rights of
the Administrative Agent or any Lender against either Borrower.
2.21 Requirements of Law. (a) If the adoption of or any change in
any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Letter of Credit, any Letter of Credit
Application or any Eurocurrency Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for Non-
Excluded Taxes covered by Section 2.22 and changes in the rate of tax on
the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets held
by, deposits or other liabilities in or for the account of, advances, loans
or other extensions of credit by, or any other acquisition of funds by, any
office of such Lender that is not otherwise included in the determination
of the Eurocurrency Rate hereunder; or
(iii) shall impose on such Lender any other condition;
49
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurocurrency Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the relevant Borrower shall promptly pay such
Lender, upon its demand, any additional amounts necessary to compensate such
Lender for such increased cost or reduced amount receivable. If any Lender
becomes entitled to claim any additional amounts pursuant to this Section, it
shall promptly notify the relevant Borrower (with a copy to the Administrative
Agent) of the event by reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under or in respect of any Letter of
Credit to a level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's or such corporation's policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to time, after
submission by such Lender to the Borrowers (with a copy to the Administrative
Agent) of a written request therefor, the Borrowers shall pay to such Lender
such additional amount or amounts as will compensate such Lender or such
corporation for such reduction.
(c) A certificate as to any additional amounts payable pursuant to
this Section submitted by any Lender to the relevant Borrower(s) (with a copy to
the Administrative Agent) shall be conclusive in the absence of manifest error.
The obligations of the Borrowers pursuant to this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.22 Taxes. (a) All payments made by the Borrowers under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding net income taxes and franchise taxes (imposed in lieu of
net income taxes) imposed on any Agent or any Lender as a result of a present or
former connection between such Agent or such Lender and the jurisdiction of the
Governmental Authority imposing such tax or any political subdivision or taxing
authority thereof or therein (other than any such connection arising solely from
such Agent's or such Lender's having executed, delivered or performed its
obligations or received a payment under, or enforced, this Agreement or any
other Loan Document). If any such non-excluded taxes, levies, imposts, duties,
charges, fees, deductions or withholdings ("Non-Excluded Taxes") or any Other
Taxes are required to be withheld from any amounts payable to any Agent or any
Lender hereunder, the amounts so payable to such Agent or such Lender shall be
increased to the extent necessary to yield to such Agent or such Lender (after
payment of all Non-Excluded Taxes and Other Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement; provided, however, that the Borrowers shall not be required to
increase any such amounts
50
payable to any Lender with respect to any Non-Excluded Taxes (i) that are
attributable to such Lender's failure to comply with the requirements of
paragraph (d) or (e) of this Section or (ii) that are United States withholding
taxes imposed on amounts payable to such Lender at the time such Lender becomes
a party to this Agreement, except to the extent that such Lender's assignor (if
any) was entitled, at the time of assignment, to receive additional amounts from
the Borrower with respect to such Non-Excluded Taxes pursuant to Section
2.22(a).
(b) In addition, the Borrowers shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by a
Borrower, as promptly as possible thereafter the relevant Borrower shall send to
the Administrative Agent for the account of the relevant Agent or Lender, as the
case may be, a certified copy of an original official receipt received by such
Borrower showing payment thereof. If such Borrower fails to pay any Non-
Excluded Taxes or Other Taxes when due to the appropriate taxing authority or
fails to remit to the Administrative Agent the required receipts or other
required documentary evidence, such Borrower shall indemnify the Agents and the
Lenders for any incremental taxes, interest or penalties that may become payable
by any Agent or any Lender as a result of any such failure. The agreements in
this Section 2.22 shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.
(d) Each Lender (or Transferee) that is not a citizen or resident of
the United States of America, a corporation, partnership or other entity created
or organized in or under the laws of the United States of America (or any
jurisdiction thereof), or any estate or trust that is subject to federal income
taxation regardless of the source of its income (a "Non-U.S. Lender") shall
deliver to the Borrowers and the Administrative Agent (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) two copies of either U.S. Internal Revenue Service Form 1001 or Form
4224, or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest" a statement substantially in the form of
Exhibit I and a Form W-8, or any subsequent versions thereof or successors
thereto properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrowers under this Agreement and the other Loan Documents.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Each Non-U.S. Lender shall promptly notify the Borrowers at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrowers (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any
other provision of this paragraph, a Non-U.S. Lender shall not be required to
deliver any form pursuant to this paragraph that such Non-U.S. Lender is not
legally able to deliver.
(e) A Lender that is entitled to an exemption from or reduction of
non-U.S. withholding tax under the law of the jurisdiction in which a Borrower
is located, or any treaty to
51
which such jurisdiction is a party, with respect to payments under this
Agreement shall deliver to such Borrower (with a copy to the Administrative
Agent), at the time or times prescribed by applicable law or reasonably
requested by such Borrower, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate, provided that such Lender is legally entitled
to complete, execute and deliver such documentation and in such Lender's
reasonable judgment such completion, execution or submission would not
materially prejudice the legal position of such Lender.
2.23 Indemnity. Each Borrower agrees to indemnify each Lender for,
and to hold each Lender harmless from, any loss or expense that such Lender may
sustain or incur as a consequence of (a) default by such Borrower in making a
borrowing of, conversion into or continuation of Eurocurrency Loans after such
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by such Borrower in making any
prepayment after such Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment or conversion of
Eurocurrency Loans on a day that is not the last day of an Interest Period with
respect thereto. Such indemnification may include an amount equal to the
excess, if any, of (i) the amount of interest that would have accrued on the
amount so prepaid, or not so borrowed, converted or continued, for the period
from the date of such prepayment or of such failure to borrow, convert or
continue to the last day of such Interest Period (or, in the case of a failure
to borrow, convert or continue, the Interest Period that would have commenced on
the date of such failure) in each case at the applicable rate of interest for
such Loans provided for herein (excluding, however, the Applicable Margin
included therein, if any) over (ii) the amount of interest (as reasonably
determined by such Lender) that would have accrued to such Lender on such amount
by placing such amount on deposit for a comparable period with leading banks in
the interbank eurocurrency market. A certificate as to any amounts payable
pursuant to this Section submitted to a Borrower by any Lender shall be
conclusive in the absence of manifest error. This covenant shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.24 Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurocurrency Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurocurrency Loans, continue Eurocurrency Loans as such
and convert Base Rate Loans to Eurocurrency Loans shall forthwith be canceled,
(b) such Lender's Loans then outstanding as Eurocurrency Loans denominated in
Dollars, if any, shall be converted automatically to Base Rate Loans on the
respective last days of the then current Interest Periods with respect to such
Loans or within such earlier period as required by law and (c) such Lender's
Loans then outstanding as Eurocurrency Loans denominated in Sterling or Euro, if
any, shall be repaid on the respective last days of the then current Interest
Periods with respect to such Loans or within such earlier period as required by
law. If any such conversion or repayment of a Eurocurrency Loan occurs on a day
which is not the last day of the then current Interest Period with respect
thereto, the relevant Borrower shall pay to such Lender such amounts, if any, as
may be required pursuant to Section 2.23.
52
2.25 Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 2.21, 2.22(a) or
2.24 with respect to such Lender, it will, if requested by a Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; provided, that such
designation is made on terms that, in the sole judgment of such Lender, cause
such Lender and its lending office(s) to suffer no economic, legal or regulatory
disadvantage, and provided, further, that nothing in this Section shall affect
or postpone any of the obligations of any Borrower or the rights of any Lender
pursuant to Section 2.21, 2.22(a) or 2.24.
2.26 Change in Borrowing Base. The Borrowing Base shall be
determined monthly (or at such other interval as may be specified pursuant to
Section 2.2(g)) by the Administrative Agent by reference to the Borrowing Base
Report. The Administrative Agent shall give to the Borrower written notice of
any change in the Borrowing Base determined by the Administrative Agent. In the
case of a reduction in the lending formula with respect to Eligible Accounts
Receivable or Eligible Inventory, such notice shall be effective five days after
its receipt by the Borrower, and in the case of any change in the general
criteria for Eligible Accounts Receivable or Eligible Inventory, such notice
shall be effective upon its receipt by the Borrower. Prior to the time that
such notice becomes effective, the Borrowing Base shall be computed as it would
have been computed in the absence of such notice.
2.27 Prepayments Required Due to Currency Fluctuation. (a) Not
later than 1:00 p.m., New York City time, on the last Business Day of each
calendar month (the "Calculation Date"), the Administrative Agent shall
determine the Dollar Equivalent of the Total Revolving Extensions of Credit as
of such date. The Dollar Equivalent so determined shall become effective on the
first Business Day immediately following such determination (a "Reset Date") and
shall remain effective until the next succeeding Reset Date. In the event there
are any Revolving Credit Loans or Letters of Credit outstanding on a Calculation
Date which are denominated in any Optional Currency, the Administrative Agent
shall on the Reset Date immediately following such Calculation Date provide the
Lenders and Borrower with calculations of the Dollar Equivalent of such
Revolving Credit Loans and Letters of Credit as of such Calculation Date.
(b) If, as a result of fluctuations in respective currency exchange
rates, on any Reset Date the Dollar Equivalent so determined pursuant to the
immediately preceding paragraph exceeds the lesser of (i) the Total Revolving
Credit Commitments then in effect and (ii) the Borrowing Base then in effect for
three consecutive Business Days, then the Borrower shall on such date prepay the
Swing Line Loans or Revolving Credit Loans or cash collateralize the outstanding
Letters of Credit in an aggregate principal amount at least equal to such
excess.
(c) Without limiting the immediately preceding paragraph, if, as a
result of fluctuations in respective currency exchange rates, on any Business
Day prior to the Revolving Credit Termination Date, the Dollar Equivalent of the
Total Revolving Extensions of Credit as of such day exceeds the lesser of (i)
the Total Revolving Credit Commitments then in effect and (ii) the Borrowing
Base then in effect by 5% or more, then within two Business Days thereafter, the
Borrower shall prepay the Swing Line Loans or Revolving Credit Loans or cash
collateralize the outstanding Letters of Credit in an aggregate principal amount
at least equal to such excess.
53
Nothing set forth in this Section 2.27(c) shall be construed to require the
Administrative Agent to calculate compliance under this Section 2.27(c) other
than at the times set forth in Section 2.27(a).
(d) If, as a result of fluctuations in respective currency exchange
rates, on any Reset Date the L/C Obligations exceed the L/C Commitment by more
than 5%, then the Borrower shall on such date cash collateralize the outstanding
Letters of Credit in an aggregate principal amount at least equal to such
excess.
2.28 Adoption of the Euro. Each provision of this Agreement shall be
subject to such reasonable changes of construction as the Administrative Agent
may from time to time specify to be necessary or appropriate to reflect the
adoption of the Euro in any Participating Member State and any relevant market
conventions or practices relating to the Euro. Each obligation under this
Agreement of a party to this Agreement which has been denominated in the
National Currency Unit of a Subsequent Participant state shall be redenominated
into the Euro in accordance with EMU Legislation immediately upon such
Subsequent Participant becoming a Participating Member State (but otherwise in
accordance with EMU Legislation). If, in relation to the currency of any
Subsequent Participant, the basis of accrual of interest or fees expressed in
this Agreement with respect to such currency shall be inconsistent with any
convention or practice in the interbank market for the basis of accrual of
interest or fees in respect of the Euro, such convention or practice shall
replace such expressed basis effective as of and from the date on which such
Subsequent Participant becomes a Participating Member State; provided, that if
any Loan in the currency of such Subsequent Participant is outstanding
immediately prior to such date, such replacement shall take effect, with respect
to such Loan, at the end of the then current Interest Period.
SECTION 3. LETTERS OF CREDIT
3.1 Letter of Credit Commitments.
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(a) Subject to the terms and conditions hereof and the execution and
delivery by the Borrower of a letter of credit application on the Issuing
Lender's customary form (a "Letter of Credit Application"), the Issuing Lender,
on behalf of the Lenders and in reliance upon the agreement of the Lenders set
forth in Section 3.1(d) and upon the representations and warranties of the
Borrower contained herein, agrees to issue, extend and renew for the account of
the Borrower (either for its own account or on behalf of any Subsidiary) one or
more standby or documentary letters of credit (on a sight or time basis), bank
guarantees, indemnities, or other similar instruments, and as to such
instruments other than letters of credit, in each case, reasonably capable of
issuance by the Issuing Lender ("Letters of Credit"), denominated in Dollars or
any Optional Currency in such form as may be requested from time to time by the
Borrower and agreed to by the Issuing Lender; provided, however, that, the
Issuing Lender shall not have any obligation to issue any Letter of Credit if,
after giving effect to such issuance (i) the L/C Obligations would exceed the
L/C Commitment, (ii) the aggregate amount of the Available Revolving Credit
Commitments would be less than zero, (iii) the Total Revolving Extensions of
Credit denominated in any Optional Currency would exceed the Optional Currency
Sublimit or (iv) the Total Revolving Extensions of Credit would exceed the
Borrowing Base. Notwithstanding the foregoing, each of the letters of credit
issued or deemed issued under the Existing Credit Agreement shall, from and
after the Closing Date, be deemed to have been issued pursuant to this Section
3.1(a); provided, that the reimbursement provisions contained in the Existing
Credit Agreement with respect to the borrowers of such letters of credit shall
remain operative with respect to such letters of credit. Notwithstanding the
foregoing, the Issuing Lender shall have no obligation to issue any Letter of
Credit to support or secure any Indebtedness of the Borrower or any Subsidiary
to the extent that such Indebtedness was incurred prior to the proposed issuance
date of such Letter of Credit, unless in any such case the Borrower demonstrates
to the satisfaction of the Issuing Lender that (x) such prior incurred
Indebtedness was then fully secured by a prior perfected and unavoidable
security interest in collateral provided by the Borrower or such Subsidiary to
the proposed beneficiary of such Letter of Credit or (y) such prior incurred
Indebtedness was then secured or supported by a letter of credit issued for the
account of the Borrower or such Subsidiary and the reimbursement obligation with
respect to such letter of credit was fully secured by a prior perfected and
unavoidable security interest in collateral provided to the issuer of such
letter of credit by the Borrower or such Subsidiary.
(b) Each Letter of Credit Application shall be completed to the
satisfaction of the Issuing Lender. In the event that any provision of any
Letter of Credit Application shall be inconsistent with any provision of this
Agreement, then the provisions of this Agreement shall, to the extent of any
such inconsistency, govern.
(c) Each Letter of Credit issued, extended or renewed hereunder
shall, among other things, (a) provide for the payment of sight and time drafts
for honor thereunder when presented in accordance with the terms thereof and
when accompanied by the documents described therein, and (b) have an expiry date
no later than the date which is fourteen (14) days (or, if the Letter of Credit
is confirmed by a confirmer or otherwise provides for one or more nominated
persons, forty-five (45) days) prior to the Revolving Credit Termination Date.
(d) Each Lender severally agrees that it shall be absolutely liable,
without regard to the occurrence of any Default or Event of Default or any other
condition precedent
55
whatsoever, to the extent of such Lender's Revolving Credit Percentage, to
reimburse the Issuing Lender on demand for the amount of each draft paid by the
Issuing Lender (as calculated pursuant to Section 3.2) under each Letter of
Credit to the extent that such amount is not reimbursed by the Borrower pursuant
to Section 3.2 (such agreement for a Lender being called herein the "Letter of
Credit Participation" of such Lender).
(e) Each such payment made by a Lender shall be treated as the
purchase by such Lender of a participating interest in the Borrower's
Reimbursement Obligation under Section 3.2 in an amount equal to such payment.
Each Lender shall share from its purchase date in accordance with its
participating interest in any interest which accrues pursuant to Section 3.2.
3.2 Reimbursement Obligation of the Borrower. (a) In order to induce
the Issuing Lender to issue, extend and renew each Letter of Credit and the
Lenders to participate therein, the Borrower hereby agrees to reimburse or pay
to the Issuing Lender, for the account of the Issuing Lender or (as the case may
be) the Lenders, with respect to each Letter of Credit issued, extended or
renewed by the Issuing Lender hereunder for the account of the Borrower,
(i) except as otherwise expressly provided in Sections 3.2(b) and
(c), on each date that any draft presented under such Letter of Credit is
honored by the Issuing Lender, or the Issuing Lender otherwise makes a
payment with respect thereto (in the same currency in which such Letter of
Credit was issued or the Dollar Equivalent thereof), (i) the amount paid by
the Issuing Lender under or with respect to such Letter of Credit, and (ii)
the amount of any taxes (other than taxes based upon or measured by the
income or profits of a Lender or the Issuing Lender), fees, charges or
other costs and expenses whatsoever incurred by the Issuing Lender or any
Lender in connection with any payment made by the Issuing Lender or any
Lender under, or with respect to, such Letter of Credit;
(ii) upon the reduction (but not termination) of the Revolving Credit
Commitments to an amount less than the face amount of all outstanding
Letters of Credit, an amount equal to such difference, which amount shall
be held by the Issuing Lender for the benefit of the Lenders as cash
collateral for all Reimbursement Obligations; and
(iii) upon the termination of the Revolving Credit Commitments, or
the acceleration of the Reimbursement Obligations with respect to all
Letters of Credit in accordance with Section 8, an amount equal to the face
amount of all outstanding Letters of Credit, which amount shall be held by
the Issuing Lender for the benefit of the Lenders as cash collateral for
all Reimbursement Obligations.
Each such payment shall be made to the Issuing Lender at the Administrative
Agent's office in same day funds. Interest on any and all amounts remaining
unpaid by the Borrower under this Section 3.2 at any time from the date such
amounts become due and payable (whether as stated in this Section 3.2, by
acceleration or otherwise) until payment in full (whether before or after
judgment) shall be payable to the Issuing Lender on demand at the rate specified
in Section 2.17 for overdue principal on the Revolving Credit Loans.
(b) Each drawing under any Letter of Credit denominated in Dollars
shall constitute a request by the Borrower to the Administrative Agent for a
borrowing pursuant to Section 2.5 of Base Rate Loans in the amount of such
drawing (but without any requirement for
56
compliance with the prior notice or minimum borrowing amount provisions of
Section 2.5. The Borrowing Date with respect to such borrowing shall be the date
of such drawing and each Lender shall make its Revolving Credit Percentage of
such borrowing available to the Administrative Agent on such date to be used to
repay the Reimbursement Obligation created by such drawing. The application of
such Loans shall satisfy the Borrower's obligations under Section 3.2(a) in the
amount thereof.
