EXHIBIT 99.1
EXECUTION COPY
AMENDED AND RESTATED CREDIT AGREEMENT
AMONG
RAWLINGS SPORTING GOODS COMPANY, INC.,
as Borrower,
THE LENDERS NAMED HEREIN
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
DATED AS OF
SEPTEMBER 12, 1997
TABLE OF CONTENTS
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE II THE CREDITS. . . . . . . . . . . . . . . . . . . . . 17
2.1. Revolving Credit Advances . . . . . . . . . . . . . . . . 17
2.2. Ratable Loans . . . . . . . . . . . . . . . . . . . . . . 18
2.3. Types of Advances . . . . . . . . . . . . . . . . . . . . 18
2.4. Commitment Fee; Reductions in Aggregate Revolving
Credit Commitment. . . . . . . . . . . . . . . . . . 18
2.5. Minimum Amount of Each Advance. . . . . . . . . . . . . . 19
2.6. Optional Principal Payments . . . . . . . . . . . . . . . 19
2.7. Mandatory Commitment Reductions . . . . . . . . . . . . . 19
2.8. Method of Selecting Types and Interest Periods for
New Advances . . . . . . . . . . . . . . . . . . . . 20
2.9. Conversion and Continuation of Outstanding Advances . . . 20
2.10. Changes in Interest Rate, etc. . . . . . . . . . . . . . 21
2.11. Rates Applicable After Default . . . . . . . . . . . . . 21
2.12. Method of Payment. . . . . . . . . . . . . . . . . . . . 22
2.13. Notes; Telephonic Notices. . . . . . . . . . . . . . . . 22
2.14. Interest Payment Dates; Interest and Fee Basis . . . . . 23
2.15. Notification of Advances, Interest Rates,
Prepayments and Commitment Reductions. . . . . . . . 23
2.16. Lending Installations. . . . . . . . . . . . . . . . . . 23
2.17. Non-Receipt of Funds by the Agent. . . . . . . . . . . . 24
2.18. Withholding Tax Exemption. . . . . . . . . . . . . . . . 24
2.19. Agent's Fees . . . . . . . . . . . . . . . . . . . . . . 25
2.20. Facility Letters of Credit . . . . . . . . . . . . . 25
2.20.1 Issuance of Facility Letters of Credit . . . . . . . 25
2.20.2 Participating Interests. . . . . . . . . . . . . . . 26
2.20.3 Facility Letter of Credit
Reimbursement Obligations. . . . . . . . . 26
2.20.4 Procedure for Issuance . . . . . . . . . . . . . . . 28
2.20.5 Nature of the Lenders' Obligations . . . . . . . . . 29
2.20.6 Facility Letter of Credit Fees . . . . . . . . . . . 30
2.21. Swing Line Loans . . . . . . . . . . . . . . . . . . 30
2.21.1 Amount of Swing Line Loans . . . . . . . . . . . . . . 30
2.21.2 Borrowing Notice. . . . . . . . . . . . . . . . . . . . 31
2.21.3 Making of Swing Line Loans . . . . . . . . . . . . . . 31
2.21.4 Repayment of Swing Line Loans . . . . . . . . . . . . . 31
2.21.5 Rate Options for Swing Line Loans . . . . . . . . . . . 32
ARTICLE III CHANGE IN CIRCUMSTANCES . . . . . . . . . . . . . . 32
3.1. Yield Protection. . . . . . . . . . . . . . . . . . . . . 32
3.2. Changes in Capital Adequacy Regulations . . . . . . . . . 33
3.3. Availability of Types of Advances . . . . . . . . . . . . 33
3.4. Funding Indemnification . . . . . . . . . . . . . . . . . 34
3.5. Lender Statements; Survival of Indemnity. . . . . . . . . 34
ARTICLE IV CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . 34
4.1. Restatement . . . . . . . . . . . . . . . . . . . . . . . 34
4.2. Each Advance and Facility Letter of Credit. . . . . . . . 37
ARTICLE V REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . 37
5.1. Corporate Existence and Standing. . . . . . . . . . . . . 37
5.2. Authorization and Validity. . . . . . . . . . . . . . . . 38
5.3. Compliance with Laws and Contracts. . . . . . . . . . . . 38
5.4. Governmental Consents . . . . . . . . . . . . . . . . . . 39
5.5. Financial Statements. . . . . . . . . . . . . . . . . . . 39
5.6. Material Adverse Change . . . . . . . . . . . . . . . . . 40
5.7. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.8. Litigation and Contingent Obligations . . . . . . . . . . 40
5.9. Capitalization. . . . . . . . . . . . . . . . . . . . . . 40
5.10. ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.11. Defaults . . . . . . . . . . . . . . . . . . . . . . . . 42
5.12. Federal Reserve Regulations. . . . . . . . . . . . . . . 42
5.13. Investment Company . . . . . . . . . . . . . . . . . . . 42
5.14. Certain Fees . . . . . . . . . . . . . . . . . . . . . . 42
5.15. Ownership of Properties. . . . . . . . . . . . . . . . . 42
5.16. Indebtedness . . . . . . . . . . . . . . . . . . . . . . 43
5.17. Post-Retirement Welfare Benefits . . . . . . . . . . . . 43
5.18. Employee Controversies . . . . . . . . . . . . . . . . . 43
5.19. Material Agreements. . . . . . . . . . . . . . . . . . . 43
5.20. Acquisition Documents. . . . . . . . . . . . . . . . . . 44
5.21. Environmental Laws . . . . . . . . . . . . . . . . . . . 44
5.22. Insurance. . . . . . . . . . . . . . . . . . . . . . . . 45
5.23. Disclosure . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE VI COVENANTS. . . . . . . . . . . . . . . . . . . . . . 46
6.1. Financial Reporting . . . . . . . . . . . . . . . . . . . 46
6.2. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . 48
6.3. Notice of Default.. . . . . . . . . . . . . . . . . . . . 48
6.4. Conduct of Business . . . . . . . . . . . . . . . . . . . 49
6.5. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.6. Insurance . . . . . . . . . . . . . . . . . . . . . . . . 49
6.7. Compliance with Laws. . . . . . . . . . . . . . . . . . . 49
6.8. Maintenance of Properties . . . . . . . . . . . . . . . . 49
6.9. Inspection. . . . . . . . . . . . . . . . . . . . . . . . 49
6.10. Capital Stock and Dividends. . . . . . . . . . . . . . . 50
6.11. Indebtedness . . . . . . . . . . . . . . . . . . . . . . 50
6.12. Merger . . . . . . . . . . . . . . . . . . . . . . . . . 50
6.13. Sale of Assets . . . . . . . . . . . . . . . . . . . . . 51
6.14. Sale of Accounts . . . . . . . . . . . . . . . . . . . . 51
6.15. Sale and Leaseback . . . . . . . . . . . . . . . . . . . 51
6.16. Investments and Purchases. . . . . . . . . . . . . . . . 51
6.17. Contingent Obligations . . . . . . . . . . . . . . . . . 52
6.18. Liens. . . . . . . . . . . . . . . . . . . . . . . . . . 52
6.19. Capital Expenditures . . . . . . . . . . . . . . . . . . 53
6.20. Lease Rentals. . . . . . . . . . . . . . . . . . . . . . 53
6.21. Letters of Credit. . . . . . . . . . . . . . . . . . . . 53
6.22. Affiliates . . . . . . . . . . . . . . . . . . . . . . . 53
6.23. Prepayment of Indebtedness . . . . . . . . . . . . . . . 54
6.24. Rate Hedging Obligations . . . . . . . . . . . . . . . . 54
6.25. Environmental Matters. . . . . . . . . . . . . . . . . . 54
6.26. Change in Corporate Structure; Fiscal Year . . . . . . . 54
6.27. Inconsistent Agreements. . . . . . . . . . . . . . . . . 55
6.28. Financial Covenants. . . . . . . . . . . . . . . . . . . 55
6.28.1. Minimum Tangible Net Worth. . . . . . . . . . . . . . 55
6.28.2. Debt to Capitalization Ratio. . . . . . . . . . . . . 55
6.28.3. Fixed Charge Coverage Ratio . . . . . . . . . . . . . 55
6.29. Tax Consolidation. . . . . . . . . . . . . . . . . . . . 55
6.30. ERISA Compliance55
ARTICLE VII DEFAULTS. . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE VIII ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES . . 58
8.1. Acceleration. . . . . . . . . . . . . . . . . . . . . . . 58
8.2. Amendments. . . . . . . . . . . . . . . . . . . . . . . . 59
8.3. Preservation of Rights. . . . . . . . . . . . . . . . . . 60
ARTICLE IX GENERAL PROVISIONS . . . . . . . . . . . . . . . . . 60
9.1. Survival of Representations . . . . . . . . . . . . . . . 60
9.2. Governmental Regulation . . . . . . . . . . . . . . . . . 60
9.3. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 60
9.4. Headings. . . . . . . . . . . . . . . . . . . . . . . . . 60
9.5. Entire Agreement. . . . . . . . . . . . . . . . . . . . . 61
9.6. Several Obligations; Benefits of this Agreement . . . . . 61
9.7. Expenses; Indemnification . . . . . . . . . . . . . . . . 61
9.8. Numbers of Documents. . . . . . . . . . . . . . . . . . . 61
9.9. Accounting. . . . . . . . . . . . . . . . . . . . . . . . 61
9.10. Severability of Provisions . . . . . . . . . . . . . . . 62
9.11. Nonliability of Lenders. . . . . . . . . . . . . . . . . 62
9.12. CHOICE OF LAW. . . . . . . . . . . . . . . . . . . . . . 62
9.13. CONSENT TO JURISDICTION. . . . . . . . . . . . . . . . . 62
9.14. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . 63
9.15. Disclosure . . . . . . . . . . . . . . . . . . . . . . . 63
9.16. Counterparts . . . . . . . . . . . . . . . . . . . . . . 63
ARTICLE X THE AGENT . . . . . . . . . . . . . . . . . . . . . . 63
10.1. Appointment . . . . . . . . . . . . . . . . . . . . . . 63
10.2. Powers. . . . . . . . . . . . . . . . . . . . . . . . . 63
10.3. General Immunity. . . . . . . . . . . . . . . . . . . . 64
10.4. No Responsibility for Loans, Recitals, etc. . . . . . . 64
10.5. Action on Instructions of Lenders . . . . . . . . . . . 64
10.6. Employment of Agents and Counsel. . . . . . . . . . . . 64
10.7. Reliance on Documents; Counsel. . . . . . . . . . . . . 65
10.8. Agent's Reimbursement and Indemnification . . . . . . . 65
10.9. Notice of Default . . . . . . . . . . . . . . . . . . . 65
10.10. Rights as a Lender. . . . . . . . . . . . . . . . . . . 65
10.11. Lender Credit Decision. . . . . . . . . . . . . . . . . 66
10.12. Successor Agent . . . . . . . . . . . . . . . . . . . . 66
ARTICLE XI SETOFF; RATABLE PAYMENTS . . . . . . . . . . . . . . 67
11.1. Setoff. . . . . . . . . . . . . . . . . . . . . . . . . 67
11.2. Ratable Payments. . . . . . . . . . . . . . . . . . . . 67
ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS . 67
12.1. Successors and Assigns. . . . . . . . . . . . . . . . . 67
12.2. Participations. . . . . . . . . . . . . . . . . . . . . 68
12.2.1. Permitted Participants; Effect. . . . . . . . . . . 68
12.2.2. Voting Rights. . . . . . . . . . . . . . . . . . . . 68
12.2.3. Benefit of Setoff. . . . . . . . . . . . . . . . . . 68
12.3. Assignments . . . . . . . . . . . . . . . . . . . . . . 69
12.3.1. Permitted Assignments. . . . . . . . . . . . . . . . 69
12.3.2. Effect; Effective Date . . . . . . . . . . . . . . . 69
12.4. Dissemination of Information. . . . . . . . . . . . . . 69
12.5. Tax Treatment . . . . . . . . . . . . . . . . . . . . . 70
ARTICLE XIII NOTICES. . . . . . . . . . . . . . . . . . . . . . 70
13.1. Giving Notice . . . . . . . . . . . . . . . . . . . . . 70
13.2. Change of Address . . . . . . . . . . . . . . . . . . . 70
EXHIBITS
Exhibit A (Section 1) Revolving Credit Note
Exhibit B (Section 1) Swing Line Note
Exhibit C (Section 6.1(d)) Compliance Certificate
Exhibit D (Section 12.3.1) Assignment Agreement
SCHEDULES
Schedule 5.3 - Approvals and Consents
Schedule 5.5 - Pro Forma
Schedule 5.8 - Litigation and Contingent Obligations
Schedule 5.9 - Capitalization
Schedule 5.10 - ERISA
Schedule 5.14 - Brokers' Fees
Schedule 5.15 - Owned and Leased Properties; Intellectual
Property
Schedule 5.16 - Indebtedness
Schedule 5.21 - Environmental
Schedule 5.22 - Insurance
Schedule 6.16 - Investments
Schedule 6.18 - Liens
AMENDED AND RESTATED CREDIT AGREEMENT
This Amended and Restated Credit Agreement, dated as of
September 12, 1997, is among RAWLINGS SPORTING GOODS COMPANY,
INC., a Delaware corporation, the Lenders and THE FIRST NATIONAL
BANK OF CHICAGO, individually and as Agent.
R E C I T A L S:
WHEREAS, the Borrower, the lenders named therein (the "Prior
Lenders") and the Agent entered into that certain Credit
Agreement dated as of July 8, 1994 and amended as of March 24,
1995, August 31, 1995, September 23, 1996 and May 30, 1997 (the
"Prior Credit Agreement"), pursuant to which such lenders
extended a revolving credit facility to the Borrower;
WHEREAS, as of the date hereof the aggregate of the
revolving credit commitments of the Prior Lenders under the Prior
Credit Agreement is $72,000,000;
WHEREAS, the Borrower has agreed to purchase substantially
all of the assets of USA Skate Company, Inc. (the "Acquisition")
pursuant to the Acquisition Documents; and
WHEREAS, in connection with the Acquisition, the Borrower,
the Lenders and the Agent wish to extend the maturity of the
revolving credit facility to September 1, 2002, to increase the
aggregate revolving credit commitments of the Lenders to
$90,000,000 and, concurrently, to amend and restate the Prior
Credit Agreement in its entirety.
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrower, the Lenders and the Agent hereby
agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Acquisition" is defined in the Recitals to this Agreement.
"Acquisition Documents" means the Purchase Agreement and the
other documents and instruments delivered in connection
therewith.
"Advance" means a borrowing hereunder consisting of the
aggregate amount of the several Loans made on the same Borrowing
Date by the Lenders to the Borrower of the same Type and, in the
case of Eurodollar Advances, for the same Interest Period.
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control
with such Person. A Person shall be deemed to control another
Person if the controlling Person owns 10% or more of any class of
voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power
to direct or cause the direction of the management or policies of
the controlled Person, whether through ownership of stock, by
contract or otherwise.
"Agent" means First Chicago in its capacity as agent for the
Lenders pursuant to Article X, and not in its individual capacity
as a Lender, and any successor Agent appointed pursuant to
Article X.
"Aggregate Available Commitment" means, at any time, the
Aggregate Revolving Credit Commitment at such time, minus the
Facility Letter of Credit Obligations outstanding at such time,
minus the aggregate principal amount of the Swing Line Loans
outstanding at such time; provided, that prior to any reduction
of the Aggregate Revolving Credit Commitment pursuant to Section
2.7(b)(i), $18,000,000 of such Aggregate Available Commitment
shall be reserved to finance the purchase price for the
Acquisition.
"Aggregate Revolving Credit Commitment" means the aggregate
of the Revolving Credit Commitments of all the Lenders hereunder.
"Agreement" means this Amended and Restated Credit
Agreement, as it may be further amended, modified or restated and
in effect from time to time.
"Agreement Accounting Principles" means generally accepted
accounting principles as in effect from time to time.
"Alternate Base Rate" means, for any day, a rate of interest
per annum equal to the higher of (a) the Corporate Base Rate for
such day, and (b) the sum of the Federal Funds Effective Rate for
such day plus 1/2% per annum.
"Applicable Margin" means, subject to the last sentence of
this definition, for any period, the applicable of the following
percentages in effect with respect to such period as the Fixed
Charge Coverage Ratio of the Borrower shall fall within the
indicated ranges:
Applicable
Fixed Charge Coverage Ratio Eurodollar Margin
Less than or Equal to 2.0:1.0 1.0%
Greater than 2.0:1.0 0.75%
The Fixed Charge Coverage Ratio shall be calculated by the
Borrower as of the end of each Fiscal Quarter, commencing with
the Fiscal Quarter ending August 31, 1997, and shall be reported
to the Agent pursuant to a certificate executed by an Authorized
Officer of the Borrower and delivered in connection with Section
6.1(d) hereof, as applicable. The Applicable Margin shall be
adjusted, if necessary, with respect to each Interest Period
beginning on or after the third Business Day after the delivery
of such certificate; provided, that if such certificate, together
with the financial statements to which such certificate relates,
is not delivered to the Agent by the date on which the related
financial statements are due to be delivered to the Agent
pursuant to Section 6.1(a) or (b), then the Applicable Margin
shall be equal to 1.0% until the next adjustment date. Until
adjusted as described above, the Applicable Margin shall be equal
to .75%; provided, that if the Borrower's Fixed Charge Coverage
Ratio as of August 31, 1997 is less than or equal to 2.0:1.0,
then the Applicable Margin shall be adjusted to be equal to 1.0%,
retroactive to the Restatement Date.
"Article" means an article of this Agreement unless another
document is specifically referenced.
"Asset Disposition" means any sale, transfer or other
disposition of any asset of the Borrower or any Subsidiary in a
single transaction or in a series of related transactions (other
than the sale of inventory in the ordinary course).
"Asset Transfer Documents" means that certain Assets
Transfer Agreement dated as of July 8, 1994 between Figgie and
the Borrower and the other documents and instruments executed and
delivered in connection therewith.
"Asset Transfers" means the transactions contemplated by the
Asset Transfer Documents.
"Authorized Officer" means any of the chairman, chief
executive officer or chief financial officer of the Borrower, or
another officer of the Borrower designated by any of them in
writing to the Agent, acting singly.
"Bankruptcy Code" means Title 11, United States Code,
sections 1 et seq., as the same may be amended from time to time,
and any successor thereto or replacement therefor which may be
hereafter enacted.
"Borrower" means Rawlings Sporting Goods Company, Inc., a
Delaware corporation, and its successors and assigns.
"Borrowing Date" means a date on which an Advance or a Swing
Line Loan is made or a Facility Letter of Credit is issued
hereunder.
"Borrowing Notice" is defined in Section 2.8.
"Business Day" means (a) with respect to any borrowing,
payment or rate selection of Eurodollar Advances, a day (other
than a Saturday or Sunday) on which banks generally are open in
Chicago and New York for the conduct of substantially all of
their commercial lending activities and on which dealings in
United States dollars are carried on in the London interbank
market, and (b) for all other purposes, a day (other than a
Saturday or Sunday) on which banks generally are open in Chicago
for the conduct of substantially all of their commercial lending
activities.
"Capital Expenditures" means, without duplication, any
expenditures for any purchase or other acquisition for value of
any asset that is classified on a consolidated balance sheet of
the Borrower with the Subsidiaries prepared in accordance with
Agreement Accounting Principles as a fixed or capital asset.
"Capitalized Lease" of a Person means any lease of Property
by such Person as lessee which would be capitalized on a balance
sheet of such Person prepared in accordance with Agreement
Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount
of the obligations of such Person under Capitalized Leases which
would be shown as a liability on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"Change" is defined in Section 3.2.
"Change in Control" means (a) the acquisition by any Person,
or two or more Persons acting in concert, including without
limitation any acquisition effected by means of any transaction
contemplated by Section 6.12, of beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission
under the Securities Exchange Act of 1934) of 23% or more of the
outstanding shares of voting stock of the Borrower (other than
any acquisition by an underwriter or underwriters made to
facilitate an underwritten public offering of the Borrower's
common stock in accordance with Section 6.10), or (b) during any
period of 25 consecutive calendar months, commencing on the date
of this Agreement, the ceasing of those individuals (the
"Continuing Directors") who (i) were directors of the Borrower on
the first day of each such period or (ii) subsequently became
directors of the Borrower and whose initial election or initial
nomination for election subsequent to that date was made or
approved by a majority of the Continuing Directors then on the
board of directors of the Borrower, to constitute a majority of
the board of directors of the Borrower; provided, that no such
event or occurrence shall be deemed to be a Change in Control for
the purposes of this Agreement upon the confirmation thereof in
writing to the Borrower by the Required Lenders.
"Closing Date" means July 8, 1994.
"Closing Transactions" means, collectively, the IPO, the
Asset Transfers, the initial Loans hereunder and the Repayment.
"Code" means the Internal Revenue Code of 1986, as amended,
reformed or otherwise modified from time to time.
"Commercial Letter of Credit" means a trade or commercial
Facility Letter of Credit issued by an Issuer pursuant to Section
2.20 hereof.