3.3 Letter of Credit Payments. If any draft shall be presented or
other demand for payment shall be made under any Letter of Credit, the Issuing
Lender shall notify the Borrower of the date and amount of the draft presented
or demand for payment and of the date and time when it expects to pay such draft
or honor such demand for payment. If the Borrower fails to reimburse the
Issuing Lender as provided in Section 3.2 on or before the date that such draft
is paid or other payment is made by the Issuing Lender, the Issuing Lender may
at any time thereafter notify the Lenders of the amount of any such unpaid
Reimbursement Obligation and shall specify such amount in Dollars (based upon
the actual exchange rate at which the Issuing Lender anticipates being able to
obtain the applicable Optional Currency on the date payment is to be made by the
Lenders, with any excess payment being refunded to the Lenders and any
deficiency being payable by the Lenders) required from each of the Lenders. No
later than 3:00 p.m., New York City time, on the Business Day next following the
receipt of such notice, each Lender shall make available to the Issuing Lender,
through the Administrative Agent, in same day funds, such Lender's Revolving
Credit Percentage of such unpaid Reimbursement Obligation, together with an
amount equal to the product of (a) the average, computed for the period referred
to in clause (c) below, of the Overnight Rate for each day included in such
period, times (b) the amount equal to such Lender's Revolving Credit Percentage
of such unpaid Reimbursement Obligation, times (c) a fraction, the numerator of
which is the number of days that elapse from and including the date the Issuing
Lender paid the draft presented for honor or otherwise made payment to the date
on which such Lender's Revolving Credit Percentage of such unpaid Reimbursement
Obligation shall become immediately available to the Issuing Lender, and the
denominator of which is 365. The responsibility of the Issuing Lender to the
Borrower and the Lenders shall be only to determine that the documents
(including each draft) delivered under each Letter of Credit in connection with
such presentment shall be in conformity in all material respects with such
Letter of Credit. From and after such purchase of the applicable Letter of
Credit Participations, such unpaid Reimbursement Obligations shall be deemed to
have been converted into Base Rate Loans made by the Lenders, and all amounts
from time to time accruing, and all amounts from time to time payable, on
account of such unpaid Reimbursement Obligations shall be payable in Dollars as
if such Letter of Credit had originally been issued in Dollars.
3.4 Obligations Absolute. The Borrower's obligations under this
Section 3 shall be absolute and unconditional under any and all circumstances
and irrespective of the occurrence of any Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim or defense to payment
which the Borrower may have or have had against the Issuing Lender, any Lender
or any beneficiary of a Letter of Credit. The Borrower further agrees with the
Issuing Lender and the Lenders that the Issuing Lender and the Lenders shall not
be responsible for, and the Borrower's Reimbursement Obligations under Section
3.2 shall not be affected by, among other things, the validity or genuineness of
documents or of any endorsements thereon, even if such documents should in fact
prove to be in any or all respects
57
invalid, fraudulent or forged, or any dispute between or among the Borrower, the
beneficiary of any Letter of Credit or any financing institution or other party
to which any Letter of Credit may be transferred or any claims or defenses
whatsoever of the Borrower against the beneficiary of any Letter of Credit or
any such transferee. The Issuing Lender and the Lenders shall not be liable for
any error, omission, interruption or delay in transmission, dispatch or delivery
of any message or advice, however transmitted, in connection with any Letter of
Credit. The Borrower agrees that any action taken or omitted by the Issuing
Lender or any Lender under or in connection with each Letter of Credit and the
related drafts and documents, if done in good faith and without gross
negligence, shall be binding upon the Borrower and shall not result in any
liability on the part of the Issuing Lender or any Lender to the Borrower.
3.5 Reliance by Issuer. To the extent not inconsistent with Section
3.4, the Issuing Lender shall be entitled to rely, and shall be fully protected
in relying upon, any Letter of Credit, draft, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document 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, independent
accountants and other experts selected by the Issuing Lender. The Issuing
Lender shall be fully justified in failing or refusing to take any action under
this Agreement unless it shall first have received such advice or concurrence of
the Required Lenders as it reasonably deems appropriate or it shall first be
indemnified to its reasonable 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 Issuing Lender shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement in
accordance with a request of the Required Lenders, and such request and any
action taken or failure to act pursuant thereto shall be binding upon the
Lenders and all future holders of the Loans or Letter of Credit Participations.
3.6 Letter of Credit Fee. The Borrower shall pay a fee (in each
case, a "Letter of Credit Fee") to the Issuing Lender in respect of each Letter
of Credit issued pursuant to this Agreement, calculated at the rate of the
Applicable Margin then in effect with respect to Eurocurrency Loans under the
Revolving Credit Facility on the face amount of each such Letter of Credit, for
the accounts of the Lenders in accordance with their respective Revolving Credit
Percentages, plus an amount equal to 1/4 of 1% per annum of the face amount of
such Letter of Credit, for the account of the Issuing Lender, as a fronting fee.
The Letter of Credit Fees for each Letter of Credit shall be payable quarterly
in arrears on the first day of each calendar quarter for the immediately
preceding calendar quarter and on the last day of the Revolving Credit
Commitment Period. In respect of each Letter of Credit, the Borrower shall also
pay to the Issuing Lender, for the Issuing Lender's own account, on the date of
any issuance, extension, renewal or amendment of any Letter of Credit, or at
such other time or times as such charges are customarily made by the Issuing
Lender, for the Issuing Lender's own account, the Issuing Lender's customary
issuance, amendment, negotiation or document examination and other
administrative fees as in effect from time to time.
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SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this Agreement and
to make the Loans and issue or participate in the Letters of Credit, Holdings
and the Borrowers hereby jointly and severally represent and warrant to each
Agent and each Lender that:
4.1 Financial Condition. (a) The unaudited pro forma consolidated
balance sheet of Holdings and its consolidated Subsidiaries as at February 29,
2000 (including the notes thereto) (the "Pro Forma Balance Sheet"), copies of
which have heretofore been furnished to each Lender, has been prepared giving
effect (as if such events had occurred on such date) to (i) the consummation of
the Acquisition, (ii) the Loans to be made and the Senior Subordinated Notes to
be issued on the Closing Date and the use of proceeds thereof and (iii) the
payment of fees and expenses in connection with the foregoing. The Pro Forma
Balance Sheet has been prepared based on the best information available to
Holdings as of the date of delivery thereof, and presents fairly on a pro forma
basis the estimated financial position of Holdings and its consolidated
Subsidiaries as at February 29, 2000, assuming that the events specified in the
preceding sentence had actually occurred at such date.
(b) The audited consolidated balance sheets of Holdings as at
February 29, 2000 and March 31, 1999 and the related consolidated statements of
income and of cash flows for each of the eleven month periods ended on such
dates, reported on by and accompanied by an unqualified report from
PriceWaterhouseCoopers, present fairly the consolidated financial condition of
Holdings as at such dates, and the consolidated results of its operations and
its consolidated cash flows for the respective periods then ended. The audited
combined balance sheet of Weigh-Tronix Scale Products Business, prior to the
acquisition from Staveley Plc by Holdings (the "Predecessor") as at March 31,
1998, and the related combined statements of income and cash flow for the year
ended on such date and for the one-month period ended April 30, 1998, as
reported on and accompanied by the unqualified report from
PricewaterhouseCoopers, present fairly the combined financial condition of the
Predecessor as of such dates and the combined results of its operations and cash
flows for the respective periods then ended. All such financial statements,
including the related schedules and notes thereto, have been prepared in
accordance with GAAP applied consistently throughout the periods involved
(except as approved by the aforementioned firm of accountants and disclosed
therein). Holdings, the Borrowers and their respective Subsidiaries do not have
any material Guarantee Obligations, contingent liabilities and liabilities for
taxes, or any long-term leases or unusual forward or long-term commitments,
including, without limitation, any interest rate or foreign currency swap or
exchange transaction or other obligation in respect of derivatives, that are not
reflected in the most recent financial statements referred to in this paragraph.
During the period from February 29, 2000 to and including the date hereof there
has been no Disposition or Restricted Payment by Holdings of any material part
of its business or Property.
(c) The audited combined balance sheets of Avery Berkel as at
February 26, 2000, March 31, 1999 and March 31, 1998, and the related combined
statements of income and of cash flows for the eleven month, twelve month and
twelve month periods, respectively, ended on such dates, reported on by and
accompanied by an unqualified report from Deloitte & Touche present fairly the
combined financial condition of Avery Berkel as at such dates, and the combined
results of their respective operations and their respective combined cash flows
for the respective periods then ended. All such financial statements, including
the related schedules and notes thereto, have been prepared in accordance with
generally accepted accounting principles in
59
the United Kingdom applied consistently throughout the periods involved (except
as approved by the aforementioned firm of accountants and disclosed therein).
Avery Berkel and their respective Subsidiaries do not have any material
Guarantee Obligations, contingent liabilities and liabilities for taxes, or any
long-term leases or unusual forward or long-term commitments, including, without
limitation, any interest rate or foreign currency swap or exchange transaction
or other obligation in respect of derivatives, that are not reflected in the
most recent financial statements referred to in this paragraph. During the
period from February 26, 2000 to and including the date hereof there has been no
Disposition by Avery Berkel of any material part of their respective businesses
or Properties.
4.2 No Change. Since February 26, 2000 there has been no development
or event that has had or could reasonably be expected to have a Material Adverse
Effect.
4.3 Corporate Existence; Compliance with Law. Each of Holdings, the
Borrowers and each of their respective Subsidiaries (a) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, (b) has the corporate power and authority, and the legal right, to
own and operate its Property, to lease the Property it operates as lessee and to
conduct the business in which it is currently engaged, (c) is duly qualified as
a foreign corporation and in good standing under the laws of each jurisdiction
where its ownership, lease or operation of Property or the conduct of its
business requires such qualification and (d) is in compliance with all
Requirements of Law except to the extent that the failure to comply therewith
could not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.
4.4 Corporate Power; Authorization; Enforceable Obligations. Each
Loan Party has the corporate power and authority, and the legal right, to make,
deliver and perform the Loan Documents to which it is a party and, in the case
of the Borrowers, to borrow hereunder. Each Loan Party has taken all necessary
corporate or other action to authorize the execution, delivery and performance
of the Loan Documents to which it is a party and, in the case of the Borrowers,
to authorize the borrowings on the terms and conditions of this Agreement. No
consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required in
connection with the Acquisition, the borrowings hereunder or the execution,
delivery, performance, validity or enforceability of this Agreement or any of
the other Loan Documents, except (i) consents, authorizations, filings and
notices described in Schedule 4.4, which consents, authorizations, filings and
notices have been obtained or made and are in full force and effect, (ii) the
filings referred to in Section 4.19 and (iii) the "whitewash" procedures
referred to in Section 5.1(x). Each Loan Document has been or, in the case of
the Foreign Guarantees and Foreign Collateral Documents, will be upon
consummation of the "whitewash" procedures referred to in Section 5.1(x), duly
executed and delivered on behalf of each Loan Party that is a party thereto.
This Agreement constitutes, and each other Loan Document upon execution will
constitute, a legal, valid and binding obligation of each Loan Party that is a
party thereto, enforceable against each such Loan Party in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
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4.5 No Legal Bar. The execution, delivery and performance of this
Agreement and the other Loan Documents, the issuance of Letters of Credit, the
borrowings hereunder and the use of the proceeds thereof will not violate any
Requirement of Law or any Contractual Obligation of Holdings, the Borrowers or
any of their Subsidiaries and will not result in, or require, the creation or
imposition of any Lien on any of their respective properties or revenues
pursuant to any Requirement of Law or any such Contractual Obligation (other
than the Liens created by the Security Documents). No Requirement of Law or
Contractual Obligation applicable to Holdings, the Borrowers or any of their
Subsidiaries could reasonably be expected to have a Material Adverse Effect.
4.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of Holdings or the Borrowers, threatened by or against
Holdings, the Borrowers or any of their Subsidiaries or against any of their
respective properties or revenues (a) with respect to any of the Loan Documents
or any of the transactions contemplated hereby or thereby, or (b) that could
reasonably be expected to have a Material Adverse Effect.
4.7 No Default. Neither Holdings, the Borrowers nor any of their
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect that could reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
4.8 Ownership of Property; Liens. Each of Holdings, the Borrowers
and their Subsidiaries has title in fee simple to, or a valid leasehold interest
in, all its real property, and good title to, or a valid leasehold interest in,
all its other material Property, and none of its real property or any other
Property is subject to any Lien except as permitted by Section 7.3. Set forth
on Schedule 4.8 is a complete listing of all real property and related
facilities owned or leased by Holdings or any of its Subsidiaries and the
relevant owners or lessees thereof.
4.9 Intellectual Property. Holdings, the Borrowers and each of their
respective Subsidiaries owns, or is licensed to use, all Intellectual Property
necessary for the conduct of its business as currently conducted. No material
claim has been asserted and is pending by any Person challenging or questioning
the use of any Intellectual Property or the validity or effectiveness of any
Intellectual Property, nor does Holdings or any of the Borrowers know of any
valid basis for any such claim. The use of Intellectual Property by Holdings,
the Borrowers and their Subsidiaries does not infringe on the rights of any
Person in any material respect.
4.10 Taxes. Each of Holdings, the Borrowers and each of their
Subsidiaries has filed or caused to be filed all Federal, state and other
material tax returns that are required to be filed and has paid all taxes shown
to be due and payable on said returns or on any assessments made against it or
any of its Property and all other taxes, fees or other charges imposed on it or
any of its Property by any Governmental Authority (other than immaterial taxes
or any taxes the amount or validity of which are currently being contested in
good faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of Holdings, the Borrowers
or their Subsidiaries, as the case may be); and no tax Lien has been filed, and,
to the knowledge of Holdings and the Borrowers, no claim is being asserted by
any taxing authority, with respect to any such tax, fee or other charge.
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4.11 Federal Regulations. No part of the proceeds of any Loans will
be used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U as now and from time to
time hereafter in effect or for any purpose that violates the provisions of the
Regulations of the Board. If requested by any Lender or the Administrative
Agent, the Borrowers will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
G-3 or FR Form U-1 referred to in Regulation U.
4.12 Labor Matters. There are no strikes or other labor disputes
against Holdings, the Borrower or any of their Subsidiaries pending or, to the
knowledge of Holdings or the Borrowers, threatened that (individually or in the
aggregate) could reasonably be expected to have a Material Adverse Effect.
Hours worked by and payment made to employees of Holdings, the Borrowers and
their Subsidiaries have not been in violation of the Fair Labor Standards Act or
any other applicable Requirement of Law dealing with such matters that
(individually or in the aggregate) could reasonably be expected to have a
Material Adverse Effect. All payments due from Holdings, the Borrowers or any
of their Subsidiaries on account of employee health and welfare insurance that
(individually or in the aggregate) could reasonably be expected to have a
Material Adverse Effect if not paid have been paid or accrued as a liability on
the books of Holdings, the relevant Borrower or the relevant Subsidiary.
4.13 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and no
Lien in favor of the PBGC or a Plan has arisen, during such five-year period.
The present value of all accrued benefits under each Single Employer Plan (based
on those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits by a material amount. Neither Holdings nor any Commonly Controlled
Entity has had a complete or partial withdrawal from any Multiemployer Plan that
has resulted or could reasonably be expected to result in a material liability
under ERISA, and neither Holdings nor any Commonly Controlled Entity would
become subject to any material liability under ERISA if Holdings or any such
Commonly Controlled Entity were to withdraw completely from all Multiemployer
Plans as of the valuation date most closely preceding the date on which this
representation is made or deemed made. No such Multiemployer Plan is in
Reorganization or Insolvent.
4.14 Investment Company Act; Other Regulations. No Loan Party is an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. No Loan
Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) which limits its ability to incur Indebtedness.
4.15 Subsidiaries. (a) The Subsidiaries listed on Schedule 4.15
constitute all the Subsidiaries of Holdings on the date hereof. Schedule 4.15
sets forth as of the Closing Date the
62
name and jurisdiction of incorporation of each Subsidiary and, as to each
Subsidiary, the percentage of each class of Capital Stock owned by each Loan
Party.
(b) There are no outstanding subscriptions, options, warrants, calls,
rights or other agreements or commitments (other than stock options granted to
employees or directors and directors' qualifying shares) of any nature relating
to any Capital Stock of Holdings, the Borrowers or any Subsidiary, other than
the warrants granted to the Seller in connection with the Acquisition for the
purchase of up to 5% of the Capital Stock of Holdings and other than the PIK
Preferred Stock.
4.16 Use of Proceeds. The proceeds of the Term Loans shall be used
to finance a portion of the Acquisition and to pay related fees and expenses.
The proceeds of the Revolving Credit Loans and the Swing Line Loans, and the
Letters of Credit, shall be used for general corporate purposes; provided, that
up to $29,900,000 of the Revolving Credit Loans may be used to finance the
Acquisition and to pay related fees and expenses.
4.17 Environmental Matters. Other than exceptions to any of the
following representations and warranties that could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect:
(a) Holdings and its Subsidiaries: (i) are, and within the period of
all applicable statutes of limitation have been, in compliance with all
applicable Environmental Laws; (ii) hold all Environmental Permits (each of
which is in full force and effect) required for any of their current or intended
operations or for any property owned, leased, or otherwise operated by any of
them; (iii) are, and within the period of all applicable statutes of limitation
have been, in compliance with all of their Environmental Permits; and (iv)
reasonably believe that: each of their Environmental Permits will be timely
renewed and complied with, without material expense; any additional
Environmental Permits that may be required of any of them will be timely
obtained and complied with, without material expense; and compliance with any
Environmental Law that is or is expected to become applicable to any of them
will be timely attained and maintained, without material expense.
(b) Materials of Environmental Concern are not present at, on, under,
in, or about any real property now or formerly owned, leased or operated by
Holdings or any of its Subsidiaries, or at any other location (including,
without limitation, any location to which Materials of Environmental Concern
have been sent for re-use or recycling or for treatment, storage, or disposal)
which could reasonably be expected to (i) give rise to liability of Holdings or
any of its Subsidiaries under any applicable Environmental Law or otherwise
result in costs to Holdings or any of its Subsidiaries, or (ii) interfere with
Holdings' or any of its Subsidiaries' continued operations, or (iii) impair the
fair saleable value of any real property owned or leased by Holdings or any of
its Subsidiaries.
(c) There is no judicial, administrative, or arbitral proceeding
(including any notice of violation or alleged violation) under or relating to
any Environmental Law to which Holdings or any of its Subsidiaries is, or to the
knowledge of Holdings or any of its Subsidiaries will be, named as a party that
is pending or, to the knowledge of Holdings or any of its Subsidiaries,
threatened.
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(d) Neither Holdings nor any of its Subsidiaries has received any
written request for information, or been notified that it is a potentially
responsible party under or relating to the federal Comprehensive Environmental
Response, Compensation, and Liability Act or any similar Environmental Law, or
with respect to any Materials of Environmental Concern.
(e) Neither Holdings nor any of its Subsidiaries has entered into or
agreed to any consent decree, order, or settlement or other agreement, or is
subject to any judgment, decree, or order or other agreement, in any judicial,
administrative, arbitral, or other forum for dispute resolution, relating to
compliance with or liability under any Environmental Law.
(f) Neither Holdings nor any of its Subsidiaries has assumed or
retained, by contract or operation of law, any liabilities of any kind, fixed or
contingent, known or unknown, under any Environmental Law or with respect to any
Material of Environmental Concern.
4.18 Accuracy of Information, etc. No statement or information
contained in this Agreement, any other Loan Document, the Confidential
Information Memorandum or any other document, certificate or statement furnished
to the Syndication Agent, the Administrative Agent, the Arrangers or the Lenders
or any of them, by or on behalf of any Loan Party for use in connection with the
transactions contemplated by this Agreement or the other Loan Documents,
contained as of the date such statement, information, document or certificate
was so furnished (or, in the case of the Confidential Information Memorandum, as
of the date of this Agreement), any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances under
which such statements were made. The projections and pro forma financial
information contained in the materials referenced above are based upon good
faith estimates and assumptions believed by management of Holdings to be
reasonable at the time made, it being recognized by the Lenders that such
financial information as it relates to future events is not to be viewed as fact
and that actual results during the period or periods covered by such financial
information may differ from the projected results set forth therein by a
material amount. As of the date hereof, to the best of Holdings' and each of
the Borrower's knowledge, the representations and warranties contained in the
Acquisition Documentation are true and correct in all material respects. There
is no fact known to any Loan Party that could reasonably be expected to have a
Material Adverse Effect that has not been expressly disclosed herein, in the
other Loan Documents, in the Confidential Information Memorandum or in any other
documents, certificates and statements furnished to the Agents and the Lenders
for use in connection with the transactions contemplated hereby and by the other
Loan Documents.
4.19 Security Documents. (a) The Guarantee and Collateral Agreement
is effective to create in favor of the Administrative Agent, for the benefit of
the Lenders, a legal, valid and enforceable security interest in the Collateral
described therein and proceeds thereof. In the case of the Pledged Stock
described in the Guarantee and Collateral Agreement, when any stock certificates
representing such Pledged Stock are delivered to the Administrative Agent, and
in the case of the other Collateral described in the Guarantee and Collateral
Agreement, when financing statements in appropriate form are filed in the
offices specified on Schedule 4.19(a)-1 (which financing statements have been
duly completed and executed and delivered to the Administrative Agent) and such
other filings as are specified on Schedule 3 to the Guarantee and
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Collateral Agreement (all of which filings have been duly completed), the
Guarantee and Collateral Agreement shall constitute a fully perfected Lien on,
and security interest in, all right, title and interest of the Loan Parties in
such Collateral and the proceeds thereof, as security for the Obligations (as
defined in the Guarantee and Collateral Agreement), in each case prior and
superior in right to any other Person (except, in the case of Collateral other
than Pledged Stock, Liens permitted by Section 7.3). Schedule 4.19(a)-2 lists
each UCC Financing Statement that (i) names any Loan Party as debtor and (ii)
will remain on file after the Closing Date. Schedule 4.19(a)-3 lists each UCC
Financing Statement that (i) names any Loan Party as debtor and (ii) will be
terminated on or prior to the Closing Date; and on or prior to the Closing Date,
Holdings will have delivered to the Administrative Agent, or caused to be filed,
duly completed UCC termination statements, signed by the relevant secured party,
in respect of each UCC Financing Statement listed in Schedule 4.19(a)-3.
(b) Each of the Foreign Collateral Documents is effective to create
in favor of the Administrative Agent, for the benefit of the Lenders, a legal,
valid and enforceable security interest in the Collateral described therein and
proceeds thereof. In the case of the Collateral described in any such Foreign
Collateral Document, when the action specified in such Foreign Collateral
Document have been taken, such Foreign Collateral Document shall constitute a
fully perfected Lien on, and security interest in, all right, title and interest
of the Loan Parties in such Collateral and the proceeds thereof, as security for
the Obligations (as defined in such Foreign Collateral Document), in each case
prior and superior in right to any other Person (except, in the case of
Collateral other than any pledged stock described therein, Liens permitted by
Section 7.3).
(c) Each of the Mortgages is effective to create in favor of the
Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable Lien on the Mortgaged Properties described therein and proceeds
thereof; and when the Mortgages are filed in the offices specified on Schedule
4.19(b) (in the case of the Mortgages to be executed and delivered on the
Closing Date) or in the recording office designated by Holdings (in the case of
any Mortgage to be executed and delivered pursuant to Section 6.9 (b)), each
Mortgage shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the Loan Parties in the Mortgaged Properties
described therein and the proceeds thereof, as security for the Obligations (as
defined in the relevant Mortgage), in each case prior and superior in right to
any other Person (other than Persons holding Liens or other encumbrances or
rights permitted by the relevant Mortgage and by Sections 7.3(a), (e), (i) and
(j)). Each of the Mortgaged Properties are correctly described in the related
Mortgage and such Mortgage will take effect in respect of the entire interest
owned by Holdings or any Subsidiary in respect of each such Mortgaged Property.
4.20 Solvency. Each Loan Party is, and after giving effect to the
Acquisition and the incurrence of all Indebtedness and obligations being
incurred in connection herewith and therewith will be and will continue to be,
Solvent.
4.21 Senior Indebtedness. The Obligations constitute "Senior Debt"
of the Borrower under and as defined in the Senior Subordinated Note Indenture.
The obligations of each Guarantor under the Guarantee and Collateral Agreement
and each Foreign Guarantee constitute "Senior Debt" of such Guarantor under and
as defined in the Senior Subordinated Note Indenture.
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4.22 Regulation H. No Mortgage encumbers improved real property
which is located in an area that has been identified by the Secretary of Housing
and Urban Development as an area having special flood hazards and in which flood
insurance has been made available under the National Flood Insurance Act of 1968
(except any Mortgaged Properties as to which such flood insurance as required by
Regulation H has been obtained and is in full force and effect as required by
this Agreement).
4.23 Real/Heritable Properties. The real/heritable Properties owned
and leased by Holdings, the Borrowers and the Subsidiaries:
(a) are not subject to any Lien (in respect of those Mortgaged
Properties situated in Scotland meaning existing standard securities and/or
other heritable charges) (other than under Sections 7.3(e) and (h)); and
(b) that are referred to in the Security Documents as being subject to
Mortgages are correctly described in the Security Documents and that the
relevant Mortgage (or standard securities in respect of the Mortgaged Properties
situated in Scotland) will take effect in respect of the entire interest owned
by Holdings, the Borrowers or any Subsidiary in respect of each such
real/heritable Property.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Initial Extension of Credit. The agreement of each
Lender to make the initial extension of credit requested to be made by it
hereunder is subject to the satisfaction, prior to or concurrently with the
making of such extension of credit on the Closing Date, of the following
conditions precedent:
(a) Loan Documents. The Administrative Agent shall have received (i)
this Agreement, executed and delivered by a duly authorized officer of Holdings
and the Borrowers, (ii) the Guarantee and Collateral Agreement, executed and
delivered by a duly authorized officer of Holdings and each Domestic Guarantor,
(iii) each Foreign Guarantee, executed and delivered by a duly authorized
officer of the Foreign Guarantor party thereto (other than those Foreign
Guarantees covered by paragraph (x) below), (iv) each Foreign Collateral
Document, executed and delivered by a duly authorized officer of the Foreign
Guarantor party thereto (other than those Foreign Guarantees covered by
paragraph (x) below), (v) a Mortgage covering each of the Mortgaged Properties,
executed and delivered by a duly authorized officer of each party thereto (other
than those Foreign Guarantees covered by paragraph (x) below), and (vi) for the
account of each relevant Lender, Notes conforming to the requirements hereof and
executed and delivered by a duly authorized officer of the relevant Borrower.
(b) Acquisition, etc. The following transactions shall have been
consummated, in each case on terms and conditions reasonably satisfactory to the
Lenders:
(i) the Purchaser shall have acquired from the Seller all of the
issued and outstanding share capital of Avery and Berkel, pursuant to the
Acquisition
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Documentation (the "Acquisition") for an aggregate purchase price not
exceeding $182,500,000 (including fees and expenses), and no material
provision of the Acquisition Documentation shall have been waived, amended,
supplemented or otherwise modified;
(ii) Holdings shall have received at least $40,300,000 from the
proceeds of equity issued by Holdings to funds managed by the Sponsor and
by existing management of Holdings, and such proceeds shall have been
contributed to the Purchaser to finance the Acquisition;
(iii) the Borrower shall have received at least euro 100,000,000
in gross cash proceeds from the issuance of the Senior Subordinated Notes;
and
(iv) Holdings shall have issued to the Seller the PIK Preferred
Stock in an aggregate amount equal to euro 10,000,000 on terms and
conditions satisfactory to the Agents.
(c) Pro Forma Balance Sheet; Financial Statements. The Lenders shall
have received (i) the Pro Forma Balance Sheet, (ii) the financial statements
described in Sections 4.1(b) and (c), (iii) unaudited (but reviewed by
independent accountants for Holdings) consolidated income and cash flow
statements of Holdings for the ten-month period ended February 28, 1999, (iv)
unaudited (but reviewed by independent accountants for Avery Berkel) combined
financial statements for Avery and Berkel (combined) for the eleven-month period
ended February 27, 1999, and (v) summary unaudited pro forma combined financial
date for Holdings and Avery Berkel as of and for the latest twelve-month period
ended February 29, 2000, prepared in a manner described in the notes thereto;
and such financial statements shall not, in the reasonable judgment of the
Lenders, reflect any material adverse change in the consolidated financial
condition of Holdings, Avery Berkel, as reflected in the financial statements or
projections contained in the Confidential Information Memorandum.
(d) Approvals. All governmental and third party approvals (including
landlords' and other consents) necessary in connection with the Acquisition, the
continuing operations of Holdings and its Subsidiaries and the transactions
contemplated hereby 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 adverse conditions on the Acquisition or the financing
contemplated hereby.
(e) Related Agreements. The Administrative Agent shall have received
(in a form reasonably satisfactory to the Administration Agent), with a copy for
each Lender, true and correct copies, certified as to authenticity by the
Borrower, of the Senior Subordinated Note Indenture and such other documents or
instruments as may be reasonably requested by the Syndication Agent or the
Administrative Agent, including, without limitation, a copy of the Senior
Subordinated Note Indenture and any other material debt instrument, security
agreement or other material contract to which the Loan Parties may be a party.
(f) Fees. The Lenders, the Syndication Agent and the Administrative
Agent shall have received all fees required to be paid, and all expenses for
which invoices have been presented (including reasonable fees, disbursements and
other charges of counsel to the Agents),
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on or before the Closing Date. All such amounts will be paid with proceeds of
Loans made on the Closing Date and will be reflected in the funding instructions
given by Holdings to the Administrative Agent on or before the Closing Date.
(g) Business Plan. The Lenders shall have received a satisfactory
business plan and written analysis of the business and prospects of Holdings and
its Subsidiaries (including Avery and Berkel).
(h) Solvency Analysis. The Lenders shall have received a reasonably
satisfactory solvency analysis certified by the chief financial officer of
Holdings which shall certify the solvency of Holdings and its Subsidiaries
considered as a whole after giving effect to the Acquisition and the other
transactions contemplated hereby.
(i) Lien Searches. The Administrative Agent shall have received the
results of a recent lien search (or comparable procedure under local law) in
each of the jurisdictions in which Uniform Commercial Code financing statement
or other filings or recordations should be made to evidence or perfect security
interests in all assets of the Loan Parties, and such search shall reveal no
liens on any of the assets of the Loan Party, except for Liens permitted by
Section 7.3.
(j) Environmental Matters. The Administrative Agent shall have
received letters from the environmental consultants which prepared the
environmental assessments of Avery and Berkel and their respective Subsidiaries
permitting the Agents and the Lenders to rely on the environmental assessment as
if addressed to and prepared for each of them.
(k) Expenses. The Administrative Agent shall have received
satisfactory evidence that the fees and expenses to be incurred in connection
with the Acquisition and the financing thereof shall not exceed $18,500,000.
(l) Closing Certificate. The Administrative Agent shall have
received a certificate of each Loan Party, dated the Closing Date, substantially
in the form of Exhibit C, with appropriate insertions and attachments.
(m) Legal Opinions. The Administrative Agent shall have received the
following executed legal opinions:
(i) the legal opinion of Hutchins, Wheeler & Ditmar, US counsel
to Holdings and its Subsidiaries, substantially in the form of Exhibit F;
(ii) the legal opinion of Ashurst Morris Crisp, UK counsel to
Holdings and its Subsidiaries, in form and substance satisfactory to the
Agents;
(iii) the legal opinion of Linklaters & Alliance, UK counsel to
the Lenders, in form and substance satisfactory to the Agents;
(iv) the legal opinion of Trenite van Doome, Netherlands counsel
to the Borrower, in form and substance satisfactory to the Agents;
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(v) the legal opinions of (A) McCarthy Tetrault, (B) Baxter
Harris, (C) Stewart McKelvey Stirling Scales and (D) Aikins, MacCaulay &
Thorvaldson, Canadian counsel to the Canadian Borrower, in form and
substance satisfactory to the Agents;
(vi) to the extent consented to by the relevant counsel, each
legal opinion, if any, delivered in connection with the Acquisition
Agreement, accompanied by a reliance letter in favor of the Lenders; and
(vii) the legal opinion of local counsel in each jurisdiction
in which Collateral is being provided to secure the obligations under the
Loan Documents, and of such other special and local counsel as may be
required by the Administrative Agent.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent may
reasonably require.
(n) Pledged Stock; Stock Powers; Acknowledgment and Consent; Pledged
Notes. The Administrative Agent shall have received (i) the certificates
representing the shares of Capital Stock pledged pursuant to the Guarantee and
Collateral Agreement and, to the extent required by local law, each Foreign
Collateral Document, together with an undated stock power or stock transfer form
for each such certificate executed in blank by a duly authorized officer of the
pledgor thereof, (ii) an Acknowledgment and Consent, substantially in the form
of Annex II to the Guarantee and Collateral Agreement, duly executed by any
issuer of Capital Stock pledged pursuant to the Guarantee and Collateral
Agreement that is not itself a party to the Guarantee and Collateral Agreement
and (iii) each promissory note pledged pursuant to the Guarantee and Collateral
Agreement or any Foreign Collateral Document endorsed (without recourse) in
blank (or accompanied by an executed transfer form in blank satisfactory to the
Administrative Agent) by the pledgor thereof, to the extent required by law.
(o) Filings, Registrations and Recordings. Each document (including,
without limitation, any Uniform Commercial Code financing statement) required by
the Security Documents or under law or reasonably requested by the
Administrative Agent to be filed, registered or recorded in order to create in
favor of the Administrative Agent, for the benefit of the Lenders, a perfected
Lien on the Collateral described therein, prior and superior in right to any
other Person (other than with respect to Liens expressly permitted by Section
7.3), shall have been or, upon completion of the "whitewash" procedures referred
to in Section 5.1(x) and the satisfaction of the conditions set forth in Section
5.1(y), will be, filed, registered or recorded or shall have been delivered to
the Administrative Agent be in proper form for filing, registration or
recordation.
(p) Title Insurance; Flood Insurance. With respect to each Mortgaged
Property located in the United States of America: (i) If requested by the
Administrative Agent, the Administrative Agent shall have received, and the
title insurance company issuing the policy referred to in clause (ii) below (the
"Title Insurance Company") shall have received, maps or plats of an as-built
survey of the sites of the Mortgaged Properties certified to the Administrative
Agent and the Title Insurance Company in a manner satisfactory to them, dated a
date satisfactory to the Administrative Agent and the Title Insurance Company by
an independent
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professional licensed land surveyor satisfactory to the Administrative Agent and
the Title Insurance Company, which maps or plats and the surveys on which they
are based shall be made in accordance with the Minimum Standard Detail
Requirements for Land Title Surveys jointly established and adopted by the
American Land Title Association and the American Congress on Surveying and
Mapping in 1992, and, without limiting the generality of the foregoing, there
shall be surveyed and shown on such maps, plats or surveys the following: (A)
the locations on such sites of all the buildings, structures and other
improvements and the established building setback lines; (B) the lines of
streets abutting the sites and width thereof; (C) all access and other easements
appurtenant to the sites; (D) all roadways, paths, driveways, easements,
encroachments and overhanging projections and similar encumbrances affecting the
site, whether recorded, apparent from a physical inspection of the sites or
otherwise known to the surveyor; (E) any encroachments on any adjoining property
by the building structures and improvements on the sites; (F) if the site is
described as being on a filed map, a legend relating the survey to said map; and
(G) the flood zone designations, if any, in which the Mortgaged Properties are
located.
(ii) The Administrative Agent shall have received in respect of
each Mortgaged Property a mortgagee's title insurance policy (or policies)
or marked up unconditional binder for such insurance. Each such policy
shall (A) be in an amount satisfactory to the Administrative Agent; (B) be
issued at ordinary rates; (C) insure that the Mortgage insured thereby
creates a valid first Lien on such Mortgaged Property free and clear of all
defects and encumbrances, except as disclosed therein; (D) name the
Administrative Agent for the benefit of the Lenders as the insured
thereunder; (E) be in the form of ALTA Loan Policy - 1970 (Amended 10/17/70
and 10/17/84) (or equivalent policies); (F) contain such endorsements and
affirmative coverage as the Administrative Agent may reasonably request and
(G) be issued by title companies satisfactory to the Administrative Agent
(including any such title companies acting as co-insurers or reinsurers, at
the option of the Administrative Agent). The Administrative Agent shall
have received evidence satisfactory to it that all premiums in respect of
each such policy, all charges for mortgage recording tax, and all related
expenses, if any, have been paid.
(iii) If requested by the Administrative Agent, the
Administrative Agent shall have received (A) a policy of flood insurance
that (1) covers any parcel of improved real property that is encumbered by
any Mortgage (2) is written in an amount not less than the outstanding
principal amount of the indebtedness secured by such Mortgage that is
reasonably allocable to such real property or the maximum limit of coverage
made available with respect to the particular type of property under the
National Flood Insurance Act of 1968, whichever is less, and (3) has a term
ending not later than the maturity of the indebtedness secured by such
Mortgage and (B) confirmation that Holdings has received the notice
required pursuant to Section 208(e)(3) of Regulation H of the Board.
(iv) The Administrative Agent shall have received a copy of all
recorded documents referred to, or listed as exceptions to title in, the
title policy or policies referred to in clause (ii) above and a copy of all
other material documents affecting the Mortgaged Properties.
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(q) Mortgaged Properties in England and Wales. The Administrative
Agent shall have received in respect of those Mortgaged Properties situated in
England and Wales:
(i) all title documents to such Mortgaged Properties;
(ii) a clear Land Charges Registry search against whichever of
Holdings, either Borrower or a Subsidiary is the legal and beneficial owner
of any such Mortgaged Property or results of H M Land Registry searches in
favor of the Administrative Agent on the appropriate forms against all
registered titles giving not less than 10 Business Days' priority beyond
the date of the relevant Mortgage and showing no adverse entries;
(iii) certificates of title together with a letter readdressing
such certificates of title to the Administrative Agent both in a form
approved by the Administrative Agent's attorneys from;
(1) Slaughter and May in respect of Soho Foundry, Foundry Lane,
Smethwick and of 72/76 Baggrave Street, Leicester; and
(2) Harrison & Clark in respect of Sertec House, Walsall Road,
Walsall and of Intec Site, Woodruff Way, Tamebridge, Walsall;
(iv) an effective discharge of all Liens affecting such
Mortgaged Properties;
(v) appropriate Land Registry application forms or an
undertaking from the Borrowers' attorneys (in a form approved by the
Administrative Agent's attorneys to provide the same) duly completed and
accompanied by all necessary fees of the Land Registry; and
(vi) a certificate from Ashurst Morris Crisp addressed to the
Administrative Agent in a form approved by the Administrative Agent's
attorneys.