"Commitment" means, for each Lender, the obligation of such
Lender to make Loans and participate in Facility Letters of
Credit in an aggregate amount not at any time exceeding the
amount set forth opposite its signature below, as such amount may
be modified from time to time pursuant to the terms hereof.
"Condemnation" is defined in Section 7.8.
"Consolidated" or "consolidated", when used in connection
with any calculation, means a calculation to be determined on a
consolidated basis (as determined in accordance with Agreement
Accounting Principles) for the Borrower in accordance with
Agreement Accounting Principles.
"Consolidated Person" means, for the taxable year of
reference, each Person which is a member of the affiliated group
of the Borrower if Consolidated returns are or shall be filed for
such affiliated group for federal income tax purposes or any
combined or unitary group of which the Borrower is a member for
state income tax purposes.
"Contingent Obligation" of a Person means any agreement,
undertaking or arrangement by which such Person assumes,
guarantees, endorses, contingently agrees to purchase or provide
funds for the payment of, or otherwise becomes or is contingently
liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other
financial condition of any other Person, or otherwise assures any
creditor of such other Person against loss, including, without
limitation, any operating agreement or take-or-pay contract or
application for a Letter of Credit.
"Controlled Group" means all members of a controlled group
of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the
Borrower or any of its Subsidiaries and after giving effect to
the Closing Transactions, are treated as a single employer under
Section 414 of the Code.
"Conversion/Continuation Notice" is defined in Section 2.9.
"Corporate Base Rate" means a rate per annum equal to the
corporate base rate of interest announced by First Chicago from
time to time, changing when and as said corporate base rate
changes. The Corporate Base Rate is a reference rate and does
not necessarily represent the lowest or best rate of interest
actually charged to any customer. First Chicago may make
commercial loans or other loans at rates of interest at, above or
below the Corporate Base Rate.
"Debt to Capitalization Ratio" means, at any time, the ratio
of (a) the consolidated Indebtedness of the Borrower at such time
to (b) the sum of the consolidated Indebtedness of the Borrower
plus the Borrower's Shareholders' Equity at such time.
"Default" means an event described in Article VII.
"EBITDA" means, for any applicable computation period, the
Borrower's Net Income from continuing operations, plus (a) income
and franchise taxes paid or accrued during such period, (b)
interest expenses paid or accrued during such period, and (c)
amortization and depreciation deducted in determining Net Income
for such period, determined in each case on a consolidated basis.
"Environmental Laws" is defined in Section 5.21.
"Environmental Permits" is defined in Section 5.21.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"Eurodollar Advance" means an Advance which bears interest
at a Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar
Advance for the relevant Interest Period, the rate determined by
the Agent to be the rate at which deposits in U.S. dollars are
offered by First Chicago to first-class banks in the London
interbank market at approximately 11 a.m. (London time) two
Business Days prior to the first day of such Interest Period, in
the approximate amount of First Chicago's relevant Eurodollar
Advance and having a maturity approximately equal to such
Interest Period.
"Eurodollar Rate" means, with respect to a Eurodollar
Advance for the relevant Interest Period, the sum of (a) the
quotient of (i) the Eurodollar Base Rate applicable to such
Interest Period, divided by (ii) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest
Period, plus (b) the Applicable Margin. The Eurodollar Rate
shall be rounded to the next higher multiple of 1/16 of 1% if the
rate is not such a multiple.
"Facility Letter of Credit" means a Letter of Credit issued
pursuant to Section 2.20.
"Facility Letter of Credit Obligations" means, as at the
time of determination thereof, the sum of (a) the Reimbursement
Obligations then outstanding and (b) the aggregate then undrawn
face amount of the then outstanding Facility Letters of Credit.
"Facility Letter of Credit Sublimit" means an aggregate
amount of $25,000,000, of which not more than $3,000,000 at any
one time outstanding shall be used by the Borrower for Standby
Letters of Credit.
"Facility Termination Date" means September 1, 2002.
"Federal Funds Effective Rate" means, for any day, an
interest rate per annum equal to the weighted average of the
rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such
day, as published for such day (or, if such day is not a Business
Day, for the immediately preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the
quotations at approximately 10 a.m. (Chicago time) on such day on
such transactions received by the Agent from three Federal funds
brokers of recognized standing selected by the Agent in its sole
discretion.
"Figgie" means Figgie International Inc., a Delaware
corporation.
"Financial Statements" is defined in Section 5.5.
"First Chicago" means The First National Bank of Chicago in
its individual capacity, and its successors.
"Fiscal Quarter" means one of the four three month
accounting periods in each Fiscal Year.
"Fiscal Year" means the twelve month accounting period
ending on August 31 of each year.
"Fixed Charge Coverage Ratio" means, for any applicable
computation period, the ratio of (a) the aggregate of (i) EBITDA
plus (ii) Rentals paid or accrued, including without limitation
lease rentals on Capitalized Leases of less than one year, plus
(iii) Minimum Royalty Payments accrued in such period to (b)
Fixed Charges.
"Fixed Charges" means, with respect to the Borrower and its
Subsidiaries on a consolidated basis, for any applicable
computation period, the sum of (a) interest expenses paid or
accrued on outstanding Indebtedness, (b) Minimum Royalty Payments
accrued in such period, (c) Rentals paid or accrued, including
without limitation lease rentals on Capitalized Leases of less
than one year and (d) principal payments with respect to
Indebtedness set forth on Schedule 5.16 or incurred pursuant to
Section 6.11(d).
"Floating Rate" means, for any day, a rate per annum equal
to the Alternate Base Rate for such day, changing when and as the
Alternate Base Rate changes.
"Floating Rate Advance" means an Advance which bears
interest at the Floating Rate.
"Hazardous Materials" is defined in Section 5.21.
"Indebtedness" of a Person means such Person's (a)
obligations for borrowed money, (b) obligations representing the
deferred purchase price of Property or services (other than
accounts payable arising in the ordinary course of such Person's
business payable on terms reasonably believed by the Borrower to
be customary in the trade), (c) obligations, whether or not
assumed, secured by Liens or payable out of the proceeds or
production from Property now or hereafter owned or acquired by
such Person, (d) obligations which are evidenced by notes,
acceptances, or other instruments, (e) Capitalized Lease
Obligations, (f) Rate Hedging Obligations, (g) Contingent
Obligations, (h) obligations for which such Person is then liable
pursuant to or in respect of a Facility Letter of Credit and the
face amount of any other Letter of Credit and (i) repurchase
obligations or liabilities of such Person with respect to
Accounts or notes receivable sold by such Person. Indebtedness
shall not include any liability to Figgie pursuant to the Tax
Sharing Agreement.
"Interest Period" means, with respect to a Eurodollar
Advance, a period of one, two, three or six months commencing on
a Business Day selected by the Borrower pursuant to this
Agreement. Such Interest Period shall end on (but exclude) the
day which corresponds numerically to such date one, two, three or
six months thereafter; provided, however, that if there is no
such numerically corresponding day in such next, second, third or
sixth succeeding month, such Interest Period shall end on the
last Business Day of such next, second, third or sixth succeeding
month. If an Interest Period would otherwise end on a day which
is not a Business Day, such Interest Period shall end on the next
succeeding Business Day; provided, however, that if said next
succeeding Business Day falls in a new calendar month, such
Interest Period shall end on the immediately preceding Business
Day.
"Investment" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees
made in the ordinary course of business), extension of credit
(other than accounts receivable arising in the ordinary course of
business on terms customary in the trade), deposit account or
contribution of capital by such Person to any other Person or any
investment in, or purchase or other acquisition of, the stock,
partnership interests, notes, debentures or other securities of
any other Person made by such Person.
"IPO" means the initial public offering of the common shares
of the Borrower by Figgie.
"Issuance Request" is defined in Section 2.20.4.
"Issuer" means the Lender which has been requested by the
Borrower to act as the issuer of a Facility Letter of Credit.
"Lenders" means the lending institutions listed on the
signature pages of this Agreement and their respective successors
and assigns.
"Lending Installation" means, with respect to a Lender or
the Agent, any office, branch, subsidiary or affiliate of such
Lender or the Agent.
"Letter of Credit" of a Person means a letter of credit or
similar instrument which is issued upon the application of such
Person or upon which such Person is an account party or for which
such Person is in any way liable.
"Letter of Credit Cash Collateral Account" is defined in
Section 8.1. Such account and the related cash collateralization
shall be subject to documentation satisfactory to the Agent.
"Lien" means any lien (statutory or other), mortgage,
pledge, hypothecation, assignment, deposit arrangement,
encumbrance or preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever
(including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other
title retention agreement).
"Loan" means, with respect to a Lender, such Lender's
portion of any Advance and "Loans" means, with respect to the
Lenders, the aggregate of all Advances.
"Loan Documents" means this Agreement, the Notes, the
Reimbursement Agreements and the other documents and agreements
contemplated by the Prior Credit Agreement or hereby and executed
by the Borrower in favor of the Agent or any Lender.
"Margin Stock" has the meaning assigned to that term under
Regulation U.
"Material Adverse Effect" means a material adverse effect on
(a) the business, Property, condition (financial or other),
performance, results of operations, or prospects of the Borrower
and its Subsidiaries taken as a whole, (b) the ability of the
Borrower or any Subsidiary to perform its obligations under the
Loan Documents, or (c) the validity or enforceability of any of
the Loan Documents or the rights or remedies of the Agent or the
Lenders thereunder.
"Minimum Royalty Payments" means, for any applicable
computation period, the minimum payments required to be made
under the royalty and licensing agreements of the Borrower and
its Subsidiaries in such period.
"Multiemployer Plan" means a Plan coming within Section
4001(a)(3) of ERISA.
"Net Available Proceeds" means (a) with respect to any Asset
Disposition, the sum of cash or readily marketable cash
equivalents received (including by way of a cash generating sale
or discounting of a note or receivable, but excluding any other
consideration received in the form of assumption by the acquiring
Person of debt or other obligations relating to the properties or
assets so disposed of or received in any other non-cash form)
therefrom, whether at the time of such disposition or subsequent
thereto, or (b) with respect to any sale or issuance of common
stock of the Borrower or any Subsidiary, cash or readily
marketable cash equivalents received (but excluding any other
non-cash form) therefrom, whether at the time of such
disposition, sale or issuance or subsequent thereto, net, in
either case, of all legal, title and recording tax expenses,
commissions and other fees and all costs and expenses incurred
and all federal, state, local and other taxes required to be
accrued as a liability as a consequence of such transactions and,
in the case of an Asset Disposition, net of all payments made by
the Borrower or any of its Subsidiaries on any Indebtedness which
is secured by such assets pursuant to a permitted Lien upon or
with respect to such assets or which must by the terms of such
Lien, or in order to obtain a necessary consent to such Asset
Disposition, or by applicable law be repaid out of the proceeds
from such Asset Disposition.
"Net Income" means, for any computation period, with respect
to the Borrower on a consolidated basis with its Subsidiaries
(other than any Subsidiary which is restricted from declaring or
paying dividends or otherwise advancing funds to its parent
whether by contract or otherwise), cumulative net income earned
during such period in accordance with Agreement Accounting
Principles.
"Note" means any one or more of the Revolving Credit Notes
or the Swing Line Notes.
"Notice of Assignment" is defined in Section 12.3.2.
"Obligations" means all unpaid principal of and accrued and
unpaid interest on the Notes, the Facility Letter of Credit
Obligations and all other liabilities (if any), whether actual or
contingent, of the Borrower with respect to Facility Letters of
Credit, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Borrower
to the Lenders or to any Lender, the Agent or any indemnified
party hereunder arising under any of the Loan Documents and any
Rate Hedging Obligations or foreign exchange contracts of the
Borrower owing to the Agent or any Lender.
"Participants" is defined in Section 12.2.1.
"Payment Date" means the last day of each February, May,
August and November.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"Person" means any natural person, corporation, firm, joint
venture, partnership, association, enterprise, trust or other
entity or organization, or any government or political
subdivision or any agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan, as defined in
Section 3(2) of ERISA, as to which the Borrower or any member of
the Controlled Group may have any liability.
"Prior Credit Agreement" is defined in the Recitals to this
Agreement.
"Prior Lenders" is defined in the Recitals to this
Agreement.
"Property" of a Person means any and all property, whether
real, personal, tangible, intangible, or mixed, of such Person,
or other assets owned, leased or operated by such Person.
"Pro Forma" is defined in Section 5.5(b).
"pro-rata" means, when used with respect to a Lender, and
any described aggregate or total amount, an amount equal to such
Lender's pro-rata share or portion based on its percentage of the
Aggregate Revolving Credit Commitment or if the Aggregate
Revolving Credit Commitment has been terminated, its percentage
of the aggregate principal amount of outstanding Obligations.
"Purchase" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement,
by which the Borrower or any of its Subsidiaries (a) acquires any
going business or all or substantially all of the assets of any
firm, corporation or division thereof, whether through purchase
of assets, merger or otherwise, or (b) directly or indirectly
acquires (in one transaction or as the most recent transaction in
a series of transactions) at least a majority (in number of
votes) of the securities of a corporation which have ordinary
voting power for the election of directors (other than securities
having such power only by reason of the happening of a
contingency) or a majority (by percentage or voting power) of the
outstanding partnership interests of a partnership.
"Purchase Agreement" means that certain Asset Purchase
Agreement dated September 10, 1997 among Les Equipements Sportifs
Davtec Inc., USA Skate Co., Inc., USA Skate Corporation,
California Pro Sports, Inc., Rawlings Canada, Inc. and the
Borrower.
"Purchasers" is defined in Section 12.3.1.
"Rate Hedging Obligations" of a Person means any and all
obligations of such Person, whether absolute or contingent and
howsoever and whensoever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and
substitutions therefor), under (a) any and all agreements,
devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, exchange
rates or forward rates applicable to such party's assets,
liabilities or exchange transactions, including, but not limited
to, dollar-denominated or cross-currency interest rate exchange
agreements, forward currency exchange agreements, interest rate
cap or collar protection agreements, forward rate currency or
interest rate options, puts and warrants, and (b) any and all
cancellations, buybacks, reversals, terminations or assignments
of any of the foregoing.
"Rate Swap Agreements" means interest rate swap, exchange,
cap, hedging or similar interest rate protection agreements
permitted or required by Section 6.24 in form and substance and,
where applicable with swap parties, acceptable to the Agent.
"Rawlings Business" means the Borrower's predecessor
business consisting of Rawlings Sporting Goods Company, a
division of Figgie, and certain related assets of other
subsidiaries of Figgie.
"Regulation D" means Regulation D of the Board of Governors
of the Federal Reserve System as from time to time in effect and
any successor thereto or other regulation or official
interpretation of said Board of Governors relating to reserve
requirements applicable to depositary institutions.
"Regulation G" means Regulation G of the Board of Governors
of the Federal Reserve System as from time to time in effect and
shall include any successor or other regulation or official
interpretation of said Board of Governors relating to the
extension of credit by Persons other than banks, brokers and
dealers for the purpose of purchasing or carrying margin stocks
applicable to such Persons.
"Regulation T" means Regulation T of the Board of Governors
of the Federal Reserve System as from time to time in effect and
shall include any successor or other regulation or official
interpretation of such Board of Governors relating to the
extension of credit by securities brokers and dealers for the
purpose of purchasing or carrying margin stocks applicable to
such Persons.
"Regulation U" means Regulation U of the Board of Governors
of the Federal Reserve System as from time to time in effect and
any successor or other regulation or official interpretation of
said Board of Governors relating to the extension of credit by
banks for the purpose of purchasing or carrying margin stocks
applicable to such Persons.
"Regulation X" means Regulation X of the Board of Governors
of the Federal Reserve System as from time to time in effect and
shall include any successor or other regulation or official
interpretation of said Board of Governors relating to the
extension of credit by the specified lenders for the purpose of
purchasing or carrying margin stocks applicable to such Persons.
"Reimbursement Agreement" means a letter of credit
application and reimbursement agreement in such form as the
Issuer may from time to time employ in the ordinary course of
business.
"Reimbursement Obligations" means, at any time, the
aggregate (without duplication) of the Obligations of the
Borrower to the Lenders, the Issuer and/or the Agent in respect
of all unreimbursed payments or disbursements made by the
Lenders, the Issuer and/or the Agent under or in respect of draws
made under the Facility Letters of Credit.
"Release" is defined in the Comprehensive Environmental
Response, Compensation and Liability Act, as amended, 42 U.S.C.
39601 et seq.
"Rentals" of a Person means the aggregate fixed amounts
payable by such Person under any lease of Property including
without limitation Capitalized Leases having an original term
(including any required renewals or any renewals at the option of
the lessor or lessee) of one year or more.
"Repayment" means the repayment on the Closing Date of that
certain $35,000,000 Note dated July 8, 1994 by the Borrower to
Figgie.
"Reportable Event" means a reportable event as defined in
Section 4043 of ERISA and the regulations issued under such
section, with respect to a Plan, excluding, however, such events
as to which the PBGC has by regulation waived the requirement of
Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event; provided, that a failure to meet
the minimum funding standard of Section 412 of the Code and of
Section 302 of ERISA shall be a Reportable Event regardless of
the issuance of any such waiver of the notice requirement in
accordance with Section 4043(a) of ERISA.
"Required Lenders" means Lenders in the aggregate having at
least 66-2/3% of the Aggregate Revolving Credit Commitment or, if
the Aggregate Revolving Credit Commitment has been terminated,
Lenders in the aggregate holding at least 66-2/3% of the sum of
(a) the aggregate unpaid principal amount of the outstanding
Loans plus (b) the aggregate amount of the outstanding Facility
Letter of Credit Obligations.
"Reserve Requirement" means, with respect to an Interest
Period, the maximum aggregate reserve requirement (including all
basic, supplemental, marginal and other reserves) which is
imposed under Regulation D on new non-personal time deposits of
$100,000 or more with a maturity equal to that of such Interest
Period.
"Restatement Date" means September 12, 1997.
"Restatement Documents" means the Acquisition Documents and
this Agreement and the other documents delivered in connection
therewith.
"Restatement Transactions" is defined in Section 4.1(d).
"Revolving Credit Advance" means an Advance made by the
Lenders to the Borrower pursuant to Section 2.1.
"Revolving Credit Commitment" means, for each Lender, the
obligation of such Lender to make Loans to the Borrower pursuant
to Section 2.1 in an aggregate amount at any one time outstanding
not exceeding the amount set forth opposite its name under the
heading "Revolving Credit Commitment" on the signature page
hereto, as such amount may be modified or reduced from time to
time pursuant to the terms of this Agreement.
"Revolving Credit Loan" means, with respect to a Lender,
such Lender's pro-rata portion of all Revolving Credit Advances.
"Revolving Credit Note" means a promissory note in
substantially the form of Exhibit A hereto, with appropriate
insertions, duly executed and delivered to the Agent by the
Borrower and payable to the order of a Lender in the amount of
its Revolving Credit Commitment, including any amendment,
modification, renewal or replacement of such promissory note.
"Risk-Based Capital Guidelines" is defined in Section 3.2.
"Section" means a numbered section of this Agreement, unless
another document is specifically referenced.
"Shareholders' Equity" means aggregate shareholders' equity
of the Borrower determined in accordance with Agreement
Accounting Principles.
"Single Employer Plan" means a Plan subject to Title IV of
ERISA, other than a Multiemployer Plan.
"Solvent" means, when used with respect to a Person, that
(a) the fair saleable value of the assets of such Person is in
excess of the total amount of the present value of its
liabilities (including for purposes of this definition all
liabilities (including loss reserves as determined by the
Borrower), whether or not reflected on a balance sheet prepared
in accordance with Agreement Accounting Principles and whether
direct or indirect, fixed or contingent, secured or unsecured,
disputed or undisputed), (b) such Person is able to pay its debts
or obligations in the ordinary course as they mature and (c) such
Person does not have unreasonably small capital to carry out its
business as conducted and as proposed to be conducted.
"Solvency" shall have a correlative meaning.
"Standby Letter of Credit" means a Facility Letter of Credit
which is not a Commercial Letter of Credit.
"Subsidiary" of a Person means (a) any corporation more than
50% of the outstanding securities having ordinary voting power of
which shall at the time be owned or controlled, directly or
indirectly, by such Person or by one or more of its Subsidiaries
or by such Person and one or more of its Subsidiaries, or (b) any
partnership, association, joint venture or similar business
organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or
controlled. Unless otherwise expressly provided, all references
herein to a "Subsidiary" shall mean a Subsidiary of the Borrower.
"Substantial Portion" means, with respect to the Property of
the Borrower and its Subsidiaries, Property which (a) represents
more than 10% of the consolidated assets of the Borrower, as
would be shown in the consolidated financial statements of the
Borrower as at the end of the Fiscal Quarter next preceding the
date on which such determination is made, or (b) is responsible
for more than 10% of the consolidated net sales or of the Net
Income of the Borrower for the 12-month period ending as of the
end of the Fiscal Quarter next preceding the date of
determination.
"Swing Line Bank" means First Chicago or any other Lender as
a successor Swing Line Bank.