(r) Mortgaged Properties in Scotland. The Administrative Agent shall
have received in respect of those Mortgaged Properties situated in Scotland:
(i) all title documents to such Mortgaged Properties (or an
undertaking from attorneys approved by the Administrative Agent's attorneys
in a form approved by the Administrative Agent's attorneys to provide the
title documents);
(ii) clear searches in the Property Registers for the Mortgaged
Properties situated in Scotland for 10 years or if earlier from the date of
the foundation Writ to date and in the Personal Registers against all
relevant interested parties for the appropriate prescriptive periods;
(iii) an effective discharge of all existing standard securities
and other heritable charges affecting such Mortgaged Properties;
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(iv) appropriate Land Registry application forms duly completed
and accompanied by all necessary fees of the Land Registry;
(v) a certificate from DLA addressed to the Administrative Agent
in a form approved by the Administrative Agent's attorneys; and
(vi) validly executed standard securities over such Mortgaged
Properties in favor of the Administrative Agent in forms approved by the
Administrative Agent's attorneys.
(s) Mortgaged Properties in Jersey. The Administrative Agent shall
have received in respect of those Mortgaged Properties situated in Jersey:
(i) a copy of the Deeds of Acquisition of such Mortgaged
Properties by GEC Avery Limited (under its former name of W & T Avery
Limited);
(ii) a certificate from Ogier & Le Masurier addressed to the
Administrative Agent confirming that the freeholds of such Mortgaged
Properties are owned by GEC Avery Limited and are free of all registered
charges; and
(iii) an executed billet in respect of the Foreign Guarantee of
GEC Avery Limited.
(t) Mortgaged Properties in Guernsey. The Administrative Agent shall
have received in respect of those Mortgaged Properties situated in Guernsey, a
copy of the conveyances of such Mortgaged Properties to GEC Avery Limited (under
its former name of W & T Avery Limited).
(u) Insurance. The Administrative Agent shall have received
insurance certificates satisfying the requirements of Section 5.3 of the
Guarantee and Collateral Agreement.
(v) Reports. Holdings shall have caused to be prepared a final due
diligence report of Ashurst Morris Crisp, as well as certain insurance reports,
in each case relating to Avery Berkel, and the Lenders shall have received
copies of such reports.
(w) Borrowing Base Report The Administrative Agent shall have
received from Holdings the initial Borrowing Base Report dated as of the Closing
Date.
(x) Whitewash. Within one Business Day of the Closing Date, all
requirements of Sections 151 through 158 of the Companies Act 1985 (England)
necessary to permit the Foreign Guarantors organized under the laws of the
England and Wales and Ireland, to which such requirements are applicable, to
enter into the Foreign Guarantees and Foreign Security Documents to which they
are parties shall have been satisfied.
(y) Conditions Subsequent Related to Mortgaged Properties in Jersey
and Guernsey. Within ten Business Days of the Closing Date:
(i) With respect of those Mortgaged Properties situated in
Jersey:
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(A) prior to the registration of the charge against such
Mortgaged Properties, Ogier & Le Masurier shall have received
authorization from GEC Avery Limited to apply to the Royal Court of
Jersey to record the change of name from W & T Avery Limited to GEC
Avery Limited; and
(B) the originals of the Foreign Guarantee and billet referred to
in Section 5.1(s)(iii) shall have been remitted to Ogier & Le Masurier
to enable the billet to be registered as a charge against such
Mortgaged Properties and Ogier & Le Masurier shall have registered
such billet with the Judicial Greffe in Jersey.
(ii) With respect of those Mortgaged Properties situated in
Guernsey:
(A) the Administrative Agent shall have received a certificate
from Ogier & Le Masurier addressed to the Administrative Agent
confirming that GEC Avery Limited shall have consented to a bond;
(B) prior to the registration of the bond against such Mortgaged
Properties, Ogier & Le Masurier shall have received authorization from
GEC Avery Limited in the form of a power of attorney to appear before
the Conveyancing Court of Guernsey to consent to the bond; and
(C) Ogier & Le Masurier shall have appeared before the
Conveyancing Court of Guernsey and consented to the bond and the bond
shall have been registered in Guernsey against such Mortgaged
Properties.
5.2 Conditions to Each Extension of Credit. The agreement of each
Lender to make any extension of credit requested to be made by it hereunder on
any date (including, without limitation, its initial extension of credit) is
subject to the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by any Loan Party in or pursuant to the Loan Documents shall be
true and correct on and as of such date as if made on and as of such date,
except to the extent any of such representations and warranties relate to a
specific date, in which case such representations and warranties shall be true
and correct on and as of such date.
(b) No Default. No Default or Event of Default shall have occurred
and be continuing on such date or after giving effect to the extensions of
credit requested to be made on such date.
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrowers
hereunder shall constitute a representation and warranty by Holdings and the
Borrowers as of the date of such extension of credit that the conditions
contained in this Section 5.2 have been satisfied.
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SECTION 6. AFFIRMATIVE COVENANTS
Holdings and the Borrowers hereby jointly and severally agree that, so
long as the Commitments remain in effect, any Letter of Credit remains
outstanding or any Loan or other amount is owing to any Lender or any Agent
hereunder, each of Holdings and each of the Borrowers shall and shall cause each
of its Subsidiaries to:
6.1 Financial Statements. Furnish to each Agent and each Lender:
(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of Holdings, a copy of the audited consolidated balance
sheet of Holdings and its consolidated Subsidiaries as at the end of such year
and the related audited consolidated statements of income and of cash flows for
such year, setting forth in each case in comparative form the figures as of the
end of and for the previous year, reported on without qualification or
exception, by PriceWaterhouseCoopers LLP or other independent certified public
accountants of nationally recognized standing;
(b) as soon as available, but in any event not later than 45 days
after the end of each quarterly period of each fiscal year of Holdings, the
unaudited consolidated and consolidating balance sheets of Holdings and its
consolidated Subsidiaries as at the end of such quarter and the related
unaudited consolidated and consolidating statements of income and of cash flows
for such quarter and the portion of the fiscal year through the end of such
quarter (provided, that, no such consolidating statements of cash flows shall be
required for the fiscal quarter ended June 30, 2000), setting forth in each case
in comparative form the figures as of the end of and for the corresponding
period in the previous year and a comparison of such figures to the budget with
respect to such period previously delivered to the Lenders, certified by a
Responsible Officer as being fairly stated in all material respects (subject to
normal year-end audit adjustments) and a narrative discussion and analysis of
the financial condition and results of operations of Holdings and its
Subsidiaries for such fiscal quarter and for the period from the beginning of
the then current fiscal year to the end of such fiscal quarter, as compared to
the portion of the Projections covering such periods and to the comparable
periods of the previous year and to its budget with respect to such period
previously delivered to the Lenders; and
(c) as soon as available, but in any event not later than 45 days
after the end of each month occurring during each fiscal year of Holdings (other
than the third, sixth, ninth and twelfth such month), the unaudited consolidated
and consolidating balance sheets of Holdings and its Subsidiaries as at the end
of such month and the related unaudited consolidated and consolidating
statements of income and of cash flows for such month and the portion of the
fiscal year through the end of such month, setting forth in each case in
comparative form the figures as of the end of and for the corresponding period
in the previous year and a comparison of such figures to the budget with respect
to such period previously delivered to the Lenders, certified by a Responsible
Officer as being fairly stated in all material respects (subject to normal year-
end audit adjustments); provided, that, no such consolidating information shall
be required for the first fiscal year following the Closing Date and no such
consolidating statements of cash flows shall be required pursuant to this
paragraph at any time;
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the
74
periods reflected therein and with prior periods (except as approved by such
accountants or officer, as the case may be, and disclosed therein).
6.2 Certificates; Other Information. Furnish to each Agent and each
Lender, or, in the case of clause (h), to the relevant Lender:
(a) concurrently with the delivery of the financial statements
referred to in Section 6.1(a), a certificate of the independent certified public
accountants reporting on such financial statements stating that in making the
examination necessary therefor no knowledge was obtained of any Default or Event
of Default, except as specified in such certificate;
(b) concurrently with the delivery of any financial statements
pursuant to Section 6.1, (i) a certificate of a Responsible Officer stating
that, to the best of such Responsible Officer's knowledge, each Loan Party
during such period has observed or performed all of its covenants and other
agreements, and satisfied every condition, contained in this Agreement and the
other Loan Documents to which it is a party to be observed, performed or
satisfied by it, and that such Responsible Officer has obtained no knowledge of
any Default or Event of Default except as specified in such certificate and (ii)
in the case of quarterly financial statements, (x) a Compliance Certificate
containing all information and calculations necessary for determining compliance
by Holdings and its Subsidiaries with the provisions of this Agreement referred
to therein as of the last day of the fiscal quarter of Holdings and (y) to the
extent not previously disclosed to the Administrative Agent, a listing of any
county or state within the United States where any Loan Party keeps inventory or
equipment and of any Intellectual Property acquired by any Loan Party since the
date of the most recent list delivered pursuant to this clause (y) (or, in the
case of the first such list so delivered, since the Closing Date) or any
location where any Foreign Guarantor has any assets and where local law requires
any filing to be made and in which a filing has not previously been made;
(c) as soon as available, and in any event no later than the end of
each fiscal year of Holdings, a detailed consolidated and consolidating budget
for the following fiscal year (broken down on a consolidated basis by month)
(including a projected consolidated and consolidating balance sheet of Holdings
and its Subsidiaries as of the end of the following fiscal year, and the related
consolidated and consolidating statements of projected cash flow, projected
changes in financial position, projected income and projected calculations for
purposes of compliance with Section 7.1), and, as soon as available, significant
revisions, if any, of such budget and projections with respect to such fiscal
year (collectively, the "Projections"), which Projections shall in each case be
accompanied by a certificate of a Responsible Officer stating that such
Projections are based on reasonable estimates, information and assumptions and
that such Responsible Officer has no reason to believe that such Projections are
incorrect or misleading in any material respect;
(d) no later than 10 Business Days prior to the effectiveness
thereof, copies of substantially final drafts of any proposed amendment,
supplement, waiver or other modification with respect to the Senior Subordinated
Note Indenture or the Acquisition Agreement;
(e) within five days after the same are sent, copies of all financial
statements and reports that Holdings or the Borrower sends to the holders of any
class of its debt securities or
75
public equity securities and, within five days after the same are filed, copies
of all financial statements and reports that Holdings or the Borrower may make
to, or file with, the SEC or any similar foreign regulatory authority;
(f) within 20 days after the end of each calendar month or at such
earlier time as the Administrative Agent may reasonably request, a Borrowing
Base Report setting forth the Borrowing Base as at the end of such calendar
month or other date so requested by the Administrative Agent;
(g) within 20 days after the end of each fiscal quarter, an Accounts
Receivable aging report; and
(h) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
6.3 Payment of Obligations. Pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of Holdings or its Subsidiaries, as the case may be.
6.4 Conduct of Business and Maintenance of Existence, etc. (a)
(i) Preserve, renew and keep in full force and effect its corporate or other
existence and (ii) take all reasonable action to maintain all rights, privileges
and franchises necessary or desirable in the normal conduct of its business,
except, in each case, as otherwise permitted by Section 7.4 and except, in the
case of clause (ii) above, to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect and (b) comply with all
Contractual Obligations and Requirements of Law, except to the extent that
failure to comply therewith could not, in the aggregate, reasonably be expected
to have a Material Adverse Effect.
6.5 Maintenance of Property; Insurance. (a) Keep all Property and
systems useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted and (b) maintain with financially
sound and reputable insurance companies insurance on all its Property in at
least such amounts and against at least such risks (but including in any event
public liability, product liability and business interruption) as are usually
insured against in the same general area by companies engaged in the same or a
similar business.
6.6 Inspection of Property; Books and Records; Discussions;
Collateral Reports. (a) Keep proper books of records and account 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, (b) permit representatives of any Lender to visit and inspect
any of its properties and examine and make abstracts from any of its books and
records at any reasonable time and as often as may reasonably be desired and to
discuss the business, operations, properties and financial and other condition
of Holdings and its Subsidiaries with officers and employees of Holdings and its
Subsidiaries and with its independent certified public accountants and (c) no
more frequently than two times during each calendar year (one of which shall
correspond to the preparation of Holdings' annual financial
76
statements), or more frequently as determined by the Administrative Agent if an
Event of Default shall have occurred and be continuing, upon the request of the
Administrative Agent, obtain and deliver to the Administrative Agent, or, if the
Administrative Agent so elects, cooperate with the Administrative Agent in the
Administrative Agent's obtaining, at the expense of Holdings and the Borrowers,
a report of an independent collateral auditor satisfactory to the Administrative
Agent (which may be affiliated with one of the Lenders) with respect to the
Accounts Receivable and inventory components included in the Borrowing Base,
which report shall indicate whether or not the information set forth in the
Borrowing Base Report most recently delivered is accurate and complete in all
material respects based upon a review by such auditors of the Accounts
Receivable (including verification with respect to the amount, aging, identity
and credit of the respective account debtors and the billing practices of the
Holdings or its applicable Subsidiaries) and inventory (including verification
as to the value, location and respective types).
6.7 Notices. Promptly give written notice to the Administrative
Agent and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of Holdings or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between Holdings or any
of its Subsidiaries and any Governmental Authority, that in either case, if not
cured or if adversely determined, as the case may be, could reasonably be
expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting Holdings or any of its
Subsidiaries in which the amount involved is $1,000,000 or more and not covered
by insurance or in which injunctive or similar relief affecting any material
activity, operation or property of Holdings or any such Subsidiary is sought;
(d) the following events, as soon as possible and in any event within
30 days after Holdings knows or has reason to know thereof: (i) the occurrence
of any Reportable Event with respect to any Plan, a failure to make any required
contribution to a Plan, the creation of any Lien in favor of the PBGC or a Plan
or any withdrawal from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan or (ii) the institution of proceedings or the taking of any
other action by the PBGC or Holdings or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the termination,
Reorganization or Insolvency of, any Plan; and
(e) any development or event that has had or could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action Holdings or the relevant Subsidiary proposes to take
with respect thereto.
6.8 Environmental Laws. (a) Comply in all material respects with,
and ensure compliance in all material respects by all tenants and subtenants, if
any, with, all applicable
77
Environmental Laws, and obtain and comply in all material respects with and
maintain, and ensure that all tenants and subtenants obtain and comply in all
material respects with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental
Laws.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws.
6.9 Additional Collateral, etc. (a) With respect to any Property
acquired after the Closing Date by Holdings or any of the Guarantors (other than
(x) any Property described in paragraph (b) or paragraph (c) of this Section,
(y) any Property subject to a Lien expressly permitted by Section 7.3(g) and (z)
Property acquired by an Excluded Subsidiary) as to which the Administrative
Agent, for the benefit of the Lenders, does not have a perfected Lien, promptly
(i) execute and deliver to the Administrative Agent such amendments to the
Guarantee and Collateral Agreement or relevant Foreign Security Document or such
other documents as the Administrative Agent deems necessary or advisable to
grant to the Administrative Agent, for the benefit of the Lenders, a security
interest in such Property and (ii) take all actions necessary or advisable to
grant to the Administrative Agent, for the benefit of the Lenders, a perfected
first priority security interest in such Property, including without limitation,
the filing of Uniform Commercial Code financing statements or similar filings in
such jurisdictions as may be required by the Guarantee and Collateral Agreement
or Foreign Security Document, as the case may be, or by law or as may be
requested by the Administrative Agent.
(b) With respect to any fee interest in any real property having a
value (together with improvements thereof) of at least $1,000,000 acquired after
the Closing Date by Holdings or any of its Subsidiaries (other than any such
real property owned by an Excluded Subsidiary or subject to a Lien expressly
permitted by Section 7.3(g)), promptly (i) execute and deliver a first priority
Mortgage in favor of the Administrative Agent, for the benefit of the Lenders,
covering such real property, (ii) if requested by the Administrative Agent,
provide the Lenders with (x) title and extended coverage insurance covering such
real property in an amount at least equal to the purchase price of such real
property (or such other amount as shall be reasonably specified by the
Administrative Agent) as well as, if the real property is located in the United
States of America, a current ALTA survey thereof, together with a surveyor's
certificate and (y) any consents or estoppels reasonably deemed necessary or
advisable by the Administrative Agent in connection with such Mortgage, each of
the foregoing in form and substance reasonably satisfactory to the
Administrative Agent and (iii) if requested by the Administrative Agent, deliver
to the Administrative Agent legal opinions relating to the matters described
above, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.
(c) With respect to any new Subsidiary (other than an Excluded
Subsidiary) created or acquired after the Closing Date (which, for the purposes
of this paragraph, shall include any existing Subsidiary that ceases to be an
Excluded Subsidiary), by Holdings or any of its Subsidiaries which (along with
any of its Subsidiaries) has Total Net Assets in excess of $750,000 or which had
(for the most recently concluded four fiscal quarter period) Consolidated
78
EBITDA in excess of $500,000, promptly (i) execute and deliver to the
Administrative Agent such amendments to the Guarantee and Collateral Agreement,
if such new Subsidiary is a Domestic Subsidiary, or a Foreign Guarantee and
Foreign Collateral Document in conformity with local law, if such new Subsidiary
is a Foreign Subsidiary, as the Administrative Agent deems necessary or
advisable to grant to the Administrative Agent, for the benefit of the Lenders,
a perfected first priority security interest in the Capital Stock of such new
Subsidiary that is owned by Holdings or any of its Subsidiaries, (ii) deliver to
the Administrative Agent the certificates representing such Capital Stock,
together with undated stock powers, in blank, executed and delivered by a duly
authorized officer of Holdings or such Subsidiary, as the case may be, or take
such actions as are required under local law to perfect the security interest in
such Capital Stock, (iii) cause such new Subsidiary (A) to become a party to the
Guarantee and Collateral Agreement, if such new Subsidiary is a Domestic
Subsidiary, or to execute a Foreign Guarantee and a Foreign Collateral Document
in conformity with local law, if such new Subsidiary is a Foreign Subsidiary,
and (B) to take such actions necessary or advisable to grant to the
Administrative Agent for the benefit of the Lenders a perfected first priority
security interest in the Collateral described in the Guarantee and Collateral
Agreement or the new Foreign Collateral Document, as the case may be, with
respect to such new Subsidiary, including, without limitation, the filing of
Uniform Commercial Code financing statements or similar filings in such
jurisdictions as may be required by the Guarantee and Collateral Agreement or
Foreign Collateral Document, as the case may be, or by law or as may be
requested by the Administrative Agent, and (iv) if requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(d) With respect to any new Excluded Subsidiary which (along with any
of its Subsidiaries) has Total Net Assets in excess of $750,000 or which had
(for the most recently concluded four fiscal quarter period) Consolidated EBITDA
in excess of $500,000, created or acquired after the Closing Date by Holdings or
any of its Subsidiaries (other than by any Excluded Subsidiaries), promptly (i)
execute and deliver to the Administrative Agent such amendments to the Guarantee
and Collateral Agreement or the relevant Foreign Collateral Document or such
other documents as the Administrative Agent deems necessary or advisable in
order to grant to the Administrative Agent, for the benefit of the Lenders, a
perfected first priority security interest in the Capital Stock of such new
Subsidiary that is owned by Holdings or any of its Subsidiaries (other than any
Excluded Subsidiaries), (ii) deliver to the Administrative Agent the
certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of
Holdings or such Subsidiary, as the case may be, or take such actions as are
required by local law and take all such other action as may be necessary or, in
the opinion of the Administrative Agent, desirable to perfect the Lien of the
Administrative Agent thereon, and (iii) if requested by the Administrative
Agent, deliver to the Administrative Agent legal opinions relating to the
matters described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Administrative Agent.
(e) Within 180 days following the Closing Date, to the extent the
Excepted UK Subsidiaries have not been dissolved or sold in compliance with the
terms of this Agreement, cause the Excepted UK Subsidiaries to become parties to
a Foreign Guarantee and Foreign
79
Collateral Document, substantially in the forms of such documents executed on
the Closing Date by the Foreign Guarantors organized under the laws of the
United Kingdom, take the steps referred to in Section 5.1(w) with respect to the
Excepted UK Subsidiaries, provide corporate resolutions and constituent
documents for the Excepted UK Subsidiaries substantially similar to those
provided on the Closing Date by the other Foreign Guarantors organized under the
laws of the United Kingdom, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent, and take all such other action as may be necessary or, in the opinion of
the Administrative Agent, desirable to perfect the Lien of the Administrative
Agent on the assets owned by the Excepted UK Subsidiaries.
(f) If at any time the portion of the Total Net Assets of Holdings
and its Subsidiaries constituted by the sum of (i) the Total Net Assets of all
of the non-Guarantor Subsidiaries, taken as a whole, and (ii) the Total Net
Assets of all Guarantor Subsidiaries which do not at such time constitute
Collateral exceeds 25%, or the portion of the Consolidated EBITDA of Holdings
and its Subsidiaries constituted by the Consolidated EBITDA of all of the non-
Guarantor Subsidiaries, taken as a whole, exceeds 12.5%, in each such case (any
such case constituting a "Deficiency Condition"), either (A) cause one or more
non-Guarantor Subsidiaries to become party to a Foreign Guarantee and Foreign
Collateral Document, provide corporate resolutions and constituent documents for
any such Subsidiaries and deliver to the Administrative Agent legal opinions
relating to the matters described above or (B) pledge additional assets of any
Guarantor Subsidiary which do not at such time constitute Collateral, in each
such case, in form and substance reasonably satisfactory to the Administrative
Agent, and take all such other action as may be necessary or, in the opinion of
the Administrative Agent, desirable to perfect the Lien of the Administrative
Agent on the assets owned by any such Subsidiaries, such that after giving
effect thereto no Deficiency Condition exists.
6.10 Further Assurances. From time to time execute and deliver, or
cause to be executed and delivered, such additional instruments, certificates or
documents, and take all such actions, as the Administrative Agent may reasonably
request for the purposes of implementing or effectuating the provisions of this
Agreement and the other Loan Documents, or of more fully perfecting or renewing
the rights of the Administrative Agent and the Lenders with respect to the
Collateral (or with respect to any additions thereto or replacements or proceeds
thereof or with respect to any other property or assets hereafter acquired by
Holdings or any Guarantor which may be deemed to be part of the Collateral)
pursuant hereto or thereto. Upon the exercise by the Administrative Agent or
any Lender of any power, right, privilege or remedy pursuant to this Agreement
or the other Loan Documents which requires any consent, approval, recording,
qualification or authorization of any Governmental Authority, Holdings will
execute and deliver, or will cause the execution and delivery of, all
applications, certifications, instruments and other documents and papers that
the Administrative Agent or such Lender may be required to obtain from Holdings
or any of its Subsidiaries for such governmental consent, approval, recording,
qualification or authorization.
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SECTION 7. NEGATIVE COVENANTS
Holdings and the Borrowers hereby jointly and severally agree that, so
long as the Commitments remain in effect, any Letter of Credit remains
outstanding or any Loan or other amount is owing to any Lender or any Agent
hereunder, each of Holdings and each of the Borrowers shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly:
7.1 Financial Condition Covenants.
(a) Consolidated Leverage Ratio. Permit the Consolidated Leverage
Ratio as at the last day of any period of four consecutive fiscal quarters of
Holdings (or, if less, the number of full fiscal quarters subsequent to the
Closing Date) ending with any fiscal quarter set forth below to exceed the ratio
set forth below opposite such fiscal quarter:
Fiscal Quarter Consolidated Leverage Ratio
- -------------- ---------------------------
FQ2 2000 5.00 to 1.00
FQ3 2000 4.75 to 1.00
FQ4 2000 4.65 to 1.00
FQ1 2001 - FQ2 2001 4.50 to 1.00
FQ3 2001 - FQ2 2002 4.25 to 1.00
FQ3 2002 - FQ4 2002 4.00 to 1.00
FQ1 2003 - FQ2 2003 3.85 to 1.00
FQ3 2003 - FQ4 2003 3.75 to 1.00
FQ1 2004 - FQ2 2004 3.65 to 1.00
FQ3 2004 - FQ4 2004 (or, if earlier, the 3.50 to 1.00
Consolidated Leverage Ratio Stepdown Date)
FQ1 2005 - FQ2 2005 3.35 to 1.00
FQ3 2005 - FQ4 2005 3.25 to 1.00
FQ1 2006 and thereafter 3.00 to 1.00
; provided, that for the purposes of determining the ratio described above as at
the end of FQ2 2000, FQ3 2000 and FQ4 2000, Consolidated EBITDA for the relevant
period shall be deemed to equal the sum of (i) Consolidated EBITDA (without
giving effect to the second proviso in the definition thereof) for such fiscal
quarter (and, in the case of the latter two such determinations, each previous
fiscal quarter commencing after the Closing Date) multiplied by 4, 2 and 4/3,
respectively, and (ii) the relevant amount of the add-back for such fiscal
quarter set forth in the second proviso to the definition of "Consolidated
EBITDA"; provided, further, that from and
81
after any Conversion Date until the date of any repayment of the Seller
Subordinated Notes, the foregoing ratios shall be increased by 0.25 (or such
less amount based on the ratable amount of PIK Preferred Stock converted into
Seller Subordinated Notes on such date).
(b) Consolidated Interest Coverage Ratio. Permit the Consolidated
Interest Coverage Ratio for any period of four consecutive fiscal quarters of
Holdings (or, if less, the number of full fiscal quarters subsequent to the
Closing Date) ending with any fiscal quarter set forth below to be less than the
ratio set forth below opposite such fiscal quarter:
Fiscal Quarter Consolidated Interest Coverage Ratio
- -------------- ------------------------------------
FQ2 2000 1.80 to 1.00
FQ3 2000 1.90 to 1.00
FQ4 2000 - FQ1 2001 1.95 to 1.00
FQ2 2001 - FQ4 2001 2.00 to 1.00
FQ1 2002 - FQ2 2002 2.05 to 1.00
FQ3 2002 2.10 to 1.00
FQ4 2002 - FQ2 2004 2.15 to 1.00
FQ3 2004 - FQ1 2005 2.25 to 1.00
FQ2 2005 - FQ4 2005 2.35 to 1.00
FQ1 2006 and thereafter 2.50 to 1.00
(c) Consolidated Fixed Charge Coverage Ratio. Permit the
Consolidated Fixed Charge Coverage Ratio for any period of four consecutive
fiscal quarters of Holdings (or, if less, the number of full fiscal quarters
subsequent to the Closing Date) ending with any fiscal quarter set forth below
to be less than the ratio set forth below opposite such fiscal quarter:
Fiscal Quarter Consolidated Fixed Charge Coverage Ratio
- -------------- ----------------------------------------
FQ2 2000 - FQ4 2000 1.10 to 1.00
FQ1 2001 - FQ2 2001 1.15 to 1.00
FQ3 2001 - FQ4 2001 1.20 to 1.00
FQ1 2002 - FQ2 2002 1.25 to 1.00
FQ3 2002 - FQ1 2003 1.30 to 1.00
FQ2 2003 1.25 to 1.00
82
FQ3 2003 1.20 to 1.00
FQ4 2003 1.15 to 1.00
FQ1 2004 1.10 to 1.00
FQ2 2004 and thereafter 1.00 to 1.00
(d) Maintenance of Net Worth. Permit Consolidated Tangible Net Worth
as of the last day of any fiscal quarter of Holdings ending during any fiscal
year set forth below to be less than the amount set forth below opposite such
fiscal year:
Fiscal Quarter Consolidated Tangible Net Worth
- -------------- -------------------------------
FQ2 2000 - FQ1 2001 ($130,000,000)
FQ2 2001 ($127,500,000)
FQ3 2001 ($125,000,000)
FQ4 2001 ($122,500,000)
FQ1 2002 ($120,000,000)
FQ2 2002 ($117,500,000)
FQ3 2002 ($115,000,000)
FQ4 2002 ($112,500,000)
FQ1 2003 ($110,000,000)
FQ2 2003 ($107,500,000)
FQ3 2003 ($105,000,000)
FQ4 2003 ($102,500,000)
FQ1 2004 ($100,000,000)
FQ2 2004 ($97,500,000)
FQ3 2004 ($95,000,000)
FQ4 2004 ($92,500,000)
FQ1 2005 ($90,000,000)
FQ2 2005 ($87,500,000)
FQ3 2005 ($85,000,000)
83
FQ4 2005 ($82,500,000)
FQ1 2006 ($80,000,000)
FQ2 2006 ($77,500,000)
FQ3 2006 ($75,000,000)
FQ4 2006 and thereafter ($72,500,000)
7.2 Limitation on Indebtedness. Create, incur, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan Document;
(b) Indebtedness of either Borrower to any Subsidiary and of any
Wholly Owned Guarantor to either Borrower or any other Subsidiary;
(c) Indebtedness (including, without limitation, Capital Lease
Obligations) secured by Liens permitted by Section 7.3(g) in an aggregate
principal amount not to exceed $2,500,000 at any one time outstanding;
(d) Indebtedness outstanding on the date hereof and listed on
Schedule 7.2(d) and any refinancings, refundings, renewals or extensions thereof
(without any increase in the principal amount thereof or any shortening of the
maturity of any principal amount thereof);
(e) Guarantee Obligations made in the ordinary course of business by
Holdings or any of its Subsidiaries of obligations of either Borrower or any
Guarantor;
(f) (i) Indebtedness of the Borrower in respect of the Senior
Subordinated Notes in an aggregate principal amount not to exceed euro
100,000,000 and (ii) Guarantee Obligations of any Guarantor in respect of such
Indebtedness; provided that such Guarantee Obligations are subordinated to the
obligations of such Guarantor under the Guarantee and Collateral Agreement and
the Foreign Guarantees to the same extent as the obligations of the Borrower in
respect of the Senior Subordinated Notes are subordinated to the Obligations;
(g) (i) unsecured Indebtedness incurred or assumed in connection with
any Permitted Acquisitions, in an aggregate principal amount not to exceed
$5,000,000 at any one time outstanding and (ii) secured Indebtedness assumed in
connection with any Permitted Acquisitions so long as the aggregate principal
amount of all such secured Indebtedness does not exceed $5,000,000 at any one
time outstanding and any such security interest covers only the real or personal
property acquired in such Permitted Acquisition;
(h) Indebtedness of Holdings in respect of any promissory notes
issued by Holdings to certain members of its management as permitted by 7.9(d)
hereof as payment for the redemption by Holdings of certain shares of its
Capital Stock issued to such member;
(i) unsecured Indebtedness of any non-Guarantor Subsidiary to either
Borrower or any Guarantor in an aggregate principal amount for all non-Guarantor
Subsidiaries not to exceed $5,000,000 at any one time outstanding (of which no
more than $1,000,000 may be loans
84
to entities domiciled in any one country) and which, when combined with the
Investments described in Section 7.8(k), shall not exceed $7,500,000; provided
that such loans are evidenced by promissory notes or other instruments which
shall be pledged to the Administrative Agent;
(j) Indebtedness in the form of earnouts payable to management of
Persons acquired in connection with a Permitted Acquisition, in an aggregate
principal amount not to exceed $4,000,000;
(k) Indebtedness of Holdings in the form of the Seller Subordinated
Notes in connection with the conversion of the PIK Preferred Stock described in
Section 7.6(g) in an aggregate principal amount not to exceed euro 10,000,000
(plus any accrued dividends thereon paid prior to such conversion in the form of
additional PIK Preferred Stock); and
(l) additional unsecured Indebtedness of any Subsidiary in an
aggregate principal amount (for all Subsidiaries) not to exceed $3,000,000 at
any one time outstanding.
7.3 Limitation on Liens. Create, incur, assume or suffer to exist
any Lien upon any of its Property, whether now owned or hereafter acquired,
except for:
(a) Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings, provided that adequate reserves with respect
thereto are maintained on the books of Holdings or its Subsidiaries, as the case
may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business which are not
overdue for a period of more than 30 days or that are being contested in good
faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature incurred
in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business that, in the aggregate,
are not substantial in amount and which do not in any case materially detract
from the value of the Property subject thereto or materially interfere with the
ordinary conduct of the business of Holdings or any of its Subsidiaries;
(f) Liens in existence on the date hereof listed on Schedule 7.3(f),
securing Indebtedness permitted by Section 7.2(d), provided that no such Lien is
spread to cover any additional Property after the Closing Date and that the
amount of Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of Holdings or any Subsidiary
incurred pursuant to Section 7.2(c) to finance the acquisition of fixed or
capital assets, provided that (i) such Liens
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shall be created substantially simultaneously with the acquisition of such fixed
or capital assets, (ii) such Liens do not at any time encumber any Property
other than the Property financed by such Indebtedness, (iii) the amount of
Indebtedness secured thereby is not increased and (iv) the amount of
Indebtedness initially secured thereby is not less than 80%, or more than 100%
of the purchase price of such fixed or capital asset;
(h) Liens created pursuant to the Security Documents;
(i) any interest or title of a lessor under any lease entered into by
Holdings or any other Subsidiary in the ordinary course of its business and
covering only the assets so leased; and
(j) liens securing Indebtedness permitted under Section 7.2(g)(ii);
provided that such lien was in existence prior to the Permitted Acquisition and
extends only to the real or personal property subject to such lien prior to the
Permitted Acquisition and not to any other property.
7.4 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or Dispose of all or substantially all
of its Property or business, except that:
(a) any Subsidiary of Holdings may be merged or consolidated (i) with
or into either Borrower (provided that the relevant Borrower shall be the
continuing or surviving corporation), (ii) with or into any Guarantor (provided
that (x) the Guarantor shall be the continuing or surviving corporation or (y)
simultaneously with such transaction, the continuing or surviving corporation
shall become a Guarantor and Holdings and the Borrowers shall comply with
Section 6.9 in connection therewith) or (iii) if such Subsidiary is not a
Guarantor, with or into another Subsidiary which is not a Guarantor; and
(b) any Subsidiary of Holdings may Dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to Holdings or any Guarantor or
if such Subsidiary is not a Guarantor, to another Subsidiary which is not a
Guarantor.
7.5 Limitation on Disposition of Property. Dispose of any of its
Property (including, without limitation, receivables and leasehold interests),
whether now owned or hereafter acquired, or, in the case of any Subsidiary,
issue or sell any shares of such Subsidiary's Capital Stock to any Person,
except:
(a) the Disposition of obsolete, redundant or worn out property in
the ordinary course of business;
(b) the sale of inventory in the ordinary course of business;
(c) Dispositions permitted by Section 7.4(b);
(d) the sale or issuance of any Subsidiary's Capital Stock (i) to
Holdings or any Guarantor or (ii) if such Subsidiary is not wholly-owned by a
Guarantor, on a proportionate basis
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(based on ownership percentage) to any other non-Guarantor Subsidiary which at
the time of such sale or issuance owns Capital Stock in the selling or issuing
Subsidiary;
(e) the sale of the West Bromwich facility at fair market value and
on commercially reasonable terms;
(f) the sale (as a stock sale or asset sale) of the slicer facility
owned by Berkel in LaPorte, Indiana;
(g) the Disposition of other assets having a fair market value not to
exceed $5,000,000 in the aggregate for any fiscal year of Holdings; and
(h) Dispositions constituting Recovery Events, provided, that the
requirements of Section 2.14(b) are complied with in connection therewith.
7.6 Limitation on Restricted Payments. Declare or pay any dividend
on, or make any payment on account of, or set apart assets for a sinking or
other analogous fund for, the purchase, redemption, defeasance, retirement or
other acquisition of, any Capital Stock of Holdings or any Subsidiary, whether
now or hereafter outstanding, or make any other distribution in respect thereof,
either directly or indirectly, whether in cash or property or in obligations of
Holdings or any Subsidiary, or enter into any derivatives or other transaction
with any financial institution, commodities or stock exchange or clearinghouse
(a "Derivatives Counterparty") obligating Holdings or any Subsidiary to make
payments to such Derivatives Counterparty as a result of any change in market
value of any such Capital Stock (collectively, "Restricted Payments"), except
that:
(a) any Subsidiary may make Restricted Payments to Holdings or any
Guarantor or if such Subsidiary is not a Guarantor, to another Subsidiary which
is not a Guarantor and which is the first Subsidiary's immediate parent;
(b) Holdings may make Restricted Payments in the form of common stock
of Holdings;
(c) so long as no Default or Event of Default shall have occurred and
be continuing, Holdings may (i) purchase Holdings' common stock or common stock
options from present or former directors, officers or employees of Holdings or
any Subsidiary upon the death, disability or termination of employment of such
officer or employee, provided, that the aggregate amount of payments under this
clause (i) subsequent to the date hereof (net of any proceeds received by
Holdings subsequent to the date hereof in connection with resales of any common
stock or common stock options so purchased) shall not exceed $5,000,000 during
the term of this Agreement and $2,000,000 in any consecutive twelve-month period
and (ii) pay quarterly management services fees to the Sponsor pursuant to the
Management Agreement in an aggregate amount not to exceed (x) $125,000 in any
fiscal quarter plus (y) the amount of management services fees, if any, which
are in arrears under the Management Agreement, provided, however, that the
aggregate amount of all fees to be paid in any fiscal quarter under this
subparagraph (ii) shall not exceed 150% of the amount otherwise required to be
paid by clause (x) of this subparagraph (ii); and provided, further, that such
payments shall not be made
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earlier than ten (10) days prior to the date such payments are due and payable
pursuant to the terms of the Management Agreement;
(d) Holdings may make a Restricted Payment in the form of promissory
notes issued by Holdings to repurchase or redeem equity interests pursuant to
certain buy-back arrangements with certain members of Holdings' management,
provided that (i) no Default or Event of Default then exists or would result
after the making of such Restricted Payment, (ii) the terms of such notes are
acceptable to the Agents in all respects and (iii) such notes contain
subordination provisions acceptable to the Agents;
(e) Holdings may redeem, on or after December 31, 2005, the Class C
membership interests in the Company pursuant to the terms of its operating
agreement with respect to such interests as in effect on the Closing Date;
(f) Holdings may pay dividends on the PIK Preferred Stock in the form
of additional PIK Preferred Stock, and at any time after the third anniversary
of the Closing Date so long as no Default or Event of Default shall have
occurred and is then continuing or would occur as a result thereof, Holdings may
pay cash dividends on the PIK Preferred Stock in an amount not to exceed euro
1,200,000 in any consecutive twelve month period (plus 12% of the amount by
which the outstanding amount of the PIK Preferred Stock shall have increased as
a result of the payment of dividends thereon in the form of additional PIK
Preferred Stock); and
(g) at any time after the first anniversary of the Closing Date and
so long as the Consolidated Interest Coverage Ratio (excluding the add-backs
specified in the second proviso of the definition of "Consolidated EBITDA") at
the end of the most recently concluded fiscal quarter is not less than 2.50 to
1.00, Holdings may, at the request of the holders of the PIK Preferred Stock,
convert all or a portion of the PIK Preferred Stock into senior subordinated
notes (the "Seller Subordinated Notes") of the Borrower having terms (including
as to maturity) substantially identical to the Senior Subordinated Notes.