"Swing Line Commitment" means the obligations of the Swing
Line Bank to make Swing Line Loans up to a maximum principal
amount of $5,000,000 at any one time outstanding.
"Swing Line Loan" means a swing line loan made available to
the Borrower by the Swing Line Bank pursuant to Section 2.21
hereof.
"Swing Line Note" means a promissory note, in substantially
the form of Exhibit B hereto, duly executed by the Borrower and
payable to the order of the Swing Line Bank in the amount of its
Swing Line Commitment, including any amendment, restatement,
modification, renewal or replacement of such Swing Line Note.
"Tangible Net Worth" means at any date (a) the consolidated
common stockholders' equity of the Borrower determined in
accordance with Agreement Accounting Principles but including
preferred stock and excluding any reductions therein resulting
from non-cash losses from discontinued operations, less (b) the
amount of the unamortized debt discount and expense, unamortized
deferred charges, goodwill, patents, trademarks, service marks,
trade names, copyrights, organization or developmental expenses
and other intangible items of the Borrower and its Subsidiaries,
other than goodwill acquired by the Borrower pursuant to the
Acquisition in an amount not to exceed $8,000,000.
"Tax Sharing Agreement" means that certain Tax Sharing and
Separation Agreement dated as of July 8, 1994 between Figgie and
the Borrower.
"Termination Event" means, with respect to a Plan which is
subject to Title IV of ERISA, (a) a Reportable Event, (b) the
withdrawal of the Borrower or any other member of the Controlled
Group from such Plan during a plan year in which the Borrower or
any other member of the Controlled Group was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA or was deemed
such under Section 4066 of ERISA, (c) the termination of such
Plan or the filing of a notice of intent to terminate such Plan
under Section 4041 of ERISA, or (d) the institution by the PBGC
of proceedings to terminate such Plan or the occurrence of any
event or condition which constitutes grounds under Section 4042
of ERISA for the termination of, or appointment of a trustee to
administer, such Plan.
"Total Capitalization" means, at any time, the sum of the
Borrower's consolidated Indebtedness and its Shareholders Equity
at such time, in each case determined in accordance with
Agreement Accounting Principles.
"Total Liabilities" means all liabilities of the Borrower,
on a consolidated basis, reflected on a balance sheet prepared in
accordance with Agreement Accounting Principles, including,
without limitation, all Indebtedness.
"Transaction Documents" means the Prior Credit Agreement,
the documents and instruments delivered in connection therewith
and the Asset Transfer Documents.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Advance, its nature as a
Floating Rate Advance or Eurodollar Advance.
"Unfunded Liability" means the amount (if any) by which the
present value of all vested and unvested accrued benefits under a
Single Employer Plan exceeds the fair market value of assets
allocable to such benefits, all determined as of the then most
recent valuation date for such Plan using PBGC actuarial
assumptions for single employer plan terminations.
"Unmatured Default" means an event which but for the lapse
of time or the giving of notice, or both, would constitute a
Default.
"Wholly-Owned Subsidiary" of a Person means (a) any
Subsidiary all of the outstanding voting securities of which
shall at the time be owned or controlled, directly or indirectly,
by such Person or one or more Wholly-Owned Subsidiaries of such
Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person, or (b) any partnership, association,
joint venture or similar business organization 100% of the
ownership interests having ordinary voting power of which shall
at the time be so owned or controlled.
The foregoing definitions shall be equally applicable to
both the singular and plural forms of the defined terms.
ARTICLE II
THE CREDITS
2.1. Revolving Credit Advances. From and including the
date hereof to but excluding the Facility Termination Date, each
Lender severally (and not jointly) agrees, on the terms and
conditions set forth in this Agreement, to make Revolving Credit
Advances to the Borrower from time to time in amounts not to
exceed in the aggregate at any one time outstanding the amount of
its pro-rata share of the Aggregate Available Commitment existing
at such time. Subject to the terms of this Agreement, the
Borrower may borrow, repay and reborrow Revolving Credit Advances
at any time prior to the Facility Termination Date.
(b) The Borrower hereby agrees that if at any time the
aggregate balance of the Revolving Credit Loans, the Swing Line
Loans and the Facility Letter of Credit Obligations exceeds the
Aggregate Revolving Credit Commitment (whether as a result of
reductions in the Aggregate Revolving Credit Commitment pursuant
to Section 2.4(b) or Section 2.7 or otherwise), the Borrower
shall repay immediately its then outstanding Revolving Credit
Loans in such amount as may be necessary to eliminate such
excess; provided, that if an excess remains after repayment of
all outstanding Revolving Credit Loans, then the Borrower shall
cash collateralize the Facility Letter of Credit Obligations by
depositing into the Letter of Credit Cash Collateral Account such
amount as may be necessary to eliminate such excess.
(c) The Borrower's obligation to pay the principal of,
and interest on, the Revolving Credit Loans shall be evidenced by
the Revolving Credit Notes. Although the Revolving Credit Notes
shall be dated the date of the initial Revolving Credit Advance,
interest in respect thereof shall be payable only for the periods
during which the Revolving Credit Loans evidenced thereby are
outstanding and, although the stated amount of each Revolving
Credit Note shall be equal to the applicable Lender's Revolving
Credit Commitment, each Revolving Credit Note shall be
enforceable, with respect to the Borrower's obligation to pay the
principal amount thereof, only to the extent of the unpaid
principal amount of the Revolving Credit Loan at the time
evidenced thereby.
(d) Each Revolving Credit Advance included in the
Revolving Credit Loan shall mature, and the principal amount
thereof and the unpaid accrued interest thereon shall be due and
payable, on the Facility Termination Date.
2.2. Ratable Loans. Each Advance hereunder shall consist of
Loans made from the several Lenders ratably in proportion to the
ratio that their respective Revolving Credit Commitments bear to
the Aggregate Revolving Credit Commitment.
2.3. Types of Advances. The Advances may be Floating Rate
Advances or Eurodollar Advances, or a combination thereof,
selected by the Borrower in accordance with Sections 2.8 and 2.9.
2.4. Commitment Fee; Reductions in Aggregate Revolving
Credit Commitment. The Borrower agrees to pay to the Agent for
the account of each Lender a commitment fee of thirty basis
points (.30%) per annum on such Lender's pro-rata share of (i)
the Aggregate Revolving Credit Commitment, minus (ii) the sum of
the outstanding balance of the Revolving Credit Loans and the
Facility Letter of Credit Obligations, calculated on a daily
basis from the date hereof to and including the Facility
Termination Date, payable on each Payment Date hereafter and on
the Facility Termination Date. All accrued commitment fees shall
be payable on the effective date of any termination of the
obligations of the Lenders to make Loans hereunder.
(b) The Borrower may permanently reduce the Aggregate
Revolving Credit Commitment in whole, or in part ratably among
the Lenders in a minimum aggregate amount of $1,000,000 or any
integral multiple of $100,000 in excess thereof, upon at least
three (3) Business Days' written notice to the Agent, which
notice shall specify the amount of any such reduction; provided,
however, that the amount of the Aggregate Revolving Credit
Commitment may not be reduced below the sum of (i) the aggregate
principal amount of the outstanding Revolving Credit Advances,
plus (ii) the aggregate amount of the outstanding Facility Letter
of Credit Obligations, plus (iii) the aggregate principal amount
of the outstanding Swing Line Loans. Such reductions shall be in
addition to reductions occurring pursuant to Section 2.7.
2.5 Minimum Amount of Each Advance. Each Eurodollar
Advance shall be in the minimum amount of $1,000,000 (and in
multiples of $250,000 if in excess thereof), and each Floating
Rate Advance shall be in the minimum amount of $250,000 (and in
multiples of $100,000 if in excess thereof); provided, however,
that (a) any Floating Rate Advance may be in the amount of the
unused Aggregate Revolving Credit Commitment and (b) in no event
shall more than eight (8) Eurodollar Advances be permitted to be
outstanding at any time.
2.6 Optional Principal Payments. The Borrower may from
time to time pay, without penalty or premium, all outstanding
Floating Rate Advances, or, in a minimum aggregate amount of
$250,000 or any integral multiple of $100,000 in excess thereof,
any portion of the outstanding Floating Rate Advances upon two
Business Days' prior notice to the Agent. A Eurodollar Advance
may not be paid prior to the last day of the applicable Interest
Period.
2.7 Mandatory Commitment Reductions. The Aggregate
Revolving Credit Commitment shall be automatically and
permanently reduced by the following amounts on the following
dates:
Date Reduction Amount
September 1, 1998 $ 4,000,000
September 1, 1999 $ 5,000,000
September 1, 2000 $ 6,000,000
September 1, 2001 $ 7,000,000
September 1, 2002 $68,000,000 or such other
amount as shall
then be
outstanding
(b) The Aggregate Revolving Credit Commitment shall also be
automatically and permanently reduced in the amounts and at the
times set forth below:
(i) in the amount of $18,000,000, (A) in the event
that the Acquisition is not consummated by the close of
business on December 31, 1997, as of such date, or (B) in
the event that the Purchase Agreement is terminated prior to
December 31, 1997, as of the date of such termination;
(ii) within two (2) Business Days after the end of each
Fiscal Quarter, in an amount equal to 100% of the aggregate
Net Available Proceeds realized upon all Asset Dispositions
made by the Borrower or any Subsidiary; provided, that no
such reduction shall occur with respect to amounts less than
or equal to $500,000 in the aggregate in each Fiscal Year;
and
(iii) within two (2) Business Days after the receipt
thereof by the Borrower, in an amount equal to 100% of the
aggregate Net Available Proceeds realized upon all issuances
of common stock of the Borrower or any Subsidiary, except to
the extent made pursuant to clause (i) or (ii) of Section
6.10.
(c) Mandatory commitment reductions under this Section
2.7 shall be cumulative and in addition to reductions occurring
pursuant to Section 2.4(b). Any mandatory commitment reductions
under Section 2.7(b) or voluntary commitment reduction pursuant
to Section 2.4(b) shall be applied to the mandatory commitment
reductions required to be made pursuant to Section 2.7(a) in the
inverse order of maturity.
(d) Any reduction in the Aggregate Revolving Credit
Commitment pursuant to this Section 2.7 or otherwise shall
ratably reduce the Revolving Credit Commitment of each Lender.
2.8 Method of Selecting Types and Interest Periods for New
Advances. The Borrower shall select the Type of Advance and, in
the case of each Eurodollar Advance, the Interest Period
applicable to each Advance from time to time. The Borrower shall
give the Agent irrevocable notice (a "Borrowing Notice") not
later than 10:00 a.m. (Chicago time) at least one (1) Business
Day before the Borrowing Date of each Floating Rate Advance and
at least three (3) Business Days before the Borrowing Date for
each Eurodollar Advance, specifying:
(a) the Borrowing Date, which shall be a Business Day,
of such Advance;
(b) the aggregate amount of such Advance;
(c) the Type of Advance selected; and
(d) in the case of each Eurodollar Advance, the
Interest Period applicable thereto, which shall end on or prior
to the Facility Termination Date.
Not later than noon (Chicago time) on each Borrowing Date, each
Lender shall make available its Loan or Loans, in funds
immediately available in Chicago, to the Agent at its address
specified pursuant to Article XIII. The Agent will make the
funds so received from the Lenders available to the Borrower at
the Agent's aforesaid address.
2.9 Conversion and Continuation of Outstanding Advances.
Floating Rate Advances shall continue as Floating Rate Advances
unless and until such Floating Rate Advances are converted by the
Borrower into Eurodollar Advances. Each Eurodollar Advance of
any Type shall continue as a Eurodollar Advance of such Type
until the end of the then applicable Interest Period therefor, at
which time such Eurodollar Advance shall be automatically
converted into a Floating Rate Advance unless the Borrower shall
have given the Agent a Conversion/Continuation Notice requesting
that, at the end of such Interest Period, such Eurodollar Advance
continue as a Eurodollar Advance of such Type for the same or
another Interest Period. Subject to the terms of Section 2.5,
the Borrower may elect from time to time to convert all or any
part of an Advance of any Type into any other Type or Types of
Advances; provided, however, that any conversion of any
Eurodollar Advance shall be made on, and only on, the last day of
the Interest Period applicable thereto. The Borrower shall give
the Agent irrevocable notice (a "Conversion/Continuation Notice")
of each conversion of a Floating Rate Advance or continuation of
a Eurodollar Advance not later than 10:00 a.m. (Chicago time) at
least one (1) Business Day, in the case of a conversion into a
Floating Rate Advance, or at least three (3) Business Days, in
the case of a conversion into or continuation of a Eurodollar
Advance, prior to the date of the requested conversion or
continuation, specifying:
(a) the requested date which shall be a Business Day,
of such conversion or continuation;
(b) the aggregate amount and Type of the Advance which
is to be converted or continued; and
(c) the amount and Type(s) of Advance(s) into which
such Advance is to be converted or continued and, in the
case of a conversion into or continuation of a Eurodollar
Advance, the duration of the Interest Period applicable
thereto, which shall end on or prior to the Facility
Termination Date.
2.10 Changes in Interest Rate, etc. Each Floating Rate
Advance shall bear interest at the Floating Rate from and
including the date of such Advance or the date on which such
Advance was converted into a Floating Rate Advance to (but not
including) the date on which such Floating Rate Advance is paid
or converted to a Eurodollar Advance. Changes in the rate of
interest on that portion of any Advance maintained as a Floating
Rate Advance will take effect simultaneously with each change in
the Alternate Base Rate. Each Eurodollar Advance shall bear
interest from and including the first day of the Interest Period
applicable thereto to, but not including, the last day of such
Interest Period at the interest rate determined as applicable to
such Eurodollar Advance. No Interest Period may end after the
Facility Termination Date. The Borrower shall select Interest
Periods so that it is not necessary to repay any portion of a
Eurodollar Advance prior to the last day of the applicable
Interest Period in order to make a mandatory repayment required
pursuant to Section 2.1(b) in respect of a reduction in the
Aggregate Revolving Credit Commitment pursuant to Section 2.7(a).
2.11 Rates Applicable After Default. Notwithstanding
anything to the contrary contained in Section 2.8 or 2.9, no
Advance may be made as, converted into or continued as a
Eurodollar Advance (except with the consent of the Agent and the
Required Lenders) when any Default or Unmatured Default or Change
in Control has occurred and is continuing. During the
continuance of a Default and following the occurrence of a Change
in Control, the Required Lenders may, at their option, by notice
to the Borrower (which notice may be revoked at the option of the
Required Lenders notwithstanding any provision of Section 8.2
requiring unanimous consent of the Lenders to changes in interest
rates), declare that after a Default has occurred and for the
duration of time during which such Default shall be continuing or
after the occurrence of a Change in Control, each Eurodollar
Advance and Floating Rate Advance shall bear interest at a rate
per annum equal to the rate otherwise applicable plus three
percent (3%) per annum.
2.12 Method of Payment. All payments of the Obligations
hereunder shall be made, without setoff, deduction or
counterclaim, in immediately available funds to the Agent at the
Agent's address specified pursuant to Article XIII, or at any
other Lending Installation of the Agent specified in writing by
the Agent to the Borrower, by noon (Chicago time) on the date
when due and shall be applied ratably by the Agent among the
Lenders. If the Borrower shall be required by law to deduct any
such amounts from or in respect of any sum payable hereunder to
the Agent or any Lender, then the sum payable hereunder shall be
increased so that, after making all required deductions, the
Agent or such Lender receives an amount equal to the sum it would
have received had no such deduction been made, and the Borrower
shall indemnify the Agent and such Lender for taxes, assessments
and governmental charges imposed by any jurisdiction on account
of amounts paid or payable pursuant to this sentence. Within 30
days after the date of any payment of any such amount withheld by
the Borrower in respect of any payment to the Agent or any
Lender, the Borrower shall furnish to the Agent or such Lender
the original or certified copy of a receipt evidencing payment
thereof. Each payment delivered to the Agent for the account of
any Lender shall be delivered promptly by the Agent to such
Lender in the same type of funds that the Agent received at its
address specified pursuant to Article XIII or at any Lending
Installation specified in a notice received by the Agent from
such Lender. The Agent is hereby authorized to charge the
account of the Borrower which is designated by the Borrower
maintained with First Chicago for each payment of principal,
interest and fees as it becomes due hereunder; provided, that
after a Default has occurred and is continuing or after the
occurrence of a Change in Control, the Agent may so charge any
account of the Borrower without such designation. So long as (a)
no Default shall have occurred and be continuing or (b) no Change
in Control has occurred, the Borrower may designate how each
payment is to be applied.
2.13 Notes; Telephonic Notices. Each Lender is hereby
authorized to record the principal amount of each of its Loans
and each repayment on the schedule attached to its Revolving
Credit Note; provided, however, that neither the failure to so
record nor any error in such recordation shall affect the
Borrower's obligations under such Note. The Borrower hereby
authorizes the Lenders and the Agent to extend, convert or
continue Advances, effect selections of Types of Advances and to
transfer funds based on telephonic notices made by any person or
persons the Agent or any Lender in good faith believes to be
acting on behalf of the Borrower. The Borrower agrees to deliver
promptly to the Agent a written confirmation, if such
confirmation is requested by the Agent or any Lender, of each
telephonic notice signed by an Authorized Officer. If the
written confirmation differs in any material respect from the
action taken by the Agent and the Lenders, the records of the
Agent and the Lenders shall govern absent manifest error.
2.14 Interest Payment Dates; Interest and Fee Basis.
Interest accrued on each Floating Rate Advance shall be payable
on each Payment Date, commencing with the first such date to
occur after the date hereof, on any date on which a Floating Rate
Advance is prepaid, whether due to acceleration or otherwise, and
at maturity. Interest accrued on that portion of the outstanding
principal amount of any Floating Rate Advance converted into a
Eurodollar Advance on a day other than a Payment Date shall be
payable on the next Payment Date. Interest accrued on each
Eurodollar Advance shall be payable on the last day of its
applicable Interest Period, on any date on which the Eurodollar
Advance is prepaid, whether by acceleration or otherwise, and at
maturity. Interest accrued on each Eurodollar Advance having an
Interest Period longer than three months shall also be payable on
the last day of each three-month interval during such Interest
Period. Interest and commitment fees shall be calculated for
actual days elapsed on the basis of a 360-day year. Interest
shall be payable for the day an Advance is made but not for the
day of any payment on the amount paid if payment is received
prior to noon (Chicago time) at the place of payment. If any
payment of principal of or interest on an Advance shall become
due on a day which is not a Business Day, such payment shall be
made on the next succeeding Business Day and, in the case of a
principal payment, such extension of time shall be included in
computing interest in connection with such payment.
2.15 Notification of Advances, Interest Rates, Prepayments
and Commitment Reductions. Promptly after receipt thereof, the
Agent will notify each Lender of the contents of each Aggregate
Revolving Credit Commitment reduction notice, Borrowing Notice,
Conversion/Continuation Notice, Issuance Request and repayment
notice received by it hereunder. The Agent will notify each
Lender of the interest rate applicable to each Eurodollar Advance
promptly upon determination of such interest rate and will give
each Lender prompt notice of each change in the Alternate Base
Rate.
2.16 Lending Installations. Each Lender may book its Loans
at any Lending Installation selected by such Lender and may
change its Lending Installation from time to time. All terms of
this Agreement shall apply to any such Lending Installation and
the Notes shall be deemed held by each Lender for the benefit of
such Lending Installation. Each Lender may, by written or
telecopy notice to the Agent and the Borrower, designate a
Lending Installation through which Loans will be made by it and
for whose account Loan payments are to be made.
2.17 Non-Receipt of Funds by the Agent. Unless the Borrower
or a Lender, as the case may be, notifies the Agent prior to the
date on which it is scheduled to make payment to the Agent of (a)
in the case of a Lender, the proceeds of a Loan, or (b) in the
case of the Borrower, a payment of principal, interest or fees to
the Agent for the account of the Lenders, that it does not intend
to make such payment, the Agent may assume that such payment has
been made. The Agent may, but shall not be obligated to, make
the amount of such payment available to the intended recipient in
reliance upon such assumption. If the Borrower has not in fact
made such payment to the Agent, the Lenders shall, on demand by
the Agent, repay to the Agent the amount so made available
together with interest thereon in respect of each day during the
period commencing on the date such amount was so made available
by the Agent until the date the Agent recovers such amount at a
rate per annum equal to the Federal Funds Effective Rate for such
day. If any Lender has not in fact made such payment to the
Agent, such Lender or the Borrower shall, on demand by the Agent,
repay to the Agent the amount so made available together with
interest thereon in respect of each day during the period
commencing on the date such amount was so made available by the
Agent until the date the Agent recovers such amount at a rate per
annum equal to (a) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day, or (b) in the case of
payment by the Borrower, the interest rate applicable to the
relevant Loan.
2.18 Withholding Tax Exemption. At least five Business Days
prior to the first date on which interest or fees are payable
hereunder for the account of any Lender, each Lender that is not
incorporated under the laws of the United States of America, or a
state thereof, agrees that it will deliver to each of the
Borrower and the Agent two duly completed copies of United States
Internal Revenue Service Forms 1001 or 4224 and W-8, certifying
in either case that such Lender is entitled to receive payments
under this Agreement and the Notes without deduction or
withholding of any United States federal income taxes. Each
Lender which so delivers a Form 1001 or 4224 and Form W-8 further
undertakes to deliver to each of the Borrower and the Agent two
additional copies of such form (or a successor form) on or before
the date that such form expires (currently, three successive
calendar years for Form 1001, one calendar year for Form 4224) or
becomes obsolete or after the occurrence of any event requiring a
change in the most recent forms so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be
reasonably requested by the Borrower or the Agent, in each case
certifying that such Lender is entitled to receive payments under
this Agreement and the Notes without deduction or withholding of
any United States federal income taxes, unless an event
(including, without limitation, any change in treaty, law or
regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Lender from duly
completing and delivering any such form with respect to it and
such Lender advises the Borrower and the Agent that it is not
capable of receiving payments without any deduction or
withholding of United States federal income tax.
2.19 Agent's Fees. The Borrower shall pay to the Agent
those fees, in addition to the commitment fees referenced in
Section 2.4(a), in the amounts and at the times separately agreed
to between the Agent and the Borrower.
2.20 Facility Letters of Credit.
2.20.1 Issuance of Facility Letters of Credit.
From and after the date hereof, the Issuer agrees, upon the
terms and conditions set forth in this Agreement, to issue
at the request and for the account of the Borrower, one or
more Facility Letters of Credit; provided, however, that the
Issuer shall not be under any obligation to issue, and shall
not issue, any Facility Letter of Credit if (i) any order,
judgment or decree of any governmental authority or other
regulatory body with jurisdiction over the Issuer shall
purport by its terms to enjoin or restrain such Issuer from
issuing such Facility Letter of Credit, or any law or
governmental rule, regulation, policy, guideline or
directive (whether or not having the force of law) from any
governmental authority or other regulatory body with
jurisdiction over the Issuer shall prohibit, or request that
the Issuer refrain from, the issuance of Facility Letters of
Credit in particular or shall impose upon the Issuer with
respect to any Facility Letter of Credit any restriction or
reserve or capital requirement (for which the Issuer is not
otherwise compensated) or any unreimbursed loss, cost or
expense which was not applicable, in effect and known to the
Issuer as of the date of this Agreement and which the Issuer
in good faith deems material to it; (ii) one or more of the
conditions to such issuance contained in Section 4.2 is not
then satisfied; or (iii) after giving effect to such
issuance, the aggregate outstanding amount of the Facility
Letter of Credit Obligations would exceed the Facility
Letter of Credit Sublimit; provided, further, that if any
circumstance set forth in clause (i) is applicable, then, at
the Borrower's request, another Lender may serve as Issuer
and issue Facility Letters of Credit so long as none of
clauses (i), (ii), or (iii) shall be applicable at the time
of each such issuance by such Issuer.
(b) In no event shall: (i) the aggregate amount of
the Facility Letter of Credit Obligations at any time exceed
the Facility Letter of Credit Sublimit; (ii) the aggregate
amount of Facility Letter of Credit Obligations in respect
of Standby Letters of Credit exceed $3,000,000; (iii) the
sum at any time of (A) the aggregate amount of Facility
Letter of Credit Obligations, (B) the aggregate principal
balance of outstanding Revolving Credit Advances and (C) the
aggregate principal balance of Swing Line Loans exceed the
amount of the Aggregate Revolving Credit Commitment; or (iv)
the expiration date of any Facility Letter of Credit
(including, without limitation, Facility Letters of Credit
issued with an automatic "evergreen" provision providing for
renewal absent advance notice by the applicable Borrower or
the Issuer), or the date for payment of any draft presented
thereunder and accepted by the Issuer, be later than
September 1, 2002.
2.20.2 Participating Interests. Immediately upon
the issuance by the Issuer of a Facility Letter of Credit in
accordance with Section 2.20.4, each Lender shall be deemed
to have irrevocably and unconditionally purchased and
received from the Issuer, without recourse, representation
or warranty, an undivided participation interest equal to
its pro-rata share of the Aggregate Revolving Credit
Commitment of the principal amount of such Facility Letter
of Credit and each draw paid by the Issuer thereunder. Each
Lender's obligation to pay its proportionate share of all
draws under the Facility Letters of Credit, absent gross
negligence or willful misconduct by the Issuer in honoring
any such draw, shall be absolute, unconditional and
irrevocable and in each case shall be made without
counterclaim or set-off by such Lender.
2.20.3 Facility Letter of Credit Reimbursement
Obligations. (a) The Borrower agrees to pay to the Issuer
of a Facility Letter of Credit (i) on each date that any
amount is drawn under each Facility Letter of Credit a sum
(and interest on such sum as provided in clause (ii) below)
equal to the amount so drawn plus all other charges and
expenses with respect thereto specified in Section 2.20.6 or
in the applicable Reimbursement Agreement and (ii) interest
on any and all amounts remaining unpaid under this Section
2.20.3 until payment in full at the Floating Rate plus the
margin specified in Section 2.11. The Borrower agrees to
pay to the Issuer the amount of all Facility Letter of
Credit Reimbursement Obligations owing in respect of any
Facility Letter of Credit immediately when due, under all
circumstances, including, without limitation, any of the
following circumstances: (a) any lack of validity or
enforceability of this Agreement or any of the Loan
Documents; (b) the existence of any claim, set-off, defense
or other right which the Borrower may have at any time
against a beneficiary named in a Facility Letter of Credit,
any transferee of any Facility Letter of Credit (or any
Person for whom any such transferee may be acting), any
Lender or any other Person, whether in connection with this
Agreement, any Facility Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including
any underlying transaction between the Borrower and the
beneficiary named in any Facility Letter of Credit); (c) the
validity, sufficiency or genuineness of any document which
the Issuer has determined in good faith complies on its face
with the terms of the applicable Facility Letter of Credit,
even if such document should later prove to have been
forged, fraudulent, invalid or insufficient in any respect
or any statement therein shall have been untrue or
inaccurate in any respect; or (d) the surrender or
impairment of any security for the performance or observance
of any of the terms hereof.
(b) Notwithstanding any provisions to the contrary in
any Reimbursement Agreement, the Borrower agrees to
reimburse the Issuer for amounts which the Issuer pays under
such Facility Letter of Credit no later than the time
specified in this Agreement. If the Borrower does not pay
any such Facility Letter of Credit Reimbursement Obligations
when due, the Borrower shall be deemed to have immediately
requested that the Lenders make a Floating Rate Advance
under this Agreement in a principal amount equal to such
unreimbursed Facility Letter of Credit Reimbursement
Obligations. The Agent shall promptly notify the Lenders of
such deemed request and, without the necessity of compliance
with the requirements of Sections 2.5 and 4.2, each Lender
shall make available to the Agent its Loan in the manner
prescribed for Floating Rate Advances. The proceeds of such
Loans shall be paid over by the Agent to the Issuer for the
account of the Borrower in satisfaction of such unreimbursed
Facility Letter of Credit Reimbursement Obligations, which
shall thereupon be deemed satisfied by the proceeds of, and
replaced by, such Floating Rate Advance.
(c) If the Issuer makes a payment on account of any
Facility Letter of Credit and is not concurrently reimbursed
therefor by the Borrower and if for any reason a Floating
Rate Advance may not be made pursuant to paragraph (b)
above, then as promptly as practical during normal banking
hours on the date of its receipt of such notice or, if not
practicable on such date, not later than noon (Chicago time)
on the Business Day immediately succeeding such date of
notification, each Lender shall deliver to the Agent for the
account of the Issuer, in immediately available funds, the
purchase price for such Lender's interest in such
unreimbursed Facility Letter of Credit Obligations, which
shall be an amount equal to such Lender's pro-rata share of
such payment. Each Lender shall, upon demand by the Issuer,
pay the Issuer interest on such Lender's pro-rata share of
such draw from the date of payment by the Issuer on account
of such Facility Letter of Credit until the date of delivery
of such funds to the Issuer by such Lender at a rate per
annum, computed for actual days elapsed based on a 360-day
year, equal to the Federal Funds Effective Rate for such
period; provided, that such payments shall be made by the
Lenders only in the event and to the extent that the Issuer
is not reimbursed in full by the Borrower for interest on
the amount of any draw on the Facility Letters of Credit.
(d) At any time after the Issuer has made a payment on
account of any Facility Letter of Credit and has received
from any other Lender such Lender's pro-rata share of such
payment, such Issuer shall, forthwith upon its receipt of
any reimbursement (in whole or in part) by the Borrower for
such payment, or of any other amount from the Borrower or
any other Person in respect of such payment (including,
without limitation, any payment of interest or penalty fees
and any payment under any collateral account agreement of
the Borrower or any Loan Document but excluding any transfer
of funds from any other Lender pursuant to Section
2.20.3(b)), transfer to such other Lender such other
Lender's ratable share of such reimbursement or other
amount; provided, that interest shall accrue for the benefit
of such Lender from the time such Issuer has made a payment
on account of any Facility Letter of Credit; provided,
further, that in the event that the receipt by the Issuer of
such reimbursement or other amount is found to have been a
transfer in fraud of creditors or a preferential payment
under the United States Bankruptcy Code or is otherwise
required to be returned, such Lender shall promptly return
to the Issuer any portion thereof previously transferred by
the Issuer to such Lender, but without interest to the
extent that interest is not payable by the Issuer in
connection therewith.
2.20.4 Procedure for Issuance. Prior to the
issuance of each Facility Letter of Credit, and as a
condition of such issuance, the Borrower shall deliver to
the Issuer (with a copy to the Agent) a Reimbursement
Agreement signed by such Borrower, together with such other
documents or items as may be required pursuant to the terms
thereof, and the proposed form and content of such Facility
Letter of Credit shall be reasonably satisfactory to the
Issuer. Each Facility Letter of Credit shall be issued no
earlier than two (2) Business Days after delivery of the
foregoing documents, which delivery may be by the Borrower
to the Issuer by telecopy, telex or other electronic means
followed by delivery of executed originals within five (5)
days thereafter. The documents so delivered shall be in
compliance with the requirements set forth in Section
2.20.1(b), and shall specify therein (i) the stated amount
of the Facility Letter of Credit requested, (ii) the
effective date of issuance of such requested Facility Letter
of Credit, which shall be a Business Day, (iii) the date on
which such requested Facility Letter of Credit is to expire,
which shall be a Business Day prior to September 1, 2002,
(iv) the entity for whose benefit the requested Facility
Letter of Credit is to be issued, which shall be the
Borrower or a Subsidiary (v) whether the requested Facility
letter of Credit is a Standby Letter of Credit or Commercial
Letter of Credit, and (vi) the aggregate amount of Facility
Letter of Credit Obligations in respect of Standby Letters
of Credit and Commercial Letters of Credit which are
outstanding and which will be outstanding giving effect to
the requested Facility Letter of Credit issuance. The
delivery of the foregoing documents and information shall
constitute an "Issuance Request" for purposes of this
Agreement. Subject to the terms and conditions of Section
2.20.1 and provided that the applicable conditions set forth
in Section 4.2 hereof have been satisfied, the Issuer shall,
on the requested date, issue a Facility Letter of Credit on
behalf of the Borrower in accordance with the Issuer's usual
and customary business practices. In addition, any
amendment of an existing Facility Letter of Credit shall be
deemed to be an issuance of a new Facility Letter of Credit
and shall be subject to the requirements set forth above.
The Issuer shall give the Agent prompt written notice of the
issuance of any Facility Letter of Credit.
2.20.5 Nature of the Lenders' Obligations. (a) As
between the Borrower and the Lenders, the Borrower assumes
all risks of the acts and omissions of, or misuse of the
Facility Letters of Credit by, the respective beneficiaries
of the Facility Letters of Credit. In furtherance and not
in limitation of the foregoing, the Lenders shall not be
responsible for (i) the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application
for an issuance of a Facility Letter of Credit, even if it
should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Facility
Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) the failure of
the beneficiary of a Facility Letter of Credit to comply
fully with conditions required to be satisfied by any Person
other than the Issuer in order to draw upon such Facility
Letter of Credit; (iv) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise; (v) errors in the
interpretation of technical terms; (vi) the misapplication
by the beneficiary of a Facility Letter of Credit of the
proceeds of any drawing under such Facility Letter of
Credit; or (vii) any consequences arising from causes beyond
control of the Issuer.
(b) In furtherance and extension and not in limitation
of the specific provisions hereinabove set forth, any action
taken or omitted by the Issuer under or in connection with
the Facility Letters of Credit or any related certificates,
if taken or omitted in good faith, shall not put the Agent
or any Lender under any resulting liability to the Borrower
or relieve the Borrower of any of its obligations hereunder
to the Issuer or any such Person.
2.20.6 Facility Letter of Credit Fees. The Borrower
hereby agrees to pay to the Agent for the account of the
Issuer or the Lenders, as applicable, a letter of credit fee
with respect to each Facility Letter of Credit from and
including the date of issuance thereof until the date such
Facility Letter of Credit is fully drawn, cancelled or
expired, (a) for the account of the Issuer, computed at such
rate as may be agreed upon between the Issuer and the
Borrower, on the aggregate initial face amount of such
Facility Letter of Credit payable on the date of issuance,
and (b) for the ratable account of the Lenders, equal to (i)
in the case of Commercial Letters of Credit, .50% of the
aggregate initial face amount of such Commercial Letter of
Credit, payable upon the date of issuance thereof, and (ii)
in the case of Standby Letters of Credit, the Applicable
Margin times the aggregate amount from time to time
available to be drawn on such Facility Letter of Credit,
calculated with respect to actual days elapsed on the basis
of a 360-day year and payable quarterly in arrears on each
Payment Date in each year (with such amount to be paid by
the Agent to each Lender within 15 days after such Payment
Date) and upon the expiration, cancellation or utilization
in full of such Facility Letter of Credit. In addition to
the foregoing, the Borrower agrees to pay the Issuer any
other fees customarily charged by it in respect of standby
or commercial Letters of Credit issued by it.
2.21. Swing Line Loans.
2.21.1 Amount of Swing Line Loans. Subject to
the terms and conditions set forth in this Agreement, at any
time prior to the earlier of (x) the Facility Termination
Date and (y) the termination of the obligation of the
Lenders to make Loans hereunder, the Swing Line Bank agrees
to make swing line loans to the Borrower from time to time,
in a minimum amount of $100,000 and in increments of $25,000
in excess thereof and in an aggregate amount not to exceed
the Swing Line Commitment (each, individually, a "Swing Line
Loan" and collectively, the "Swing Line Loans"); provided,
however, that at no time shall the sum of (a) the principal
amount of outstanding Revolving Credit Loans, plus (b) the
outstanding Facility Letter of Credit Obligations, plus (c)
the principal amount of outstanding Swing Line Loans exceed
the Aggregate Revolving Credit Commitment. Subject to the
terms of this Agreement, the Borrower may borrow, repay and
reborrow Swing Line Loans at any time prior to the earlier
of (x) the Facility Termination Date and (y) the termination
of the obligation of the Lenders to make Loans hereunder.
2.21.2 Borrowing Notice. The Borrower shall give
the Agent and the Swing Line Bank telephonic notice, not
later than 11:00 a.m. (Chicago time) on the Borrowing Date
of each Swing Line Loan, specifying (a) the applicable
Borrowing Date (which shall be a Business Day), and (b) the
aggregate amount of the requested Swing Line Loan.
2.21.3 Making of Swing Line Loans. Not later
than 1:30 p.m. (Chicago time) on the applicable Borrowing
Date, the Swing Line Bank shall make available its Swing
Line Loan, in funds immediately available in Chicago, to the
Agent at its address specified on the signature pages to
this Agreement; provided, that each of the conditions set
forth in Section 4.2 shall be satisfied (with the making of
a Swing Line Loan deemed to be an Advance for the purposes
of such Section 4.2). The Agent will promptly make the
funds so received from the Swing Line Bank available to the
Borrower at the Agent's aforesaid address.
2.21.4 Repayment of Swing Line Loans. The
Borrower may at any time pay, without penalty or premium,
all outstanding Swing Line Loans upon notice to the Agent
and the Swing Line Bank. In addition, the Agent (a) may at
any time in its sole discretion with respect to any
outstanding Swing Line Loan, or (b) shall on the fifth
Business Day after the Borrowing Date of any Swing Line Loan
which, after giving effect thereto, caused the aggregate
principal amount of all outstanding Swing Line Loans to be
greater than $500,000, require the Lenders (including the
Swing Line Bank) to make Revolving Loans pursuant to Section
2.1 hereof to repay such outstanding Swing Line Loans. Not
later than 1:30 p.m. (Chicago time) on the date of any
notice received pursuant to this Section 2.21.4, each Lender
shall make available its required Revolving Loan in funds
immediately available in Chicago to the Agent at its address
specified on the signature pages to this Agreement. Unless
a Lender shall have notified the Swing Line Bank, prior to
its making any Swing Line Loan, that any applicable
condition precedent set forth in Section 4.1 or 4.2 had not
then been satisfied, such Lender's obligation to make
Revolving Loans pursuant to this Section 2.21.4 to repay
Swing Line Loans shall be unconditional, continuing,
irrevocable and absolute and shall not be affected by any
circumstance, including, without limitation, (i) any set-off,
counterclaim, recoupment, defense or any other rights
which such Lender may have against the Agent, the Swing Line
Bank or any other Person, (ii) the occurrence or continuance
of a Default or Unmatured Default or any termination of the
obligation of the Lenders to make Revolving Loans pursuant
to Section 7.2 hereof or otherwise, (iii) any adverse change
in the condition (financial or otherwise) of the Borrower,
or (iv) any other circumstance, happening or event
whatsoever. In the event that any Lender fails to make
payment to the Agent of any amount due under this Section
2.21.4, the Agent shall be entitled to receive, retain and
apply against such obligation the principal and interest
otherwise payable to such Lender hereunder until the Agent
received such payment from such Lender or such obligation is
otherwise fully satisfied. In addition to the foregoing, if
for any reason any Lender fails to make a Revolving Loan
required to be made by it pursuant to this Section 2.21.4,
such Lender shall be deemed, at the option of the Agent, to
have unconditionally and irrevocably purchased from the
Swing Line Bank, without recourse or warranty, an undivided
interest and participation in the applicable Swing Line Loan
in the amount of such Revolving Loan, and such interest and
participation may be recovered from such Lender together
with interest thereon at the Federal Funds Effective Rate
for each day during the period commencing on the date of
demand and ending on the date such amount is received. On
the Facility Termination Date, the Borrower shall repay in
full the outstanding principal balance of the Swing Line
Loans.
2.21.5 Rate Options for Swing Line Loans. The
Swing Line Loans shall at all times bear interest at the
Floating Rate.
ARTICLE III
CHANGE IN CIRCUMSTANCES
3.1 Yield Protection. If, after the Closing Date, the
adoption or any change in any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or
directive (whether or not having the force of law), or any
interpretation thereof, or the compliance of any Lender
therewith,
(a) subjects any Lender or any applicable Lending
Installation to any tax, duty, charge or withholding on or
from payments due from the Borrower (excluding taxation of
the overall net income of any Lender or applicable Lending
Installation imposed by the jurisdiction in which such
Lender or Lending Installation is incorporated or has its
principal place of business), or changes the basis of
taxation of principal, interest or any other payments to any
Lender or Lending Installation in respect of its Loans, its
interest in the Facility Letters of Credit or other amounts
due it hereunder, or
(b) imposes or increases or deems applicable any
reserve, assessment, insurance charge, special deposit or
similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender or any
applicable Lending Installation (other than reserves and
assessments taken into account in determining the interest
rate applicable to Eurodollar Advances), or
(c) imposes any other condition the result of which is
to increase the cost to any Lender or any applicable Lending
Installation of making, funding or maintaining loans or
issuing Facility Letters of Credit or reduces any amount
receivable by any Lender or any applicable Lending
Installation in connection with Loans or Facility Letters of
Credit, or requires any Lender or any applicable Lending
Installation to make any payment calculated by reference to
the amount of Loans held, Facility Letters of Credit issued
or participated in, or interest received by it, by an amount
deemed material by such Lender,
then, within 15 days of demand by such Lender, the Borrower shall
pay such Lender that portion of such increased expense incurred
or resulting in an amount received which such Lender determines
is attributable to making, funding and maintaining its Loans, its
interest in the Facility Letters of Credit, and its Commitment.
3.2 Changes in Capital Adequacy Regulations. If a Lender
determines the amount of capital required or expected to be
maintained by such Lender, any Lending Installation of such
Lender or any corporation controlling such Lender is increased as
a result of a Change, then, within 15 days of demand by such
Lender, the Borrower shall pay such Lender the amount necessary
to compensate for any shortfall in the rate of return on the
portion of such increased capital which such Lender determines is
attributable to this Agreement, its Loans, its interest in the
Facility Letters of Credit, or its obligation to make Loans or
participate in or issue Facility Letters of Credit hereunder
(after taking into account such Lender's policies as to capital
adequacy). "Change" means (a) any change after the Closing Date
in the Risk-Based Capital Guidelines, or (b) any adoption of or
change in any other law, governmental or quasi-governmental rule,
regulation, policy, guideline, interpretation, or directive
(whether or not having the force of law) after the Closing Date
which affects the amount of capital required or expected to be
maintained by any Lender or any Lending Installation or any
corporation controlling any Lender. "Risk-Based Capital
Guidelines" means (a) the risk-based capital guidelines in effect
in the United States on the Closing Date, including transition
rules, and (b) the corresponding capital regulations promulgated
by regulatory authorities outside the United States implementing
the July 1988 report of the Basle Committee on Banking Regulation
and Supervisory Practices entitled "International Convergence of
Capital Measurements and Capital Standards," including transition
rules, and any amendments to such regulations adopted prior to
the Closing Date.