7.7 Limitation on Capital Expenditures. Make or commit to make any
Capital Expenditure, except Capital Expenditures of Holdings and its
Subsidiaries in the ordinary course of business not exceeding $12,500,000 in any
fiscal year (or, during the period from the Closing Date to March 31, 2001,
$10,000,000); provided, that (i) up to 50% of any such amount referred to above,
if not so expended in the fiscal year for which it is permitted, may be carried
over for expenditure in the next succeeding fiscal year and (ii) Capital
Expenditures made pursuant to this clause (a) during any fiscal year shall be
deemed made, first, in respect of amounts permitted for such fiscal year as
provided above and second, in respect of amounts carried over from the prior
fiscal year pursuant to subclause (i) above.
7.8 Limitation on Investments. Make any advance, loan, extension of
credit (by way of guaranty or otherwise) or capital contribution to, or purchase
any Capital Stock, bonds, notes, debentures or other debt securities of, or any
assets constituting an ongoing business from, or make any other investment in,
any other Person (all of the foregoing, "Investments"), except:
(a) extensions of trade credit in the ordinary course of business;
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(b) investments in Cash Equivalents;
(c) Investments arising in connection with the incurrence of
Indebtedness permitted by Section 7.2(b) and (e);
(d) loans and advances to employees of Holdings, the Borrowers or any
Subsidiaries of Holdings in the ordinary course of business (including, without
limitation, for travel, entertainment and relocation expenses and for the
purchase of Capital Stock in Holdings) in an aggregate amount for Holdings, the
Borrowers and Subsidiaries of Holdings not to exceed $1,500,000 at any one time
outstanding;
(e) the Acquisition;
(f) Investments in assets useful in the Borrower's business made by
the Borrower or any of its Subsidiaries with the proceeds of any Reinvestment
Deferred Amount;
(g) Investments (other than those relating to the incurrence of
Indebtedness permitted by Section 7.8(c)) by Holdings or any of its Subsidiaries
in either Borrower or any Person that, prior to such Investment, is a Guarantor;
(h) Investments consisting of promissory notes or other obligations
or securities received as proceeds of asset dispositions permitted by Section
7.5;
(i) Investments in connection with Hedge Agreements so long as such
arrangements are in the ordinary course of business and not for speculative
purposes;
(j) any Purchase of any Person or business, either through the
purchase of the assets (including the goodwill) of such Person or business or
the purchase of 100% of the Capital Stock of such Person, if each of the
following conditions is satisfied: (i) the requirements of Section 6.9 have been
satisfied with respect to such Purchase and Holdings shall be in pro forma
compliance with Section 7.1 both before and after giving effect to such Purchase
(as if such acquisition had been consummated on the first day of the relevant
period and assuming adequately documented reductions in management compensation,
rental expenses and, with the prior written approval of the Agents (which
approval shall not be unreasonably withheld), other reasonable cost savings,
expenses and other income statement or operating statement adjustments which are
attributable to the change in ownership and/or management resulting from such
acquisition shall be deemed to have been realized on the first day of such
period); (ii) no Default or Event of Default has occurred and is continuing, or
would occur after giving effect to such Purchase; (iii) the aggregate Purchase
Prices of all such Purchases, shall not exceed $10,000,000 in any fiscal year
(iv) any such Purchase shall have been approved by the Board of Directors or
such comparable governing body of the Person or business being acquired (all
such Purchases, the "Permitted Acquisitions") and (v) after giving effect to any
such Purchase, the sum of (i) cash or Cash Equivalents on the Company's balance
sheet in excess of $5,000,000 and (ii) the aggregate of the Available Revolving
Credit Commitments of all the Lenders shall be at least $10,000,000 ; provided,
that if at any time after the first anniversary of the Closing Date the
Consolidated Leverage Ratio as of the last day of the most recently completed
fiscal quarter for which the relevant financial information is available both
before and after giving pro forma effect
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for such Permitted Acquisition is less than 3.50 to 1.0, then the amount
referred to in clause (iii) shall be increased to $15,000,000 (and if
availability under this proviso is utilized the Consolidated Leverage Ratio
Stepdown Date shall occur);
(k) Investments in non-Guarantor Subsidiaries of Holdings, provided
that the parent of such Subsidiary remains a Borrower or Guarantor hereunder,
the aggregate amount of such Investments shall not exceed $5,000,000 and the
aggregate amount of such Investments, when combined with the aggregate amount of
intercompany loans made in reliance on Section 7.2(i) and outstanding at such
time, shall not exceed $7,500,000; and
(l) in addition to investments otherwise expressly permitted by this
Section 7.8, investments by Holdings or any of its Subsidiaries in an aggregate
amount (valued at cost) not to exceed $5,000,000 in the aggregate during the
term of this Agreement.
7.9 Limitation on Optional Payments and Modifications of Debt
Instruments, etc. (a) Make or offer to make any optional or voluntary
payment, prepayment, repurchase or redemption of, or otherwise voluntarily or
optionally defease, the Senior Subordinated Notes or the Seller Subordinated
Notes, or segregate funds for any such payment, prepayment, repurchase,
redemption or defeasance, or enter into any derivative or other transaction with
any Derivatives Counterparty obligating Holdings or any Subsidiary to make
payments to such Derivatives Counterparty as a result of any change in market
value of the Senior Subordinated Notes or the Seller Subordinated Notes, (b)
amend, modify or otherwise change, or consent or agree to any amendment,
modification, waiver or other change to, any of the terms of the Senior
Subordinated Notes or the Seller Subordinated Notes (other than any such
amendment, modification, waiver or other change which (i) would extend the
maturity or reduce the amount of any payment of principal thereof, reduce the
rate or extend the date for payment of interest thereon or relax any covenant or
other restriction applicable to Holdings or any of its Subsidiaries and (ii)
does not involve the payment of a consent fee), (c) designate any Indebtedness
(other than the Obligations) as "Designated Senior Debt" for the purposes of the
Senior Subordinated Note Indenture or make any similar designation with respect
to the Seller Subordinated Notes or (d) amend its certificate of incorporation
in any manner determined by the Administrative Agent to be adverse to the
Lenders.
7.10 Limitation on Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of Property, the rendering of any service or the payment of any
management, advisory or similar fees (other than the management fees payable
pursuant to the terms of Section 7.6(c)(ii) and the fees payable to the Sponsor
on the Closing Date in connection with the Acquisition and the other
transactions contemplated hereby in amounts previously disclosed to the
Lenders), with any Affiliate (other than Holdings, the Borrowers or any
Guarantor) unless such transaction is (a) otherwise permitted under this
Agreement, (b) in the ordinary course of business of Holdings, the Borrowers or
such Guarantor, as the case may be, and (c) upon fair and reasonable terms no
less favorable to Holdings, the Borrowers or such Guarantor, as the case may be,
than it would obtain in a comparable arm's length transaction with a Person that
is not an Affiliate.
7.11 Limitation on Sales and Leasebacks. Enter into any arrangement
with any Person providing for the leasing by Holdings or any Subsidiary of real
or personal property
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which has been or is to be sold or transferred by Holdings or such Subsidiary to
such Person or to any other Person to whom funds have been or are to be advanced
by such Person on the security of such property or rental obligations of
Holdings or such Subsidiary.
7.12 Limitation on Changes in Fiscal Periods. Permit the fiscal year
of Holdings to end on a day other than March 31 or change Holdings' method of
determining fiscal quarters.
7.13 Limitation on Negative Pledge Clauses. Enter into or suffer to
exist or become effective any agreement that prohibits or limits the ability of
Holdings or any of its Subsidiaries to create, incur, assume or suffer to exist
any Lien upon any of its Property or revenues, whether now owned or hereafter
acquired, to secure the Obligations or, in the case of any Guarantor, its
obligations under the Guarantee and Collateral Agreement, the Foreign Collateral
Documents or the Foreign Guarantees, as the case may be, other than (a) this
Agreement and the other Loan Documents and (b) any agreements governing any
purchase money Liens or Capital Lease Obligations otherwise permitted hereby (in
which case, any prohibition or limitation shall only be effective against the
assets financed thereby).
7.14 Limitation on Restrictions on Subsidiary Distributions. Enter
into or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Subsidiary to (a) make Restricted Payments in
respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness
owed to, Holdings or any other Subsidiary, (b) make Investments in Holdings or
any other Subsidiary or (c) transfer any of its assets to Holdings or any other
Subsidiary, except for such encumbrances or restrictions existing under or by
reason of (i) any restrictions existing under the Loan Documents and (ii) any
restrictions with respect to a Subsidiary imposed pursuant to an agreement that
has been entered into in connection with the Disposition of all or substantially
all of the Capital Stock or assets of such Subsidiary permitted hereunder.
7.15 Limitation on Lines of Business. Enter into any business,
either directly or through any Subsidiary, except for those businesses in which
Holdings and its Subsidiaries are engaged on the date of this Agreement (after
giving effect to the Acquisition) or that are reasonably related thereto.
7.16 Limitation on Amendments to Acquisition Documentation. (a)
Amend, supplement or otherwise modify (pursuant to a waiver or otherwise) the
terms and conditions of the indemnities and licenses furnished to Holdings or
any of its Subsidiaries pursuant to the Acquisition Documentation such that
after giving effect thereto such indemnities or licenses shall be materially
less favorable to the Loan Parties or the Lenders with respect thereto or (b)
otherwise amend, supplement or otherwise modify the terms and conditions of the
Acquisition Documentation except to the extent that any such amendment,
supplement or modification could not reasonably be expected to have a Material
Adverse Effect.
7.17 Limitation on Activities of Holdings. In the case of Holdings,
notwithstanding anything to the contrary in this Agreement or any other Loan
Document, (a) conduct, transact or otherwise engage in, or commit to conduct,
transact or otherwise engage in, any business or operations other than those
incidental to its ownership of the Capital Stock of Weigh-Tronix, Inc. and SWT
Holdings B.V. or incident to the issuance of the PIK Preferred
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Stock and the Seller Subordinated Notes and the transactions in connection
therewith permitted by this Agreement, (b) incur, create, assume or suffer to
exist any Indebtedness or other liabilities or financial obligations, except (i)
nonconsensual obligations imposed by operation of law, (ii) pursuant to the Loan
Documents to which it is a party and the Senior Subordinated Note Indenture,
(iii) obligations with respect to its Capital Stock and (iv) pursuant to the
Seller Subordinated Notes, or (c) own, lease, manage or otherwise operate any
properties or assets (including cash (other than cash received in connection
with dividends made by any Subsidiary in accordance with Section 7.6 pending
application in the manner contemplated by said Section) and cash equivalents)
other than the ownership of shares of Capital Stock of Weigh-Tronix, Inc. and
SWT Holdings B.V.
7.18 Limitation on Hedge Agreements. Enter into any Hedge Agreement
other than Hedge Agreements entered into in the ordinary course of conducting
its business, and not for speculative purposes, to protect against changes in
interest rates, foreign exchange rates or for commodity price protection.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) Either Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms hereof; or either
Borrower shall fail to pay any interest on any Loan or Reimbursement Obligation,
or any other amount payable hereunder or under any other Loan Document, within
five days after any such interest or other amount becomes due in accordance with
the terms hereof; or
(b) Any representation or warranty made or deemed made by any Loan
Party herein or in any other Loan Document or that is contained in any
certificate, document or financial or other statement furnished by it at any
time under or in connection with this Agreement or any such other Loan Document
shall prove to have been inaccurate in any material respect on or as of the date
made or deemed made or furnished; or
(c) (i) Any Loan Party shall default in the observance or
performance of any agreement contained in Section 5.1(x), Section 5.1(y), clause
(i) or (ii) of Section 6.4(a) (with respect to Holdings and the Borrowers only),
Section 6.7(a) or Section 7, or in Sections 5.5, 5.6 or 5.7 of the Guarantee and
Collateral Agreement or (ii) an "Event of Default" under and as defined in any
Mortgage shall have occurred and be continuing; or
(d) Any Loan Party shall default in the observance or performance of
any other agreement contained in this Agreement or any other Loan Document
(other than as provided in paragraphs (a) through (c) of this Section), and such
default shall continue unremedied for a period of 30 days; or
(e) Holdings or any of its Subsidiaries shall (i) default in making
any payment of any principal of any Indebtedness (including, without limitation,
any Guarantee Obligation, but excluding the Loans and Reimbursement Obligations)
on the scheduled or original due date with
92
respect thereto; or (ii) default in making any payment of any interest on any
such Indebtedness beyond the period of grace, if any, provided in the instrument
or agreement under which such Indebtedness was created; or (iii) default in the
observance or performance of any other agreement or condition relating to any
such Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition exist,
the effect of which default or other event or condition is to cause, or to
permit the holder or beneficiary of such Indebtedness (or a trustee or agent on
behalf of such holder or beneficiary) to cause, with the giving of notice if
required, such Indebtedness to become due prior to its stated maturity or to
become subject to or mandatory offer to purchase by the obligor thereunder or
(in the case of any such Indebtedness constituting a Guarantee Obligation) to
become payable; provided, that a default, event or condition described in clause
(i), (ii) or (iii) of this paragraph (e) shall not at any time constitute an
Event of Default unless, at such time, one or more defaults, events or
conditions of the type described in clauses (i), (ii) and (iii) of this
paragraph (e) shall have occurred and be continuing with respect to Indebtedness
the outstanding principal amount of which exceeds in the aggregate $2,500,000;
or
(f) (i) Holdings or any of its Subsidiaries shall commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian, conservator or other
similar official for it or for all or any substantial part of its assets, or
Holdings or any of its Subsidiaries shall make a general assignment for the
benefit of its creditors; or (ii) there shall be commenced against Holdings or
any of its Subsidiaries any case, proceeding or other action of a nature
referred to in clause (i) above that (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall be
commenced against Holdings or any of its Subsidiaries any case, proceeding or
other action seeking issuance of a warrant of attachment, execution, distraint
or similar process against all or any substantial part of its assets that
results in the entry of an order for any such relief that shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60 days from the
entry thereof; or (iv) Holdings or any of its Subsidiaries shall take any action
in furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v)
Holdings or any of its Subsidiaries shall generally not, or shall be unable to,
or shall admit in writing its inability to, pay its debts as they become due; or
(g) (i)Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan,
(ii) any "accumulated funding deficiency" (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Plan or any Lien in favor
of the PBGC or a Plan shall arise on the assets of the Borrower or any Commonly
Controlled Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Single Employer Plan, which
Reportable Event or commencement of proceedings or appointment of a trustee is,
in the reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any Single
Employer Plan shall terminate for purposes of Title IV of ERISA, (v)
93
Holdings or any Commonly Controlled Entity shall, or in the reasonable opinion
of the Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or
(vi) any other event or condition shall occur or exist with respect to a Plan;
and in each case in clauses (i) through (vi) above, such event or condition,
together with all other such events or conditions, if any, could, in the sole
judgment of the Required Lenders, reasonably be expected to have a Material
Adverse Effect; or
(h) One or more judgments or decrees shall be entered against
Holdings or any of its Subsidiaries involving for Holdings and its Subsidiaries
taken as a whole a liability (not paid or fully covered by insurance as to which
the relevant insurance company has acknowledged coverage) of $1,000,000 or more,
and all such judgments or decrees shall not have been vacated, discharged,
stayed or bonded pending appeal within 30 days from the entry thereof; or
(i) Any of the Security Documents shall cease, for any reason (other
than by reason of the express release thereof pursuant to Section 10.15), to be
in full force and effect, or any Loan Party or any Affiliate of any Loan Party
shall so assert, or any Lien created by any of the Security Documents shall
cease to be enforceable and of the same effect and priority purported to be
created thereby; or
(j) The guarantee contained in Section 2 of the Guarantee and
Collateral Agreement or in any Foreign Guarantee shall cease, for any reason
(other than by reason of the express release thereof pursuant to Section 10.15),
to be in full force and effect or any Loan Party or any Affiliate of any Loan
Party shall so assert; or
(k) (i) at any time prior to the Initial Public Offering of Holdings,
the Permitted Investors shall cease to have the power to vote or direct the
voting of securities having more than 50% of the ordinary voting power for the
election of directors of Holdings (determined on a fully diluted basis); (ii) at
any time after the Initial Public Offering of Holdings, (A) any person or group
of persons (within the meaning of Section 13 or 14 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")), other than the Permitted
Investors or any other Person who owns Capital Stock in Holdings on the date
hereof, shall become, or obtain rights (whether by means or warrants, options or
otherwise) to become, the "beneficial owner" (as defined in Rules 13(d)-3 and
13(d)-5 under the Exchange Act) of 20% or more of the outstanding shares of
common stock or membership interests of Holdings or (B) the Permitted Investors
shall cease to have the power to vote or direct the voting of securities having
more than 35% of the ordinary voting power for the election of directors of
Holdings (determined on a fully diluted basis); (iii) the board of directors of
Holdings shall cease to consist of a majority of Continuing Directors; (iv)
Holdings shall cease to own and control, of record and beneficially, directly or
indirectly, 100% of each class of outstanding Capital Stock of each Borrower
free and clear of all Liens (except Liens created by the Security Documents); or
(v) a Specified Change of Control shall occur;
(l) The Senior Subordinated Notes or the Seller Subordinated Notes or
the guarantees thereof shall cease, for any reason, to be validly subordinated
to the Obligations or the obligations of the Guarantors under the Guarantee and
Collateral Agreement or any Foreign Guarantee, as the case may be, as provided
in the Senior Subordinated Note Indenture or the Seller Subordinated Notes, as
the case may be, or any Loan Party, any Affiliate of any Loan
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Party, the trustee in respect of the Senior Subordinated Notes or the Seller
Subordinated Notes (if any) or the holders of at least 25% in aggregate
principal amount of the Senior Subordinated Notes or the Seller Subordinated
Notes shall so assert;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to either Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) shall immediately become due and payable, and (B) if such event is
any other Event of Default, either or both of the following actions may be
taken: (i) with the consent of the Majority Revolving Credit Facility Lenders,
the Administrative Agent may, or upon the request of the Majority Revolving
Credit Facility Lenders, the Administrative Agent shall, by notice to the
Borrower declare the Revolving Credit Commitments to be terminated forthwith,
whereupon the Revolving Credit Commitments shall immediately terminate; and (ii)
with the consent of the Required Lenders, the Administrative Agent may, or upon
the request of the Required Lenders, the Administrative Agent shall, by notice
to the Borrowers, declare the Loans hereunder (with accrued interest thereon)
and all other amounts owing under this Agreement and the other Loan Documents
(including, without limitation, all amounts of L/C Obligations, whether or not
the beneficiaries of the then outstanding Letters of Credit shall have presented
the documents required thereunder) to be due and payable forthwith, whereupon
the same shall immediately become due and payable. In the case of all Letters
of Credit with respect to which presentment for honor shall not have occurred at
the time of an acceleration pursuant to this paragraph, the Borrower shall at
such time deposit in a cash collateral account opened by the Administrative
Agent an amount equal to the aggregate then undrawn and unexpired amount of such
Letters of Credit. Amounts held in such cash collateral account shall be
applied by the Administrative Agent to the payment of drafts drawn under such
Letters of Credit, and the unused portion thereof after all such Letters of
Credit shall have expired or been fully drawn upon, if any, shall be applied to
repay other obligations of the Borrower hereunder and under the other Loan
Documents. After all such Letters of Credit shall have expired or been fully
drawn upon, all Reimbursement Obligations shall have been satisfied and all
other obligations of the Borrower hereunder and under the other Loan Documents
shall have been paid in full, the balance, if any, in such cash collateral
account shall be returned to the Borrower (or such other Person as may be
lawfully entitled thereto).
SECTION 9. THE AGENTS
9.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Agents as the agents of such Lender under this Agreement and the
other Loan Documents, and each Lender irrevocably authorizes each Agent, in such
capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to such Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, no Agent shall have any duties or responsibilities,
except those expressly set forth herein, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities,
95
duties, obligations or liabilities shall be read into this Agreement or any
other Loan Document or otherwise exist against any Agent. As are independent
contractors empowered by the Lenders to exercise certain rights and perform
certain duties and responsibilities hereunder and under the other Loan
Documents, the Agents are nevertheless "representatives" of the Lenders, as that
term is defined in Article 1 of the Uniform Commercial Code, for purposes of
actions for the benefit of the Agents with respect to all collateral security
and guaranties contemplated by the Loan Documents. Such actions include the
designation of the Administrative Agent as "secured party", "mortgagee" or the
like on all financing statements and other documents and instruments, whether
recorded or otherwise, relating to the attachment, perfection, priority or
enforcement of any security interests, mortgages or deeds of trust in collateral
security intended to secure the payment or performance of any of the
Obligations, all for the benefit of the Agents.
9.2 Delegation of Duties. Each Agent may execute any of its duties
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
9.3 Exculpatory Provisions. Neither any Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates shall be
(i) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement or any other Loan Document
(except to the extent that any of the foregoing are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from its or such Person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any Loan Party or any officer thereof
contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Agents under or in connection with, this Agreement or any other Loan
Document or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document or for any failure
of any Loan Party a party thereto to perform its obligations hereunder or
thereunder. The Agents shall not 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 any Loan Party.
9.4 Reliance by Agents. Each Agent shall be entitled to rely, and
shall be fully protected in relying, upon any instrument, writing, resolution,
notice, consent, certificate, affidavit, letter, telecopy, telex or teletype
message, statement, order 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, without
limitation, counsel to the Loan Parties), independent accountants and other
experts selected by such Agent. The Agents may deem and treat the payee of any
Note as the owner thereof for all purposes unless such Note shall have been
transferred in accordance with Section 10.6 and all actions required by such
Section in connection with such transfer shall have been taken. Each 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 Required Lenders (or, if so specified by this Agreement,
all Lenders) as it deems appropriate or it shall
96
first be indemnified to its satisfaction by the Lenders against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action. Each Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Loan Documents in accordance with a request of the Required Lenders (or,
if so specified by this Agreement, all Lenders or any other instructing group of
Lenders specified by this Agreement), and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Loans.
9.5 Notice of Default. No Agent shall be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless
such Agent shall have received notice from a Lender, Holdings or a 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
Administrative Agent shall receive such a notice, the Administrative Agent shall
give notice thereof to the Lenders. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders (or, if so specified by this Agreement, all
Lenders or any other instructing group of Lenders specified by this Agreement);
provided that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the
Lenders.
9.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly
acknowledges that neither any of the Agents nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or affiliates have
made any representations or warranties to it and that no act by any Agent
hereafter taken, including any review of the affairs of a Loan Party or any
affiliate of a Loan Party, shall be deemed to constitute any representation or
warranty by any Agent to any Lender. Each Lender represents to the Agents that
it has, independently and without reliance upon any Agent or any other Lender,
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon any Agent or any other Lender, 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
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, no Agent shall have any duty or responsibility
to provide any Lender with any credit or other information concerning the
business, operations, property, condition (financial or otherwise), prospects or
creditworthiness of any Loan Party or any affiliate of a Loan Party that may
come into the possession of such Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
9.7 Indemnification. The Lenders agree to indemnify each Agent in
its capacity as such (to the extent not reimbursed by Holdings or the Borrowers
and without limiting the
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obligation of Holdings or the Borrowers to do so), ratably according to their
respective Aggregate Exposure Percentages in effect on the date on which
indemnification is sought under this Section (or, if indemnification is sought
after the date upon which the Commitments shall have terminated and the Loans
shall have been paid in full, ratably in accordance with such Aggregate Exposure
Percentages immediately prior to such date), for, and to save each Agent
harmless from and against, any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever that may at any time (including, without limitation, at
any time following the payment of the Loans) be imposed on, incurred by or
asserted against such Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by such Agent
under or in connection with any of the foregoing; provided that no Lender shall
be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements that are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from such Agent's gross negligence or
willful misconduct. The agreements in this Section shall survive the payment of
the Loans and all other amounts payable hereunder.
9.8 Agent in Its Individual Capacity. Each Agent and its affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with any Loan Party as though such Agent were not an Agent. With
respect to its Loans made or renewed by it and with respect to any Letter of
Credit issued or participated in by it, each Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and
may exercise the same as though it were not an Agent, and the terms "Lender" and
"Lenders" shall include each Agent in its individual capacity.
9.9 Successor Agents. The Administrative Agent may resign as
Administrative Agent upon 10 days' notice to the Lenders and the Borrower. If
the Administrative Agent shall resign as Administrative Agent under this
Agreement and the other Loan Documents, then the Required Lenders shall appoint
from among the Lenders a successor agent for the Lenders, which successor agent
shall (unless an Event of Default under Section 8(a) or Section 8(f) with
respect to either Borrower shall have occurred and be continuing) be subject to
approval by the Borrower (which approval shall not be unreasonably withheld or
delayed), whereupon such successor agent shall succeed to the rights, powers and
duties of the Administrative Agent, and the term "Administrative Agent" shall
mean such successor agent effective upon such appointment and approval, and the
former Administrative Agent's rights, powers and duties as Administrative Agent
shall be terminated, without any other or further act or deed on the part of
such former Administrative Agent or any of the parties to this Agreement or any
holders of the Loans. If no successor agent has accepted appointment as
Administrative Agent by the date that is 10 days following a retiring
Administrative Agent's notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective, and the
Lenders shall assume and perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above. The Syndication Agent may, at any time, by notice
to the Lenders and the Administrative Agent, resign as Syndication Agent
hereunder, whereupon the duties, rights, obligations and responsibilities of the
Syndication Agent hereunder shall automatically be assumed by, and inure to the
benefit of, the Administrative Agent, without any further act by the Syndication
Agent, the
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Administrative Agent or any Lender. After any retiring Agent's resignation as
Agent, the provisions of this Section 9 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement and the other Loan Documents.
9.10 Authorization to Release Liens and Guarantees. The
Administrative Agent is hereby irrevocably authorized by each of the Lenders to
effect any release of Liens or guarantee obligations contemplated by Section
10.15.
9.11 The Arrangers. The Arrangers, in their capacity as such, shall
have no duties or responsibilities, and shall incur no liability, under this
Agreement and the other Loan Documents.
9.12 Execution of Security Trust Deeds. Each Lender irrevocably
authorizes the Security Agent to sign the English Security Trust Deed and the
Irish Security Trust Deed and each Deed of Accession delivered to the Security
Agent thereunder on its behalf and agrees to be bound by the terms of the
English Security Trust Deed and the Irish Security Trust Deed.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement or any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 10.1. The
Required Lenders and each Loan Party party to the relevant Loan Document may, or
(with the written consent of the Required Lenders) the Agents and each Loan
Party party to the relevant Loan Document may, from time to time, (a) enter into
written amendments, supplements or modifications hereto and to the other Loan
Documents (including amendments and restatements hereof or thereof) for the
purpose of adding any provisions to this Agreement or the other Loan Documents
or changing in any manner the rights of the Lenders or of the Loan Parties
hereunder or thereunder or (b) waive, on such terms and conditions as may be
specified in the instrument of waiver, any of the requirements of this Agreement
or the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall:
(i) forgive the principal amount or extend the final scheduled
date of maturity of any Loan or Reimbursement Obligation, extend the
scheduled date of any amortization payment in respect of any Term Loan,
reduce the stated rate of any interest or fee payable hereunder or extend
the scheduled date of any payment thereof, or increase the amount or extend
the expiration date of any Commitment of any Lender, in each case without
the consent of each Lender directly affected thereby;
(ii) amend, modify or waive any provision of this Section or
reduce any percentage specified in the definition of Required Lenders,
consent to the assignment or transfer by either Borrower of any of its
rights and obligations under this Agreement and the other Loan Documents,
release all or substantially all of the Collateral or release all or
substantially all of the Guarantors from their guarantee obligations under
the Guarantee and Collateral Agreement and the Foreign Guarantees, in each
case without the consent of all Lenders;
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(iii) amend, modify or waive any condition precedent to any
extension of credit under the Revolving Credit Facility set forth in
Section 5.2 (including, without limitation, the waiver of an existing
Default or Event of Default required to be waived in order for such
extension of credit to be made) without the consent of any Majority
Revolving Credit Facility Lenders;
(iv) reduce the percentage specified in the definition of
Majority Facility Lenders with respect to any Facility without the written
consent of all Lenders under such Facility;
(v) amend, modify or waive any provision of Section 9 without the
consent of any Agent affected thereby;
(vi) amend, modify or waive any provision of Section 2.8 or 2.9
without the written consent of the Swing Line Lender;
(vii) amend, modify or waive any provision of Section 2.20
without the consent of each Lender directly affected thereby; or
(viii) amend, modify or waive any provision of Section 3 without
the consent of the Issuing Lender.
Any such waiver and any such amendment, supplement or modification
shall apply equally to each of the Lenders and shall be binding upon the Loan
Parties, the Lenders, the Administrative Agent and all future holders of the
Loans. In the case of any waiver, the Loan Parties, the Lenders and the
Administrative Agent shall be restored to their former position and rights
hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon. Any such waiver, amendment, supplement or
modification shall be effected by a written instrument signed by the parties
required to sign pursuant to the foregoing provisions of this Section; provided,
that delivery of an executed signature page of any such instrument by facsimile
transmission shall be effective as delivery of a manually executed counterpart
thereof.
For the avoidance of doubt, this Agreement may be amended (or amended
and restated) with the written consent of the Required Lenders, the
Administrative Agent and each Loan Party to each relevant Loan Document (x) to
add one or more additional credit facilities to this Agreement and to permit the
extensions of credit from time to time outstanding thereunder and the accrued
interest and fees in respect thereof (collectively, the "Additional Extensions
of Credit") to share ratably in the benefits of this Agreement and the other
Loan Documents with the Term Loans and Revolving Extensions of Credit and the
accrued interest and fees in respect thereof and (y) to include appropriately
the Lenders holding such credit facilities in any determination of the Required
Lenders and Majority Revolving Facility Lenders; provided, however, that no such
amendment shall permit the Additional Extensions of Credit to share ratably with
or with preference to the Term Loans in the application of mandatory prepayments
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without the consent of the Majority Facility Lenders in respect of the Tranche A
Term Loan Facility and the Tranche B Term Loan Facility.
10.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed (a) in the case of Holdings, the Borrowers and the Agents,
as follows and (b) in the case of the Lenders, as set forth in an administrative
questionnaire delivered to the Administrative Agent or (c) in the case of any
party, to such other address as such party may hereafter notify to the other
parties hereto:
Holdings: Weigh-Tronix, LLC
293 S. Main Street
Providence, Rhode Island 02903
Attention: Chief Financial Officer
Telephone: (401) 272-4402
Facsimile: (401) 751-8829
with a copy to: Berkshire Partners, LLC
One Boston Place
33rd Floor
Boston, MA 02108
Attention: Bradley M. Bloom
Telephone: (617) 227-0050
Facsimile: (617) 227-6105
The Borrower: SWT Finance B.V.
c/o Weigh-Tronix, LLC
293 S. Main Street
Providence, Rhode Island 02903
Attention: Chief Financial Officer
Telephone: (401) 272-4402
Facsimile: (401) 751-8829
with a copy to: Berkshire Partners, LLC
One Boston Place
33rd Floor
Boston, MA 02108
Attention: Bradley M. Bloom
Telephone: (617) 227-0050
Facsimile: (617) 227-6105
The Canadian Borrower: Weigh-Tronix Canada, ULC
c/o Weigh-Tronix, LLC
293 S. Main Street
Providence, Rhode Island 02903
Attention: Chief Financial Officer
101
Telephone: (401) 272-4402
Facsimile: (401) 751-8829
with a copy to: Berkshire Partners, LLC
One Boston Place
33rd Floor
Boston, MA 02108
Attention: Bradley M. Bloom
Telephone: (617) 227-0050
Facsimile: (617) 227-6105
The Syndication Agent: Lehman Commercial Paper Inc.
3 World Financial Center
New York, New York 10285
Attention: Andrew Keith
Telecopy: (212) 526-7691
Telephone: (212) 526-4059
The Administrative Agent
(in respect of
borrowings in Dollars): Fleet National Bank
100 Federal Street
MA DE 10307C
Boston, Massachusetts 02110
Attention: Al Lima
Telephone: (617) 346-4665
Facsimile: (617) 346-5833
with copies to: Fleet National Bank
100 Federal Street
MA DE 10011B
Boston, Massachusetts 02110
Attention: Connie Moore
Telephone: (617) 434-9383
Facsimile: (617) 434-4929
and Lehman Commercial Paper Inc.
3 World Financial Center
New York, New York 10285
Attention: Andrew Keith
Telecopy: (212) 526-7691
Telephone: (212) 526-4059
The Administrative Agent
(in respect of borrowings
in Euro and Sterling): Fleet National Bank
39 Victoria Street
102
London SW1H OEE
Attention: Mike Rowe
Telephone: 44 (0) 207-932-9253
Facsimile: 44 (0) 207-932-9364
with copies to: Fleet National Bank
100 Federal Street
MA DE 10011B
Boston, Massachusetts 02110
Attention: Connie Moore
Telephone: (617) 434-9383
Facsimile: (617) 434-4929
and Lehman Commercial Paper Inc.
3 World Financial Center
New York, New York 10285
Attention: Andrew Keith
Telecopy: (212) 526-7691
Telephone: (212) 526-4059
The Administrative Agent
(in respect of all
other notices): Fleet National Bank
100 Federal Street
MA DE 10307C
Boston, Massachusetts 02110
Attention: Al Lima
Telephone: (617) 346-4665
Facsimile: (617) 346-5833
with copies to: Fleet National Bank
100 Federal Street
MA DE 10011B
Boston, Massachusetts 02110
Attention: Connie Moore
Telephone: (617) 434-9383
Facsimile: (617) 434-4929
and Lehman Commercial Paper Inc.
3 World Financial Center
New York, New York 10285
Attention: Andrew Keith
Telecopy: (212) 526-7691
Telephone: (212) 526-4059
Issuing Lender: As notified by the Issuing Lender to the
Administrative Agent and the Borrower
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provided that any notice, request or demand to or upon any Agent, the Issuing
Lender or any Lender shall not be effective until received.
10.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of any Agent or any Lender, any right, remedy,
power or privilege hereunder or under the other Loan Documents 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. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
10.4 Survival of Representations and Warranties. All representations
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans and other extensions of credit hereunder.
10.5 Payment of Expenses. Each of Holdings and each of the Borrowers
agrees (a) to pay or reimburse the Agents for all their reasonable out-of-pocket
costs and expenses incurred in connection with the syndication of the Facilities
(other than fees payable to syndicate members) and the development, preparation
and execution of, and any amendment, supplement or modification to, this
Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including, without limitation, the
reasonable fees and disbursements and other charges of counsel to the
Administrative Agent, (b) to pay or reimburse each Lender and the Agents for all
their costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the other Loan Documents and
any such other documents, including, without limitation, the fees and
disbursements of counsel (including the allocated fees and disbursements and
other charges of in-house counsel) to each Lender and of counsel to the Agents,
(c) to pay, indemnify, or reimburse each Lender and the Agents for, and hold
each Lender and the Agents harmless from, any and all recording and filing fees
and any and all liabilities with respect to, or resulting from any delay in
paying, stamp, excise and other taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Agreement, the other Loan Documents and any such other
documents, and (d) to pay, indemnify or reimburse each Lender, each Agent, their
respective affiliates, and their respective officers, directors, trustees,
employees, advisors, agents and controlling persons (each, an "Indemnitee") for,
and hold each Indemnitee harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration
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of this Agreement, the other Loan Documents and any such other documents,
including, without limitation, any of the foregoing relating to the use of
proceeds of the Loans or the violation of, noncompliance with or liability
under, any Environmental Law applicable to the operations of Holdings, any of
its Subsidiaries or any of the Properties and the fees and disbursements and
other charges of legal counsel in connection with claims, actions or proceedings
by any Indemnitee against Holdings or the Borrowers hereunder (all the foregoing
in this clause (d), collectively, the "Indemnified Liabilities"), provided,
neither Holdings nor either Borrower shall have any obligation hereunder to any
Indemnitee with respect to Indemnified Liabilities to the extent such
Indemnified Liabilities are found by a final and nonappealable decision of a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of such Indemnitee. Without limiting the foregoing, and to
the extent permitted by applicable law, Holdings and the Borrowers agree not to
assert and to cause their respective Subsidiaries not to assert, and hereby
waive and agree to cause their respective Subsidiaries so to waive, all rights
for contribution or any other rights of recovery with respect to all claims,
demands, penalties, fines, liabilities, settlements, damages, costs and expenses
of whatever kind or nature, under or related to Environmental Laws, that any of
them might have by statute or otherwise against any Indemnitee. All amounts due
under this Section shall be payable not later than 30 days after written demand
therefor. The agreements in this Section shall survive repayment of the Loans
and all other amounts payable hereunder.