3.3 Availability of Types of Advances. If any Lender
determines that maintenance of its Eurodollar Advances at a
suitable Lending Installation would violate any applicable law,
rule, regulation, or directive, whether or not having the force
of law, or if the Required Lenders determine that (a) deposits of
a type and maturity appropriate to match fund Eurodollar Advances
are not available, or (b) the interest rate applicable to a Type
of Advance does not accurately or fairly reflect the cost of
making or maintaining such Advance, then the Agent shall suspend
the availability of the affected Type of Advance and require any
Eurodollar Advances of the affected Type to be repaid.
3.4 Funding Indemnification. If any payment of a
Eurodollar Advance occurs on a date which is not the last day of
the applicable Interest Period, whether because of acceleration,
prepayment or otherwise, or a Eurodollar Advance is not made on
the date specified by the Borrower for any reason other than
default by the Lenders, the Borrower will indemnify the Agent and
each Lender for any loss or cost incurred by it resulting
therefrom, including, without limitation, any loss or cost in
liquidating or employing deposits acquired to fund or maintain
the Eurodollar Advance.
3.5 Lender Statements; Survival of Indemnity. To the extent
reasonably possible, each Lender shall designate an alternate
Lending Installation with respect to its Eurodollar Advances to
reduce any liability of the Borrower to such Lender under
Sections 3.1 and 3.2 or to avoid the unavailability of a Type of
Advance under Section 3.3, so long as such designation is not
disadvantageous to such Lender. Each Lender shall deliver a
written statement of such Lender to the Borrower (with a copy to
the Agent) as to the amount due, if any, under Sections 3.1, 3.2
or 3.4. Such written statement shall set forth in reasonable
detail the calculations upon which such Lender determined such
amount and shall be final, conclusive and binding on the Borrower
in the absence of manifest error. Determination of amounts
payable under such Sections in connection with a Eurodollar
Advances shall be calculated as though each Lender funded its
Eurodollar Advances through the purchase of a deposit of the type
and maturity corresponding to the deposit used as a reference in
determining the Eurodollar Rate applicable to such Loan, whether
in fact that is the case or not. Unless otherwise provided
herein, the amount specified in the written statement of any
Lender shall be payable on demand after receipt by the Borrower
of the written statement. The obligations of the Borrower under
Sections 3.1, 3.2 and 3.4 shall survive payment of the
Obligations and termination of this Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
4.1 Restatement. This Agreement shall not be effective
until the Borrower has furnished to the Agent with sufficient
copies for the Lenders and the other conditions set forth below
have been satisfied:
(a) Charter Documents. Copies of the certificate of
incorporation of the Borrower, together with all amendments,
certified by the Secretary of State of Delaware, together
with a good standing certificate issued by the Secretary of
State of Delaware and such other jurisdictions as shall be
requested by the Agent.
(b) By-Laws and Resolutions. Copies, certified by the
Secretary or Assistant Secretary of the Borrower, of its
by-laws and of its Board of Directors' resolutions
authorizing the execution, delivery and performance of the
Loan Documents to which the Borrower is a party and the
consummation of the other Closing Transactions.
(c) Secretary's Certificate. An incumbency
certificate, executed by the Secretary or Assistant
Secretary of the Borrower, which shall identify by name and
title and bear the signature of the officers of the Borrower
authorized to sign the Loan Documents and to make borrowings
hereunder, upon which certificate the Agent and the Lenders
shall be entitled to rely until informed of any change in
writing by the Borrower.
(d) Officer's Certificate. A certificate, dated the
Restatement Date, signed by an Authorized Officer of the
Borrower, in form and substance satisfactory to the Agent,
to the effect that: (i) on the Restatement Date (both
before and after giving effect to the execution and delivery
of this Agreement, the making of the Loans hereunder and the
consummation of the Acquisition and the other transactions
contemplated hereby (collectively, the "Restatement
Transactions"), no Default or Unmatured Default has occurred
and is continuing; (ii) no injunction or temporary
restraining order which would prohibit the making of the
Loans, the issuance of any Facility Letter of Credit or the
consummation of any of the other Restatement Transactions,
or other litigation which could reasonably be expected to
have a Material Adverse Effect is pending or, to the best of
such Person's knowledge, threatened; (iii) all orders,
consents, approvals, licenses, authorizations, or
validations of, or filings, recordings or registrations
with, or exemptions by, any governmental or public body or
authority, or any subdivision thereof, required to make or
consummate the Restatement Transactions have been or, prior
to the time required, will have been, obtained, given, filed
or taken and are or will be in full force and effect (or the
Borrower has obtained effective judicial relief with respect
to the application thereof) and that all applicable waiting
periods have expired; (iv) the Acquisition is being
consummated contemporaneously with the effectiveness of this
Agreement in accordance with the terms of the Purchase
Agreement, the Restatement Documents are in full force and
effect and no term or condition thereof has been amended,
modified or waived after the execution thereof except with
the written consent of the Agent; (v) neither the Borrower
nor any Subsidiary has failed to perform any material
obligation or covenant required in connection with any
Restatement Transaction to be performed or complied with by
it on or before the Restatement Date; (vi) each of the
representations and warranties set forth in Article V of
this Agreement is true and correct on and as of the date
hereof; and (vii) no event or change has occurred since
August 31, 1996 that has caused or evidences a Material
Adverse Effect.
(e) Legal Opinions. (i) A written opinion of Stinson,
Mag and Fizzell, P.C., counsel to the Borrower, addressed to
the Agent and the Lenders and in form and substance
acceptable to the Agent and its counsel, and (ii)
confirmation from counsel to each party to the Purchase
Agreement that the Agent and the Lenders may rely upon its
opinions delivered pursuant to the Purchase Agreement.
(f) Notes. Revolving Credit Notes payable to the
order of each of the Lenders and a Swing Loan Note payable
to the order of the Swing Line Lender duly executed by the
Borrower.
(g) Restatement Documents. Executed originals of this
Agreement and each of the Restatement Documents, which shall
be in full force and effect, together with all schedules,
exhibits, certificates, instruments, opinions, documents and
financial statements required to be delivered pursuant
hereto and thereto.
(h) Money Transfer Instructions. Written money
transfer instructions with respect to the Advances to be
made on the Restatement Date addressed to the Agent and
signed by an Authorized Officer, together with such other
related money transfer authorizations as the Agent may have
reasonably requested.
(i) Purchase Agreement. A copy of the Purchase
Agreement and any amendments, supplements and modifications
thereto.
(j) Solvency Certificate. A written solvency
certificate from the chief financial officer of the Borrower
in form and content satisfactory to the Agent, dated the
initial Borrowing Date, with respect to the value, Solvency
and other factual information of, or relating to, as the
case may be, the Borrower on a consolidated basis, both
before and after giving effect to the Restatement
Transactions.
(k) Financial Statements. The Agent and the Lenders
shall have received (i) unaudited pro forma opening
financial statements giving effect to the Acquisition which
must not be materially less favorable, in the Agent's and
the Lenders' reasonable judgment, than the projections and
unaudited pro forma financial statements previously provided
to them and which must demonstrate, in their reasonable
judgment, together with all other information then available
to the Agent and the Lenders, that the Borrower (both
individually and together with its Subsidiaries on a
consolidated basis) can repay its debts and satisfy its
other obligations as and when due and can comply with the
financial covenants set forth herein and (ii) such
information as the Agent or any Lender may reasonable
request to confirm the tax, legal and business assumptions
made in such pro forma financial statements.
(l) Lien Searches. Copies of searches of financing
statements filed under the Uniform Commercial Code, together
with tax lien and judgment searches, with respect to the
assets of USA Skate Company, Inc., in such jurisdictions as
the Agent may request.
(m) Other. Such other documents as the Agent, any
Lender or their counsel may have reasonably requested.
4.2 Each Advance and Facility Letter of Credit. The
Lenders shall not be required to make any Advance and the Issuer
shall not be obligated to issue any Facility Letter of Credit,
unless on the applicable Borrowing Date:
(a) There exists no Default or Unmatured Default and
none would result from such Advance or the issuance of such
Facility Letter of Credit;
(b) No Change in Control has occurred;
(c) The representations and warranties contained in
Article V are true and correct as of such Borrowing Date
except to the extent any such representation or warranty is
stated to relate solely to an earlier date, in which case
such representation or warranty shall be true and correct on
and as of such earlier date;
(d) A Borrowing Notice or Issuance Request shall have
been properly submitted; and
(e) All legal matters incident to the making of such
Advance or issuance of such Facility Letter of Credit shall
be satisfactory to the Lenders and their counsel.
Each Borrowing Notice with respect to each such Advance and
each Issuance Request with respect to each Facility Letter of
Credit shall constitute a representation and warranty by the
Borrower that the conditions contained in Section 4.2 have been
satisfied. Any Lender may require a duly completed compliance
certificate in substantially the form of Exhibit C hereto as a
condition to making an Advance or the issuance of a Facility
Letter of Credit.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that,
both before and after giving effect to the Restatement
Transactions:
5.1 Corporate Existence and Standing. Each of the Borrower
and each Subsidiary is a corporation duly incorporated, validly
existing and in good standing under the laws of its respective
jurisdiction of incorporation and is duly qualified and in good
standing as a foreign corporation and is duly authorized to
conduct its business in each jurisdiction in which its business
is conducted or proposed to be conducted where the failure to be
so qualified or authorized could reasonably be expected to have a
Material Adverse Effect.
5.2 Authorization and Validity. Each of the Borrower and
each Subsidiary has all requisite power and authority (corporate
and otherwise) and legal right to execute and deliver (or file,
as the case may be) each of the Loan Documents and the other
Restatement Documents and Transaction Documents to which it is a
party and to perform its obligations thereunder. The execution
and delivery (or filing, as the case may be) by the Borrower and
each Subsidiary of the Loan Documents and the other Restatement
Documents to which it is a party and the performance of its
obligations thereunder have been duly authorized by proper
corporate proceedings and the Loan Documents and the other
Restatement Documents constitute legal, valid and binding
obligations of the Borrower or such Subsidiary, as applicable,
enforceable against the Borrower or such Subsidiary, as
applicable, in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights
generally.
5.3 Compliance with Laws and Contracts. Each of the
Rawlings Business and the Borrower and its Subsidiaries have
complied in all material respects with all applicable statutes,
rules, regulations, orders and restrictions of any domestic or
foreign government or any instrumentality or agency thereof,
having jurisdiction over the conduct of their respective
businesses or the ownership of their respective properties,
except where the failure to so comply could not reasonably be
expected to have a Material Adverse Effect. Neither the execu-
tion and delivery by the Borrower of the Loan Documents, the
application of the proceeds of the Loans, the consummation of the
Closing Transactions, the Restatement Transactions or any other
transaction contemplated in the Loan Documents or the other
Restatement Documents, nor compliance with the provisions of the
Loan Documents or the other Restatement Documents, will, or at
the relevant time did, (a) violate any law, rule, regulation
(including Regulations G, T, U or X), order, writ, judgment,
injunction, decree or award binding on the Borrower or any
Subsidiary or the Borrower's or any Subsidiary's charter,
articles or certificate of incorporation or by-laws, (b) violate
the provisions of or require the approval or consent of any party
to any indenture, instrument or agreement to which the Borrower
or any Subsidiary is a party or is subject, or by which it, or
its property, is bound, or conflict with or constitute a default
thereunder, or result in the creation or imposition of any Lien
(other than Liens permitted by the Loan Documents) in, of or on
the property of the Borrower or any Subsidiary pursuant to the
terms of any such indenture, instrument or agreement, or (c)
require any consent of the stockholders of any Person; except for
(x) approvals or consents which have been obtained on or before
the initial Advance and are disclosed on Schedule 5.3, and (y)
any violations or failures to obtain approvals and consents that
could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
5.4 Governmental Consents. No order, consent, approval,
qualification, license, authorization, or validation of, or
filing, recording or registration with, or exemption by, or other
action in respect of, any court, governmental or public body or
authority, or any subdivision thereof, any securities exchange or
other governmental Person is or at the relevant time was required
to authorize, or is or at the relevant time was required in
connection with the execution, delivery, consummation or
performance of, or the legality, validity, binding effect or
enforceability of, any of the Loan Documents or the other
Restatement Documents, the application of the proceeds of the
Loans or the consummation of any of the Closing Transactions or
Restatement Transactions, except where the failure to obtain such
action could not reasonably be expected to have a Material
Adverse Effect. Neither the Borrower nor any Subsidiary is in
default under or in violation of any foreign, federal, state or
local law, rule, regulation, order, writ, judgment, injunction,
decree or award binding upon or applicable to the Borrower or
such Subsidiary, in each case the consequences of which default
or violation could reasonably be expected to have a Material
Adverse Effect.
5.5 Financial Statements. (a) The Borrower has furnished
to each of the Lenders (i) the August 31, 1996 audited
consolidated financial statements of the Borrower and its
Subsidiaries and (ii) the unaudited consolidated financial
statements of the Borrower and its Subsidiaries through May 31,
1997 (collectively, the "Financial Statements"). Each of the
Financial Statements was prepared in accordance with generally
accepted accounting principles and fairly presents the
consolidated financial condition and operations of the Borrower
and its Subsidiaries at such dates and the consolidated results
of their operations for the respective periods then ended
(except, in the case of such unaudited statements, for normal
year-end audit adjustments).
(b) The unaudited pro forma consolidated balance sheet at
May 31, 1997 and unaudited pro forma consolidated income
statement for the period ended May 31, 1997 of the Borrower and
its Subsidiaries (the "Pro Forma") is attached hereto as Schedule
5.5. As of the date of this Agreement, the Pro Forma is complete
and accurate and fairly represents the Borrowers' and the
Subsidiaries' assets, liabilities, financial condition and
results of operations on a consolidated basis in accordance with
Agreement Accounting Principles, consistently applied, and taking
into account the Restatement Transactions and the other
transactions and actions contemplated by this Agreement, the
other Loan Documents and the other Restatement Documents.
5.6 Material Adverse Change. No event or change has
occurred since August 31, 1996 that has caused or evidences a
Material Adverse Effect.
5.7 Taxes. The Borrower and its Subsidiaries have filed or
caused to be filed on a timely basis and in correct form all
United States federal and applicable foreign, state and local tax
returns and all other tax returns which are required to be filed,
except for such returns (other than federal tax returns) as to
which the failure to file could not reasonably be expected to
have a Material Adverse Effect in the aggregate, and have paid
all taxes due pursuant to said returns or pursuant to any
assessment received by the Borrower or any Subsidiary, except (a)
such taxes, if any, as are being contested in good faith and as
to which adequate reserves have been provided in accordance with
Agreement Accounting Principles and as to which no Lien exists
and (b) such foreign, state and local taxes which could not
reasonably be expected to have a Material Adverse Effect in the
aggregate. The United States income tax returns of the Borrower
on a consolidated basis have never been audited by the Internal
Revenue Service and there are no pending audits or investigations
regarding the Borrower's or its Subsidiaries' federal, foreign,
state or local tax returns. No tax liens have been filed and no
claims are being asserted with respect to any such taxes which
could reasonably be expected to have a Material Adverse Effect.
The charges, accruals and reserves on the books of the Borrower
and its Subsidiaries in respect of any taxes or other
governmental charges are in accordance with Agreement Accounting
Principles.
5.8 Litigation and Contingent Obligations. There is no
litigation, arbitration, proceeding, inquiry or governmental
investigation (including, without limitation, by the Federal
Trade Commission) pending or, to the knowledge of any of their
officers, threatened against or affecting the Rawlings Business,
the Borrower or any Subsidiary or any of their respective
properties (a) as of the date of this Agreement, except as set
forth on Schedule 5.8, and no such matter set forth therein could
reasonably be expected to have a Material Adverse Effect or to
prevent, enjoin or unduly delay the making of the Loans or
Advances under this Agreement or (b) after the date of this
Agreement which could reasonably be expected to have a Material
Adverse Effect or to prevent, enjoin or unduly delay the making
of the Loans or Advances under this Agreement. As of the date of
this Agreement, neither the Borrower nor any Subsidiary has any
material contingent obligations except as set forth on Schedule
5.8.
5.9 Capitalization. Schedule 5.9 hereto contains (a) an
accurate description of the Borrower's capitalization and (b) an
accurate list of all of the existing Subsidiaries setting forth
their respective jurisdictions of incorporation and the
percentage of their capital stock owned by the Borrower or other
Subsidiaries, in each case as of the date of this Agreement after
giving effect to the Restatement Transactions. All of the issued
and outstanding shares of capital stock of the Borrower and of
each Subsidiary have been duly authorized and validly issued and
are fully paid and non-assessable, and all such shares of each
Subsidiary are free and clear of all Liens, other than the Liens
created by the Loan Documents. Except as set forth in Schedule
5.9, as of the date of this Agreement, no authorized but unissued
or treasury shares of capital stock of the Borrower or any
Subsidiary are subject to any option, warrant, right to call or
commitment of any kind or character. Except as set forth on
Schedule 5.9, as of the date of this Agreement, neither the
Borrower nor any Subsidiary has any outstanding stock or
securities convertible into or exchangeable for any shares of its
capital stock, or any right issued to any Person (either
preemptive or other) to subscribe for or to purchase, or any
options for the purchase of, or any agreements providing for the
issuance (contingent or otherwise) of, or any calls, commitments
or claims of any character relating to any of its capital stock
or any stock or securities convertible into or exchangeable for
any of its capital stock other than as expressly set forth in the
certificate or articles of incorporation of the Borrower or such
Subsidiary. Neither the Borrower nor any Subsidiary is subject
to any obligation (contingent or otherwise) as of the date of
this Agreement, to repurchase or otherwise acquire or retire any
shares of its capital stock or any convertible securities, rights
or options of the type described in the preceding sentence except
as otherwise set forth on Schedule 5.9.
5.10 ERISA. Except as disclosed on Schedule 5.10, after
giving effect to the Restatement Transactions, as of the date of
this Agreement (a) neither the Borrower nor any other member of
the Controlled Group maintains a Single Employer Plan, (b) no
Single Employer Plan has any Unfunded Liability and (c) neither
the Borrower nor any other member of the Controlled Group
maintains, or is obligated to contribute to, any Multiemployer
Plan or has incurred, or is reasonably expected to incur, any
withdrawal liability to any Multiemployer Plan. Each Plan
complies in all material respects with all applicable
requirements of ERISA, the Code and the regulations arising
thereunder. Neither the Borrower nor any member of the
Controlled Group has, with respect to any Plan, failed to make
any contribution required under Section 412 of the Code or
Section 302 of ERISA or pay any amount required under the terms
of such Plan. There are no pending or, to the knowledge of the
Borrower, threatened claims, actions, investigations or lawsuits
against any Plan, any fiduciary thereof, or the Borrower or any
member of the Controlled Group with respect to a Plan. Neither
the Borrower nor any other member of the Controlled Group has
engaged in any prohibited transaction (as defined in Section 4975
of the Code or Section 406 of ERISA) in connection with any Plan
which would subject any such Person to any material liability.
Within the last five years neither the Borrower nor any member of
the Controlled Group has engaged in a transaction which resulted
in a Single Employer Plan with an Unfunded Liability being
transferred out of the Controlled Group. No Termination Event
has occurred or is reasonably expected to occur with respect to
any Plan which is subject to Title IV of ERISA. After giving
effect to the Restatement Transactions, neither the Borrower nor
any member of the Controlled Group has any liability in respect
of any employee benefit plan, as defined in Section 3(2) of
ERISA, maintained by any Person not in the Controlled Group.
5.11 Defaults. No Default or Unmatured Default has occurred
and is continuing.
5.12 Federal Reserve Regulations. Neither the Borrower nor
any Subsidiary is engaged, directly or indirectly, principally,
or as one of its important activities, in the business of
extending, or arranging for the extension of, credit for the
purpose of purchasing or carrying Margin Stock. No part of the
proceeds of any Loan will be used in a manner which would
violate, or result in a violation of, Regulation G, Regulation T,
Regulation U or Regulation X. Neither the making of any Advance
hereunder, the use of the proceeds thereof, nor any other aspect
of the financing of the Acquisition, will violate or be
inconsistent with the provisions of Regulation G, Regulation T,
Regulation U or Regulation X. Less than 25% of the value (as
determined by any reasonable method) of the assets of the
Borrower and its Subsidiaries which are subject to any limitation
on sale, pledge, or other restriction hereunder taken as a whole
have been, and will continue to be, represented by Margin Stock.
5.13 Investment Company. Neither the Borrower nor any
Subsidiary is, or after giving effect to any Advance will be, an
"investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of
1940, as amended.
5.14 Certain Fees. Other than as disclosed on Schedule
5.14, no broker's or finder's fee or commission was, is or will
be payable by the Borrower or any Subsidiary with respect to any
of the transactions contemplated by this Agreement or the
Restatement Documents. The Borrower hereby agrees to indemnify
the Agent and the Lenders against and agrees that it will hold
each of them harmless from any claim, demand or liability for
broker's or finder's fees or commissions alleged to have been
incurred by the Borrower in connection with any of the
transactions contemplated by this Agreement and any expenses
(including, without limitation, attorneys' fees and time charges
of attorneys for the Agent or any Lender, which attorneys may be
employees of the Agent or any Lender) arising in connection with
any such claim, demand or liability. No other similar fee or
commissions will be payable by the Borrower or any Subsidiary for
any other services rendered to the Borrower or any Subsidiary
ancillary to any of the transactions contemplated by this
Agreement or the Restatement Documents.
5.15 Ownership of Properties. Except as set forth on
Schedule 5.15 hereto, the Borrower and its Subsidiaries have a
subsisting leasehold interest in, or good and marketable title,
free of all Liens, other than those permitted by Section 6.18 or
by any of the other Loan Documents, to all of the Properties and
assets reflected in the Financial Statements as being owned by
it, except for assets sold, transferred or otherwise disposed of
in the ordinary course of business since the date thereof.
Schedule 5.15 hereto contains a true, complete and accurate list
of all real property owned or leased by the Borrower as of the
date of this Agreement and indicates whether such property is
owned or leased. To the knowledge of the Borrower, there are no
actual, threatened or alleged defaults with respect to any leases
of real property under which the Borrower or any Subsidiary is
lessee or lessor which could reasonably be expected to have a
Material Adverse Effect. Except as set forth on Schedule 5.15,
the Borrower and its Subsidiaries own or possess rights to use
all licenses, patents, patent applications, copyrights, service
marks, trademarks and trade names necessary to continue to
conduct their business as heretofore conducted, and no such
license, patent or trademark has been declared invalid, been
limited by order of any court or by agreement or is the subject
of any infringement, interference or similar proceeding or
challenge, except for challenges which could not reasonably be
expected to have a Material Adverse Effect.
5.16 Indebtedness. Attached hereto as Schedule 5.16 is a
complete and correct list of all Indebtedness of the Borrower and
its Subsidiaries outstanding on the date of this Agreement (other
than Indebtedness in a principal amount not exceeding $100,000
for a single item of Indebtedness and $500,000 in the aggregate
for all such Indebtedness not listed), showing the aggregate
principal amount which was outstanding on such date after giving
effect to the making of the Loans. The Borrower has delivered or
caused to be delivered to the Lenders a true and complete copy of
each instrument evidencing any Indebtedness listed on Schedule
5.16 and of each document pursuant to which any of such
Indebtedness was issued.
5.17 Post-Retirement Welfare Benefits. As of the date of
this Agreement, the present value of the expected cost of post-
retirement medical and insurance benefits payable by the Borrower
and its Subsidiaries to its employees, as estimated by the
Borrower in accordance with procedures and assumptions deemed
reasonable by the Agent, is zero.
5.18 Employee Controversies. There are no strikes, work
stoppages or controversies pending or, to the knowledge of the
Borrower or any Subsidiary, threatened between the Borrower or
any Subsidiary and any of its employees, other than employee
grievances arising in the ordinary course of business, which, in
the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
5.19 Material Agreements. Neither the Borrower nor any
Subsidiary is a party to any agreement or instrument or subject
to any charter or other self-imposed corporate restriction which
could reasonably be expected to have a Material Adverse Effect.
Neither the Borrower nor any Subsidiary is in default in the
performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any agreement to which it is
a party, which default could reasonably be expected to have a
Material Adverse Effect.
5.20 Acquisition Documents. The Borrower has delivered to
each of the Lenders true, complete and correct copies of the
Acquisition Documents (including all schedules, exhibits,
annexes, amendments, supplements, modifications and all other
documents delivered pursuant thereto or in connection therewith).
The Acquisition Documents as originally executed and delivered by
the parties thereto have not been amended, waived, supplemented
or modified without the consent of the Agent. Each of the
representations and warranties of the Borrower and its
Subsidiaries and, to its knowledge, all other parties thereto is
true and correct in all material respects as of the date hereof.
Neither the Borrower nor any of its Subsidiaries nor, to the
Borrower's knowledge, any other party thereto is in default in
the performance of or compliance with any provision thereof. The
Acquisition is being consummated contemporaneously with the
effectiveness of this Agreement in accordance with applicable
laws and regulations, and no condition to closing by the Borrower
set forth in the Acquisition Documents has been waived.
5.21 Environmental Laws. Except as described on Schedule
5.21:
(a) there are no claims, investigations, litigation,
administrative proceedings, notices, requests for
information, whether pending or threatened, or judgments or
orders asserting violations of applicable federal, state and
local environmental, health and safety statutes,
regulations, ordinances, codes, rules, orders, decrees,
directives and standards ("Environmental Laws") or relating
to any toxic or hazardous waste, substance or chemical or
any pollutant, contaminant, chemical or other substance
defined or regulated pursuant to any Environmental Law,
including, without limitation, asbestos, petroleum, crude
oil or any fraction thereof ("Hazardous Materials") asserted
against the Borrower or any of its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect in
the aggregate;
(b) none of the Rawlings Business, the Borrower or any
Subsidiary has caused or permitted any material amount of
Hazardous Materials to be released, either on or under real
property, currently or formerly, legally or beneficially
owned or operated by the Rawlings Business, the Borrower or
any Subsidiary or on or under real property to which the
Rawlings Business, the Borrower or any of its Subsidiaries
transported, arranged for the transport or disposal of, or
disposed of Hazardous Materials;
(c) no real property currently or formerly owned or
operated by the Rawlings Business, the Borrower or any
Subsidiary has ever been used as a dump or disposal site, or
as a treatment or storage site, for a material amount of
Hazardous Materials;
(d) the Rawlings Business, the Borrower and each
Subsidiary have obtained and are in compliance with all
permits, certificates, licenses, approvals and other
authorizations ("Environmental Permits") required for the
operation of their business and have filed all required
notifications or reports relating to chemical substances,
air emissions, effluent discharges and the storage,
treatment, transport and disposal of Hazardous Materials,
except such which could not reasonably be expected to have a
Material Adverse Effect in the aggregate;
(e) no material amount of asbestos containing
materials or polychlorinated biphenyls are or have been
located in, on or under real property owned or operated by
the Rawlings Business, the Borrower or any Subsidiary and
there have been no material Releases of Hazardous Materials
from underground storage tanks on such real property;
(f) there are no material Liens arising under
Environmental Laws threatened or attached to real property
owned or operated by the Borrower or any of its
Subsidiaries;
(g) as of the date hereof, the Borrower and its
Subsidiaries do not have liabilities with respect to
compliance with applicable Environmental Laws and
Environmental Permits or related to the generation,
treatment, storage, disposal, release, investigation or
cleanup of Hazardous Materials which could reasonably be
expected to have a Material Adverse Effect in the aggregate,
and no facts or circumstances exist which could give rise to
liabilities with respect to compliance with applicable
Environmental Laws and Environmental Permits and the
generation, treatment, storage, disposal, release,
investigation or cleanup of Hazardous Materials which could
reasonably be expected to have a Material Adverse Effect in
the aggregate; and
(h) the operation and production of the Borrower and
its Subsidiaries will not be impacted or affected by the
compliance by any such Person with applicable Environmental
Laws and Environmental Permits or related to the generation,
treatment, storage, disposal, release, investigation or
cleanup of Hazardous Materials in a manner which could
reasonably be expected to have a Material Adverse Effect.
5.22 Insurance. Schedule 5.22 completely and accurately
summarizes the property and liability insurance in existence and
carried by the Borrower and its Subsidiaries as of the date of
this Agreement, and such insurance is in such amounts and
covering such risks as is consistent with sound business
practice. The summary on Schedule 5.22 includes the insurer's or
insurers' name(s), expiration date(s), amount(s) of coverage,
type(s) of coverage, material exclusion(s), and deductibles.
This summary also includes similar information, and describes any
reserves, relating to any self-insurance program that is in
effect.
5.23 Disclosure. None of the (a) information, exhibits or
reports furnished or to be furnished by the Borrower or any
Subsidiary to the Agent or to any Lender in connection with the
negotiation of the Loan Documents, or (b) representations or
warranties of the Borrower contained in this Agreement, the other
Loan Documents, the Transaction Documents, the Restatement
Documents or any other document, certificate or written statement
furnished to the Agent or the Lenders by or on behalf of the
Borrower or any Subsidiary for use in connection with the
transactions contemplated by this Agreement contained, contains
or will contain any untrue statement of a material fact or
omitted, omits or will omit to state a material fact necessary in
order to make the statements contained herein or therein not
misleading in light of the circumstances in which the same were
made. The Pro Forma is based upon good faith estimates and
assumptions believed by the Borrower to be reasonable at the time
made. There is no fact known to the Borrower (other than matters
of a general economic or political nature) that has had or could
reasonably be expected to have a Material Adverse Effect and that
has not been disclosed herein or in such other documents,
certificates and statements furnished to the Lenders for use in
connection with the transactions contemplated by this Agreement.
ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required
Lenders shall otherwise consent in writing:
6.1 Financial Reporting. The Borrower will maintain, for
itself and each Subsidiary, a system of accounting established
and administered in accordance with generally accepted accounting
principles, consistently applied, and furnish to the Lenders:
(a) As soon as practicable and in any event within
five (5) days after its filing with the Securities and
Exchange Commission (but not more than 120 days after the
close of each of its Fiscal Years), an unqualified audit
report certified by independent certified public accountants
(which shall be a "Big Six" accounting firm, or another
accounting firm acceptable to the Lenders), prepared in
accordance with Agreement Accounting Principles on a
consolidated and consolidating basis (consolidating
statements need not be certified by such accountants),
including balance sheets as of the end of such period and
related statements of income and cash flows, accompanied by
(i) any management letter prepared by said accountants, (ii)
a certificate of said accountants that, in the course of the
examination necessary for their certification of the
foregoing, they have obtained no knowledge of any Default or
Unmatured Default, or if, in the opinion of such
accountants, any Default or Unmatured Default shall exist,
stating the nature and status thereof, and (iii) a letter
from said accountants addressed to the Lenders acknowledging
that the Lenders are extending credit in primary reliance on
such financial statements and authorizing such reliance.
The Borrower hereby authorizes the Agent to communicate
directly with such accountants following the occurrence of a
Default or Change in Control.
(b) As soon as practicable and in any event within
five (5) days after its filing with the Securities and
Exchange Commission (but not more than 65 days after the
close of the first three quarterly periods of each of its
Fiscal Years), consolidated and consolidating unaudited
balance sheets as at the close of each such period and
consolidated and consolidating statements of income and cash
flows for the period from the beginning of such Fiscal Year
to the end of such quarter, all certified by its chief
financial officer.
(c) As soon as available, but in any event not later
than 15 days before the end of each Fiscal Year, beginning
with Fiscal Year 1998, a copy of the plan and forecast
(including a projected consolidated and consolidating
balance sheet, income statement and cash flow statement) of
the Borrower for the next Fiscal Year.
(d) Together with the financial statements required by
clauses (a) and (b) above, a compliance certificate in
substantially the form of Exhibit C hereto signed by its
chief financial officer showing the calculations necessary
to determine compliance with this Agreement and stating that
no Default or Unmatured Default exists and no Change in
Control has occurred, or if any Default or Unmatured Default
exists, stating the nature and status thereof.
(e) Within 270 days after the close of each Fiscal
Year, a statement of the Unfunded Liabilities of each Single
Employer Plan, certified by an actuary enrolled under ERISA.
(f) As soon as possible and in any event within 10
days after the Borrower knows that any event has occurred
which is a Termination Event with respect to any Plan which
is subject to Title IV of ERISA, a statement, signed by the
chief financial officer of the Borrower, describing said
Termination Event and any action which the Borrower proposes
to take with respect thereto.
(g) As soon as possible and in any event within 10
days after receipt by the Borrower, a copy of (i) any
notice, claim, complaint or order to the effect that the
Borrower or any of its Subsidiaries is or may be liable to
any Person as a result of the release by the Borrower, any
of its Subsidiaries, or any other Person of any Hazardous
Materials into the environment or requiring that action be
taken to respond to or clean up a Release of Hazardous
Materials into the environment, and (ii) any notice,
complaint or citation alleging any violation of any
Environmental Law or Environmental Permit by the Borrower or
any of its Subsidiaries. Within ten days of the Borrower or
any Subsidiary having knowledge of the proposal, enactment
or promulgation of any Environmental Law which could
reasonably be expected to have a Material Adverse Effect,
the Borrower shall provide the Agent with written notice
thereof.
(h) Promptly upon the furnishing thereof to the
shareholders of the Borrower, copies of all financial
statements, reports and proxy statements so furnished.
(i) Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly or
other regular reports which the Borrower or any of its
Subsidiaries files with the Securities and Exchange
Commission.
(j) Promptly and in any event within ten (10) days
after learning thereof, notification of (i) any tax
assessment, demand, notice of proposed deficiency or notice
of deficiency received by the Borrower or any other
Consolidated Person or (ii) the filing of any tax Lien or
commencement of any judicial proceeding by or against any
such Consolidated Person, if any such assessment, demand,
notice, Lien or judicial proceeding relates to tax
liabilities in excess of ten percent (10%) of the net worth
(determined according to generally accepted accounting
standards and without reduction for any reserve for such
liabilities) of the Borrower and its Subsidiaries taken as a
whole.
(k) Within thirty (30) days after the close of each
Fiscal Year, a summary of the property and liability
insurance carried by the Borrower and its Subsidiaries and
including the information specified in Section 5.22.
(l) Such other information (including non-financial
information) as the Agent or any Lender may from time to
time reasonably request.
6.2 Use of Proceeds. The Borrower will, and will cause
each Subsidiary to, use the proceeds of the Revolving Advances to
meet the working capital needs of the Borrower and its
Subsidiaries; provided, that up to $18,000,000 of proceeds of the
Revolving Advances may be used to finance the Acquisition. The
Borrower will not, nor will it permit any Subsidiary to, use any
of the Facility Letters of Credit or the proceeds of the Advances
to purchase or carry any "margin stock" (as defined in Regulation
U).
6.3 Notice of Default. The Borrower will, and will cause
each Subsidiary to, give prompt notice in writing to the Lenders
of the occurrence of any Default or Unmatured Default or Change
in Control and of any other development relating to the Borrower
or any Subsidiary, financial or other, which could reasonably be
expected to have a Material Adverse Effect.
6.4 Conduct of Business. The Borrower will, and will cause
each Subsidiary to, carry on and conduct its business in
generally the same manner and in generally the same fields of
enterprise as it is presently conducted and to do all things
necessary to remain duly incorporated, validly existing and in
good standing as a domestic corporation in its jurisdiction of
incorporation and, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect,
maintain all requisite authority to conduct its business in each
jurisdiction in which its business is conducted.
6.5 Taxes. The Borrower will, and will cause each
Subsidiary to, timely file complete and correct United States
federal and applicable foreign, state and local tax returns
required by applicable law and pay when due all taxes,
assessments and governmental charges and levies upon it or its
income, profits or Property, except those which are being
contested in good faith by appropriate proceedings and with
respect to which adequate reserves have been set aside.
6.6 Insurance. The Borrower will, and will cause each
Subsidiary to, maintain with financially sound and reputable
insurance companies insurance on all their Property in such
amounts and covering such risks as is consistent with sound
business practice, and the Borrower will furnish to the Agent and
any Lender upon request full information as to the insurance
carried.
6.7 Compliance with Laws. The Borrower will, and will
cause each Subsidiary to, comply with all laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or
awards to which it may be subject, the failure to comply with
which could reasonably be expected to have a Material Adverse
Effect.
6.8 Maintenance of Properties. The Borrower will, and will
cause each Subsidiary to, do all things necessary to maintain,
preserve, protect and keep its Property in good repair, working
order and condition, and make all necessary and proper repairs,
renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times.
6.9 Inspection. The Borrower will, and will cause each
Subsidiary to, permit the Agent and the Lenders, by their
respective representatives and agents, to inspect any of the
Property, corporate books and financial records of the Borrower
and each Subsidiary, to examine and make copies of the books of
accounts and other financial records of the Borrower and each
Subsidiary, and to discuss the affairs, finances and accounts of
the Borrower and each Subsidiary with, and to be advised as to
the same by, their respective officers at such reasonable times
and intervals as the Lenders may designate; provided, that so
long as no Default or Change in Control has occurred and is
continuing, no such action shall unreasonably interfere with the
normal business operations of the Borrower and its Subsidiaries.
The Borrower will keep or cause to be kept, and cause each
Subsidiary to keep or cause to be kept, appropriate records and
books of account in which complete entries are to be made
reflecting its and their business and financial transactions,
such entries to be made in accordance with Agreement Accounting
Principles consistently applied.
6.10 Capital Stock and Dividends. The Borrower will not,
nor will it permit any Subsidiary to, (a) issue any preferred
stock, other capital stock or any debt or equity securities of
any kind, or (b) declare or pay any dividends or make any
distributions on its capital stock (other than dividends payable
in its own capital stock) or redeem, repurchase or otherwise
acquire or retire any of its capital stock at any time
outstanding, except that (i) any Subsidiary may declare and pay
dividends or make distributions to the Borrower, (ii) the
Borrower may make distributions of its equity securities in
accordance with its shareholder rights plan and employee benefit
plans, (iii) the Borrower may issue common shares and warrants or
options to purchase common shares from time to time, and (iv) so
long as no Default or Unmatured Default or Change in Control is
pending before or after giving effect to the payment of such
dividends, the Borrower may declare and pay dividends on its
common stock in any Fiscal Year of up to an amount not to exceed
fifty percent (50%) of the Borrower's Net Income for the
preceding Fiscal Year.
6.11 Indebtedness. The Borrower will not, nor will it
permit any Subsidiary to, create, incur or suffer to exist any
Indebtedness, except:
(a) the Loans;
(b) Indebtedness existing on the date of this
Agreement and described in Schedule 5.16 hereto;
(c) Rate Hedging Obligations related to the Loans; and
(d) additional Indebtedness with an aggregate
principal amount not to exceed $3,000,000 in the aggregate at any
one time outstanding.
6.12 Merger. The Borrower will not, nor will it permit any
Subsidiary to, merge or consolidate with or into any other
Person, except that (a) a Subsidiary may merge into the Borrower
or any Wholly-Owned Subsidiary of the Borrower and (b) another
Person may merge with or consolidate into the Borrower or any
Subsidiary so long as (i) no Default or Unmatured Default shall
have occurred and be continuing either before or after giving
effect to such transaction, (ii) no Change in Control shall have
occurred before or after giving effect to such transaction and
(iii) the Borrower or such Subsidiary is the surviving Person.
6.13 Sale of Assets. The Borrower will not, nor will it
permit any Subsidiary to, lease, sell, transfer or otherwise
dispose of its Property, to any other Person except for (a) sales
of inventory in the ordinary course of business,(b) the sale of
the Borrower's facility located in Dolgeville, New York, (c)
subject to Section 6.16, other leases, sales, transfers and
dispositions of its Property (other than any patent, trademark,
copyright, license or other item of intellectual property) that,
together with all other Property of the Borrower and its
Subsidiaries previously leased, sold, transferred, or disposed of
(other than property sold pursuant to clause (a) or (b) above) as
permitted by this Section 6.13 since the Closing Date do not
constitute a Substantial Portion of the Property of the Borrower
and its Subsidiaries and (d) the Borrower may exchange immaterial
items of equipment subject to an operating lease for other
similar items subject to an operating lease, subject to Section
6.20; provided, that the Borrower may transfer all or any portion
of its intellectual property to a direct domestic Wholly-Owned
Subsidiary so long as after any such transfer or transfers, (i)
all of the capital stock of such Subsidiary shall continue to be
held directly by the Borrower free and clear of any Liens and
(ii) such Subsidiary shall engage in no activity other than the
ownership of such intellectual property and the lease thereof to
the Borrower and shall incur no obligations except pursuant to
such lease arrangements.
6.14 Sale of Accounts. The Borrower will not, nor will it
permit any Subsidiary to, sell or otherwise dispose of any notes
receivable or accounts receivable, with or without recourse.
6.15 Sale and Leaseback. The Borrower will not, nor will
it permit any Subsidiary to, sell or transfer any of its Property
in order to concurrently or subsequently lease as lessee such or
similar Property, except for (a) up to $500,000 of equipment in
the aggregate and (b) any intellectual property transferred in
accordance with the proviso to Section 6.13.
6.16 Investments and Purchases. The Borrower will not, nor
will it permit any Subsidiary to, make or suffer to exist any
Investments (including, without limitation, loans and advances
to, and other Investments in, Subsidiaries), or commitments
therefor, or to create any Subsidiary or to become or remain a
partner in any partnership or joint venture, or to make any
Purchases of any Person, except:
(a) Obligations with a term of one year or less of, or
fully guaranteed by, the United States of America;
(b) Commercial paper rated A-l or better by Standard
and Poor's Corporation or P-l or better by Moody's Investors
Service, Inc.;
(c) Demand deposit accounts maintained in the ordinary
course of business;
(d) Certificates of deposit issued by and time
deposits with commercial banks (whether domestic or foreign)
having capital and surplus in excess of $100,000,000;
(e) Repurchase agreements issued by any commercial
bank or trust company organized under the laws of the United
States or any state thereof having capital and surplus in
excess of $100,000,000 and whose commercial paper (or that
of its parent corporation) is rated A-1 or better by
Standard & Poor's Ratings Group or P-1 or better by Moody's
Investors Service, Inc.;
(f) Investments in existence on the date hereof and
described in Schedule 6.16 hereto, including without
limitation such Investments in partnerships, joint ventures
and Subsidiaries; and
(g) Investments consisting of transfers of
intellectual property made in accordance with the proviso to
Section 6.13.
6.17 Contingent Obligations. The Borrower will not, nor
will it permit any Subsidiary to, make or suffer to exist any
Contingent Obligation (including, without limitation, any
Contingent Obligation with respect to the obligations of a
Subsidiary), except (a) by endorsement of instruments for deposit
or collection in the ordinary course of business and (b)
Contingent Obligations in respect of Facility Letters of Credit.
6.18 Liens. The Borrower will not, nor will it permit any
Subsidiary to, create, incur, or suffer to exist any Lien in, of
or on the Property of the Borrower or any of its Subsidiaries,
except:
(a) Liens for taxes, assessments or governmental
charges or levies on its Property if the same shall not at
the time be delinquent or thereafter can be paid without
penalty, or are being contested in good faith and by
appropriate proceedings and for which adequate reserves in
accordance with generally accepted principles of accounting
shall have been set aside on its books;
(b) Liens imposed by law, such as carriers',
warehousemen's and mechanics' liens and other similar liens
arising in the ordinary course of business which secure
payment of obligations not more than 60 days past due or
which are being contested in good faith by appropriate
proceedings and for which adequate reserves shall have been
set aside on its books;
(c) Liens arising out of pledges or deposits under
worker's compensation laws, unemployment insurance, old age
pensions, or other social security or retirement benefits,
or similar legislation;
(d) Utility easements, building restrictions and such
other encumbrances or charges against real property as are
of a nature generally existing with respect to properties of
a similar character and which do not in any material way
affect the marketability of the same or interfere with the
use thereof in the business of the Borrower or the
Subsidiaries;
(e) Liens existing on the date of this Agreement and
described in Schedule 6.18 hereto; and
(f) Additional Liens securing Indebtedness of not more
than $500,000 in the aggregate.
6.19 Capital Expenditures. The Borrower will not, nor will
it permit any Subsidiary to, expend, or be committed to expend,
for Capital Expenditures (including, without limitation, for the
acquisition of fixed assets) on a non-cumulative basis in the
aggregate for the Borrower and its Subsidiaries more than
$3,000,000 during the 1997 Fiscal Year, more than $3,500,000
during the 1998 Fiscal Year or more than $3,000,000 during any
Fiscal Year thereafter.
6.20 Lease Rentals. The Borrower will not, nor will it
permit any Subsidiary to, create, incur or suffer to exist
obligations for Rentals in excess of $3,000,000 during any one
Fiscal Year on a non-cumulative basis in the aggregate for the
Borrower and its Subsidiaries.
6.21 Letters of Credit. The Borrower will not, nor will it
permit any Subsidiary to, apply for or become liable upon any
Letter of Credit except the Facility Letters of Credit; provided,
that if no Lender may act as Issuer because of the applicability
of clause (i) of Section 2.20.1(a), then the Borrower may apply
or become liable for Letters of Credit other than Facility
Letters of Credit with an aggregate face amount not to exceed
$2,000,000, notwithstanding Section 6.11 hereof, plus such
additional amount which may be permitted from time to time
pursuant to Section 6.11(d).
6.22 Affiliates. The Borrower will not, and will not
permit any Subsidiary to, enter into any transaction (including,
without limitation, the purchase or sale of any Property or
service) with, or make any payment or transfer to, any Affiliate
except (a) where expressly permitted under Section 6.10 or 6.16,
(b) the transfer and lease of items of intellectual property in
accordance with the proviso to Section 6.13 or (c) in the
ordinary course of business and pursuant to the reasonable
requirements of the Borrower's or such Subsidiary's business and
upon fair and reasonable terms no less favorable to the Borrower
or such Subsidiary than the Borrower or such Subsidiary would
obtain in a comparable arms-length transaction.
6.23 Prepayment of Indebtedness. The Borrower will not,
and will not permit any Subsidiary to, directly or indirectly
voluntarily prepay, defease or in substance defease, purchase,
redeem, retire or otherwise acquire, any Indebtedness other than
(a) the Obligations; (b) the Indebtedness listed in Schedule
5.16; and (c) Indebtedness incurred pursuant to Section 6.11(c).
6.24 Rate Hedging Obligations. The Borrower will continue
to maintain an interest rate exchange or insurance agreement or
agreements with one or more financial institutions acceptable to
the Agent in its reasonable discretion, providing for a fixed
rate of interest on a notional amount of at least $20,000,000,
bearing interest at an all-in fixed rate not in excess of ten
percent (10%) per annum and having a term of at least two (2)
years upon each renewal thereof.
6.25 Environmental Matters. The Borrower shall and shall
cause each of its Subsidiaries to (a) at all times materially
comply with all applicable Environmental Laws and (b) take any
and all remedial actions as are required by Environmental Laws in
response to the Release of any Hazardous Materials on, under or
about any real property owned, leased or operated by the Borrower
or any of its Subsidiaries. In the event that the Borrower or
any Subsidiary undertakes any remedial action with respect to any
Hazardous Material on, under or about any real property, the
Borrower or such Subsidiary shall conduct and complete such
remedial action in compliance with all applicable Environmental
Laws, except when the Borrower's or such Subsidiary's liability
for such Release of any Hazardous Material is being contested in
good faith by the Borrower or such Subsidiary and appropriate
reserves therefor have been established. If the Agent or any
Lender at any time has a reasonable basis to believe that there
may be a material violation of any Environmental Law by the
Borrower or any of its Subsidiaries, a Release of a material
amount of Hazardous Materials on any real property owned, leased
or operated by the Borrower or any of its Subsidiaries or a
Release of a material amount of Hazardous Materials from such
real property onto real property adjacent to such real property,
then the Borrower shall, upon the request of the Agent or such
Lender, provide the Agent and each Lender with all such reports,
certificates, engineering studies and other written material or
data relating thereto as the Agent or any Lender may reasonably
require which shall be maintained as confidential by the Agent
and the Lenders to the fullest extent authorized by law.
6.26 Change in Corporate Structure; Fiscal Year. The
Borrower shall not, nor shall it permit any Subsidiary to, (a)
permit any amendment or modification to be made to its
certificate of incorporation or by-laws which is materially
adverse to the interests of the Lenders (provided that the
Borrower shall notify the Agent of any other amendment or
modification thereto as soon as practicable thereafter) or (b)
change its Fiscal Year to end on any date other than August 31 of
each year.
6.27 Inconsistent Agreements. The Borrower shall not, nor
shall it permit any Subsidiary to, enter into any material
indenture, agreement, instrument or other arrangement which, (a)
directly or indirectly prohibits or restrains, or has the effect
of prohibiting or restraining, or imposes materially adverse
conditions upon, the incurrence of the Obligations, the granting
of Liens to secure the Obligations, or the amending of the Loan
Documents or (b) contains any provision which would be violated
or breached by the making of Advances or by the performance by
the Borrower of any of its obligations under any Loan Document.
6.28 Financial Covenants. The Borrower on a consolidated
basis with its Subsidiaries shall:
6.28.1. Minimum Tangible Net Worth. At all times
after the date hereof, determined as of the end of each Fiscal
Quarter, maintain a minimum Tangible Net Worth at least equal to
the sum of (a) $34,000,000 plus (b) 50% of the sum of the
Borrower's positive Net Income, if any, for each Fiscal Year
ending on or after August 31, 1998 and on or prior to the time of
determination.
6.28.2. Debt to Capitalization Ratio. Maintain a Debt
to Capitalization Ratio as of the end of each Fiscal Quarter of
not greater than the following:
Maximum
Measurement Date Ratio
As of each February 28 and November 30 65%
As of each May 31 and August 31 60%
6.28.3. Fixed Charge Coverage Ratio. As of the end of
each Fiscal Quarter, maintain a Fixed Charge Coverage Ratio for
the four Fiscal Quarters then ended of not less than 1.75 to 1.0.
For the purposes of calculating the Fixed Charge Coverage Ratio,
there shall be added back to EBITDA non-cash charges associated
with the closing of the Borrower's Adirondack, New York facility
or the write-down of assets located at such facility in an amount
not to exceed $1,500,000 in the aggregate.
6.29 Tax Consolidation. The Borrower will not and will not
permit any of its Subsidiaries to (a) file or consent to the
filing of any consolidated, combined or unitary income tax return
with any Person other than the Borrower and its Subsidiaries,
except as may be required by any state taxing authority, or (b)
amend, terminate or fail to enforce the Tax Sharing Agreement.
6.30 ERISA Compliance.
With respect to any Plan, neither the Borrower nor any
Subsidiary shall:
(a) engage in any "prohibited transaction" (as such
term is defined in Section 406 of ERISA or Section 4975 of
the IRC) for which a civil penalty pursuant to Section
502(i) of ERISA or a tax pursuant to Section 4975 of the IRC
in excess of $100,000 could be imposed;
(b) incur any "accumulated funding deficiency" (as
such term is defined in Section 302 of ERISA) in excess of
$1,000,000, whether or not waived, or permit any Unfunded
Liability in excess of $1,000,000 to exist for more than 30
days after learning thereof;
(c) permit the occurrence of any Termination Event
which could result in a liability to the Borrower or any
other member of the Controlled Group in excess of $100,000;
(d) fail to make any contribution or payment to any
Multiemployer Plan which the Borrower or any other member of
the Controlled Group may be required to make under any
agreement relating to such Multiemployer Plan or Title IV of
ERISA which results in or could reasonably be expected to
result in a liability in excess of $100,000; or
(e) permit the establishment or amendment of any Plan
or fail to comply with the applicable provisions of ERISA
and the IRC with respect to any Plan which could result in
liability to the Borrower or any other member of the
Controlled Group which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse
Effect.
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events
shall constitute a Default:
7.1 Any representation or warranty made or deemed made by
or on behalf of the Borrower or any of its Subsidiaries to the
Lenders or the Agent under or in connection with this Agreement,
any Loan, any Facility Letter of Credit, or any certificate or
information delivered in connection with this Agreement or any
other Loan Document shall be false in any material respect on the
date as of which made.
7.2 Nonpayment of (a) principal of any Note or any
Reimbursement Obligation when due, or (b) interest upon any Note
or any commitment fee or other fee or obligations under any of
the Loan Documents within five (5) days after the same becomes
due.
7.3 The breach by the Borrower of any of the terms or
provisions of Section 6.2, 6.3 or Sections 6.10 through 6.30.
7.4 The breach by the Borrower (other than a breach which
constitutes a Default under Section 7.1, 7.2 or 7.3) of any of
the terms or provisions of this Agreement which is not remedied
within thirty (30) days after written notice to the Borrower from
the Agent or any Lender.
7.5 The default by the Borrower or any of its Subsidiaries
in the performance of any term, provision or condition contained
in any agreement or agreements under which any Indebtedness
aggregating in excess of $1,000,000 was created or is governed,
or the occurrence of any other event or existence of any other
condition, the effect of any of which is to cause, or to permit
the holder or holders of such Indebtedness to cause, such
Indebtedness to become due prior to its stated maturity; or any
such Indebtedness of the Borrower or any of its Subsidiaries
shall be declared to be due and payable or required to be prepaid
(other than by a regularly scheduled payment) prior to the stated
maturity thereof.
7.6 The Borrower or any of its Subsidiaries shall (a) have
an order for relief entered with respect to it under the Federal
bankruptcy laws as now or hereafter in effect, (b) make an
assignment for the benefit of creditors, (c) apply for, seek,
consent to, or acquiesce in, the appointment of a receiver,
custodian, trustee, examiner, liquidator or similar official for
it or any Substantial Portion of its Property, (d) institute any
proceeding seeking an order for relief under the Federal
bankruptcy laws as now or hereafter in effect or seeking to
adjudicate it a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment
or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or
fail to file an answer or other pleading denying the material
allegations of any such proceeding filed against it, (e) take any
corporate action to authorize or effect any of the foregoing
actions set forth in this Section 7.6, (f) fail to contest in
good faith any appointment or proceeding described in Section 7.7
or (g) become unable to pay, not pay, or admit in writing its
inability to pay, its debts generally as they become due.
7.7 Without the application, approval or consent of the
Borrower or any of its Subsidiaries, a receiver, trustee,
examiner, liquidator or similar official shall be appointed for
the Borrower or any of its Subsidiaries or any Substantial
Portion of its Property, or a proceeding described in Section
7.6(d) shall be instituted against the Borrower or any of its
Subsidiaries, and such appointment continues undischarged or such
proceeding continues undismissed or unstayed for a period of
ninety (90) consecutive days.
7.8 Any court, government or governmental agency shall
condemn, seize or otherwise appropriate, or take custody or
control of (each a "Condemnation"), all or any portion of the
Property of the Borrower and its Subsidiaries which, when taken
together with all other Property of the Borrower and its
Subsidiaries so condemned, seized, appropriated, or taken custody
or control of, during the twelve-month period ending with the
month in which any such Condemnation occurs, constitutes a
Substantial Portion.
7.9 The Borrower or any of its Subsidiaries shall fail
within thirty days to pay, bond or otherwise discharge any
judgment or order for the payment of money in excess of $250,000
(or multiple judgments or orders for the payment of an aggregate
amount in excess of $1,000,000), which is not stayed on appeal or
otherwise being appropriately contested in good faith.
7.10 Nonpayment by the Borrower of any Rate Hedging
Obligation or the breach by the Borrower of any term, provision
or condition contained in any agreement, device or arrangement
giving rise to any Rate Hedging Obligation within five (5) days
after the same becomes due.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1 Acceleration. If any Default described in Section 7.6
or 7.7 occurs with respect to the Borrower, the obligations of
the Lenders to make Loans or to issue Facility Letters of Credit
hereunder shall automatically terminate and the Obligations shall
immediately become due and payable without any election or action
on the part of the Agent or any Lender. If (a) any other Default
or (b) any Change in Control occurs, the Required Lenders (or the
Agent with the consent of the Required Lenders) may terminate or
suspend the obligations of the Lenders to make Loans or to issue
Facility Letters of Credit hereunder, or declare the Obligations
to be due and payable, or both, whereupon the Obligations shall
become immediately due and payable, without presentment, demand,
protest or notice of any kind, all of which the Borrower hereby
expressly waives. In addition to the foregoing, following the
occurrence and during the continuance of a Default or any Change
in Control, so long as any Facility Letter of Credit has not been
fully drawn and has not been cancelled or expired by its terms,
upon demand by the Agent the Borrower shall deposit in an account
(the "Letter of Credit Cash Collateral Account") maintained with
First Chicago in the name of the Agent, for the ratable benefit
of the Lenders and the Agent, cash in an amount equal to the
aggregate undrawn face amount of all outstanding Facility Letters
of Credit and all fees and other amounts due or which may become
due with respect thereto. The Borrower shall have no control
over funds in the Letter of Credit Cash Collateral Account, which
funds shall be invested by the Agent from time to time in its
discretion in certificates of deposit of First Chicago having a
maturity not exceeding thirty days. Such funds shall be promptly
applied by the Agent to reimburse the Issuer for drafts drawn
from time to time under the Facility Letters of Credit. Such
funds, if any, remaining in the Letter of Credit Cash Collateral
Account following the payment of all Obligations in full or the
earlier termination of all Defaults or the waiver of any Change
in Control shall, unless the Agent is otherwise directed by a
court of competent jurisdiction, be promptly paid over to the
Borrower.
If, within ten Business Days after acceleration of the
maturity of the Obligations or termination of the obligations of
the Lenders to make Loans hereunder as a result of any Default
(other than any Default as described in Section 7.6 or 7.7 with
respect to the Borrower) or Change in Control and before any
judgment or decree for the payment of the Obligations due shall
have been obtained or entered, all of the Lenders (in their sole
discretion) shall so direct, the Agent shall, by notice to the
Borrower, rescind and annul such acceleration and/or termination.
8.2 Amendments. Subject to the provisions of this Article
VIII, the Required Lenders (or the Agent with the consent in
writing of the Required Lenders) and the Borrower may enter into
agreements supplemental hereto for the purpose of adding or
modifying any provisions to the Loan Documents or changing in any
manner the rights of the Lenders or the Borrower hereunder or
waiving any Default or Change in Control hereunder; provided,
however, that no such supplemental agreement shall, without the
consent of each Lender affected thereby:
(a) Extend the final maturity of any Loan or Note or
reduce the principal amount thereof, or reduce the rate or
extend the time of payment of interest or fees thereon;
(b) Reduce the percentage specified in the definition
of Required Lenders;
(c) Reduce the amount or extend the payment date for
the mandatory payments required under Section 2.1 or 2.7, or
increase the amount of the Commitment of any Lender
hereunder (other than an increase in the Revolving Credit
Commitment of any Lender as a result of an assignment
consummated between such Lender and another Lender pursuant
to Section 12.3.1 hereof);
(d) Extend the Facility Termination Date or permit any
Facility Letter of Credit to have an expiry date beyond
September 1, 2002;
(e) Amend this Section 8.2; or
(f) Permit any assignment by the Borrower of its
Obligations or its rights hereunder.
No amendment of any provision of this Agreement relating to the
Agent shall be effective without the written consent of the
Agent. The Agent may waive payment of the fee required under
Section 12.3.2 without obtaining the consent of any other party
to this Agreement.
8.3 Preservation of Rights. No delay or omission of the
Lenders or the Agent to exercise any right under the Loan
Documents shall impair such right or be construed to be a waiver
of any Default or Change in Control or an acquiescence therein,
and the making of a Loan notwithstanding the existence of a
Default or Change in Control or the inability of the Borrower to
satisfy the conditions precedent to such Loan shall not
constitute any waiver or acquiescence. Any single or partial
exercise of any such right shall not preclude other or further
exercise thereof or the exercise of any other right, and no
waiver, amendment or other variation of the terms, conditions or
provisions of the Loan Documents whatsoever shall be valid unless
in writing signed by such number of Lenders as is required
pursuant to Section 8.2, and then only to the extent in such
writing specifically set forth. All remedies contained in the
Loan Documents or by law afforded shall be cumulative and all
shall be available to the Agent and the Lenders until the
Obligations have been paid in full.
ARTICLE IX
GENERAL PROVISIONS
9.1 Survival of Representations. All representations and
warranties of the Borrower contained in this Agreement or of the
Borrower or any Subsidiary contained in any Loan Document shall
survive delivery of the Notes and the making of the Loans herein
contemplated.
9.2 Governmental Regulation. Anything contained in this
Agreement to the contrary notwithstanding, no Lender shall be
obligated to extend credit to the Borrower in violation of any
limitation or prohibition provided by any applicable statute or
regulation.
9.3 Taxes. Any stamp, recording, documentation or other
similar taxes, assessments or charges payable or ruled payable by
any governmental authority in respect of the Loan Documents shall
be paid by the Borrower, together with interest and penalties, if
any.
9.4 Headings. Section headings in the Loan Documents are
for convenience of reference only, and shall not govern the
interpretation of any of the provisions of the Loan Documents.
9.5 Entire Agreement. The Loan Documents embody the entire
agreement and understanding among the Borrower, the Agent and the
Lenders and supersede all prior agreements and understandings
among the Borrower, the Agent and the Lenders relating to the
subject matter thereof other than the fee letter dated August 8,
1997 in favor of First Chicago.
9.6 Several Obligations; Benefits of this Agreement. The
respective obligations of the Lenders hereunder are several and
not joint and no Lender shall be the partner or agent of any
other (except to the extent to which the Agent is authorized to
act as such). The failure of any Lender to perform any of its
obligations hereunder shall not relieve any other Lender from any
of its obligations hereunder. This Agreement shall not be
construed so as to confer any right or benefit upon any Person
other than the parties to this Agreement and their respective
successors and assigns.
9.7 Expenses; Indemnification. The Borrower shall
reimburse the Agent for any reasonable costs, internal charges
and out-of-pocket expenses (including attorneys' fees and time
charges of attorneys for the Agent, which attorneys may be
employees of the Agent) paid or incurred by the Agent in
connection with the preparation, negotiation, execution,
delivery, review, amendment, modification, and administration of
the Loan Documents. The Borrower also agrees to reimburse the
Agent and the Lenders for any costs, internal charges and
out-of-pocket expenses (including attorneys' fees and time
charges of attorneys for the Agent and the Lenders, which
attorneys may be employees of the Agent or the Lenders) paid or
incurred by the Agent or any Lender in connection with the
collection and enforcement of the Loan Documents. The Borrower
further agrees to indemnify the Agent and each Lender, its
directors, officers and employees against all losses, claims,
damages, penalties, judgments, liabilities and expenses
(including, without limitation, all expenses of litigation or
preparation therefor whether or not the Agent or any Lender is a
party thereto) which any of them may pay or incur arising out of
or relating to this Agreement or the other Loan Documents, the
transactions contemplated hereby or thereby or the direct or
indirect application or proposed application of the proceeds of
any Loan hereunder or the use or intended use of any Facility
Letter of Credit except to the extent that they arise out of the
gross negligence or willful misconduct of the party seeking
indemnification. The obligations of the Borrower under this
Section shall survive the termination of this Agreement.
9.8 Numbers of Documents. All statements, notices, closing
documents, and requests hereunder shall be furnished to the Agent
with sufficient counterparts so that the Agent may furnish one to
each of the Lenders.
9.9 Accounting. Except as provided to the contrary herein,
all accounting terms used herein shall be interpreted and all
accounting determinations hereunder shall be made in accordance
with Agreement Accounting Principles.
9.10 Severability of Provisions. Any provision in any Loan
Document that is held to be inoperative, unenforceable, or
invalid in any jurisdiction shall, as to that jurisdiction, be
inoperative, unenforceable, or invalid without affecting the
remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan
Documents are declared to be severable.
9.11 Nonliability of Lenders. The relationship between the
Borrower and the Lenders and the Agent shall be solely that of
borrower and lender. Neither the Agent nor any Lender shall have
any fiduciary responsibilities to the Borrower on account of this
Agreement. Neither the Agent nor any Lender undertakes any
responsibility to the Borrower to review or inform the Borrower
of any matter in connection with any phase of the Borrower's
business or operations. The Borrower agrees that neither the
Agent nor any Lender shall have liability to the Borrower
(whether sounding in tort, contract or otherwise) for losses
suffered by the Borrower in connection with, arising out of, or
in any way related to, the transactions contemplated and the
relationship established by the Loan Documents, or any act,
omission or event occurring in connection therewith, unless it is
determined by a court of competent jurisdiction by final and non-
appealable judgment that such losses resulted from the gross
negligence or willful misconduct of the party from which recovery
is sought. Neither the Agent nor any Lender shall have any
liability with respect to, and the Borrower hereby waives,
releases and agrees not to sue for, any special, indirect or
consequential damages suffered by the Borrower in connection
with, arising out of, or in any way related to the Loan Documents
or the transactions contemplated thereby.
9.12 CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE
CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS, WITHOUT REGARD TO
CONFLICT OF LAWS PROVISIONS, OF THE STATE OF ILLINOIS, BUT GIVING
EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
9.13 CONSENT TO JURISDICTION. THE BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY
UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO
IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY
LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY
OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY
SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT
SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT
THE RIGHT OF THE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST
THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY
JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE AGENT OR ANY
LENDER OR ANY AFFILIATE OF THE AGENT OR ANY LENDER INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT
ONLY IN A COURT IN CHICAGO, ILLINOIS; PROVIDED, THAT SUCH
PROCEEDINGS MAY BE BROUGHT IN OTHER COURTS IF JURISDICTION MAY
NOT BE OBTAINED IN A COURT IN CHICAGO, ILLINOIS.
9.14 WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT AND
EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING
IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
9.15 Disclosure. The Borrower and each Lender hereby (a)
acknowledge and agree that First Chicago and/or its Affiliates
from time to time may hold other investments in, make other loans
to or have other relationships with the Borrower, including,
without limitation, in connection with any interest rate hedging
instruments or agreements or swap transactions, and (b) waive any
liability of First Chicago or such Affiliate to the Borrower or
any Lender, respectively, arising out of or resulting from such
investments, loans or relationships other than liabilities
arising out of the gross negligence or willful misconduct of
First Chicago or its Affiliates.
9.16 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall
constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the
Borrower, the Agent and the Lenders and each party has notified
the Agent by telex or telephone, that it has taken such action.
ARTICLE X
THE AGENT
10.1 Appointment. First Chicago is hereby appointed Agent
hereunder and under each other Loan Document, and each of the
Lenders authorizes the Agent to act as the agent of such Lender.
The Agent agrees to act as such upon the express conditions
contained in this Article X. The Agent shall not have a
fiduciary relationship in respect of the Borrower or any Lender
by reason of this Agreement.
10.2 Powers. The Agent shall have and may exercise such
powers under the Loan Documents as are specifically delegated to
the Agent by the terms of each thereof, together with such powers
as are reasonably incidental thereto. The Agent shall have no
implied duties to the Lenders, or any obligation to the Lenders
to take any action thereunder, except any action specifically
provided by the Loan Documents to be taken by the Agent.
10.3 General Immunity. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable to any
Lender for any action taken or omitted to be taken by it or them
hereunder or under any other Loan Document or in connection
herewith or therewith except for its or their own gross
negligence or willful misconduct.
10.4 No Responsibility for Loans, Recitals, etc. Neither
the Agent nor any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire
into, or verify (a) any statement, warranty or representation
made in connection with any Loan Document or any borrowing
hereunder, (b) the performance or observance of any of the
covenants or agreements of any obligor under any Loan Document,
including, without limitation, any agreement by an obligor to
furnish information directly to each Lender; (c) the satisfaction
of any condition specified in Article IV, except receipt of items
required to be delivered to the Agent and not waived at closing,
or (d) the validity, effectiveness, sufficiency or,
enforceability or genuineness of any Loan Document or any other
instrument or writing furnished in connection therewith. The
Agent shall have no duty to disclose to the Lenders information
that is not required to be furnished by the Borrower to the Agent
at such time, but is voluntarily furnished by the Borrower to the
Agent (either in its capacity as Agent or in its individual
capacity).
10.5 Action on Instructions of Lenders. The Agent shall in
all cases be fully protected in respect of the Lenders in acting,
or in refraining from acting, hereunder and under any other Loan
Document in accordance with written instructions signed by the
Required Lenders, and such instructions and any action taken or
failure to act pursuant thereto shall be binding on all of the
Lenders and on all holders of Notes. The Agent shall be fully
justified in failing or refusing to take any action hereunder and
under any other Loan Document unless it shall first be
indemnified to its satisfaction by the Lenders pro rata against
any and all liability, cost and expense that it may incur by
reason of taking or continuing to take any such action.
10.6 Employment of Agents and Counsel. The Agent may
execute any of its duties as Agent hereunder and under any other
Loan Document by or through employees, agents and
attorneys-in-fact and shall not be answerable to the Lenders,
except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The Agent
shall be entitled to advice of counsel concerning all matters
pertaining to the agency hereby created and its duties hereunder
and under any other Loan Document.
10.7 Reliance on Documents; Counsel. The Agent shall be
entitled to rely upon any Note, notice, consent, certificate,
affidavit, letter, telegram, statement, paper or document
believed by it to be genuine and correct and to have been signed
or sent by the proper person or persons, and, in respect to legal
matters, upon the opinion of counsel selected by the Agent, which
counsel may be employees of the Agent.
10.8 Agent's Reimbursement and Indemnification. The
Lenders agree to reimburse and indemnify the Agent ratably in
proportion to their respective Commitments (or, if the
Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (a) for any
amounts not reimbursed by the Borrower for which the Agent is
entitled to reimbursement by the Borrower under the Loan
Documents, (b) for any other expenses incurred by the Agent on
behalf of the Lenders, in connection with the preparation,
execution, delivery, administration and enforcement of the Loan
Documents, and (c) for any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of the Loan Documents or any other
document delivered in connection therewith or the transactions
contemplated thereby, or the enforcement of any of the terms
thereof or of any such other documents; provided, that no Lender
shall be liable for any of the foregoing to the extent they arise
from the gross negligence or willful misconduct of the Agent.
The obligations of the Lenders under this Section 10.8 shall
survive payment of the Obligations and termination of this
Agreement.
10.9 Notice of Default. The Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or
Unmatured Default hereunder or of any Change in Control unless
the Agent has received written notice thereof from a Lender or
the Borrower referring to this Agreement describing such Default
or Unmatured Default or Change in Control and stating that such
notice is a "notice of default" or "notice of a Change in
Control", as applicable. In the event that the Agent receives
such a notice, the Agent shall give prompt notice thereof to the
Lenders.
10.10 Rights as a Lender. In the event the Agent is a
Lender, the Agent shall have the same rights and powers hereunder
and under any other Loan Document as any Lender and may exercise
the same as though it were not the Agent, and the term "Lender"
or "Lenders" shall, at any time when the Agent is a Lender,
unless the context otherwise indicates, include the Agent in its
individual capacity. The Agent may accept deposits from, lend
money to, and generally engage in any kind of trust, debt, equity
or other transaction, in addition to those contemplated by this
Agreement or any other Loan Document, with the Borrower or any of
its Subsidiaries in which the Borrower or such Subsidiary is not
restricted hereby from engaging with any other Person. The
Agent, in its individual capacity, is not obligated to remain a
Lender.
10.11 Lender Credit Decision. Each Lender acknowledges
that it has, independently and without reliance upon the Agent or
any other Lender and based on the financial statements prepared
by the Borrower and such other documents and information as it
has deemed appropriate, made its own credit analysis and decision
to enter into this Agreement and the other Loan Documents. Each
Lender also acknowledges that it will, independently and without
reliance upon the 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 decisions in taking or not
taking action under this Agreement and the other Loan Documents.
10.12 Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Lenders and the Borrower,
such resignation to be effective upon the appointment of a
successor Agent or, if no successor Agent has been appointed,
forty-five days after the retiring Agent gives notice of its
intention to resign. Upon any such resignation, the Required
Lenders shall have the right to appoint, on behalf of the
Borrower and the Lenders, a successor Agent. If no successor
Agent shall have been so appointed by the Required Lenders and
shall have accepted such appointment within thirty days after the
resigning Agent's giving notice of its intention to resign, then
the resigning Agent may appoint, on behalf of the Borrower and
the Lenders, a successor Agent. If the Agent has resigned and no
successor Agent has been appointed, the Lenders may perform all
the duties of the Agent hereunder and the Borrower shall make all
payments in respect of the Obligations to the applicable Lender
and for all other purposes shall deal directly with the Lenders.
No successor Agent shall be deemed to be appointed hereunder
until such successor Agent has accepted the appointment. Any
such successor Agent shall be a commercial bank having capital
and retained earnings of at least $250,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor
Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the
resigning Agent. Upon the effectiveness of the resignation of
the Agent, the resigning Agent shall be discharged from its
duties and obligations hereunder and under the Loan Documents.
After the effectiveness of the resignation of an Agent, the
provisions of this Article X shall continue in effect for the
benefit of such Agent in respect of any actions taken or omitted
to be taken by it while it was acting as the Agent hereunder and
under the other Loan Documents.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1 Setoff. In addition to, and without limitation of,
any rights of the Lenders under applicable law, if any Default or
Unmatured Default or Change in Control occurs, any and all
deposits (including all account balances, whether provisional or
final and whether or not collected or available) and any other
Indebtedness at any time held or owing by any Lender to or for
the credit or account of the Borrower may be offset and applied
toward the payment of the Obligations owing to such Lender,
whether or not the Obligations, or any part hereof, shall then be
due.
11.2 Ratable Payments. If any Lender, whether by setoff or
otherwise, has payment made to it upon its Loans (other than
payments received pursuant to Sections 3.1, 3.2 or 3.4) in a
greater proportion than its pro-rata share of such Loans, such
Lender agrees, promptly upon demand, to purchase a portion of the
Loans held by the other Lenders so that after such purchase each
Lender will hold its ratable proportion of Loans. If any Lender,
whether in connection with setoff or amounts which might be
subject to setoff or otherwise, receives collateral or other
protection for its Obligations or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to
take such action necessary such that all Lenders share in the
benefits of such collateral ratably in proportion to their Loans.
In case any such payment is disturbed by legal process, or
otherwise, appropriate further adjustments shall be made. If an
amount to be setoff is to be applied to Indebtedness of the
Borrower to a Lender, other than Indebtedness evidenced by any of
the Notes held by such Lender, such amount shall be applied
ratably to such other Indebtedness and to the Indebtedness
evidenced by such Notes.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1 Successors and Assigns. The terms and provisions of
the Loan Documents shall be binding upon and inure to the benefit
of the Borrower and the Lenders and their respective successors
and assigns, except that (a) the Borrower shall not have the
right to assign its rights or obligations under the Loan
Documents, and (b) any assignment by any Lender must be made in
compliance with Section 12.3. Notwithstanding clause (b) of this
Section, any Lender may at any time, without the consent of the
Borrower or the Agent, assign all or any portion of its rights
under this Agreement and its Notes to a Federal Reserve Bank;
provided, however, that no such assignment to a Federal Reserve
Bank shall release the transferor Lender from its obligations
hereunder. The Agent may treat the payee of any Note as the
owner thereof for all purposes hereof unless and until such payee
complies with Section 12.3 in the case of an assignment thereof
or, in the case of any other transfer, a written notice of the
transfer is filed with the Agent. Any assignee or transferee of
a Note agrees by acceptance thereof to be bound by all the terms
and provisions of the Loan Documents. Any request, authority or
consent of any Person, who at the time of making such request or
giving such authority or consent is the holder of any Note, shall
be conclusive and binding on any subsequent holder, transferee or
assignee of such Note or of any Note or Notes issued in exchange
therefor.
12.2 Participations.
12.2.1. Permitted Participants; Effect. Any Lender
may, in the ordinary course of its business and in accordance
with applicable law, at any time sell to one or more banks or
other entities ("Participants") participating interests in any
Loan owing to such Lender, any Note held by such Lender, any
Lender's interest in any Facility Letter of Credit Obligation,
any Commitment of such Lender or any other interest of such
Lender under the Loan Documents. In the event of any such sale
by a Lender of participating interests to a Participant, such
Lender's obligations under the Loan Documents shall remain
unchanged, such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations,
such Lender shall remain the holder of any such Note for all
purposes under the Loan Documents, all amounts payable by the
Borrower under this Agreement shall be determined as if such
Lender had not sold such participating interests, and the
Borrower and the Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and
obligations under the Loan Documents.
12.2.2. Voting Rights. Each Lender shall retain the
sole right to approve, without the consent of any Participant,
any amendment, modification or waiver of any provision of the
Loan Documents other than any amendment, modification or waiver
which effects any of the modifications referenced in clauses (a)
through (f) of Section 8.2.
12.2.3. Benefit of Setoff. The Borrower agrees that
each Participant shall be deemed to have the right of setoff
provided in Section 11.1 in respect of its participating interest
in amounts owing under the Loan Documents to the same extent as
if the amount of its participating interest were owing directly
to it as a Lender under the Loan Documents; provided, that each
Lender shall retain the right of setoff provided in Section 11.1
with respect to the amount of participating interests sold to
each Participant. The Lenders agree to share with each
Participant, and each Participant, by exercising the right of
setoff provided in Section 11.1, agrees to share with each
Lender, any amount received pursuant to the exercise of its right
of setoff, such amounts to be shared in accordance with Section
11.2 as if each Participant were a Lender.
12.3 Assignments.
12.3.1. Permitted Assignments. Any Lender may, in the
ordinary course of its business and in accordance with applicable
law, at any time assign to one or more banks or other entities
("Purchasers") all or any part of its rights and obligations
under the Loan Documents in an amount equal to or greater than
$5,000,000. Such assignment shall be substantially in the form
of Exhibit D hereto or in such other form as may be agreed to by
the parties thereto, the Agent and the Borrower. The consent of
the Agent and, so long as no Default or Unmatured Default has
occurred and is continuing, the Borrower, shall be required prior
to an assignment becoming effective with respect to a Purchaser
which is not a Lender or an Affiliate thereof. Such consent
shall not be unreasonably withheld. In the case of any
assignment, the assigning Lender shall surrender its Note to the
Borrower prior to the assignment becoming effective and the
Borrower shall, simultaneously with such surrender, reissue and
deliver a new Note or Notes in the same aggregate outstanding
principal amount as the surrendered Note in the name of such
holders as requested by the assigning Lender.
12.3.2. Effect; Effective Date. Upon (a) delivery to
the Agent of a notice of assignment, substantially in the form
attached as Exhibit I to Exhibit D hereto (a "Notice of
Assignment"), together with any consents required by Section
12.3.1, and (b) payment of a $3,500 fee to the Agent for
processing such assignment, such assignment shall become
effective on the effective date specified in such Notice of
Assignment. On and after the effective date of such assignment,
(a) such Purchaser shall for all purposes be a Lender party to
this Agreement and any other Loan Document executed by the
Lenders and shall have all the rights and obligations of a Lender
under the Loan Documents, to the same extent as if it were an
original party hereto, and (b) the transferor Lender shall be
released with respect to the percentage of the Aggregate
Revolving Credit Commitment and Loans assigned to such Purchaser
without any further consent or action by the Borrower, the
Lenders or the Agent. Upon the consummation of any assignment to
a Purchaser pursuant to this Section 12.3.2, the transferor
Lender, the Agent and the Borrower shall make appropriate
arrangements so that replacement Notes are issued to such
transferor Lender and new Notes or, as appropriate, replacement
Notes, are issued to such Purchaser, in each case in principal
amounts reflecting their Commitment, as adjusted pursuant to such
assignment.
12.4 Dissemination of Information. The Borrower authorizes
each Lender to disclose to any Participant or Purchaser or any
other Person acquiring an interest in the Loan Documents by
operation of law (each a "Transferee") and any prospective
Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its
Subsidiaries.
12.5 Tax Treatment. If any interest in any Loan Document
is transferred to any Transferee which is organized under the
laws of any jurisdiction other than the United States or any
State thereof, the transferor Lender shall cause such Transferee,
concurrently with the effectiveness of such transfer, to comply
with the provisions of Section 2.18.
ARTICLE XIII
NOTICES
13.1 Giving Notice. Except as otherwise permitted by
Section 2.15 with respect to borrowing notices, all notices and
other communications provided to any party hereto under this
Agreement or any other Loan Document shall be in writing, by
facsimile, first class U.S. mail or overnight courier and
addressed or delivered to such party at its address set forth
below its signature hereto or at such other address as may be
designated by such party in a notice to the other parties.
Unless otherwise provided in this Agreement, any notice, if
mailed and properly addressed with first class postage prepaid,
return receipt requested, shall be deemed given three (3)
Business Days after deposit in the U.S. mail; any notice, if
transmitted by facsimile, shall be deemed given when transmitted;
and any notice given by overnight courier shall be deemed given
one (1) Business Day after such notice is deposited with such
courier.
13.2 Change of Address. The Borrower, the Agent and any
Lender may each change the address for service of notice upon it
by a notice in writing to the other parties hereto.
[signature pages to follow]
IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent
have executed this Agreement as of the date first above written.
RAWLINGS SPORTING GOODS COMPANY,
INC.
By: /s/ Paul E. Martin
Print Name: Paul E. Martin
Title: Chief Financial Officer
Address: 1859 Intertech Drive
Fenton, Missouri 63026
Attn: Chief Financial Officer
Telecopy: 314-349-3580
Telephone: 314-349-3500
Revolving Credit
Commitments
THE FIRST NATIONAL BANK OF CHICAGO,
Individually and as Agent
$24,000,000
By: /s/ Nathan L. Bloch
Print Name: Nathan L. Bloch
Title: First Vice President
Address: One First National Plaza
Suite 0173
Chicago, Illinois 60670
Attn: Nathan L. Bloch
Telecopy: 312-732-1117
Telephone: 312-732-2243
THE BANK OF NEW YORK
$18,000,000
By: /s/ John C.Lambert
Print Name: John C. Lambert
Title: Vice President
Address: One Wall Street
New York, New York 10286
Attn: John C. Lambert
Telecopy: 212-635-1208
Telephone: 212-635-8204
COMERICA BANK
$16,000,000
By: /s/ Burt R. Shurly, III
Print Name: Burt R. Shurly, III
Title: Vice President
Address: Comerica Tower at Detroit
Center
500 Woodward Avenue, Mail
Code 3269
9th Floor
Detroit, Michigan 48226
Attn: Burt R. Shurly, III
Telecopy: 313-222-9516
Telephone: 313-222-3070
NATIONSBANK, N.A.
$16,000,000
By: /s/ Jeff Potts
Print Name: Jeff Potts
Title: Vice President
Address: One NationsBank Plaza
800 Market Street
Post Office Box 236
St. Louis, Missouri
63166-0236
Attn: Jeff Potts
Telecopy: 314-466-6499
Telephone: 314-466-6061
$16,000,000 BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /s/ Steven T. Standbridge
Print Name: Steven T. Standbridge
Title: Vice President
Address: 231 South LaSalle Street
Chicago, Illinois 60697
Attn: Steven T. Standbridge
Telecopy: 312-974-0761
Telephone: 312-828-2270
____________
$90,000,000