10.6 Successors and Assigns; Participations and Assignments. (a)
This Agreement shall be binding upon and inure to the benefit of Holdings, the
Borrowers, the Lenders, the Agents, all future holders of the Loans and their
respective successors and assigns, except that neither Holdings nor either
Borrower may assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of the Agents and each Lender.
(b) Any Lender may, without the consent of Holdings or the Borrowers,
in accordance with applicable law, at any time sell to one or more banks,
financial institutions or other entities (each, a "Participant") participating
interests in any Loan owing to such Lender, any Commitment of such Lender or any
other interest of such Lender hereunder and under the other Loan Documents. In
the event of any such sale by a Lender of a participating interest to a
Participant, such Lender's obligations under this Agreement to the other parties
to this Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the holder of
any such Loan for all purposes under this Agreement and the other Loan
Documents, and Holdings, the Borrowers and the Agents shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. In no event
shall any Participant under any such participation have any right to approve any
amendment or waiver of any provision of any Loan Document, or any consent to any
departure by any Loan Party therefrom, except to the extent that such amendment,
waiver or consent would require the consent of all Lenders pursuant to Section
10.1. Holdings and the Borrowers agree that if amounts outstanding under this
Agreement and the Loans are due or 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 maximum extent permitted by applicable law, be deemed
to have the right of setoff 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
105
Lender under this Agreement, provided that, in purchasing such participating
interest, such Participant shall be deemed to have agreed to share with the
Lenders the proceeds thereof as provided in Section 10.7(a) as fully as if such
Participant were a Lender hereunder. Holdings and the Borrowers also agree that
each Participant shall be entitled to the benefits of Sections 2.21, 2.22 and
2.23 with respect to its participation in the Commitments and the Loans
outstanding from time to time as if such Participant were a Lender; provided
that, in the case of Section 2.22, such Participant shall have complied with the
requirements of said Section, and provided, further, that no Participant shall
be entitled to receive any greater amount pursuant to any such Section than the
transferor Lender would have been entitled to receive in respect of the amount
of the participation transferred by such transferor Lender to such Participant
had no such transfer occurred.
(c) Any Lender (an "Assignor") may, in accordance with applicable law
and upon written notice to the Administrative Agent, at any time and from time
to time assign to any Lender or any affiliate or Control Investment Affiliate
thereof or, with the consent of Holdings and the Agents and, in the case of any
assignment of Revolving Credit Commitments, the written consent of the Issuing
Lender and the Swing Line Lender (which, in each case, shall not be unreasonably
withheld or delayed) (provided (x) that no such consent need be obtained by any
Lehman Entity for a period of 180 days following the Closing Date and (y) the
consent of Holdings need not be obtained with respect to any assignment of Term
Loans), to an additional bank, financial institution or other entity (an
"Assignee") all or any part of its rights and obligations under this Agreement
pursuant to an Assignment and Acceptance, substantially in the form of Exhibit
E, executed by such Assignee and such Assignor (and, where the consent of
Holdings, the Agents or the Issuing Lender or the Swing Line Lender is required
pursuant to the foregoing provisions, by Holdings and such other Persons) and
delivered to the Administrative Agent for its acceptance and recording in the
Register; provided that no such assignment to an Assignee (other than any Lender
or any affiliate thereof) shall be in an aggregate principal amount of less than
$2,500,000 (other than in the case of an assignment of all of a Lender's
interests under this Agreement), unless otherwise agreed by Holdings and the
Agents. Any such assignment need not be ratable as among the Facilities. Upon
such execution, delivery, acceptance and recording, from and after the effective
date determined pursuant to such Assignment and Acceptance, (x) the Assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
with Commitments and/or Loans as set forth therein, and (y) the Assignor
thereunder shall, to the extent provided in such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all of an Assignor's rights and obligations
under this Agreement, such Assignor shall cease to be a party hereto, except as
to Sections 2.21, 2.22 and 10.5 in respect of the period prior to such effective
date). Notwithstanding any provision of this Section, the consent of Holdings
shall not be required for any assignment that occurs at any time when any Event
of Default shall have occurred and be continuing.
(d) The Administrative Agent shall, on behalf of Holdings and the
Borrowers, maintain at its address referred to in Section 10.2 a copy of each
Assignment and Acceptance delivered to it and a register (the "Register") for
the recordation of the names and addresses of the Lenders and the Commitment of,
and principal amount of the Loans owing to, each Lender from time to time. The
entries in the Register shall be conclusive, in the absence of manifest
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error, and Holdings, the Borrowers, each Agent and the Lenders shall treat each
Person whose name is recorded in the Register as the owner of the Loans and any
Notes evidencing such Loans recorded therein for all purposes of this Agreement.
Any assignment of any Loan, whether or not evidenced by a Note, shall be
effective only upon appropriate entries with respect thereto being made in the
Register (and each Note shall expressly so provide). Any assignment or transfer
of all or part of a Loan evidenced by a Note shall be registered on the Register
only upon surrender for registration of assignment or transfer of the Note
evidencing such Loan, accompanied by a duly executed Assignment and Acceptance;
thereupon one or more new Notes in the same aggregate principal amount shall be
issued to the designated Assignee, and the old Notes shall be returned by the
Administrative Agent to the relevant Borrower marked "canceled". The Register
shall be available for inspection by Holdings, the Borrowers or any Lender (with
respect to any entry relating to such Lender's Loans) at any reasonable time and
from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
Assignor and an Assignee (and, in any case where the consent of any other Person
is required by Section 10.6(c), by each such other Person) together with payment
to the Administrative Agent of a registration and processing fee of $3,500
(except that no such registration and processing fee shall be payable (y) in
connection with an assignment by or to any Lehman Entity or (z) in the case of
an Assignee which is already a Lender or is an affiliate of a Lender or a Person
under common management with a Lender), the Administrative Agent shall (i)
promptly accept such Assignment and Acceptance and (ii) on the effective date
determined pursuant thereto record the information contained therein in the
Register and give notice of such acceptance and recordation to the Lenders, the
Agents and Holdings. On or prior to such effective date, the relevant Borrower,
at its own expense, upon request, shall execute and deliver to the
Administrative Agent (in exchange for the Revolving Credit Note and/or
applicable Term Notes, as the case may be, of the assigning Lender) a new
Revolving Credit Note and/or applicable Term Notes, as the case may be, to the
order of such Assignee in an amount equal to the Revolving Credit Commitment
and/or applicable Term Loans, as the case may be, assumed or acquired by it
pursuant to such Assignment and Acceptance and, if the Assignor has retained a
Revolving Credit Commitment and/or Term Loans, as the case may be, upon request,
a new Revolving Credit Note and/or Term Notes, as the case may be, to the order
of the Assignor in an amount equal to the Revolving Credit Commitment and/or
applicable Term Loans, as the case may be, retained by it hereunder. Such new
Note or Notes shall be dated the Closing Date and shall otherwise be in the form
of the Note or Notes replaced thereby.
(f) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this Section concerning assignments of Loans and Notes
relate only to absolute assignments and that such provisions do not prohibit
assignments creating security interests, including, without limitation, any
pledge or assignment by a Lender of any Loan or Note to any Federal Reserve Bank
in accordance with applicable law.
10.7 Adjustments; Set-off. (a) Except to the extent that this
Agreement provides for payments to be allocated to a particular Lender or to the
Lenders under a particular Facility, if any Lender (a "Benefitted Lender") shall
at any time receive any payment of all or part of the Obligations owing to it,
or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section
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8(f), or otherwise), in a greater proportion than any such payment to or
collateral received by any other Lender, if any, in respect of such other
Lender's Obligations, such Benefitted Lender shall purchase for cash from the
other Lenders a participating interest in such portion of each such other
Lender's Obligations, or shall provide such other Lenders with the benefits of
any such collateral, as shall be necessary to cause such Benefitted Lender to
share the excess payment or benefits of such collateral ratably with each of the
Lenders; provided, however, that if all or any portion of such excess payment or
benefits is thereafter recovered from such Benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned, to the extent
of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, without prior notice to Holdings or
either Borrower, any such notice being expressly waived by Holdings and each
Borrower to the extent permitted by applicable law, upon any amount becoming due
and payable by Holdings or either Borrower hereunder (whether at the stated
maturity, by acceleration or otherwise), to set off and appropriate and apply
against such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Lender or
any branch or agency thereof to or for the credit or the account of Holdings or
such Borrower, as the case may be. Each Lender agrees promptly to notify
Holdings and the relevant Borrower and the Administrative Agent after any such
setoff and application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such setoff and application.
10.8 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Agreement or of a
Lender Addendum by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof. A set of the copies of this Agreement
signed by all the parties shall be lodged with Holdings and the Administrative
Agent.
10.9 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 Integration. This Agreement and the other Loan Documents
represent the entire agreement of Holdings, the Borrowers, the Agents, the
Arrangers and the Lenders with respect to the subject matter hereof and thereof,
and there are no promises, undertakings, representations or warranties by the
Arrangers, any Agent or any Lender relative to subject matter hereof not
expressly set forth or referred to herein or in the other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES UNDER THIS AGREEMENT SHALL BE
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GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.
10.12 Submission To Jurisdiction; Waivers. Each of Holdings and each
Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its Property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the courts of the State of
New York, the courts of the United States of America for the Southern District
of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, to Holdings or the
relevant Borrower, as the case may be at its address set forth in Section 10.2
or at such other address of which the Administrative Agent shall have been
notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the right
to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to in
this Section any special, exemplary, punitive or consequential damages.
10.13 Acknowledgments. Each of Holdings and each Borrower hereby
acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither any Arranger, any Agent nor any Lender has any fiduciary
relationship with or duty to Holdings or either Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between the Arrangers, the Agents and the Lenders, on one hand, and
Holdings and the Borrowers, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among the
Arrangers, the Agents and the Lenders or among Holdings, the Borrowers and the
Lenders.
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10.14 Confidentiality. Each of the Agents and the Lenders agrees to
keep confidential all non-public information provided to it by any Loan Party
pursuant to this Agreement that is designated by such Loan Party as
confidential; provided that nothing herein shall prevent any Agent or any Lender
from disclosing any such information (a) to either Arranger, any Agent, any
other Lender or any affiliate of any thereof, (b) to any Participant or Assignee
(each, a "Transferee") or prospective Transferee that agrees to comply with the
provisions of this Section, (c) to any of its employees, directors, agents,
attorneys, accountants and other professional advisors, (d) to any financial
institution that is a direct or indirect contractual counterparty in swap
agreements or such contractual counterparty's professional advisor (so long as
such contractual counterparty or professional advisor to such contractual
counterparty agrees to be bound by the provisions of this Section, (e) upon the
request or demand of any Governmental Authority having jurisdiction over it, (f)
in response to any order of any court or other Governmental Authority or as may
otherwise be required pursuant to any Requirement of Law, (g) in connection with
any litigation or similar proceeding, (h) that has been publicly disclosed other
than in breach of this Section, (i) to the National Association of Insurance
Commissioners or any similar organization or any nationally recognized rating
agency that requires access to information about a Lender's investment portfolio
in connection with ratings issued with respect to such Lender or (j) in
connection with the exercise of any remedy hereunder or under any other Loan
Document.
10.15 Release of Collateral and Guarantee Obligations.
(a) Notwithstanding anything to the contrary contained herein or in
any other Loan Document, upon request of Holdings in connection with any
Disposition of Property permitted by the Loan Documents, the Administrative
Agent shall (without notice to, or vote or consent of, any Lender, or any
affiliate of any Lender that is a party to any Specified Hedge Agreement) take
such actions as shall be required to release its security interest in any
Collateral being Disposed of in such Disposition, and to release any guarantee
obligations under any Loan Document of any Person being Disposed of in such
Disposition, to the extent necessary to permit consummation of such Disposition
in accordance with the Loan Documents.
(b) Notwithstanding anything to the contrary contained herein or any
other Loan Document, when all Obligations (other than obligations in respect of
any Specified Hedge Agreement) have been paid in full, all Commitments have
terminated or expired and no Letter of Credit shall be outstanding, upon request
of Holdings, the Administrative Agent shall (without notice to, or vote or
consent of, any Lender, or any affiliate of any Lender that is a party to any
Specified Hedge Agreement) take such actions as shall be required to release its
security interest in all Collateral, and to release all guarantee obligations
under any Loan Document, whether or not on the date of such release there may be
outstanding Obligations in respect of Specified Hedge Agreements. Any such
release of guarantee obligations shall be deemed subject to the provision that
such guarantee obligations shall be reinstated if after such release any portion
of any payment in respect of the Obligations guaranteed thereby shall be
rescinded or must otherwise be restored or returned upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of either Borrower or any
Guarantor, or upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, either Borrower or any
Guarantor or any substantial part of its property, or otherwise, all as though
such payment had not been made.
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10.16 Accounting Changes. In the event that any "Accounting Change"
(as defined below) shall occur and such change results in a change in the method
of calculation of financial covenants, standards or terms in this Agreement,
then Holdings and the Administrative Agent agree to enter into negotiations in
order to amend such provisions of this Agreement so as to equitably reflect such
Accounting Changes with the desired result that the criteria for evaluating
Holdings' financial condition shall be the same after such Accounting Changes as
if such Accounting Changes had not been made. Until such time as such an
amendment shall have been executed and delivered by Holdings, the Administrative
Agent and the Required Lenders, all financial covenants, standards and terms in
this Agreement shall continue to be calculated or construed as if such
Accounting Changes had not occurred. "Accounting Changes" refers to changes in
accounting principles required by the promulgation of any rule, regulation,
pronouncement or opinion by the Financial Accounting Standards Board of the
American Institute of Certified Public Accountants or, if applicable, the SEC.
10.17 Delivery of Lender Addenda. Each initial Lender shall become a
party to this Agreement by delivering to the Administrative Agent and the
Syndication Agent a Lender Addendum duly executed by such Lender, Holdings and
each Agent.
10.18 WAIVERS OF JURY TRIAL. HOLDINGS, THE BORROWERS, THE AGENTS AND
THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AND FOR ANY COUNTERCLAIM THEREIN.
10.19 Judgment Currency. If, for the purposes of obtaining judgment
in any court, it is necessary to convert a sum due hereunder or under any other
Loan Document in one currency into another currency, the rate of exchange used
shall be that at which in accordance with normal banking procedures the
Administrative Agent could purchase the first currency with such other currency
on the Business Day preceding that on which final judgment is given. The
obligation of each Borrower in respect of any such sum due from it to either the
Administrative Agent or any Lender hereunder or under any other Loan Document
shall, notwithstanding any judgment in a currency (the "Judgment Currency")
other than that in which such sum is denominated in accordance with the
applicable provisions of this Agreement (the "Agreement Currency"), be
discharged only to the extent that on the Business Day following receipt by the
Administrative Agent or such Lender of any sum adjudged to be so due in the
Judgment Currency, the Administrative Agent or such Lender may in accordance
with normal banking procedures purchase the Agreement Currency so purchased is
less than the sum originally due to such Administrative Agent or such Lender in
the Agreement Currency, the applicable Borrower agrees, as a separate obligation
and notwithstanding any such judgment, to indemnify the Administrative Agent or
such Lender against such loss. If the amount of the Agreement Currency so
purchased is greater than the sum originally due to the Administrative or such
Lender in such currency, the Administrative Agent or such Lender agrees to
return the amount of any excess to the applicable Borrower (or to any other
Person who may be entitled thereto under applicable law).
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10.20 Quebec Security. For greater certainty, and without limiting
the powers of the Administrative Agent hereunder or under any of the other Loan
Documents, each of the Borrowers hereby acknowledges that the Administrative
Agent shall, for purposes of holding any security granted by the Canadian
Borrower or any Foreign Guarantor on property pursuant to the laws of the
Province of Quebec to secure obligations of the Canadian Borrower or any Foreign
Guarantor under any debenture (the "Canadian Obligations"), be the holder of an
irrevocable power of attorney (fonde de pouvoir) (within the meaning of the
Civil Code of Quebec) for all present and future Lenders, Agents and hedging
counterparties pursuant to any Specified Hedge Agreement and in particular for
all present and future holders of any debenture. Each of the Lenders (for
themselves and for all present and future affiliates that may become hedging
counterparties pursuant to any Specified Hedge Agreement) hereby irrevocably
constitutes, to the extent necessary, the Administrative Agent as the holder of
an irrevocable power of attorney (fonde de pouvoir) (within the meaning of
Article 2692 of the Civil Code of Quebec) in order to hold security granted by
the Canadian Borrower or any Foreign Guarantor in the Province of Quebec to
secure the Canadian Obligations. Each assignee of a Lender, Agent or a hedging
counterparty pursuant to any Specified Hedge Agreement shall be deemed to have
confirmed and ratified the constitution of the Administrative Agent as the
holder of such irrevocable power of attorney (fonde de pouvoir) by execution of
the relevant assignment and assumption agreement. Notwithstanding the
provisions of Section 32 of the Special Corporate Powers Act (Quebec), the
Administrative Agent may acquire and be the holder of any debenture. The
Canadian Borrower hereby acknowledges that such debenture constitutes a title of
indebtedness, as such term is used in Article 2692 of the Civil Code of Quebec.
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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.
WEIGH-TRONIX, LLC
By: /s/ Weigh-Tronix, LLC
--------------------------------------
Name: Weigh-Tronix, LLC
Title:
SWT FINANCE B.V.
By: /s/ SWT Finance B.V.
--------------------------------------
Name: SWT Finance B.V.
Title:
WEIGH-TRONIX CANADA, ULC
By: /s/ Weigh-Tronix Canada, ULC
--------------------------------------
Name: Weigh-Tronix Canada,ULC
Title:
LEHMAN BROTHERS INC.,
as sole advisor and Arranger
By: /s/ Lehman Brothers Inc.
--------------------------------------
Name: Lehman Brothers Inc.
Title:
LEHMAN COMMERCIAL PAPER INC., as
Syndication Agent
By: /s/ Lehman Commercial Paper Inc.
--------------------------------------
Name: Lehman Commercial Paper Inc.
Title:
FLEETBOSTON ROBERTSON STEPHENS INC., as Arranger
By: /s/ Fleetboston Robertson Stephens Inc.
----------------------------------------
Name: Fleetboston Robertson Stephens Inc.
Title:
FLEET NATIONAL BANK, as Administrative
Agent, as Security Agent and
as Fronting Lender
By: /s/ Fleet National Bank
--------------------------------------
Name: Fleet National Bank
Title: