EXECUTION COPY
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AMENDED AND RESTATED CREDIT AGREEMENT
dated as of
December 20, 2006
among
GRIFFON CORPORATION
TELEPHONICS CORPORATION,
as the Subsidiary Borrower
The LENDERS Party Hereto
and
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
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$175,000,000
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J.P. MORGAN SECURITIES INC.,
as Sole Lead Arranger and Sole Bookrunner
HSBC BANK USA, NATIONAL ASSOCIATION
and
BANK OF AMERICA, N.A.,
as Co-Documentation Agents
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TABLE OF CONTENTS
Page
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ARTICLE I 1
DEFINITIONS 1
SECTION 1.01. Defined Terms 1
SECTION 1.02. Terms Generally 20
SECTION 1.03. Accounting Terms; GAAP 20
SECTION 1.04. Currencies; Currency Equivalents; Euro 21
ARTICLE II 22
THE CREDITS 22
SECTION 2.01. The Commitments 22
SECTION 2.02. Loans and Borrowings 22
SECTION 2.03. Requests for Borrowings 23
SECTION 2.04. Letters of Credit 24
SECTION 2.05. Funding of Borrowings 28
SECTION 2.06. Interest Elections 29
SECTION 2.07. Termination, Reduction and Increase of the Commitments 30
SECTION 2.08. Repayment of Loans; Evidence of Debt 32
SECTION 2.09. Prepayment of Loans 33
SECTION 2.10. Fees 34
SECTION 2.11. Interest 35
SECTION 2.12. Alternate Rate of Interest 36
SECTION 2.13. Increased Costs 36
SECTION 2.14. Break Funding Payments 38
SECTION 2.15. Taxes 38
SECTION 2.16. Payments Generally; Pro Rata Treatment; Sharing of Set-offs 39
SECTION 2.17. Mitigation Obligations; Replacement of Lenders 42
ARTICLE III 42
GUARANTEE 42
SECTION 3.01. The Guarantee 42
SECTION 3.02. Obligations Unconditional 43
SECTION 3.03. Reinstatement 44
SECTION 3.04. Subrogation 44
SECTION 3.05. Remedies 44
SECTION 3.06. Continuing Guarantee 44
SECTION 3.07. General Limitation on Guarantee Obligations 44
ARTICLE IV 45
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REPRESENTATIONS AND WARRANTIES 45
SECTION 4.01. Organization; Powers 45
SECTION 4.02. Authorization; Enforceability 45
SECTION 4.03. Governmental Approvals; No Conflicts 45
SECTION 4.04. Financial Condition; No Material Adverse Change 45
SECTION 4.05. Properties 46
SECTION 4.06. Litigation and Environmental Matters. 46
SECTION 4.07. Compliance with Laws and Contractual Obligations 46
SECTION 4.08. Investment Company Status 47
SECTION 4.09. Taxes 47
SECTION 4.10. ERISA 47
SECTION 4.11. Disclosure 47
SECTION 4.12. Use of Credit 47
SECTION 4.13. Burdensome Agreements 48
SECTION 4.14. Labor Matters 48
ARTICLE V 48
CONDITIONS 48
SECTION 5.01. Effective Date 48
SECTION 5.02. Each Credit Event 50
ARTICLE VI 50
AFFIRMATIVE COVENANTS 50
SECTION 6.01. Financial Statements and Other Information 50
SECTION 6.02. Notices of Material Events 52
SECTION 6.03. Existence; Conduct of Business 53
SECTION 6.04. Payment of Obligations 53
SECTION 6.05. Maintenance of Properties 53
SECTION 6.06. Maintenance of Insurance 53
SECTION 6.07. Books and Records 53
SECTION 6.08. Inspection Rights 53
SECTION 6.09. Compliance with Laws and Contractual Obligations 53
SECTION 6.10. Use of Proceeds and Letters of Credit 53
SECTION 6.11. Collateral; Further Assurances 54
ARTICLE VII 54
NEGATIVE COVENANTS 54
SECTION 7.01. Indebtedness; Guarantees 54
SECTION 7.02. Liens 55
SECTION 7.03. Mergers, Consolidations, Etc. 56
SECTION 7.04. Dispositions 56
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Page
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SECTION 7.05. Lines of Business 57
SECTION 7.06. Investments and Acquisitions 57
SECTION 7.07. Restricted Payments 58
SECTION 7.08. Transactions with Affiliates 58
SECTION 7.09. Restrictive Agreements 58
SECTION 7.10. Swap Agreements 59
SECTION 7.11. Financial Covenants 59
SECTION 7.12. Stock Issuance 59
SECTION 7.13. Modifications of Certain Documents 59
ARTICLE VIII 60
EVENTS OF DEFAULT 60
ARTICLE IX 62
THE ADMINISTRATIVE AGENT 62
ARTICLE X 64
MISCELLANEOUS 64
SECTION 10.01. Notices 64
SECTION 10.02. Waivers; Amendments 65
SECTION 10.03. Expenses; Indemnity; Damage Waiver 66
SECTION 10.04. Successors and Assigns 67
SECTION 10.05. Survival 70
SECTION 10.06. Counterparts; Integration; Effectiveness 70
SECTION 10.07. Severability 71
SECTION 10.08. Right of Setoff 71
SECTION 10.09. Governing Law; Jurisdiction; Consent to Service of Process 71
SECTION 10.10. WAIVER OF JURY TRIAL 72
SECTION 10.11. Judgment Currency 72
SECTION 10.12. Headings 73
SECTION 10.13. Confidentiality 73
SECTION 10.14. USA PATRIOT Act 73
SECTION 10.15. Authorization of Company 74
SECTION 10.16. Confirmation of Security Interests 74
SCHEDULE 1.01 - Commitments
SCHEDULE 4.06(a) - Litigation
SCHEDULE 4.06(b) - Environmental Matters SCHEDULE 4.13 - Burdensome Agreements
SCHEDULE 4.14 - Labor Matters
SCHEDULE 7.01 - Existing Guarantees
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SCHEDULE 7.02 - Existing Liens
SCHEDULE 7.06 - Existing Investments
SCHEDULE 7.09 - Restrictive Agreements
SCHEDULE 10.01 - Addresses for Notice
EXHIBIT A - Form of Assignment and Assumption
EXHIBIT B - Pledge Agreement
EXHIBIT C - Form of Opinion of Counsel to the Borrowers
EXHIBIT D - Form of Opinion of Special New York Counsel to JPMCB
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AMENDED AND RESTATED CREDIT AGREEMENT dated as of December 20, 2006, among
GRIFFON CORPORATION, TELEPHONICS CORPORATION, the LENDERS party hereto, and
JPMORGAN CHASE BANK, N.A., as Administrative Agent.
The Borrowers (as hereinafter defined), certain of the Lenders (as so
defined) and JPMCB, as the Administrative Agent thereunder are parties to the
Credit Agreement dated as of December 15, 2005 (as in effect immediately prior
to the effectiveness of this Agreement, the "Existing Credit Agreement").
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The Borrowers have requested certain amendments to the provisions of the
Existing Credit Agreement, including the extension of the availability of the
commitments thereunder. The Lenders are willing to make such amendments and
extend credit to the Borrowers in an aggregate principal or face amount not
exceeding $175,000,000 for the purposes specified herein upon the terms and
conditions hereof, and, accordingly, the parties hereto agree to amend and
restate in its entirety the Existing Credit Agreement effective as of the
Effective Date as follows:
ARTICLE I
DEFINITIONS
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SECTION 1.01. Defined Terms. As used in this Agreement, the following terms
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have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to whether
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such Loan, or the Loans comprising such Borrowing, are denominated in Dollars
and bearing interest at a rate determined by reference to the Alternate Base
Rate.
"Adjusted LIBO Rate" means, for the Interest Period for any Eurocurrency
------------------
Borrowing, an interest rate per annum (rounded upwards, if necessary, to the
next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied
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by (b) the Statutory Reserve Rate for such Interest Period.
- --
"Adjusted Net Income" means, for any period, the aggregate income (or loss)
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for such period which shall be an amount equal to net revenues and other proper
items of income, plus extraordinary and unusual non-cash losses for such period,
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plus minority interest in earnings of consolidated Subsidiaries for such period,
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less any and all items that are treated as expenses under GAAP, less, without
- ---- ----
duplication, Federal, state and local income taxes and income taxes expensed for
taxes payable to jurisdictions outside of the United States, less minority
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interests in losses of consolidated Subsidiaries for such period and less
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extraordinary and unusual non-cash gains for such period, as determined in
accordance with GAAP.
"Administrative Agent" means JPMCB, in its capacity as administrative agent
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for the Lenders hereunder.
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"Administrative Agent's Account" means, for each Currency, an account in
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respect of such Currency designated by the Administrative Agent in a notice to
the Borrowers and the Lenders.
"Administrative Questionnaire" means an Administrative Questionnaire in a
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form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another Person that
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directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Aggregate Commitment" means, at any time, the aggregate amount of the
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Commitments of all the Lenders at such time, as such amount is subject to
reduction or increase in accordance with the terms hereof. The initial amount of
the Aggregate Commitment is $175,000,000.
"Aggregate Foreign Currency Sublimit Dollar Amount" means $100,000,000.
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"Aggregate LC Exposure" means, at any time, the sum of (a) the aggregate
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undrawn amount of all outstanding Letters of Credit at such time plus (b) the
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aggregate amount of all LC Disbursements that have not yet been reimbursed by or
on behalf of each Borrower at such time.
"Aggregate Letter of Credit Sublimit Amount" means $45,000,000.
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"Aggregate Revolving Credit Exposure" means, at any time, the sum of (a)
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the aggregate outstanding principal amount of the Loans of all the Lenders at
such time plus (b) the aggregate amount of LC Exposures of all the Lenders at
such time.
"Aggregate Subsidiary Borrower Revolving Credit Exposure" means, at any
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time, the aggregate amount of (a) the aggregate outstanding principal amount of
the Loans of all the Lenders to the Subsidiary Borrower at such time plus (b)
the aggregate amount of LC Exposures of all the Lenders in respect of Letters of
Credit issued for the account of the Subsidiary Borrower at such time.
"Aggregate Subsidiary Borrower Sublimit Commitment" means, at any time, the
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sum of the Subsidiary Borrower Sublimit Commitments of all the Lenders at such
time, as such amount is subject to reduction or increase in accordance with the
terms hereof. The initial amount of the Aggregate Subsidiary Borrower Sublimit
Commitment is $45,000,000.
"Agreed Foreign Currency" means, at any time, any of English Pounds
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Sterling, euro and, with the agreement of each Lender, any other Foreign
Currency, so long as, in respect of any such specified Currency or other Foreign
Currency, at such time (a) such Currency is dealt with in the London (or, in the
case of English Pounds Sterling, Paris) interbank deposit market, (b) such
Currency is freely transferable and convertible into Dollars in the London
foreign exchange market and (c) no central bank or other governmental
authorization in the country of issue of such Currency (including, in the case
of the Euro, any authorization by the
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European Central Bank) is required to permit use of such Currency by any Lender
for making any Loan hereunder and/or to permit the Borrowers to borrow and repay
the principal thereof and to pay the interest thereon, unless such authorization
has been obtained and is in full force and effect.
"Alternate Base Rate" means, for any day, a rate per annum equal to the
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greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 0.50%. Any change in the Alternate
Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.
"Applicable Percentage" means, with respect to any Lender, the percentage
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of the Aggregate Commitment represented by such Lender's Commitment. If the
Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments.
"Applicable Rate" means, for any day, with respect to any ABR Loan or
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Eurocurrency Loan, or with respect to the commitment fees payable hereunder, as
the case may be, the applicable rate per annum set forth below under the caption
"ABR Spread", "Eurocurrency Spread" or "Commitment Fee Rate", respectively,
based upon the Leverage Ratio as of the most recent determination date:
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Leverage Ratio: ABR Eurocurrency Commitment
--------------- Spread Spread Fee Rate
------ ------ --------
- ------------------------------------------------------------------------------
Category 1
---------- 0.125% 1.125% 0.25%
Greater than or equal to
2.75:1.00
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Category 2
---------- 0% 0.875% 0.20%
Greater than or equal to
2.00:1.00 but less than
2.75:1.00
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Category 3
---------- 0% 0.70% 0.15%
Greater than or equal to
1.25:1.00 but less than
2.00:1.00
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Category 4
---------- 0% 0.60% 0.125%
Greater than or equal to
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0.50:1.00 but less
than 1.25:1.00
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Category 5
---------- 0% 0.50% 0.10%
Less than 0.50:1.00
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For purposes of the foregoing, (i) the Leverage Ratio shall be determined as of
the end of each fiscal quarter of the Company's fiscal year based upon the
Company's consolidated financial statements delivered pursuant to Section
6.01(a) or (b) and (ii) each change in the Applicable Rate resulting from a
change in the Leverage Ratio shall be effective during the period commencing on
and including the date three Business Days after delivery to the Administrative
Agent of such consolidated financial statements indicating such change and
ending on the date immediately preceding the effective date of the next such
change; provided that the Leverage Ratio shall be deemed to be in Category 1 (A)
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at any time that an Event of Default has occurred and is continuing or (B) if
the Company fails to deliver the consolidated financial statements required to
be delivered by it pursuant to Section 6.01(a) or (b), during the period from
the expiration of the time for delivery thereof until such consolidated
financial statements are delivered.
"Approved Fund" means any Person (other than a natural person) that is
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engaged in making, purchasing, holding or investing in bank loans and similar
extensions of credit in the ordinary course of its business and that is
administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an
entity or an Affiliate of an entity that administers or manages a Lender.
"Assignment and Assumption" means an assignment and assumption entered into
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by a Lender and an assignee (with the consent of any party whose consent is
required by Section 10.04), and accepted by the Administrative Agent, in the
form of Exhibit A or any other form approved by the Administrative Agent.
"Assuming Lender" has the meaning set forth in Section 2.07(c).
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"Availability Period" means the period from and including the Effective
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Date to but excluding the earlier of the Commitment Termination Date and the
date of termination of the Commitments.
"Board" means the Board of Governors of the Federal Reserve System of the
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United States of America.
"Bohme" means Bohme-Clopay Verpackungsfolien GmbH, a wholly-owned
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subsidiary of Clopay Germany GmbH and a successor-in-interest to Bohme
Verwaltungs-Gesellschaft GmbH and Bohme GmbH & Co. KG Verpackungsfolien.
"Borrower" means the Company or the Subsidiary Borrower, as applicable.
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"Borrowing" means (a) all ABR Loans made, converted or continued on the
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same date or (b) all Eurocurrency Loans denominated in the same Currency that
have the same Interest Period.
"Borrowing Request" means a request by a Borrower for a Borrowing in
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accordance with Section 2.03.
"Business Day" means any day (a) that is not a Saturday, Sunday or other
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day on which commercial banks in New York City are authorized or required by law
to remain closed, (b) if such day relates to a borrowing of, a payment or
prepayment of principal of or interest on, a continuation or conversion of or
into, or the Interest Period for, a Eurocurrency Borrowing, or to a notice by
any Borrower with respect to any such borrowing, payment, prepayment,
continuation, conversion, or Interest Period, that is also a day on which
dealings in deposits denominated in the Currency of such Borrowing are carried
out in the London interbank market, (c) if such day relates to a borrowing or
continuation of, a payment or prepayment of principal of or interest on, or the
Interest Period for, any Borrowing denominated in any Foreign Currency (other
than euro), or to a notice by any Borrower with respect to any such borrowing,
continuation, payment, prepayment or Interest Period, that is also a day on
which commercial banks and the London foreign exchange market settle payments in
the Principal Financial Center for such Foreign Currency and (d) if such day
relates to a borrowing or continuation of, a payment or prepayment of principal
of or interest on, or the Interest Period for, any Borrowing denominated in euro
(or any notice with respect thereto), that is also a TARGET Day.
"Capital Expenditures" means, for any period, expenditures (including the
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aggregate amount of Capital Lease Obligations incurred during such period) made
by the Company or any of its Subsidiaries to acquire or construct fixed assets,
plant and equipment (including renewals, improvements and replacements, but
excluding repairs) during such period computed in accordance with GAAP.
"Capital Lease Obligations" of any Person means the obligations of such
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Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"Capital Stock" means (a) in the case of a corporation, capital stock, (b)
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in the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock, (c) in the case of a limited liability company, membership units (whether
common or preferred), (d) in the case of a partnership, partnership interests
(whether general or limited) and (e) any other equivalent ownership interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
"Change in Control" means (a) the acquisition of ownership, directly or
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indirectly, beneficially or of record, by any Person or group (within the
meaning of the Exchange
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Act and the rules of the SEC thereunder as in effect on the date hereof), of
shares representing more than 30% of the aggregate ordinary voting power
represented by the issued and outstanding Capital Stock of the Company 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")
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who (i) were directors of the Company on the first day of each such period or
(ii) subsequently became directors of the Company and whose initial election or
initial nomination for election subsequent to that date was approved by a
majority of the Continuing Directors then on the board of directors of the
Company, to constitute a majority of the board of directors of the Company.
"Change in Law" means (a) the adoption of any law, rule or regulation after
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the date of this Agreement, (b) any change in any law, rule or regulation or in
the interpretation or application thereof by any Governmental Authority after
the date of this Agreement or (c) compliance by any Lender or the Issuing Lender
(or, for purposes of Section 2.13(b), by any lending office of such Lender or by
such Lender's or the Issuing Lender's holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
"Clopay" means Clopay Corporation, a Delaware corporation.
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"Code" means the Internal Revenue Code of 1986, as amended from time to
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time.
"Collateral Account" has the meaning assigned to such term in the Pledge
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Agreement.
"Commitment" means, with respect to each Lender at any time, the commitment
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of such Lender to make Loans and to acquire participations in Letters of Credit
hereunder, expressed as an amount representing the maximum aggregate amount of
such Lender's Revolving Credit Exposure hereunder, as such commitment may be (a)
reduced or increased from time to time pursuant to Section 2.07 and (b) reduced
or increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 10.04. The initial amount of each Lender's Commitment is set
forth on Schedule 1.01, or in the Assignment and Assumption pursuant to which
such Lender shall have assumed its Commitment, as applicable.
"Commitment Increase" has the meaning set forth in Section 2.07(c).
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"Commitment Increase Date" has the meaning set forth in Section 2.07(c).
------------------------
"Commitment Termination Date" means December 20, 2011 (or if such date is
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not a Business Day, the immediately preceding Business Day).
"Company" means Griffon Corporation, a Delaware corporation.
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"Consolidated EBITDA" means, for any period, the sum of (i) Adjusted Net
-------------------
Income, (ii) Consolidated Interest Expense, (iii) depreciation and amortization
and (iv) foreign, Federal, state and local income taxes, in each case, computed
in accordance with GAAP.
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"Consolidated Fixed Charge Coverage Ratio" means, for any period, the ratio
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of (a) Consolidated EBITDA for such period, minus the aggregate amount actually
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paid by the Company and its Subsidiaries during such period on account of
Capital Expenditures (excluding the principal amount of Indebtedness other than
any Loans incurred in connection with such expenditures) to (b) Consolidated
Interest Expense for such period.
"Consolidated Funded Debt" means, at any date, the aggregate principal
------------------------
amount of all Indebtedness for borrowed money of the Company and its
Subsidiaries at such date, determined on a consolidated basis in accordance with
GAAP.
"Consolidated Interest Expense" means, for any period, total cash interest
-----------------------------
expense (including that attributable to Capital Lease Obligations) of the
Company and its Subsidiaries for such period with respect to all outstanding
Indebtedness of the Company and its Subsidiaries (including all commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing and net costs under Swap Agreements in respect of
interest rates to the extent such net costs are allocable to such period in
accordance with GAAP).
"Consolidated Leverage Ratio" means, as at the last day of any period, the
---------------------------
ratio of (a) Consolidated Funded Debt on such day to (b) Consolidated EBITDA for
such period.
"Consolidated Net Worth" means, at any date, all amounts that
----------------------
would, in conformity with GAAP, be included on a consolidated balance sheet of
the Company and its Subsidiaries under stockholders' equity at such date.
"Contractual Obligation" means, as to any Person, any provision of any
----------------------
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Control" means the possession, directly or indirectly, of the power to
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direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
----------- ----------
"Convertible Securities" means evidences of indebtedness of the Company
----------------------
which are exchangeable for or exercisable or convertible into Capital Stock of
the Company either immediately or upon the arrival of a specified date or the
occurrence of a specified event.
"Currency" means Dollars or any Foreign Currency.
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"Default" means any event or condition which constitutes an Event of
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Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and proceedings disclosed in
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Schedule 4.06(a) and the environmental matters disclosed in Schedule 4.06(b).
"Dollar Equivalent" means, with respect to any Borrowing denominated in any
-----------------
Foreign Currency, the amount of Dollars that would be required to purchase the
amount of the
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Foreign Currency of such Borrowing on the date two Business Days prior to the
date of such Borrowing (or, in the case of any determination made under Section
2.09(b) or redenomination under the last sentence of Section 2.16(a), on the
date of determination or redenomination therein referred to), based upon the
spot selling rate at which the Administrative Agent offers to sell such Foreign
Currency for Dollars in the London foreign exchange market at approximately
11:00 a.m., London time, for delivery two Business Days later.
"Dollars" or "$" refers to lawful money of the United States of America.
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"Effective Date" means the date on which the conditions specified in
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Section 5.01 are satisfied (or waived in accordance with Section 10.02).
"Environmental Laws" means all laws, rules, regulations, codes, ordinances,
------------------
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, release or threatened release of any Hazardous Material or to health
and safety matters.
"Environmental Liability" means any liability, contingent or otherwise
-----------------------
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Company or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
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amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
---------------
that, together with the Company, is treated as a single employer under Section
414(b) or (c) of the Code, or, solely for purposes of Section 302 of ERISA and
Section 412 of the Code, is treated as a single employer under Section 414 of
the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section 4043
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of ERISA or the regulations issued thereunder with respect to a Plan (other than
an event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Company or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Company or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Company or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
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receipt by the Company or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Company or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"Eurocurrency", when used in reference to any Loan or Borrowing, refers to
------------
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Adjusted LIBO Rate.
"euro" means the single currency of Participating Member States of the
----
European Union, which shall be an Agreed Foreign Currency and a Foreign Currency
under this Agreement.
"Event of Default" has the meaning assigned to such term in Article VIII.
----------------
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
------------
"Excluded Taxes" means, with respect to the Administrative Agent, any
--------------
Lender, the Issuing Lender or any other recipient of any payment to be made by
or on account of any obligation of the Borrowers hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income by the United States
of America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed on any Lender by the United States of America and (c) in
the case of a Non-U.S. Lender (other than an assignee pursuant to a request by
the Company under Section 2.17(b)), any withholding tax that is imposed on
amounts payable to such Non-U.S. Lender at the time such Non-U.S. Lender becomes
a party to this Agreement (or designates a new lending office) or is
attributable to such Non-U.S. Lender's failure to comply with Section 2.15(e),
except to the extent that such Non-U.S. Lender (or its assignor, if any) was
entitled, at the time of designation of a new lending office (or assignment), to
receive additional amounts from the applicable Borrower with respect to such
withholding tax pursuant to Section 2.15(a).
"Existing Credit Agreement" has the meaning set forth in the second
-------------------------
paragraph of this Agreement.
"Existing Letters of Credit" has the meaning set forth in Section 2.04(a).
--------------------------
"Federal Funds Effective Rate" means, for any day, the weighted average
----------------------------
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Financial Officer" means the chief financial officer, principal accounting
-----------------
officer, treasurer or controller of the Company.
-10-
"Foreign Currency" means at any time any Currency other than Dollars.
----------------
"Foreign Currency Equivalent" means, with respect to any amount in Dollars,
---------------------------
the amount of any Foreign Currency that could be purchased with such amount of
Dollars using the reciprocal of the foreign exchange rate(s) specified in the
definition of the term "Dollar Equivalent", as determined by the Administrative
Agent.
"GAAP" means generally accepted accounting principles in the United States
----
of America.
"Governmental Authority" means the government of the United States of
----------------------
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" of or by any Person (the "guarantor") means any obligation,
---------
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and
---------------
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided that the term Guarantee shall not include endorsements for
--------
collection or deposit in the ordinary course of business.
"Guaranteed Obligations" has the meaning set forth in Section 3.01.
----------------------
"Guarantors" means the Company and the Subsidiary Borrower, in each case
----------
with respect to its respective Guaranteed Obligations.
"Hazardous Materials" means all explosive or radioactive substances or
-------------------
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Increasing Lender" has the meaning set forth in Section 2.07(c).
-----------------
"Indebtedness" of any Person means, without duplication, (a) all
------------
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all
-11-
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, (c) all obligations of such Person upon which interest charges are
customarily paid, (d) all obligations of such Person under conditional sale or
other title retention agreements relating to property acquired by such Person,
(e) all obligations of such Person in respect of the deferred purchase price of
property or services (excluding current accounts payable incurred in the
ordinary course of business), (f) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been assumed, (g)
all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease
Obligations of such Person, (i) all obligations, contingent or otherwise, of
such Person as an account party in respect of letters of credit and letters of
guaranty and (j) all obligations, contingent or otherwise, of such Person in
respect of bankers' acceptances. The Indebtedness of any Person shall include
the Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person's ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide that such
Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
-----------------
"Interest Election Request" means a request by a Borrower to convert or
-------------------------
continue a Borrowing in accordance with Section 2.06.
"Interest Payment Date" means (a) with respect to any ABR Loan, each
---------------------
Quarterly Date and (b) with respect to any Eurocurrency Loan, the last day of
each Interest Period therefor and, in the case of any Interest Period of more
than three months' duration, each day prior to the last day of such Interest
Period that occurs at three-month intervals after the first day of such Interest
Period.
"Interest Period" means, for any Eurocurrency Loan or Borrowing, the period
---------------
commencing on the date of such Loan or Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter or, with respect to such portion of any Eurocurrency Loan or
Borrowing denominated in a Foreign Currency that is scheduled to be repaid on
the Commitment Termination Date, a period of less than one month's duration
commencing on the date of such Loan or Borrowing and ending on the Commitment
Termination Date, as specified in the applicable Borrowing Request or Interest
Election Request; provided that (i) if any Interest Period would end on a day
--------
other than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day, and (ii) any Interest Period (other than an
Interest Period pertaining to a Eurocurrency Borrowing denominated in a Foreign
Currency that ends on the Commitment Termination Date that is permitted to be of
less than one month's duration as provided in this definition) that commences on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period. For purposes hereof, the date of a Loan initially shall be the
date on which such Loan is made and thereafter shall be the effective date of
the most recent conversion or continuation of such Loan, and the date of a
Borrowing comprising Loans that
-12-
have been converted or continued shall be the effective date of the most recent
conversion or continuation of such Loans.
"Investment" means, by any Person, (a) the amount paid or committed to be
----------
paid, or the value of property or services contributed or committed to be
contributed, by such person for or in connection with the acquisition by such
Person of any stock, bonds, notes, debentures, partnership or other ownership
interests or other securities of any other Person and (b) the amount of any
advance, loan or extension of credit by such Person, to any other Person, or
guaranty or other similar obligation of such Person with respect to any
Indebtedness of such other Person (other than Indebtedness constituting trade
payables in the ordinary course of business), and (without duplication) any
amount committed to be advanced, loans, or extended by such Person to any other
Person, or any amount the payment of which is committed to be assured by a
guaranty or similar obligation by such Person for the benefit of, such other
Person.
"Issuing Lender" means JPMCB and (solely with respect to any Existing
--------------
Letter of Credit issued by it) Bank of America, N.A., each in its capacity as
the issuer of Letters of Credit hereunder, and (in the case of JPMCB) its
successors in such capacity as provided in Section 2.04(j). The Issuing Lender
may, in its discretion, arrange for one or more Letters of Credit to be issued
by Affiliates of the Issuing Lender, in which case the term "Issuing Lender"
shall include any such Affiliate with respect to Letters of Credit issued by
such Affiliate.
"JPMCB" means JPMorgan Chase Bank, N.A.
-----
"LC Disbursement" means a payment made by the Issuing Lender pursuant to a
---------------
Letter of Credit.
"LC Exposure" means, with respect to each Lender at any time, such Lender's
-----------
Applicable Percentage of the Aggregate LC Exposure at such time.
"Lenders" means the Persons listed on Schedule 1.01 and any other Person
-------
that shall have become a party hereto pursuant to an Assignment and Assumption,
other than any such Person that ceases to be a party hereto pursuant to an
Assignment and Assumption or an instrument entered into pursuant to Section
2.07(c).
"Letter of Credit" means any standby letter of credit issued pursuant to
----------------
this Agreement.
"Letter of Credit Documents" means, with respect to any Letter of Credit,
--------------------------
collectively, any application therefor and any other agreements, instruments,
guarantees or other documents (whether general in application or applicable only
to such Letter of Credit) governing or providing for (a) the rights and
obligations of the parties concerned or at risk with respect to such Letter of
Credit or (b) any collateral security for any of such obligations, each as the
same may be modified and supplemented and in effect from time to time.
"LIBO Rate" means, for the Interest Period for any Eurocurrency Borrowing
---------
denominated in any Currency, the rate appearing on the Screen at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period, as LIBOR
-13-
for deposits denominated in such Currency with a maturity comparable to such
Interest Period. In the event that such rate is not available on the Screen at
such time for any reason, then, unless the last sentence of Section 10.11(e) is
applicable, the LIBO Rate for such Interest Period shall be the rate at which
deposits in such Currency in the amount of $5,000,000 and for a maturity
comparable to such Interest Period are offered by the principal London office of
the Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period. For the avoidance of doubt, the LIBO Rate
for Loans denominated in euros shall be "EURIBOR".
"LIBOR" means, for any Currency, the rate at which deposits denominated in
-----
such Currency are offered to leading banks in the London interbank market.
"Lien" means, with respect to any asset, (a) any mortgage, deed of trust,
----
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or
of such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities.
"Loan Documents" means, collectively, this Agreement, the Letter of Credit
--------------
Documents and the Security Documents.
"Loan Party" means the Borrower, the Subsidiary Borrower and any Subsidiary
----------
which on the date hereof or hereafter executes and delivers to the
Administrative Agent or any Lender any Loan Document.
"Loans" means the loans made by the Lenders to the Borrowers pursuant to
-----
this Agreement.
"Local Time" means, with respect to any Loan denominated in or any payment
----------
to be made in any Currency, the local time in the Principal Financial Center for
the Currency in which such Loan is denominated or such payment is to be made.
"Margin Stock" means "margin stock" within the meaning of Regulations T, U
------------
and X of the Board.
"Material Adverse Effect" means a material adverse effect on (a) the
-----------------------
business, assets, property, operation, condition (financial or otherwise) or
prospects of the Company and its Subsidiaries taken as a whole, (b) validity or
enforceability of any of the Loan Documents or (c) the rights or remedies of the
Administrative Agent and the Lenders hereunder or under any of the other Loan
Documents.
"Material Indebtedness" means Indebtedness (other than the Loans and
---------------------
Letters of Credit), or obligations in respect of one or more Swap Agreements, of
any one or more of the Company and its Subsidiaries in an aggregate principal
amount exceeding $10,000,000. For purposes of determining Material Indebtedness,
the "principal amount" of the obligations of any
----------------
-14-
Person in respect of any Swap Agreement at any time shall be the maximum
aggregate amount (giving effect to any netting agreements) that such Person
would be required to pay if such Swap Agreement were terminated at such time.
"Multiemployer Plan" means a multiemployer plan as defined in Section
------------------
4001(a)(3) of ERISA.
"Non-U.S. Lender" means any Lender that is organized under the laws of a
---------------
jurisdiction other than the United States of America, any State thereof or the
District of Columbia.
"Obligations" means, collectively, all of the Indebtedness, liabilities and
-----------
obligations of each Borrower to the Administrative Agent and/or the Lenders
arising under the Loan Documents (including all reimbursement obligations in
respect of Letters of Credit), in each case whether fixed, contingent (including
without limitation those Obligations incurred as a Guarantor pursuant to Article
III), now existing or hereafter arising, created, assumed, incurred or acquired,
and whether before or after the occurrence of any Event of Default under clause
(h) or (i) of Article VIII and including any obligation or liability in respect
of any breach of any representation or warranty and all post-petition interest
and funding losses, whether or not allowed as a claim in any proceeding arising
in connection with such an event.
"Other Taxes" means any and all present or future stamp or documentary
-----------
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made under any Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, any Loan Document.
"Participant" has the meaning set forth in Section 10.04(c).
-----------
"Participating Member State" means any member state of the European
--------------------------
Community that adopts or has adopted the euro as its lawful currency in
accordance with the legislation of the European Union relating to the European
Monetary Union.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
----
defined in ERISA and any successor entity performing similar functions.
"Permitted Acquisition" means the acquisition by either Borrower or any
---------------------
Subsidiary of any Person or of any division or line of business of any Person
(whether a Person, or division or line of business, an "Eligible Business"),
-----------------
either by merger, consolidation, purchase of stock, or purchase of all or a
substantial part of the assets of such Eligible Business (any such type of
transaction is referred to in this Agreement as an "acquisition" and the
principal agreement relating thereto, whether a stock purchase agreement, an
asset purchase agreement, a merger agreement or otherwise, is referred to in
this Agreement as the "acquisition agreement"); provided that (a) in the case of
--------------------- --------
any acquisition by Clopay or any of its wholly-owned Subsidiaries, Clopay
remains a wholly-
-15-
owned direct Subsidiary of the Company and all of the issued and outstanding
Capital Stock of Clopay remains subject to a first priority security interest in
favor of the Administrative Agent, (b) in the case of any acquisition by the
Subsidiary Borrower or any of its wholly-owned Subsidiaries, the Subsidiary
Borrower remains a wholly-owned direct Subsidiary of the Company, (c) in the
case of any acquisition by the Company or any Subsidiary (other than the
Subsidiary Borrower, Clopay or their respective wholly-owned Subsidiaries) with
respect to which the Permitted Acquisition Purchase Price is greater than
$5,000,000, the Company or such Subsidiary shall have (i) pledged to the
Administrative Agent for the benefit of the Lenders all of the issued and
outstanding Capital Stock of such Eligible Business acquired by the Company or
such Subsidiary, (ii) delivered to the Administrative Agent, simultaneously with
consummation of such acquisition, all of the stock certificates representing
such Capital Stock, together with stock powers executed in blank and proxies
with respect thereto and (iii) caused to be delivered to the Administrative
Agent from such Subsidiary customary corporate or similar documents (including
certified certificate of incorporation, by-laws (and other organizational
documents) and good standing certificates), (d) after giving effect to such
acquisition on a pro forma basis, the Consolidated Leverage Ratio for the period
of the four consecutive fiscal quarters of the Company most recently ended prior
to such acquisition shall not exceed 2.75:1, (e) no Default shall exist
immediately before and after giving affect to such Permitted Acquisition or
result from the consummation thereof, and (f) each of the following conditions
shall have been satisfied (and the Company shall have delivered to the
Administrative Agent a certificate to the effect that the conditions under
clause (a), (b) or (c) above (as applicable) and clauses (d) and (e) above and
this clause (f) have been satisfied):
(I) such transaction shall not be a "hostile" acquisition or other
"hostile" transaction (i.e., such transaction shall not be opposed by the
board of directors (or similar governing body) of the Eligible Business),
provided that (i) in the event a Borrower proposes to initiate such
--------
transaction as hostile transaction with the intent to subsequently obtain
the approval of the board of directors of the Eligible Business, such
Borrower may notify the Administrative Agent and each Lender in writing in
advance of the initiation of such proposed transaction together with any
information concerning such transaction as the Administrative Agent or any
Lender may request, and (ii) the Administrative Agent and each Lender shall
have approved such transaction in writing prior to the initiation of such
transaction, with the approval of each Lender not to be unreasonably
withheld, such Borrower may proceed with such transaction as long as the
transaction ultimately is approved by the board of directors (or similar
governing body) of the Eligible Business (and a majority of which were
members of such board of directors (or similar governing body) at the time
such transaction was initiated) and is otherwise in accordance with the
terms of this Agreement; and
(II) such acquisition (1) if such acquisition is a stock acquisition,
shall be of greater than 50% of the issued and outstanding Capital Stock of
such Eligible Business, whether by purchase or as a result of merger or
consolidation (provided that one of the Borrowers or their respective
wholly-owned Subsidiaries shall be the surviving corporation in any such
merger or consolidation), and in any event shall consist of shares of
capital stock with sufficient voting rights which entitles such Borrower to
elect a majority of the directors of such Eligible Business and to control
the outcome of any shareholder votes with respect to the shareholders of
such Eligible Business and (2) if such acquisition is an asset acquisition,
shall be of all or a substantial part of an Eligible Business.
"Permitted Acquisition Purchase Price" means, with respect to any Permitted
------------------------------------
-16-
Acquisition, collectively, without duplication, (a) all cash paid by the
applicable Borrower or any of its Subsidiaries in connection with such Permitted
Acquisition, including in respect of transaction costs, fees and other expenses
incurred by such Borrower or any of its Subsidiaries in connection with such
Permitted Acquisition, (b) all Indebtedness created, and all Indebtedness
assumed, by such Borrower or any of its Subsidiaries in connection with such
Permitted Acquisition, including, without limitation, the maximum amount of any
purchase price to be paid pursuant to any "earn out" provision contained in the
agreements related to any Permitted Acquisition, (c) the value of all Capital
Stock issued by such Borrower or any of its Subsidiaries in connection with such
Permitted Acquisition and (d) any deferred portion of the purchase price or any
other costs paid by such Borrower or any of its Subsidiaries in connection with
such Permitted Acquisition.
"Permitted Investments" means:
---------------------
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed
by the full faith and credit of the United States of America), in each case
maturing within three years from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, the
highest credit rating obtainable from Standard & Poor's Ratings Services or
from Moody's Investors Services, Inc;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within 180 days from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts
issued or offered by, any domestic office of any commercial bank organized
under the laws of the United States of America or any State thereof which
has a combined capital and surplus and undivided profits of not less than
$500,000,000;
(d) fully collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (a) of this definition and
entered into with a financial institution satisfying the criteria described
in clause (c) of this definition;
(e) money market funds that (i) comply with the criteria set forth in
SEC Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA
by S&P and Aaa by Moody's and (iii) have portfolio assets of at least
$5,000,000,000; and
(f) investments in auction rate preferred stock rated at least BBB+ by
S&P or Baa1 by Moody's.
"Permitted Liens" means:
---------------
(a) Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 6.04;
-17-
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
and other like Liens imposed by law, arising in the ordinary course of
business and securing obligations that are not overdue by more than 30 days
or are being contested in compliance with Section 6.04;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other
social security laws or regulations;
(d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature, in each case in the ordinary course
of business;
(e) judgment liens in respect of judgments that do not constitute an
Event of Default under clause (k) of Article VIII; and
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do not
materially detract from the value of the affected property or interfere
with the ordinary conduct of business of the Company and its Subsidiaries
taken as a whole;
provided that the term "Permitted Liens" shall not include any Lien securing
- --------
Indebtedness.
"Person" means any natural person, corporation, limited liability company,
------
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"Plan" means any employee pension benefit plan (other than a Multiemployer
----
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which the Company or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Pledge Agreement" means the Pledge Agreement dated as of December 15, 2005
----------------
between the Company and the Administrative Agent attached hereto as Exhibit B,
as the same shall be modified and supplemented and in effect from time to time.
"Prime Rate" means the rate of interest per annum publicly announced from
----------
time to time by JPMCB as its prime rate in effect at its principal office in New
York City; each change in the Prime Rate shall be effective from and including
the date such change is publicly announced as being effective.
"Principal Financial Center" means, in the case of any Currency, the
--------------------------
principal financial center where such Currency is cleared and settled, as
determined by the Administrative Agent.
-18-
"Quarterly Dates" means the last Business Day of September, December, March
---------------
and June in each year, the first of which shall be the first such day after the
date hereof.
"Register" has the meaning set forth in Section 10.04.
--------
"Related Parties" means, with respect to any specified Person, such
---------------
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Required Lenders" means, at any time, Lenders having Revolving Credit
----------------
Exposures and unused Commitments representing more than 50% of the sum of the
Aggregate Revolving Credit Exposures and the unused amount of the Aggregate
Commitments at such time.
"Requirement of Law" means, as to any Person, the Certificate of
------------------
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Restricted Payment" means any dividend or other distribution (whether in
------------------
cash, securities or other property) with respect to any shares of any class of
capital stock of the Company or any of its Subsidiaries, or any payment (whether
in cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such shares of capital stock of the Company
or any option, warrant or other right to acquire any such shares of capital
stock of the Company.
"Revolving Credit Exposure" means, with respect to any Lender at any time,
-------------------------
the sum of the outstanding principal amount of such Lender's Loans and LC
Exposure at such time.
"Screen" means, for any Currency, the relevant display page for LIBOR for
------
such Currency (as determined by the Administrative Agent) on the Telerate
Service; provided that, if the Administrative Agent determines that there is no
such relevant display page for LIBOR for such Currency, "Screen" means the
relevant display page for LIBOR for such Currency (as determined by the
Administrative Agent) on the Reuter Monitor Money Rates Service.
"SEC" means the Securities and Exchange Commission, or any regulatory body
---
that succeeds to the functions thereof.
"Security Documents" means, collectively, the Pledge Agreement, any pledge
------------------
agreement entered into pursuant to Section 6.11 in favor of the Administrative
Agent, and all Uniform Commercial Code financing statements required by the
terms of any such agreement to be filed with respect to the security interests
created pursuant thereto.
"Statutory Reserve Rate" means, for the Interest Period for any
----------------------
Eurocurrency Borrowing, a fraction (expressed as a decimal), the numerator of
which is the number one and
-19-
the denominator of which is the number one minus the arithmetic mean, taken over
-----
each day in such Interest Period, of the aggregate of the maximum reserve
percentages (including any marginal, special, emergency or supplemental
reserves) expressed as a decimal established by the Board to which the
Administrative Agent is subject for eurocurrency funding (currently referred to
as "Eurocurrency liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurocurrency Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"Subsidiary" means, with respect to any Person (the "parent") at any date,
----------
any corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent's consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent. Unless otherwise specified,
"Subsidiary" means a Subsidiary of the Company.
"Subsidiary Borrower" means Telephonics Corporation, a corporation duly
-------------------
organized and validly existing under the laws of the State of Delaware and a
wholly owned Subsidiary of the Company.
"Subsidiary Borrower Revolving Credit Exposure" means, with respect to any
---------------------------------------------
Lender at any time, the sum of (a) the outstanding principal amount of such
Lender's Loans to the Subsidiary Borrower at such time and (b) LC Exposure of
such Lender in respect of Letters of Credit issued for the account of the
Subsidiary Borrower at such time.
"Subsidiary Borrower Sublimit Commitment" means, with respect to each
---------------------------------------
Lender, the commitment of such Lender to make Loans to, and to acquire
participations in Letters of Credit issued for the account of, the Subsidiary
Borrower hereunder, expressed as an amount representing the maximum aggregate
amount of such Lender's Applicable Percentage of the Subsidiary Borrower
Sublimit, as such commitment may be (a) reduced from time to time pursuant to
Section 2.07 and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 10.04. The initial amount
of each Lender's Subsidiary Borrower Sublimit Commitment is set forth on
Schedule 1.01, or in the Assignment and Assumption, or an instrument entered
into under Section 2.07(c), pursuant to which such Lender shall have assumed its
Commitment, as applicable.
"Swap Agreement" means any agreement with respect to any swap, forward,
--------------
future or derivative transaction or option or similar agreement involving, or
settled by reference to, one or more rates, currencies, commodities, equity or
debt instruments or securities, or
-20-
economic, financial or pricing indices or measures of economic, financial or
pricing risk or value or any similar transaction or any combination of these
transactions; provided that no phantom stock or similar plan providing for
--------
payments only on account of services provided by current or former directors,
officers, employees or consultants of the Company or the Subsidiaries shall be a
Swap Agreement.
"TARGET Day" means any day on which the Trans-European Automated Real-time
----------
Gross Settlement Express Transfer payment system (or any successor settlement
system as determined by the Administrative Agent) is open for the settlement of
payments in euro.
"Taxes" means any and all present or future taxes, levies, imposts, duties,
-----
deductions, charges or withholdings imposed by any Governmental Authority.
"Transactions" means the execution, delivery and performance by each Loan
------------
Party of this Agreement and the other Loan Documents to which such Loan Party is
intended to be a party, the borrowing of Loans and the issuance of Letters of
Credit hereunder.
"Type", when used in reference to any Loan or Borrowing, refers to whether
----
the rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.
"Withdrawal Liability" means liability to a Multiemployer Plan as a result
--------------------
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Terms Generally. The definitions of terms herein shall apply
---------------
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.03. Accounting Terms; GAAP. Except as otherwise expressly
----------------------
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
--------
that, if the Company notifies the Administrative Agent that the Company requests
an amendment to any provision hereof to
-21-
eliminate the effect of any change occurring after the date hereof in GAAP or in
the application thereof on the operation of such provision (or if the
Administrative Agent notifies the Company that the Required Lenders request an
amendment to any provision hereof for such purpose), regardless of whether any
such notice is given before or after such change in GAAP or in the application
thereof, then such provision shall be interpreted on the basis of GAAP as in
effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in
accordance herewith. To enable the ready and consistent determination of
compliance with the covenants set forth in Article VII, the Company will not
change the last day of its fiscal year from September 30, or the last days of
the first three fiscal quarters in each of its fiscal years from December 31,
March 31 and June 30, respectively.
SECTION 1.04. Currencies; Currency Equivalents; Euro. At any time, any
--------------------------------------
reference in the definition of the term "Agreed Foreign Currency" or in any
other provision of this Agreement to the Currency of any particular nation means
the lawful currency of such nation at such time whether or not the name of such
Currency is the same as it was on the date hereof. Except as provided in Section
2.09(b) and the last sentence of Section 2.16(a), for purposes of determining
(i) whether the amount of any Borrowing, together with all other Borrowings then
outstanding or to be borrowed at the same time as such Borrowing, would exceed
the Aggregate Commitments, (ii) the aggregate unused amount of the Commitments
and (iii) the outstanding aggregate principal amount of Borrowings, the
outstanding principal amount of any Borrowing that is denominated in any Foreign
Currency shall be deemed to be the Dollar Equivalent of the amount of the
Foreign Currency of such Borrowing determined as of the date of such Borrowing
(determined in accordance with the last sentence of the definition of the term
"Interest Period"). Wherever in this Agreement in connection with a Borrowing or
Loan an amount, such as a required minimum or multiple amount, is expressed in
Dollars, but such Borrowing or Loan is denominated in a Foreign Currency, such
amount shall be the relevant Foreign Currency Equivalent of such Dollar amount
(rounded to the nearest 1,000 units of such Foreign Currency).
(c) Each obligation hereunder of any party hereto that is denominated in a
Currency of a country that is not a Participating Member State on the date
hereof shall, effective from the date on which such country becomes a
Participating Member State, be redenominated in euro in accordance with the
legislation of the European Union applicable to the European Monetary Union;
provided that, if and to the extent that any such legislation provides that any
- --------
such obligation of any such party payable within such Participating Member State
by crediting an account of the creditor can be paid by the debtor either in euro
or such Currency, such party shall be entitled to pay or repay such amount
either in euro or in such Currency. If the basis of accrual of interest or fees
expressed in this Agreement with respect to an Agreed Foreign Currency of any
country that becomes a Participating Member State after the date on which such
currency becomes an Agreed Foreign Currency shall be inconsistent with any
convention or practice in the interbank market for the basis of accrual of
interest or fees in respect of the euro, such convention or practice shall
replace such expressed basis effective as of and from the date on which such
country becomes a Participating Member State; provided that, with respect to any
--------
Borrowing denominated in such currency that is outstanding immediately prior to
such date, such replacement shall take effect at the end of the Interest Period
therefor. Without prejudice to the respective liabilities of the Borrowers to
the Lenders and of the Lenders to the Borrowers under or pursuant to this
Agreement, each provision of this Agreement shall be subject to such
-22-
reasonable changes of construction as the Administrative Agent may from time to
time reasonably specify to be necessary or appropriate to reflect the
introduction or changeover to the euro in any country that becomes a
Participating Member State after the date hereof.
ARTICLE II
THE CREDITS
-----------
SECTION 2.01. The Commitments. Subject to the terms and conditions set
---------------
forth herein, each Lender agrees to make Loans in Dollars or in any Agreed
Foreign Currency to the Borrowers from time to time during the Availability
Period in an aggregate principal amount that will not result in (a) such
Lender's Revolving Credit Exposure exceeding such Lender's Commitment, (b) such
Lender's Subsidiary Borrower Revolving Credit Exposure exceeding such Lender's
Subsidiary Borrower Sublimit Commitment, (c) the Aggregate Revolving Credit
Exposure exceeding the Aggregate Commitment, (d) the Aggregate Subsidiary
Borrower Revolving Credit Exposures exceeding the Aggregate Subsidiary Borrower
Sublimit Commitment and (e) the aggregate amount of Revolving Credit Exposures
denominated in Foreign Currencies exceeding the Aggregate Foreign Currency
Sublimit Dollar Amount. Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrowers may borrow, prepay and reborrow
Loans.
SECTION 2.02. Loans and Borrowings.
--------------------
(a) Obligations of Lenders. Each Loan shall be made as part of a Borrowing
----------------------
consisting of Loans of the same Currency and Type made by the Lenders ratably in
accordance with their respective Commitments. The failure of any Lender to make
any Loan required to be made by it shall not relieve any other Lender of its
obligations hereunder; provided that the Commitments of the Lenders are several
and no Lender shall be responsible for any other Lender's failure to make Loans
as required.
(b) Type of Loans. Subject to Section 2.12, each Borrowing shall be
-------------
constituted entirely of ABR Loans or of Eurocurrency Loans denominated in a
single Currency as a Borrower may request in accordance herewith. Each ABR Loan
shall be denominated in Dollars. Each Lender at its option may make any
Eurocurrency Loan by causing any domestic or foreign branch or Affiliate of such
Lender to make such Loan; provided that any exercise of such option shall not
--------
affect the obligation of the applicable Borrower to repay such Loan in
accordance with the terms of this Agreement.
(c) Minimum Amounts; Limitation on Number of Borrowings. Each Eurocurrency
---------------------------------------------------
Borrowing shall be in an aggregate amount of $2,000,000 or a larger multiple of
$100,000. Each ABR Borrowing shall be in an aggregate amount equal to $500,000
or a larger multiple of $100,000; provided that an ABR Borrowing may be in an
--------
aggregate amount that is equal to the entire unused amount of the Aggregate
Commitment or that is required to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.04(f). Borrowings of more than one
Currency and Type may be outstanding at the same time; provided that there shall
--------
not at any time be more than a total of ten Eurocurrency Borrowings outstanding.
-23-
(d) Limitations on Interest Periods. Notwithstanding any other provision of
-------------------------------
this Agreement, neither Borrower shall be entitled to request (or to elect to
convert to or continue as a Eurocurrency Borrowing) any Borrowing if the
Interest Period requested therefor would end after the Commitment Termination
Date.
SECTION 2.03. Requests for Borrowings.
-----------------------
(a) Notice by the Borrowers. To request a Borrowing, a Borrower shall
-----------------------
notify the Administrative Agent of such request by telephone (i) in the case of
a Eurocurrency Borrowing denominated in Dollars, not later than 11:00 a.m., New
York City time, three Business Days before the date of the proposed Borrowing,
(ii) in the case of a Eurocurrency Borrowing denominated in English Pounds
Sterling or euro, not later than 11:00 a.m., London time, four Business Days
before the date of the proposed Borrowing, (iii) in the case of a Eurocurrency
Borrowing denominated in any Agreed Foreign Currency other than English Pounds
Sterling or euro, not later than 11:00 a.m., London time, five Business Days
before the date of the proposed Borrowing, or (iv) in the case of an ABR
Borrowing, not later than 11:00 a.m., New York City time, one Business Day
before the date of the proposed Borrowing; provided that any such notice of an
--------
ABR Borrowing to finance the reimbursement of an LC Disbursement as contemplated
by Section 2.04(f) may be given not later than 11:00 a.m., New York City time,
on the date of the proposed Borrowing. Each such telephonic Borrowing Request
shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Borrowing Request in a form
approved by the Administrative Agent and signed by such Borrower.
(b) Content of Borrowing Requests. Each telephonic and written Borrowing
-----------------------------
Request shall specify the following information in compliance with Section 2.02:
(i) the aggregate amount and Currency of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) in the case of a Borrowing denominated in Dollars, whether such
Borrowing is to be an ABR Borrowing or a Eurocurrency Borrowing;
(iv) in the case of a Eurocurrency Borrowing, the Interest Period
therefor, which shall be a period contemplated by the definition of the
term "Interest Period" and permitted under Section 2.02(d); and
(v) the location and number of the applicable Borrower's account to
which funds are to be disbursed, which shall comply with the requirements
of Section 2.05.
(c) Notice by the Administrative Agent to the Lenders. Promptly following
-------------------------------------------------
receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender's Loan to be made as part of the requested Borrowing.
-24-
(d) Failure to Elect. If no election as to the Currency of a Borrowing is
----------------
specified, then the requested Borrowing shall be denominated in Dollars. If no
election as to the Type of a Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing unless an Agreed Foreign Currency has been
specified, in which case the requested Borrowing shall be a Eurocurrency
Borrowing denominated in such Agreed Foreign Currency. If no Interest Period is
specified with respect to any requested Eurocurrency Borrowing, (i) if the
Currency specified for such Borrowing is Dollars (or if no Currency has been so
specified), the requested Borrowing shall be made instead as an ABR Borrowing,
and (ii) if the Currency specified for such Borrowing is an Agreed Foreign
Currency, the applicable Borrower shall be deemed to have selected an Interest
Period of one month's duration.
SECTION 2.04. Letters of Credit.
-----------------
(a) General. Subject to the terms and conditions set forth herein, in
-------
addition to the Loans provided for in Section 2.01, each Borrower may request
the Issuing Lender to issue, at any time and from time to time during the
Availability Period, Letters of Credit denominated in Dollars for its own
account in such form as is acceptable to the Issuing Lender in its reasonable
determination. Letters of Credit issued hereunder shall constitute utilization
of the Commitments. The Letters of Credit issued or continued under the Existing
Credit Agreement and outstanding on the Effective Date (the "Existing Letters of
-------------------
Credit") shall be Letters of Credit for all purposes of this Agreement and the
- ------
other Loan Documents.
(b) Notice of Issuance, Amendment, Renewal or Extension. To
---------------------------------------------------
request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), a Borrower shall hand deliver or
telecopy (or transmit by electronic communication, if arrangements for doing so
have been approved by the Issuing Lender) to the Issuing Lender and the
Administrative Agent (reasonably in advance of the requested date of issuance,
amendment, renewal or extension) a notice requesting the issuance of a Letter of
Credit, or identifying the Letter of Credit to be amended, renewed or extended,
and specifying the date of issuance, amendment, renewal or extension (which
shall be a Business Day), the date on which such Letter of Credit is to expire
(which shall comply with paragraph (d) of this Section), the amount of such
Letter of Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit. If requested by the Issuing Lender, such Borrower also shall submit a
letter of credit application on the Issuing Lender's standard form in connection
with any request for a Letter of Credit. In the event of any inconsistency
between the terms and conditions of this Agreement and the terms and conditions
of any form of letter of credit application or other agreement submitted by such
Borrower to, or entered into by such Borrower with, the Issuing Lender relating
to any Letter of Credit, the terms and conditions of this Agreement shall
control.
(c) Limitations on Amounts. A Letter of Credit shall be issued, amended,
----------------------
renewed or extended only if (and upon issuance, amendment, renewal or extension
of each Letter of Credit the applicable Borrower shall be deemed to represent
and warrant that), after giving effect to such issuance, amendment, renewal or
extension (i) the Aggregate LC Exposure shall not exceed the Aggregate Letter of
Credit Sublimit Amount, (ii) the Aggregate Revolving Credit Exposure shall not
exceed the Aggregate Commitment, (iii) the Aggregate Subsidiary Borrower
Revolving Credit Exposures shall not exceed the Aggregate Subsidiary Borrower
Sublimit
-25-
Commitment and (iv) the aggregate amount of Revolving Credit Exposures
denominated in Foreign Currencies shall not exceed the Aggregate Foreign
Currency Sublimit Dollar Amount.
(d) Expiration Date. Each Letter of Credit shall expire at or prior to the
---------------
close of business on the date that is five Business Days prior to the Commitment
Termination Date.
(e) Participations. By the issuance of a Letter of Credit (or an amendment
--------------
to a Letter of Credit increasing the amount thereof) by the Issuing Lender, and
without any further action on the part of the Issuing Lender or the Lenders, the
Issuing Lender hereby grants to each Lender, and each Lender hereby acquires
from the Issuing Lender, a participation in such Letter of Credit equal to such
Lender's Applicable Percentage of the aggregate amount available to be drawn
under such Letter of Credit. Each Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect of
Letters of Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments.
In consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, for
account of the Issuing Lender, such Lender's Applicable Percentage of each LC
Disbursement made by the Issuing Lender promptly upon the request of the Issuing
Lender at any time from the time of such LC Disbursement until such LC
Disbursement is reimbursed by the applicable Borrower or at any time after any
reimbursement payment is required to be refunded to such Borrower for any
reason. Such payment shall be made without any offset, abatement, withholding or
reduction whatsoever. Each such payment shall be made in the same manner as
provided in Section 2.05 with respect to Loans made by such Lender (and Section
2.05 shall apply, mutatis mutandis, to the payment obligations of the Lenders),
and the Administrative Agent shall promptly pay to the Issuing Lender the
amounts so received by it from the Lenders. Promptly following receipt by the
Administrative Agent of any payment from a Borrower pursuant to paragraph (f) of
this Section, the Administrative Agent shall distribute such payment to the
Issuing Lender or, to the extent that the Lenders have made payments pursuant to
this paragraph to reimburse the Issuing Lender, then to such Lenders and the
Issuing Lender as their interests may appear. Any payment made by a Lender
pursuant to this paragraph to reimburse the Issuing Lender for any LC
Disbursement shall not constitute a Loan and shall not relieve such Borrower of
its obligation to reimburse such LC Disbursement.
(f) Reimbursement. If the Issuing Lender shall make any LC Disbursement in
-------------
respect of a Letter of Credit, the applicable Borrower shall reimburse the
Issuing Lender in respect of such LC Disbursement by paying to the
Administrative Agent an amount equal to such LC Disbursement not later than
12:00 noon, New York City time, on (i) the Business Day that such Borrower
receives notice of such LC Disbursement, if such notice is received prior to
10:00 a.m., New York City time, or (ii) the Business Day immediately following
the day that such Borrower receives such notice, if such notice is not received
prior to such time, provided that, if such LC Disbursement is not less than
--------
$500,000, such Borrower may, subject to the conditions to borrowing set forth
herein, request in accordance with Section 2.03 that such payment be financed
with an ABR Borrowing in an equivalent amount and, to the extent so
-26-
financed, such Borrower's obligation to make such payment shall be discharged
and replaced by the resulting ABR Borrowing.
If a Borrower fails to make such payment when due, the Administrative Agent
shall notify each Lender of the applicable LC Disbursement, the payment then due
from such Borrower in respect thereof and such Lender's Applicable Percentage
thereof.
(g) Obligations Absolute. Each Borrower's obligation to reimburse LC
--------------------
Disbursements as provided in paragraph (f) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit, or any term or provision therein, (ii) any draft or other document
presented under a Letter of Credit proving to be forged, fraudulent or invalid
in any respect or any statement therein being untrue or inaccurate in any
respect, (iii) payment by the Issuing Lender under a Letter of Credit against
presentation of a draft or other document that does not comply strictly with the
terms of such Letter of Credit, and (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of
such Borrower's obligations hereunder.
Neither the Administrative Agent, the Lenders nor the Issuing Lender, nor
any of their Related Parties, shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of Credit
by the Issuing Lender or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in transmission
or delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from
causes beyond the control of the Issuing Lender; provided that the foregoing
shall not be construed to excuse the Issuing Lender from liability to a Borrower
to the extent of any direct damages (as opposed to consequential damages, claims
in respect of which are hereby waived by each Borrower to the extent permitted
by applicable law) suffered by such Borrower that are caused by the Issuing
Lender's gross negligence or wilful misconduct when determining whether drafts
and other documents presented under a Letter of Credit comply with the terms
thereof. The parties hereto expressly agree that:
(i) the Issuing Lender may accept documents that appear on their face
to be in substantial compliance with the terms of a Letter of Credit
without responsibility for further investigation, regardless of any notice
or information to the contrary, and may make payment upon presentation of
documents that appear on their face to be in substantial compliance with
the terms of such Letter of Credit;
(ii) the Issuing Lender shall have the right, in its sole discretion,
to decline to accept such documents and to make such payment if such
documents are not in strict compliance with the terms of such Letter of
Credit; and
-27-
(iii) this sentence shall establish the standard of care to be
exercised by the Issuing Lender when determining whether drafts and other
documents presented under a Letter of Credit comply with the terms thereof
(and the parties hereto hereby waive, to the extent permitted by applicable
law, any standard of care inconsistent with the foregoing).
(h) Disbursement Procedures. The Issuing Lender shall, within a reasonable
-----------------------
time following its receipt thereof, examine all documents purporting to
represent a demand for payment under a Letter of Credit. The Issuing Lender
shall promptly after such examination notify the Administrative Agent and the
applicable Borrower by telephone (confirmed by telecopy) of such demand for
payment and whether the Issuing Lender has made or will make an LC Disbursement
thereunder; provided that any failure to give or delay in giving such notice
--------
shall not relieve such Borrower of its obligation to reimburse the Issuing
Lender and the Lenders with respect to any such LC Disbursement.
(i) Interim Interest. If the Issuing Lender shall make any LC Disbursement,
----------------
then, unless the applicable Borrower shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that such Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Loans; provided that,
--------
if such Borrower fails to reimburse such LC Disbursement when due pursuant to
paragraph (f) of this Section, then Section 2.11(c) shall apply. Interest
accrued pursuant to this paragraph shall be for account of the Issuing Lender,
except that interest accrued on and after the date of payment by any Lender
pursuant to paragraph (f) of this Section to reimburse the Issuing Lender shall
be for account of such Lender to the extent of such payment.
(j) Replacement of the Issuing Lender. The Issuing Lender may be replaced
---------------------------------
at any time by written agreement between the Company, the Administrative Agent,
the replaced Issuing Lender and the successor Issuing Lender. The Administrative
Agent shall notify the Lenders of any such replacement of the Issuing Lender. At
the time any such replacement shall become effective, the Borrowers shall pay
all unpaid fees accrued for account of the replaced Issuing Lender pursuant to
Section 2.10(b). From and after the effective date of any such replacement, (i)
the successor Issuing Lender shall have all the rights and obligations of the
replaced Issuing Lender under this Agreement with respect to Letters of Credit
to be issued thereafter and (ii) references herein to the term "Issuing Lender"
shall be deemed to refer to such successor or to any previous Issuing Lender, or
to such successor and all previous Issuing Lenders, as the context shall
require. After the replacement of an Issuing Lender hereunder, the replaced
Issuing Lender shall remain a party hereto and shall continue to have all the
rights and obligations of an Issuing Lender under this Agreement with respect to
Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.
(k) Cash Collateralization. If an Event of Default shall occur and be
----------------------
continuing and the Company receives notice from the Administrative Agent or the
Required Lenders (or, if the maturity of the Loans has been accelerated, Lenders
with LC Exposures representing more than 50% of the Aggregate LC Exposure)
demanding the deposit of cash collateral pursuant to this paragraph, the
Borrowers shall immediately deposit into the Collateral Account (or such other
collateral account as the Administrative Agent shall establish for such purpose)
an amount
-28-
in cash equal to, the Aggregate LC Exposure as of such date plus any accrued and
----
unpaid interest thereon; provided that the obligation to deposit such cash
--------
collateral shall become effective immediately, and such deposit shall become
immediately due and payable, without demand or other notice of any kind, upon
the occurrence of any Event of Default described in clause (h) or (i) of Article
VIII. Such deposit shall be held by the Administrative Agent in the Collateral
Account as collateral in the first instance for the Aggregate LC Exposure under
this Agreement and thereafter for the payment of the "Secured Obligations" under
and as defined in the Pledge Agreement, and for these purposes the Company
hereby grants a security interest to the Administrative Agent for the benefit of
the Lenders in the Collateral Account (or such other collateral account, as
applicable) and in any financial assets (as defined in the Uniform Commercial
Code) or other property held therein.
(l) BofA Letters of Credit. Notwithstanding anything herein to the
----------------------
contrary, Bank of America, N.A. ("BofA") shall be the "Issuing Lender" for all
----
purposes of this Agreement with respect to each Existing Letter of Credit issued
by BofA and BofA shall have all of the rights and obligations of "the Issuing
Lender" hereunder with respect to each BofA Letter of Credit; provided that the
--------
(i) no new Letter of Credit shall be issued hereunder by BofA and (ii) no BofA
Letter of Credit shall be amended, renewed or extended (or permitted to be
renewed or extended, and in that connection BofA agrees that with respect to
each BofA Letter of Credit that provides for the automatic renewal of the expiry
date hereof unless a notice of non-renewal is given thereunder, BofA shall
provide such notice at the next earliest possible date in accordance with the
terms of such BofA Letter of Credit (and, if any Borrower shall so request in
accordance with Section 2.04, JPMCB shall issue a new Letter of Credit hereunder
to replace such expiring BofA Letter of Credit)).
SECTION 2.05. Funding of Borrowings.
---------------------
(a) Funding by Lenders. Each Lender shall make each Loan to be made by it
------------------
hereunder on the proposed date thereof by wire transfer of immediately available
funds by 12:00 noon, Local Time, to the account of the Administrative Agent most
recently designated by it for such purpose by notice to the Lenders. The
Administrative Agent will make such Loans available to the applicable Borrower
by promptly crediting the amounts so received, in like funds, to an account of
such Borrower designated by such Borrower in the applicable Borrowing Request;
provided that ABR Borrowings made to finance the reimbursement of an LC
- --------
disbursement as provided in Section 2.04(f) shall be remitted by the
Administrative Agent to the Issuing Lender.
(b) Presumption by the Administrative Agent. Unless the Administrative
---------------------------------------
Agent shall have received notice from a Lender prior to the proposed date of any
Borrowing that such Lender will not make available to the Administrative Agent
such Lender's share of such Borrowing, the Administrative Agent may assume that
such Lender has made such share available on such date in accordance with
paragraph (a) of this Section and may, in reliance upon such assumption, make
available to the applicable Borrower a corresponding amount. In such event, if a
Lender has not in fact made its share of the applicable Borrowing available to
the Administrative Agent, then the applicable Lender and such Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such
amount is made available to such Borrower to but
-29-
excluding the date of payment to the Administrative Agent, at (i) in the case of
such Lender, the greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation or (ii) in the case of such Borrower, the interest
rate applicable to ABR Loans. If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender's Loan
included in such Borrowing.
SECTION 2.06. Interest Elections.
------------------
(a) Elections by the Borrowers. The Loans constituting each Borrowing
--------------------------
initially shall be of the Type specified in the applicable Borrowing Request
and, in the case of a Eurocurrency Borrowing, shall have the Interest Period
specified in such Borrowing Request. Thereafter, a Borrower may elect to convert
such Borrowing to a Borrowing of a different Type or to continue such Borrowing
as a Borrowing of the same Type and, in the case of a Eurocurrency Borrowing,
may elect the Interest Period therefor, all as provided in this Section;
provided that (i) a Borrowing denominated in one Currency may not be continued
- --------
as, or converted to, a Borrowing in a different Currency, (ii) no Eurocurrency
Borrowing denominated in a Foreign Currency may be continued if, after giving
effect thereto, the Aggregate Revolving Credit Exposure would exceed the
Aggregate Commitment, and (iii) a Eurocurrency Borrowing denominated in a
Foreign Currency may not be converted to a Borrowing of a different Type. A
Borrower may elect different options with respect to different portions of the
affected Borrowing, in which case each such portion shall be allocated ratably
among the Lenders holding the Loans constituting such Borrowing, and the Loans
constituting each such portion shall be considered a separate Borrowing.
(b) Notice of Elections. To make an election pursuant to this Section, a
-------------------
Borrower shall notify the Administrative Agent of such election by telephone by
the time that a Borrowing Request would be required under Section 2.03 if such
Borrower were requesting a Borrowing of the Type resulting from such election to
be made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by such
Borrower.
(c) Content of Interest Election Requests. Each telephonic and written
-------------------------------------
Interest Election Request shall specify the following information in compliance
with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies and,
if different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing
(in which case the information to be specified pursuant to clauses (iii)
and (iv) of this paragraph shall be specified for each resulting
Borrowing);
(ii) the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;
(iii) whether, in the case of a Borrowing denominated in Dollars, the
resulting Borrowing is to be an ABR Borrowing or a Eurocurrency Borrowing;
and
-30-
(iv) if the resulting Borrowing is a Eurocurrency Borrowing, the
Interest Period therefor after giving effect to such election, which shall
be a period contemplated by the definition of the term "Interest Period"
and permitted under Section 2.02(d).
(d) Notice by the Administrative Agent to the Lenders. Promptly following
-------------------------------------------------
receipt of an Interest Election Request, the Administrative Agent shall advise
each Lender of the details thereof and of such Lender's portion of each
resulting Borrowing.
(e) Failure to Elect; Events of Default. If a Borrower fails to deliver a
-----------------------------------
timely and complete Interest Election Request with respect to a Eurocurrency
Borrowing prior to the end of the Interest Period therefor, then, unless such
Borrowing is repaid as provided herein, (i) if such Borrowing is denominated in
Dollars, at the end of such Interest Period such Borrowing shall be converted to
an ABR Borrowing, and (ii) if such Borrowing is denominated in a Foreign
Currency, such Borrower shall be deemed to have selected an Interest Period of
one month's duration. Notwithstanding any contrary provision hereof, if an Event
of Default has occurred and is continuing and the Administrative Agent, at the
request of the Required Lenders, so notifies the Company, then, so long as an
Event of Default is continuing (A) no outstanding Borrowing denominated in
Dollars may be converted to or continued as a Eurocurrency Borrowing, (B) unless
repaid, each Eurocurrency Borrowing denominated in Dollars shall be converted to
an ABR Borrowing at the end of the Interest Period therefor and (C) no
outstanding Eurocurrency Borrowing denominated in a Foreign Currency may have an
Interest Period of more than one month's duration.
SECTION 2.07. Termination, Reduction and Increase of the Commitments.
------------------------------------------------------
(a) Scheduled Termination. Unless previously terminated, the Commitments of
---------------------
the Lenders shall terminate on the Commitment Termination Date.
(b) Voluntary Termination or Reduction. The Company may at any time
----------------------------------
terminate, or from time to time reduce, the Aggregate Commitment, and the
Subsidiary Borrower may at any time terminate, or from time to time reduce, the
Aggregate Subsidiary Borrower Sublimit Commitment; provided that (i) each
--------
reduction of the Aggregate Commitment or the Aggregate Subsidiary Borrower
Sublimit Commitment pursuant to this Section shall be in an amount that is
$500,000 or a larger multiple of $100,000, (ii) the Company shall not terminate
or reduce the Aggregate Commitments if, after giving effect to any concurrent
prepayment of the Loans in accordance with Section 2.09, the Aggregate Revolving
Credit Exposure would exceed the Aggregate Commitment, (iii) the Subsidiary
Borrower shall not terminate or reduce the Aggregate Subsidiary Borrower
Sublimit Commitment if, after giving effect to any concurrent prepayment of the
Loans to the Subsidiary Borrower in accordance with Section 2.09, the Aggregate
Subsidiary Borrower Revolving Credit Exposure would exceed the Aggregate
Subsidiary Borrower Sublimit Commitment and (iv) the Company shall not terminate
or reduce the Aggregate Commitments if the Aggregate Subsidiary Borrower
Sublimit Commitment would exceed the Aggregate Commitment. The Company or the
Subsidiary Borrower, as applicable, shall notify the Administrative Agent of any
election to terminate or reduce the Aggregate Commitments or the Aggregate
Subsidiary Borrower Sublimit Commitments under this paragraph (b) at least three
Business Days prior to the effective date of such termination or
-31-
reduction, specifying such election and the effective date thereof. Promptly
following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by the Company or the
Subsidiary Borrower pursuant to this Section shall be irrevocable; provided that
--------
a notice of such termination may state that such notice is conditioned upon the
effectiveness of other credit facilities, in which case such notice may be
revoked by the Company or the Subsidiary Borrower, as applicable (by notice to
the Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Aggregate
Commitments and the Aggregate Subsidiary Borrower Sublimit Commitment shall be
permanent. Each reduction of the Aggregate Commitments and the Aggregate
Subsidiary Borrower Sublimit Commitment shall be made ratably among the Lenders
in accordance with their respective Commitments or Subsidiary Borrower Sublimit
Commitments, as the case may be.
(c) Increase of Commitment.
----------------------
(i) Requests for Commitment Increase. The Company may, at any time (but in
--------------------------------
no event more than three times), propose that the Aggregate Commitment hereunder
be increased (each such proposed increase being a "Commitment Increase") by
-------------------
having an existing Lender agree to increase its then existing Commitment (each
an "Increasing Lender") and/or by adding as a new Lender hereunder any Person
-----------------
which shall agree to provide a Commitment hereunder (each an "Assuming Lender"),
---------------
in each case with the consent of the Administrative Agent and the Issuing Lender
(such consent in each case not to be unreasonably withheld), by notice to the
Administrative Agent specifying the amount of the relevant Commitment Increase,
the Lender or Lenders providing for such Commitment Increase and the date on
which such increase is to be effective (the "Commitment Increase Date"), which
------------------------
shall be a Business Day at least three Business Days after delivery of such
notice and 30 days prior to the Commitment Termination Date; provided that:
--------
(A) the minimum amount of the Commitment of any Assuming Lender, and
the minimum amount of the increase of the Commitment of any Increasing
Lender, as part of such Commitment Increase shall be $10,000,000 or a
larger multiple of $1,000,000;
(B) the aggregate amount of all such Commitment Increases hereunder
shall not exceed $50,000,000;
(C) no Default shall have occurred and be continuing on such
Commitment Increase Date or shall result from the proposed Commitment
Increase;
(D) the representations and warranties contained in this Agreement and
the other Loan Documents shall be true and correct on and as of the
Commitment Increase Date as if made on and as of such date (or, if any such
representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date); and
(E) no such Commitment Increase shall result in an increase of the
-32-
Aggregate Subsidiary Borrower Sublimit Commitment.
(ii) Effectiveness of Commitment Increase. Each Commitment Increase (and
------------------------------------
the increase of the Commitment of each Increasing Lender and/or the new
Commitment of each Assuming Lender, as applicable, resulting therefrom) shall
become effective as of the relevant Commitment Increase Date upon receipt by the
Administrative Agent, on or prior to 9:00 a.m., New York time, on such
Commitment Increase Date, of (A) a certificate of a duly authorized officer of
the Company stating that the conditions with respect to such Commitment Increase
under this paragraph (c) have been satisfied and (B) an agreement, in form and
substance satisfactory to the Company and the Administrative Agent, pursuant to
which, effective as of such Commitment Increase Date, the Commitment of each
such Increasing Lender shall be increased or each such Assuming Lender, as
applicable, shall undertake a Commitment, duly executed by such Increasing
Lender or Assuming Lender, as the case may be, and the Company and acknowledged
by the Administrative Agent. Upon the Administrative Agent's receipt of a fully
executed agreement from each Increasing Lender and/or Assuming Lender referred
to in clause (B) above, together with the certificate referred to in clause (A)
above, the Administrative Agent shall record the information contained in each
such agreement in the Register and give prompt notice of the relevant Commitment
Increase to the Company and the Lenders (including, if applicable, each Assuming
Lender). On each Commitment Increase Date the Borrowers shall simultaneously (i)
prepay in full the outstanding Loans (if any) held by the Lenders immediately
prior to giving effect to the relevant Commitment Increase, (ii) if any Borrower
shall have so requested in accordance with this Agreement, borrow new Loans from
all Lenders (including, if applicable, any Assuming Lender) such that, after
giving effect thereto, the Loans (in the respective Currencies) are held ratably
by the Lenders in accordance with their respective Commitments or Subsidiary
Borrower Sublimit Commitments, as the case may be (after giving effect to such
Commitment Increase) and (iii) pay to the Lenders the amounts, if any, payable
under Section 2.14.
SECTION 2.08. Repayment of Loans; Evidence of Debt.
------------------------------------
(a) Repayment. Each Borrower hereby unconditionally promises to pay to the
---------
Administrative Agent for account of the Lenders the outstanding principal amount
of the Loans on the Commitment Termination Date.
(b) Manner of Payment. Prior to any repayment or prepayment of any
-----------------
Borrowings hereunder, the applicable Borrower shall select the Borrowing or
Borrowings to be paid and shall notify the Administrative Agent by telephone
(confirmed by telecopy) of such selection not later than 11:00 a.m., New York
City time, three Business Days before the scheduled date of such repayment. If a
Borrower fails to make a timely selection of the Borrowing or Borrowings to be
repaid or prepaid, such payment shall be applied, first, to pay any outstanding
ABR Borrowings and, second, to other Borrowings in the order of the remaining
duration of their respective Interest Periods (the Borrowing with the shortest
remaining Interest Period to be repaid first). Each payment of a Borrowing shall
be applied ratably to the Loans included in such Borrowing.
(c) Maintenance of Records by Lenders. Each Lender shall maintain in
---------------------------------
accordance with its usual practice an account or accounts evidencing the
indebtedness of each
-33-
Borrower to such Lender resulting from each Loan made by such Lender, including
the amounts and Currency of principal and interest payable and paid to such
Lender from time to time hereunder.
(d) Maintenance of Records by the Administrative Agent. The Administrative
--------------------------------------------------
Agent shall maintain accounts in which it shall record (i) the amount and
Currency of each Loan made hereunder, the Type thereof and each Interest Period
therefor, (ii) the amount and Currency of any principal or interest due and
payable or to become due and payable from each Borrower to each Lender hereunder
and (iii) the amount and Currency of any sum received by the Administrative
Agent hereunder for account of the Lenders and each Lender's share thereof.
(e) Effect of Entries. The entries made in the accounts maintained pursuant
-----------------
to paragraph (c) or (d) of this Section shall be prima facie evidence of the
----- -----
existence and amounts of the obligations recorded therein; provided that the
--------
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrowers
to repay the Loans in accordance with the terms of this Agreement.
(f) Promissory Notes. Any Lender may request that Loans made by it to any
----------------
Borrower be evidenced by a promissory note of such Borrower. In such event, the
applicable Borrower shall prepare, execute and deliver to such Lender a
promissory note payable to such Lender (or, if requested by such Lender, to such
Lender and its registered assigns) in a principal amount equal to (in the case
of the Company) such Lender's Commitment and (in case of the Subsidiary
Borrower) such Lender's Subsidiary Borrower Sublimit Commitment and in a form
approved by the Administrative Agent. Thereafter, the Loans evidenced by such
promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 10.04) be represented by one or more promissory
notes in such form payable to the payee named therein (or, if such promissory
note is a registered note, to such payee and its registered assigns).
SECTION 2.09. Prepayment of Loans.
-------------------
(a) Optional Prepayments. The Borrowers shall have the right at any time
--------------------
and from time to time to prepay any Borrowing in whole or in part, subject to
the requirements of this Section.
(b) Mandatory Prepayments Due to Currency Fluctuations. On each Quarterly
--------------------------------------------------
Date and promptly upon the receipt by the Administrative Agent of a Currency
Valuation Notice (as defined below), the Administrative Agent shall determine
the aggregate outstanding principal amount of the Loans to the extent there
shall be any Loans denominated in any Foreign Currency at such time. For the
purpose of this determination, the outstanding principal amount of any Loan that
is denominated in any Foreign Currency shall be deemed to be the Dollar
Equivalent of the amount in the Foreign Currency of such Loan, determined as of
such Quarterly Date or, in the case of a Currency Valuation Notice received by
the Administrative Agent prior to 11:00 a.m., London time, on a Business Day, on
such Business Day or, in the case of a Currency Valuation Notice otherwise
received, on the first Business Day after such Currency Valuation Notice is
received. Upon making such determination, the Administrative Agent shall
promptly notify the Lenders and the Borrowers thereof. If, on the date of such
determination, the aggregate outstanding principal amount of the Loans
denominated in Foreign Currencies exceeds
-34-
105% of the Aggregate Foreign Currency Sublimit Dollar Amount, the Borrowers
shall, if requested by the Required Lenders (through the Administrative Agent),
prepay the Loans in such amounts as shall be necessary so that after giving
effect thereto the aggregate outstanding principal amount of the Loans does not
exceed the Aggregate Foreign Currency Sublimit Dollar Amount. For purposes
hereof, "Currency Valuation Notice" means a notice given by the Required Lenders
-------------------------
to the Administrative Agent stating that such notice is a "Currency Valuation
Notice" and requesting that the Administrative Agent determine the aggregate
outstanding principal amount of the Loans. The Administrative Agent shall not be
required to make more than one valuation determination pursuant to Currency
Valuation Notices within any rolling three month period.
(c) Notices, Etc. The Borrowers shall notify the Administrative Agent by
------------
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurocurrency Borrowing, not later than 11:00 a.m., New York City
time (or, in the case of a Borrowing denominated in a Foreign Currency, 11:00
a.m., London time), three Business Days before the date of prepayment or (ii) in
the case of prepayment of an ABR Borrowing, not later than 11:00 a.m., New York
City time, one Business Day before the date of prepayment. Each such notice
shall be irrevocable and shall specify the prepayment date, the principal amount
of each Borrowing or portion thereof to be prepaid and, in the case of a
mandatory prepayment, a reasonably detailed calculation of the amount of such
prepayment; provided that, if a notice of prepayment is given in connection with
a conditional notice of termination of the Commitments as contemplated by
Section 2.07, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.07. Promptly following
receipt of any such notice relating to a Borrowing, the Administrative Agent
shall advise the Lenders of the contents thereof. Each partial prepayment of any
Borrowing shall be in an amount that would be permitted in the case of a
Borrowing of the same Type as provided in Section 2.02, except as necessary to
apply fully the required amount of a mandatory prepayment. Each prepayment of a
Borrowing shall be applied ratably to the Loans included in the prepaid
Borrowing. Prepayments shall be accompanied by accrued interest to the extent
required by Section 2.11 and shall be made in the manner specified in Section
2.08(b).
SECTION 2.10. Fees.
----
(a) Commitment Fee. The Company agrees to pay to the Administrative Agent
--------------
for account of each Lender a commitment fee, which shall accrue at the
Applicable Rate on the average daily unused amount of the Commitment of such
Lender during the period from and including the Effective Date to but excluding
the earlier of the date such Commitment terminates and the Commitment
Termination Date. Accrued commitment fees shall be payable on each Quarterly
Date and on the earlier of the date the Commitments terminate and the Commitment
Termination Date, commencing on the first such date to occur after the date
hereof. All commitment fees shall be computed on the basis of a year of 360 days
and shall be payable for the actual number of days elapsed (including the first
day but excluding the last day). For purposes of computing commitment fees, the
Commitment of a Lender shall be deemed to be used to the extent of the
outstanding Loans and LC Exposure of such Lender.
(b) Letter of Credit Fees. The Company agrees to pay (i) to the
---------------------
Administrative Agent for account of each Lender a participation fee with respect
to its participations in Letters
-35-
of Credit, which shall accrue at a rate per annum equal to the Applicable Rate
applicable to interest on Eurocurrency Loans on the average daily amount of such
Lender's LC Exposure (excluding any portion thereof attributable to unreimbursed
LC Disbursements) during the period from and including the Effective Date to but
excluding the later of the date on which such Lender's Commitment terminates and
the date on which such Lender ceases to have any LC Exposure, and (ii) to the
Issuing Lender a fronting fee, which shall accrue at the rate of 0.125% per
annum on the average daily amount of the Aggregate LC Exposure (excluding any
portion thereof attributable to unreimbursed LC Disbursements) during the period
from and including the Effective Date to but excluding the later of the date of
termination of the Aggregate Commitment and the date on which there ceases to be
any LC Exposure, as well as the Issuing Lender's standard fees with respect to
the issuance, amendment, renewal or extension of any Letter of Credit or
processing of drawings thereunder. Participation fees and fronting fees accrued
through and including each Quarterly Date shall be payable on the third Business
Day following such Quarterly Date, commencing on the first such date to occur
after the Effective Date; provided that all such fees shall be payable on the
--------
date on which the Commitments terminate and any such fees accruing after the
date on which the Commitments terminate shall be payable on demand. Any other
fees payable to the Issuing Lender pursuant to this paragraph shall be payable
within 10 days after demand. All participation fees and fronting fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).
(c) Administrative Agent Fees. The Company agrees to pay to the
-------------------------
Administrative Agent, for its own account, fees payable in the amounts and at
the times separately agreed upon between the Company and the Administrative
Agent.
(d) Payment of Fees. All fees payable hereunder shall be paid on the dates
---------------
due, in Dollars and immediately available funds, to the Administrative Agent (or
to the Issuing Lender, in the case of fees payable to it) for distribution, in
the case of facility fees and participation fees, to the Lenders entitled
thereto. Fees paid shall not be refundable under any circumstances.
SECTION 2.11. Interest.
--------
(a) ABR Loans. The Loans comprising each ABR Borrowing shall bear interest
---------
at a rate per annum equal to the Alternate Base Rate plus the Applicable Rate.
----
(b) Eurocurrency Loans. The Loans comprising each Eurocurrency Borrowing
------------------
shall bear interest at a rate per annum equal to the Adjusted LIBO Rate for the
Interest Period for such Borrowing plus the Applicable Rate.
----
(c) Default Interest. Notwithstanding the foregoing, if any principal of or
----------------
interest on any Loan or any fee or other amount payable by the Borrowers
hereunder is not paid when due, whether at stated maturity, upon acceleration,
by mandatory prepayment or otherwise, such overdue amount shall bear interest,
after as well as before judgment, at a rate per annum equal to (i) in the case
of overdue principal of any Loan, 2% plus the rate otherwise applicable to such
----
Loan as provided above or (ii) in the case of any other amount, 2% plus the rate
----
applicable to ABR Loans as provided in paragraph (a) of this Section.
-36-
(d) Payment of Interest. Accrued interest on each Loan shall be payable in
-------------------
arrears on each Interest Payment Date for such Loan and upon termination of the
Commitments; provided that (i) interest accrued pursuant to paragraph (c) of
--------
this Section shall be payable on demand, (ii) in the event of any repayment or
prepayment of any Loan (other than a prepayment of an ABR Loan prior to the
Commitment Termination Date), accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or prepayment and (iii)
in the event of any conversion of any Eurocurrency Borrowing denominated in
Dollars prior to the end of the Interest Period therefor, accrued interest on
such Borrowing shall be payable on the effective date of such conversion.
(e) Computation. All interest hereunder shall be computed on the basis of a
-----------
year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The applicable Alternate Base Rate or
Adjusted LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
SECTION 2.12. Alternate Rate of Interest. If prior to the commencement of
--------------------------
the Interest Period for any Eurocurrency Borrowing (the Currency of such
Borrowing herein called the "Affected Currency"):
-----------------
(a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate for the Affected Currency for
such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate for the Affected Currency for such Interest Period
will not adequately and fairly reflect the cost to such Lenders of making
or maintaining their respective Loans included in such Borrowing for such
Interest Period;
then the Administrative Agent shall give notice thereof to the Company and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Company and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or the
continuation of any Borrowing as, a Eurocurrency Borrowing denominated in the
Affected Currency shall be ineffective and, if the Affected Currency is Dollars,
such Borrowing (unless prepaid) shall be continued as, or converted to, an ABR
Borrowing, (ii) if the Affected Currency is Dollars and any Borrowing Request
requests a Eurocurrency Borrowing denominated in Dollars, such Borrowing shall
be made as an ABR Borrowing and (iii) if the Affected Currency is a Foreign
Currency, any Borrowing Request that requests a Eurocurrency Borrowing
denominated in the Affected Currency shall be ineffective.
SECTION 2.13. Increased Costs.
---------------
-37-
(a) Increased Costs Generally. If any Change in Law shall:
-------------------------
(i) impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for account of, or
credit extended by, any Lender (except any such reserve requirement
reflected in the Adjusted LIBO Rate) or the Issuing Lender; or
(ii) impose on any Lender or the Issuing Lender or the London
interbank market any other condition affecting this Agreement or
Eurocurrency Loans made by such Lender or any Letter of Credit or
participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lenders of making or maintaining any Eurocurrency Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Lender of participating in, issuing or maintaining any Letter of Credit
or to reduce the amount of any sum received or receivable by such Lender or the
Issuing Lender hereunder (whether of principal, interest or otherwise), then the
applicable Borrower will pay to such Lender or the Issuing Lender, as the case
may be, in Dollars, such additional amount or amounts as will compensate such
Lender or the Issuing Lender, as the case may be, for such additional costs
incurred or reduction suffered.
(b) Capital Requirements. If any Lender or the Issuing Lender determines
--------------------
that any Change in Law regarding capital requirements has or would have the
effect of reducing the rate of return on such Lender's or the Issuing Lender's
capital or on the capital of such Lender's or the Issuing Lender's holding
company, if any, as a consequence of this Agreement or the Loans made by, or
participations in Letters of Credit held by, such Lender, or the Letters of
Credit issued by the Issuing Lender, to a level below that which such Lender or
the Issuing Lender or such Lender's or the Issuing Lender's holding company
could have achieved but for such Change in Law (taking into consideration such
Lender's or the Issuing Lender's policies and the policies of such Lender's or
the Issuing Lender's holding company with respect to capital adequacy), then
from time to time the Borrowers will pay to such Lender or the Issuing Lender,
as the case may be, in Dollars, such additional amount or amounts as will
compensate such Lender or the Issuing Lender or such Lender's or the Issuing
Lender's holding company for any such reduction suffered.
(c) Certificates from Lenders. A certificate of a Lender or the Issuing
-------------------------
Lender setting forth the amount or amounts, in Dollars, necessary to compensate
such Lender or the Issuing Lender or its holding company, as the case may be, as
specified in paragraph (a) or (b) of this Section shall be delivered to the
applicable Borrower and shall be conclusive absent manifest error. The
applicable Borrower shall pay such Lender or the Issuing Lender, as the case may
be, the amount shown as due on any such certificate within 10 days after receipt
thereof.
(d) Delay in Requests. Failure or delay on the part of any Lender or the
-----------------
Issuing Lender to demand compensation pursuant to this Section shall not
constitute a waiver of such Lender's or the Issuing Lender's right to demand
such compensation; provided that the Borrowers shall not be required to
--------
compensate a Lender or the Issuing Lender pursuant to this Section for any
increased costs or reductions incurred more than 270 days prior to the date that
such Lender or the Issuing Lender, as the case may be, notifies the Borrowers of
the Change in
-38-
Law giving rise to such increased costs or reductions and of such Lender's or
the Issuing Lender's intention to claim compensation therefor; provided further
-------- -------
that, if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the 270-day period referred to above shall be extended to
include the period of retroactive effect thereof.
SECTION 2.14. Break Funding Payments. In the event of (a) the payment of
----------------------
any principal of any Eurocurrency Loan other than on the last day of an Interest
Period therefor (including as a result of an Event of Default), (b) the
conversion of any Eurocurrency Loan other than on the last day of an Interest
Period therefor, (c) the failure to borrow, convert, continue or prepay any Loan
on the date specified in any notice delivered pursuant hereto (regardless of
whether such notice is permitted to be revocable under Section 2.09(d) and is
revoked in accordance herewith), or (d) the assignment as a result of a request
by the Company pursuant to Section 2.17(b) of any Eurocurrency Loan other than
on the last day of an Interest Period therefor, then, in any such event, the
Company shall compensate each Lender for the loss, cost and expense attributable
to such event. In the case of a Eurocurrency Loan, the loss to any Lender
attributable to any such event shall be deemed to include an amount determined
by such Lender to be equal to the excess, if any, of (i) the amount of interest
that such Lender would pay for a deposit equal to the principal amount of such
Loan denominated in the Currency of such Loan for the period from the date of
such payment, conversion, failure or assignment to the last day of the then
current Interest Period for such Loan (or, in the case of a failure to borrow,
convert or continue, the duration of the Interest Period that would have
resulted from such borrowing, conversion or continuation) if the interest rate
payable on such deposit were equal to the Adjusted LIBO Rate for such Currency
for such Interest Period, over (ii) the amount of interest that such Lender
would earn on such principal amount for such period if such Lender were to
invest such principal amount for such period at the interest rate that would be
bid by such Lender (or an affiliate of such Lender) for deposits denominated in
such Currency from other banks in the eurocurrency market at the commencement of
such period. A certificate of any Lender setting forth any amount or amounts
that such Lender is entitled to receive pursuant to this Section shall be
delivered to the Borrowers and shall be conclusive absent manifest error. The
Company shall pay such Lender the amount shown as due on any such certificate
within 10 days after receipt thereof.
SECTION 2.15. Taxes.
-----
(a) Payments Free of Taxes. Any and all payments by or on account of any
----------------------
obligation of the Borrowers hereunder or under any other Loan Document shall be
made free and clear of and without deduction for any Indemnified Taxes or Other
Taxes; provided that if a Borrower shall be required to deduct any Indemnified
--------
Taxes or Other Taxes from such payments, then (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section) the
Administrative Agent, Lender or Issuing Lender (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) such Borrower shall make such deductions and (iii) such Borrower shall pay
the full amount deducted to the relevant Governmental Authority in accordance
with applicable law.
(b) Payment of Other Taxes by the Borrowers. In addition, each Borrower
---------------------------------------
shall pay any Other Taxes to the relevant Governmental Authority in accordance
with applicable law.
-39-
(c) Indemnification by the Borrowers. Each Borrower shall indemnify the
--------------------------------
Administrative Agent, each Lender and the Issuing Lender, within 10 days after
written demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) paid by the Administrative
Agent, such Lender or the Issuing Lender, as the case may be, and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability delivered to a Borrower by a Lender or
the Issuing Lender, or by the Administrative Agent on its own behalf or on
behalf of a Lender or the Issuing Lender, shall be conclusive absent manifest
error.
(d) Evidence of Payments. As soon as practicable after any payment of
--------------------
Indemnified Taxes or Other Taxes by a Borrower to a Governmental Authority, such
Borrower shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.
(e) Non-U.S. Lenders. Any Non-U.S. Lender that is entitled to an exemption
----------------
from or reduction of withholding tax under the law of the jurisdiction in which
a Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to such Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law or reasonably requested by such Borrower, such properly completed and
executed documentation prescribed by applicable law as will permit such payments
to be made without withholding or at a reduced rate.
(f) Refunds. If the Administrative Agent or a Lender determines, in its
-------
sole discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by the Borrowers or with respect to which a
Borrower has paid additional amounts pursuant to this Section, it shall pay over
such refund to such Borrower (but only to the extent of indemnity payments made,
or additional amounts paid, by such Borrower under this Section with respect to
the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of the Administrative Agent or such Lender and without interest (other
than any interest paid by the relevant Governmental Authority with respect to
such refund); provided that such Borrower, upon the request of the
--------
Administrative Agent or such Lender, agrees to repay the amount paid over to
such Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. This paragraph (f) shall not be construed
to require the Administrative Agent or any Lender to make available its tax
returns (or any other information relating to its taxes which it deems
confidential) to the Borrowers or any other Person.
SECTION 2.16. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.
-----------------------------------------------------------
(a) Payments by the Borrowers. Each Borrower shall make each payment
-------------------------
required to be made by it hereunder (whether of principal, interest, fees or
reimbursement of
-40-
LC Disbursements, or of amounts payable under Section 2.13, 2.14 or 2.15, or
otherwise) or under any other Loan Document (except to the extent otherwise
provided therein) prior to 12:00 noon, Local Time, on the date when due, in
immediately available funds, without set-off or counterclaim. Any amounts
received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at the Administrative Agent's Account,
except as otherwise expressly provided in the relevant Loan Document and except
payments to be made directly to the Issuing Lender as expressly provided herein
and payments pursuant to Sections 2.13, 2.14, 2.15 and 10.03, which shall be
made directly to the Persons entitled thereto. The Administrative Agent shall
distribute any such payments received by it for the account of any other Person
to the appropriate recipient promptly following receipt thereof. If any payment
hereunder shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next succeeding Business Day and, in the case of any
payment accruing interest, interest thereon shall be payable for the period of
such extension. All amounts owing under this Agreement (including commitment
fees, payments required under Section 2.13, and payments required under Section
2.14 relating to any Loan denominated in Dollars, but not including principal
of, and interest on, any Loan denominated in any Foreign Currency or payments
relating to any such Loan required under Section 2.14, which are payable in such
Foreign Currency) or under any other Loan Document (except to the extent
otherwise provided therein) are payable in Dollars. Notwithstanding the
foregoing, if a Borrower shall fail to pay any principal of any Loan when due
(whether at stated maturity, by acceleration, by mandatory prepayment or
otherwise), the unpaid portion of such Loan shall, if such Loan is not
denominated in Dollars, automatically be redenominated in Dollars on the due
date thereof (or, if such due date is a day other than the last day of the
Interest Period therefor, on the last day of such Interest Period) in an amount
equal to the Dollar Equivalent thereof on the date of such redenomination and
such principal shall be payable on demand; and if a Borrower shall fail to pay
any interest on any Loan that is not denominated in Dollars, such interest shall
automatically be redenominated in Dollars on the due date therefor (or, if such
due date is a day other than the last day of the Interest Period therefor, on
the last day of such Interest Period) in an amount equal to the Dollar
Equivalent thereof on the date of such redenomination and such interest shall be
payable on demand.
(b) Application of Insufficient Payments. If at any time insufficient funds
------------------------------------
are received by and available to the Administrative Agent to pay fully all
amounts of principal, unreimbursed LC Disbursements, interest and fees then due
hereunder, such funds shall be applied (i) first, to pay interest and fees then
due hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, to pay
principal and unreimbursed LC Disbursements then due hereunder, ratably among
the parties entitled thereto in accordance with the amounts of principal and
unreimbursed LC Disbursements then due to such parties.
(c) Pro Rata Treatment. Except to the extent otherwise provided herein: (i)
------------------
each Borrowing shall be made from the Lenders, each payment of commitment fee
under Section 2.10 shall be made for account of the Lenders, and each
termination or reduction of the amount of the Commitments under Section 2.07
shall be applied to the respective Commitments of the Lenders, pro rata
according to the amounts of their respective Commitments; (ii) each Borrowing
shall be allocated pro rata among the Lenders according to the amounts of their
respective Commitments
-41-
(in the case of the making of Loans) or their respective Loans that are to be
included in such Borrowing (in the case of conversions and continuations of
Loans); (iii) each payment or prepayment of principal of Loans by a Borrower
shall be made for account of the Lenders pro rata in accordance with the
respective unpaid principal amounts of the Loans held by them; and (iv) each
payment of interest on Loans by a Borrower shall be made for account of the
Lenders pro rata in accordance with the amounts of interest on such Loans then
due and payable to the respective Lenders.
(d) Sharing of Payments by Lenders. If any Lender shall, by exercising any
------------------------------
right of set-off or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of its Loans or participations in LC
Disbursements resulting in such Lender receiving payment of a greater proportion
of the aggregate amount of its Loans and participations in LC Disbursements and
accrued interest thereon then due than the proportion received by any other
Lender, then the Lender receiving such greater proportion shall purchase (for
cash at face value) participations in the Loans and participations in LC
Disbursements of other Lenders to the extent necessary so that the benefit of
all such payments shall be shared by the Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective Loans
and participations in LC Disbursements; provided that (i) if any such
--------
participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrowers pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in LC Disbursements to any assignee or participant, other than to the Company or
any Subsidiary or Affiliate thereof (as to which the provisions of this
paragraph shall apply). Each Borrower consents to the foregoing and agrees, to
the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against such Borrower rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of such Borrower
in the amount of such participation.
(e) Presumptions of Payment. Unless the Administrative Agent shall have
-----------------------
received notice from a Borrower prior to the date on which any payment is due to
the Administrative Agent for account of the Lenders or the Issuing Lender
hereunder that such Borrower will not make such payment, the Administrative
Agent may assume that such Borrower has made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to the
Lenders or the Issuing Lender, as the case may be, the amount due. In such
event, if such Borrower has not in fact made such payment, then each of the
Lenders or the Issuing Lender, as the case may be, severally agrees to repay to
the Administrative Agent forthwith on demand the amount so distributed to such
Lender or the Issuing Lender with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation.
(f) Certain Deductions by the Administrative Agent. If any Lender shall
----------------------------------------------
fail to make any payment required to be made by it pursuant to Section 2.04(e),
2.05(b) or 2.16(e), then
-42-
the Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for account of such Lender to satisfy such Lender's obligations under such
Sections until all such unsatisfied obligations are fully paid.
SECTION 2.17. Mitigation Obligations; Replacement of Lenders.
----------------------------------------------
(a) Designation of a Different Lending Office. If any Lender requests
-----------------------------------------
compensation under Section 2.13, or if a Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for account of any
Lender pursuant to Section 2.15, then such Lender shall use reasonable efforts
to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 2.13 or 2.15, as the case may be, in the future and (ii) would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender. The Company hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.
(b) Replacement of Lenders. If any Lender requests compensation under
----------------------
Section 2.13, or if a Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for account of any Lender pursuant to
Section 2.15, or if any Lender defaults in its obligation to fund Loans
hereunder, then the Company may, at its sole expense and effort, upon notice to
such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in Section 10.04), all its interests, rights and obligations under
this Agreement to an assignee that shall assume such obligations (which assignee
may be another Lender, if a Lender accepts such assignment); provided that (i)
--------
the Company shall have received the prior written consent of the Administrative
Agent (and, if a Commitment is being assigned, the Issuing Lender), which
consent shall not unreasonably be withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans and
participations in LC Disbursements, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder, from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the applicable
Borrower (in the case of all other amounts) and (iii) in the case of any such
assignment resulting from a claim for compensation under Section 2.13 or
payments required to be made pursuant to Section 2.15, such assignment will
result in a reduction in such compensation or payments. A Lender shall not be
required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Company to require such assignment and delegation cease to apply.
ARTICLE III
GUARANTEE
---------
SECTION 3.01. The Guarantee. Each Borrower hereby guarantees to each Lender
-------------
and the Administrative Agent and their respective successors and assigns the
prompt
-43-
payment in full when due (whether at stated maturity, by acceleration or
otherwise) of the other Borrower's Obligations, in each case strictly in
accordance with the terms thereof (such obligations being herein collectively
called the "Guaranteed Obligations"). Each Borrower hereby further agrees that
----------------------
if the other Borrower shall fail to pay in full when due (whether at stated
maturity, by acceleration or otherwise) any of such Guaranteed Obligations, such
Borrower will promptly pay the same, without any demand or notice whatsoever,
and that in the case of any extension of time of payment or renewal of any of
such Guaranteed Obligations, the same will be promptly paid in full when due
(whether at extended maturity, by acceleration or otherwise) in accordance with
the terms of such extension or renewal.
SECTION 3.02. Obligations Unconditional. The obligations of the Guarantors
-------------------------
under Section 3.01 are absolute and unconditional irrespective of the value,
genuineness, validity, regularity or enforceability of the obligations of the
other Borrower under this Agreement or any other agreement or instrument
referred to herein, or any substitution, release or exchange of any other
guarantee of or security for any of their respective Guaranteed Obligations,
and, to the fullest extent permitted by applicable law, irrespective of any
other circumstance whatsoever that might otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor, it being the intent of
this Section that the obligations of the Guarantors hereunder shall be absolute
and unconditional under any and all circumstances. Without limiting the
generality of the foregoing, it is agreed that the occurrence of any one or more
of the following shall not alter or impair the liability of the Guarantors
hereunder, which shall remain absolute and unconditional as described above:
(i) at any time or from time to time, without notice to the
Guarantors, the time for any performance of or compliance with any of their
respective Guaranteed Obligations shall be extended, or such performance or
compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of this
Agreement or any other agreement or instrument referred to herein shall be
done or omitted;
(iii) the maturity of any of their respective Guaranteed Obligations
shall be accelerated, or any of the Guaranteed Obligations shall be
modified, supplemented or amended in any respect, or any right under this
Agreement or any other agreement or instrument referred to herein shall be
waived or any other guarantee of any of their respective Guaranteed
Obligations or any security therefor shall be released or exchanged in
whole or in part or otherwise dealt with; or
(iv) any lien or security interest granted to, or in favor of, the
Administrative Agent or any Lender or Lenders as security for any of the
Guaranteed Obligations shall fail to be perfected.
The Guarantors hereby expressly waive diligence, presentment, demand of payment,
protest and all notices whatsoever, and any requirement that the Administrative
Agent or any Lender exhaust any right, power or remedy or proceed against the
Company under this Agreement or any other agreement or instrument referred to
herein, or against any other Person under any other guarantee of, or security
for, any of their respective Guaranteed Obligations.
-44-
SECTION 3.03. Reinstatement. The obligations of each Guarantor under this
-------------
Article shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of the other Borrowers in respect of the
relevant Guaranteed Obligations is rescinded or must be otherwise restored by
any holder of any of such Guaranteed Obligations, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise, and each Guarantor
agrees that it will indemnify the Administrative Agent and each Lender on demand
for all reasonable costs and expenses (including fees of counsel) incurred by
the Administrative Agent or such Lender in connection with such rescission or
restoration, including any such costs and expenses incurred in defending against
any claim alleging that such payment constituted a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or similar law.
SECTION 3.04. Subrogation. Each Guarantor hereby agrees that, until the
-----------
payment and satisfaction in full of all Guaranteed Obligations and the
expiration and termination of the Commitments of the Lenders under this
Agreement, it shall not exercise any right or remedy arising by reason of any
performance by it of its guarantee in Section 3.01, whether by subrogation or
otherwise, against the Company or any other guarantor of any of the Guaranteed
Obligations or any security for any of the Guaranteed Obligations.
SECTION 3.05. Remedies. Each Guarantor agrees that, as between such
--------
Guarantor and the Lenders, the obligations of the Borrowers under this Agreement
may be declared to be forthwith due and payable as provided in Article VIII (and
shall be deemed to have become automatically due and payable in the
circumstances provided in Article VIII) for purposes of Section 3.01
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or such obligations from becoming automatically due and payable) as
against any Borrower and that, in the event of such declaration (or such
obligations being deemed to have become automatically due and payable), such
obligations (whether or not due and payable by any Borrower) shall forthwith
become due and payable by such Guarantor for purposes of Section 3.01.
SECTION 3.06. Continuing Guarantee. The guarantee in this Article is a
--------------------
continuing guarantee, and shall apply to all Guaranteed Obligations whenever
arising.
SECTION 3.07. General Limitation on Guarantee Obligations. In any action or
-------------------------------------------
proceeding involving any state corporate law, or any state or Federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Guarantor under Section 3.01
would otherwise be held or determined to be void, invalid or unenforceable, or
subordinated to the claims of any other creditors, on account of the amount of
its liability under Section 3.01, then, notwithstanding any other provision
hereof to the contrary, the amount of such liability shall, without any further
action by such Guarantor, any Lender, the Administrative Agent or any other
Person, be automatically limited and reduced to the highest amount that is valid
and enforceable and not subordinated to the claims of other creditors as
determined in such action or proceeding.
-45-
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
------------------------------
Each of the Company and the Subsidiary Borrower represents and warrants (as
to itself and each of its Subsidiaries) to the Lenders that:
SECTION 4.01. Organization; Powers. Each of the Company and its
--------------------
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
SECTION 4.02. Authorization; Enforceability. The Transactions are within
-----------------------------
each Borrower and each other Loan Party's corporate powers and have been duly
authorized by all necessary corporate and, if required, by all necessary
shareholder action. This Agreement and each of the other Loan Documents have
been duly executed and delivered by each Loan Party party thereto and
constitutes, or when executed and delivered by such Loan Party will constitute,
a legal, valid and binding obligation of such Loan Party, enforceable against
each Loan Party in accordance with its terms, except as such enforceability may
be limited by (a) bankruptcy, insolvency, reorganization, moratorium or similar
laws of general applicability affecting the enforcement of creditors' rights and
(b) the application of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
SECTION 4.03. Governmental Approvals; No Conflicts. The Transactions (a) do
------------------------------------
not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except for (i) such as have been
obtained or made and are in full force and effect and (ii) filings and
recordings in respect of the Liens created pursuant to the Security Documents,
(b) will not violate any Requirement of Law, (c) will not violate or result in a
default under any Contractual Obligation upon the Company and its Subsidiaries
or its or their respective assets, or give rise to a right thereunder to require
any payment to be made by any such Person, and (d) except for the Liens created
pursuant to the Security Documents, will not result in the creation or
imposition of any Lien on any asset of the Borrowers or any of their respective
Subsidiaries.
SECTION 4.04. Financial Condition; No Material Adverse Change.
-----------------------------------------------
(a) Financial Condition. The Company has heretofore furnished to the
-------------------
Lenders its consolidated balance sheet and statements of income, stockholders'
equity and cash flows as of and for the fiscal years ended September 30, 2005
reported on by PricewaterhouseCoopers LLP and September 30, 2006 reported on by
Grant Thornton LLP. Such financial statements present fairly, in all material
respects, the financial position and results of operations and cash flows of the
Company and its Subsidiaries as of such dates and for such periods in accordance
with GAAP. There are no liabilities of the Company or any of its Subsidiaries,
fixed or contingent, which are material in relation to the consolidated
financial condition of the Company
-46-
that are not reflected in such financial statements or in the notes thereto,
other than liabilities arising in the ordinary course of business since
September 30, 2006.
(b) No Material Adverse Change. Since September 30, 2006, there has not
occurred any event, development or circumstance that has had or could reasonably
be expected to have a Material Adverse Effect.
SECTION 4.05. Properties.
----------
(a) Property Generally. Each of the Company and its Subsidiaries has good
------------------
title to, or valid leasehold interests in, all its real and personal property
material to its business, subject only to Liens permitted by Section 7.02 and
except for minor defects in title that do not interfere with its ability to
conduct its business as currently conducted or to utilize such properties for
their intended purposes. The Liens granted by the Security Documents constitute
valid perfected first priority Liens on the properties and assets covered by the
Security Documents, subject to no prior or equal Lien except as permitted by
Section 7.02.
(b) Intellectual Property. Each of the Company and its Subsidiaries owns,
---------------------
or is licensed to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to its business, and, to the Borrowers'
knowledge, the use thereof by the Company and its Subsidiaries does not infringe
upon the rights of any other Person except for any such infringements that,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
SECTION 4.06. Litigation and Environmental Matters.
------------------------------------
(a) Actions, Suits and Proceedings. There are no actions, suits or
------------------------------
proceedings by or before any arbitrator or Governmental Authority now pending
against or, to the knowledge of the Borrowers, threatened against or affecting
the Company or any of its Subsidiaries that, if adversely determined, could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect (other than the Disclosed Matters) or that involve this
Agreement or the Transactions.
(b) Environmental Matters. Except for the Disclosed Matters and except with
---------------------
respect to any other matters that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, neither the
Company nor any of its Subsidiaries (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) has become subject to
any Environmental Liability, (iii) has received notice of any claim with respect
to any Environmental Liability or (iv) knows of any basis for any Environmental
Liability.
(c) Disclosed Matters. Since the date of this Agreement, there has been no
-----------------
change in the status of the Disclosed Matters that, individually or in the
aggregate, has resulted in, or materially increased the likelihood of, a
Material Adverse Effect.
SECTION 4.07. Compliance with Laws and Contractual Obligations. Each of the
------------------------------------------------
Company and its Subsidiaries is in compliance with all Requirements of Law
applicable to it
-47-
or its property or all Contractual Obligations binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 4.08. Investment Company Status. Neither the Company nor its
-------------------------
Subsidiaries is an "investment company" as defined in, or subject to regulation
under, the Investment Company Act of 1940.
SECTION 4.09. Taxes. Each of the Company and its Subsidiaries has timely
-----
filed or caused to be filed all Tax returns and reports required to have been
filed and has paid or caused to be paid all Taxes required to have been paid by
it, except (a) Taxes that are being contested in good faith by appropriate
proceedings and for which such Person has set aside on its books adequate
reserves or (b) to the extent that the failure to do so could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 4.10. ERISA. No ERISA Event has occurred or is reasonably expected
-----
to occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. Except with respect to Clopay's underfunded
Plan, the present value of all accumulated benefit obligations under each Plan
(based on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $5,000,000 the fair
market value of the assets of such Plan. The present value of all accumulated
benefit obligations of Clopay's underfunded Plan (based on the assumptions used
for purposes of Statement of Financial Accounting Standards No. 87) did not, as
of the date of the most recent financial statements reflecting such amounts
exceed by more than $25,000,000 the fair market value of the assets of such
underfunded Plan.
SECTION 4.11. Disclosure. The Borrowers have disclosed to the Lenders all
----------
agreements, instruments and corporate or other restrictions to which it or any
of its Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. None of the reports, financial statements, certificates
or other information furnished by or on behalf of the Borrowers or any
Subsidiary to the Administrative Agent or any Lender in connection with the
negotiation of this Agreement and the other Loan Documents or delivered
hereunder or thereunder (as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, each Borrower represents only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time.
SECTION 4.12. Use of Credit. Neither the Company nor any of its
-------------
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose, whether immediate, incidental
or ultimate, of buying or carrying Margin Stock, and no part of the proceeds of
any extension of credit hereunder will be used to buy or carry any Margin Stock.
-48-
SECTION 4.13. Burdensome Agreements. Except as set forth on Schedule 4.13,
---------------------
to the Borrowers' knowledge, neither the Company nor any of its Subsidiaries is
a party to or bound by, nor are any of the properties or assets owned by the
Company or any of its Subsidiaries used in the conduct of their respective
businesses affected by, any agreement, ordinance, resolution, decree, bond,
note, indenture, order or judgment, including, without limitation, any of the
foregoing relating to any Environmental Liability, that could reasonably be
expected to result in a Material Adverse Effect.
SECTION 4.14. Labor Matters. Except as set forth on Schedule 4.14, (a) no
-------------
collective bargaining agreement or other labor contract will expire during the
term of this Agreement, (b) to the Borrowers' knowledge, no union or other labor
organization is seeking to organize, or to be recognized as bargaining
representative for, a bargaining unit of employees of the Company or any of its
Subsidiaries, (c) there is no pending or, to the Borrowers' knowledge,
threatened strike, work stoppage, material unfair labor practice claim or
charge, arbitration or other material labor dispute against or affecting the
Company or any of its Subsidiaries or their representative employees, in each
case the consequences of which could reasonably be expected to affect aggregate
business (regardless of division or entity) of the Company and its Subsidiaries
which business generated gross revenues in excess of $50,000,000 individually or
in the aggregate in the prior fiscal year, and (d) there are no actions, suits,
charges, demands, claims, counterclaims or proceedings pending or, to the best
of the Borrowers' knowledge, threatened against the Company or any of its
Subsidiaries, by or on behalf of, or with, its employees, other than any such
actions, suits charges, demands, claims, counterclaims or proceedings arising in
the ordinary course of business that could not reasonably be expected to result
in a Material Adverse Effect.
ARTICLE V
CONDITIONS
----------
SECTION 5.01. Effective Date. The obligations of the Lenders to make Loans
--------------
and of the Issuing Lender to issue Letters of Credit hereunder shall not become
effective until the date on which the Administrative Agent shall have received
each of the following documents, each of which shall be satisfactory to the
Administrative Agent in form and substance (or such condition shall have been
waived in accordance with Section 10.02):
(a) Executed Counterparts. From each party hereto either (i) a
---------------------
counterpart of this Agreement executed on behalf of the Borrowers, the
Administrative Agent and each of the Lenders (and, in the case of each
Lender not a party to the Existing Credit Agreement, by such Lender's
execution and delivery hereof, such Lender agrees that, as of the Effective
Date, it shall become a "Lender" for all purposes of this Agreement having
a Commitment in the amount set forth opposite such Lender's name on
Schedule 1.01 hereto) or (ii) written evidence satisfactory to the
Administrative Agent (which may include telecopy transmission of an
executed signature page to this Agreement) that such party has executed a
counterpart of this Agreement.
-49-
(b) Opinion of Counsel to the Borrowers. A written opinion (addressed
-----------------------------------
to the Administrative Agent and the Lenders and dated the Effective Date)
of Moomjian, Waite, Wactlar & Coleman LLP, counsel for the Borrowers,
substantially in the form of Exhibit C, and covering such other matters
relating to the Borrowers, this Agreement or the Transactions as the
Administrative Agent shall reasonably request (and the Borrowers hereby
instruct such counsel to deliver such opinion to the Lenders and the
Administrative Agent).
(c) Opinion of Special New York Counsel to JPMCB. A written opinion
--------------------------------------------
(addressed to the Administrative Agent and the Lenders and dated the
Effective Date) of Milbank, Tweed, Hadley & McCloy LLP, special New York
counsel to JPMCB, substantially in the form of Exhibit D (and JPMCB hereby
instructs such counsel to deliver such opinion to the Lenders).
(d) Corporate Documents. Such documents and certificates as the
-------------------
Administrative Agent or its counsel may reasonably request relating to the
organization, existence and good standing of each Borrower and Clopay, the
authorization of the Transactions and any other legal matters relating to
the Borrowers, Clopay, this Agreement or the Transactions, all in form and
substance satisfactory to the Administrative Agent and its counsel.
(e) Officer's Certificate. A certificate, dated the Effective Date and
---------------------
signed by a senior executive officer of the Company, confirming compliance
with the conditions set forth in clauses (a) and (b) of the first sentence
of Section 5.02.
(f) Repayment of Amounts under the Existing Credit Agreement. Evidence
--------------------------------------------------------
that the principal of and interest on outstanding loans, and all accrued
fees and all other amounts owing, under the Existing Credit Agreement shall
have been (or shall be simultaneously) paid in full.
(g) Other Documents. Such other documents as the Administrative Agent
---------------
or any Lender or special New York counsel to JPMCB may reasonably request.
The obligation of each Lender to make its initial extension of credit
hereunder is also subject to the payment by the Company of such fees and
expenses as the Company shall have agreed to pay to any Lender or the
Administrative Agent in connection herewith, including the reasonable fees and
expenses of Milbank, Tweed, Hadley & McCloy LLP, special New York counsel to
JPMCB, in connection with the negotiation, preparation, execution and delivery
of this Agreement and the other Loan Documents (to the extent that written
statements for such fees and expenses have been delivered to the Company).
The Administrative Agent shall notify the Company and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing
Lender to issue Letters of Credit hereunder shall not become effective unless
each of the foregoing conditions is satisfied (or waived pursuant to Section
10.02) at or prior to 3:00 p.m., New York City time, on January 31, 2007.
-50-
SECTION 5.02. Each Credit Event. The obligation of each Lender to make any
-----------------
Loan, and of the Issuing Lender to issue, amend, renew or extend any Letter of
Credit, is additionally subject to the satisfaction of the following conditions:
(a) the representations and warranties of the Borrowers set
forth in this Agreement, and of each Loan Party in each of the other
Loan Documents to which it is a party, shall be true and correct on and
as of the date of such Loan or the date of issuance, amendment, renewal
or extension of such Letter of Credit, as applicable; and
(b) at the time of and immediately after giving effect to such
Loan or the issuance, amendment, renewal or extension of such Letter of
Credit, as applicable, no Default shall have occurred and be
continuing.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Company on the date thereof as to the matters specified in clauses (a) and (b)
of the immediately preceding sentence.
ARTICLE VI
AFFIRMATIVE COVENANTS
---------------------
Until the Commitments have expired or been terminated and the principal of
and interest on each Loan and all fees payable hereunder shall have been paid in
full and all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, each Borrower (on behalf of itself and
each of its Subsidiaries) covenants and agrees with the Lenders that:
SECTION 6.01. Financial Statements and Other Information. The Company will
------------------------------------------
furnish to the Administrative Agent and each Lender:
(a) on the date that is the earlier of (i) the date on which
the same shall have been filed with the SEC and (ii) the date the same
are required to be filed with the SEC (without regard to any extension
of the SEC's filing requirements), the audited consolidated balance
sheet and related statements of income, stockholders' equity and cash
flows of the Company and its Subsidiaries as of the end of and for such
year, setting forth in each case in comparative form the figures for
the previous fiscal year, all reported on by Grant Thornton LLP or
other independent public accountants of recognized national standing
(without a "going concern" or like qualification or exception and
without any qualification or exception as to the scope of such audit)
to the effect that such consolidated financial statements present
fairly in all material respects the financial condition and results of
operations of the Company and its Subsidiaries on a consolidated basis
in accordance with GAAP;
(b) on the date that is the earlier of (i) the date on which
the same shall have been filed with the SEC and (ii) the date the same
are required to be filed with the SEC
-51-
(without regard to any extension of the SEC's filing requirements), the
consolidated balance sheets and related consolidated statements of
income and cash flows of the Company and its Subsidiaries as of the end
of and for such fiscal quarter and the then elapsed portion of the
fiscal year, setting forth in each case in comparative form the figures
for (or, in the case of the balance sheet, as of the end of) the
corresponding period or periods of the previous fiscal year, all
certified by a Financial Officer of the Company as presenting fairly in
all material respects the financial condition and results of operations
of the Company and its Subsidiaries on a consolidated basis in
accordance with GAAP, subject to normal year-end audit adjustments and
the absence of footnotes;
(c) as soon as available and in any event within 30 days after
the date on which financial statements under clause (b) of this Section
shall have been filed with the SEC, the consolidating balance sheets
and related consolidating statements of income and cash flows of the
Company and its Subsidiaries as of the end of and for such fiscal
quarter and the then elapsed portion of the fiscal year, setting forth
in each case in comparative form the figures for (or, in the case of
the balance sheet, as of the end of) the corresponding period or
periods of the previous fiscal year;
(d) concurrently with any delivery of financial statements
under clause (a) or (b) of this Section, a certificate of a Financial
Officer of the Company (i) certifying as to whether a Default has
occurred and, if a Default has occurred, specifying the details thereof
and any action taken or proposed to be taken with respect thereto, (ii)
setting forth reasonably detailed calculations demonstrating compliance
with Sections 7.01, 7.06 and 7.11 and (iii) stating whether any change
in GAAP or in the application thereof has occurred since the date of
the audited financial statements referred to in Section 4.04 and, if
any such change has occurred, specifying the effect of such change on
the financial statements accompanying such certificate;
(e) concurrently with any delivery of financial statements
under clause (a) of this Section, a certificate of the accounting firm
that reported on such financial statements stating whether they
obtained knowledge during the course of their examination of such
financial statements of any Default under Article VII including Section
7.11 (which certificate may be limited to the extent required by
accounting rules or guidelines);
(f) promptly upon receipt thereof, copies of all other reports
submitted to the Company by its independent certified public
accountants in connection with any annual or interim audit or review of
the books of the Company made by such accountants;
(g) annually, as soon as available, but in any event within 60
days after the last day of each fiscal year of the Company,
consolidated and consolidating projections of the Company and its
Subsidiaries for the following five fiscal years of the Company;
(h) promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other materials
filed by the Company or any of its Subsidiaries with the SEC, or any
Governmental Authority succeeding to any or all of the functions of
said Commission, or with any national securities exchange, or
distributed by the Company to its shareholders generally, as the case
may be;
-52-
(i) promptly following any request therefor, such other
information regarding the operations, business affairs and financial
condition of the Company or any of its Subsidiaries, or compliance with
the terms of this Agreement and the other Loan Documents, as the
Administrative Agent or any Lender may reasonably request.
Documents required to be delivered pursuant to Sections 6.01(a), (b) or (h) (to
the extent any such documents are included in materials otherwise filed with the
SEC) shall be deemed to have been delivered on the date (i) on which the Company
posts such documents or provides a link thereto on the Company's website or (ii)
on which such documents are posted on the Company's behalf on
Intralinks/IntraAgency or another relevant website, if any, to which each Lender
and the Administrative Agent have access (whether a commercial, third-party
website or whether sponsored by the Administrative Agent); provided that the
Company shall notify the Administrative Agent (by telecopier or electronic mail)
of the posting of any such documents and provide the Administrative Agent with
electronic mail versions of such documents.
SECTION 6.02. Notices of Material Events. The Company will furnish to the
--------------------------
Administrative Agent and each Lender prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting the
Company or any of its Affiliates, other than disputes in the ordinary
course of business or, whether or not in the ordinary of business, disputes
involving amounts exceeding $5,000,000 (excluding, however, any actions
relating to workers' compensation claims or negligence claims relating to
use of motor vehicles, if fully covered by insurance, subject to
deductibles);
(c) the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Company and its Subsidiaries in an aggregate
amount exceeding $5,000,000;
(d) the assertion of any environmental matter by any Person against,
or with respect to the activities of, the Company or any of its
Subsidiaries and any alleged violation of or non-compliance with any
Environmental Laws or any permits, licenses or authorizations, other than
any environmental matter or alleged violation that, alone or together with
any other such matters that have occurred, could reasonably be expected to
result in liability of the Company and its Subsidiaries in an aggregate
amount exceeding $5,000,000; and
(e) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Company setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
-53-
SECTION 6.03. Existence; Conduct of Business. The Company will, and will
------------------------------
cause each of its Subsidiaries to, do or cause to be done all things necessary
to preserve, renew and keep in full force and effect its legal existence and the
rights, licenses, permits, privileges and franchises material to the conduct of
its business; provided that the foregoing shall not prohibit any merger,
--------
consolidation, liquidation or dissolution permitted under Section 7.03.
SECTION 6.04. Payment of Obligations. The Company will, and will cause each
----------------------
of its Subsidiaries to, pay its obligations, including tax liabilities, that, if
not paid, could result in a Material Adverse Effect before the same shall become
delinquent or in default, except where (a) the validity or amount thereof is
being contested in good faith by appropriate proceedings, (b) the Company or
such Subsidiary has set aside on its books adequate reserves with respect
thereto in accordance with GAAP and (c) the failure to make payment pending such
contest could not reasonably be expected to result in a Material Adverse Effect.
SECTION 6.05. Maintenance of Properties. The Company will, and will cause
-------------------------
each of its Subsidiaries to, keep and maintain all property material to the
conduct of its business in good working order and condition, ordinary wear and
tear excepted.
SECTION 6.06. Maintenance of Insurance. The Company will, and will cause
------------------------
each of its Subsidiaries to, maintain, with financially sound and reputable
insurance companies, insurance in such amounts and against such risks as are
customarily maintained by companies engaged in the same or similar businesses
operating in the same or similar locations; provided that the Company may
maintain self-insurance consistent with its past practices and policies.
SECTION 6.07. Books and Records. The Company will, and will cause each of
-----------------
its Subsidiaries to, keep proper books of record and account in which full, true
and correct entries are made of all dealings and transactions in relation to its
business and activities.
SECTION 6.08. Inspection Rights. The Company will, and will cause each of
-----------------
its Subsidiaries to, permit any representatives designated by the Administrative
Agent or any Lender, upon reasonable prior notice, to visit and inspect its
properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent
accountants, all at such reasonable times and as often as reasonably requested;
provided that such visit or discussions shall be at the expense of the
Administrative Agent or any Lender, as applicable, unless a Default has occurred
and is continuing in which case the expenses of the Administrative Agent or any
Lender, as applicable, in connection therewith shall be paid or reimbursed by
the Company.
SECTION 6.09. Compliance with Laws and Contractual Obligations. The Company
------------------------------------------------
will, and will cause each of its Subsidiaries to, comply with all Requirements
of Law (including any Environmental Laws) applicable to it or its property, and
all Contractual Obligations binding upon it or its property, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 6.10. Use of Proceeds and Letters of Credit. The proceeds of the
-------------------------------------
Loans, and the Letters of Credit issued hereunder, will be used only for general
corporate
-54-
purposes of the Company and its Subsidiaries. No part of the proceeds of any
Loan will be used, whether directly or indirectly, for any purpose that entails
a violation of any of the Regulations of the Board, including Regulations U and
X.
SECTION 6.11. Collateral; Further Assurances.
------------------------------
(a) Collateral. The Company will take such action, and will cause each of
----------
its Subsidiaries to take such action, (i) within 30 days after the acquisition
of Capital Stock of any Person is acquired pursuant to a Permitted Acquisition
(subject to clause (a), (b) or (c) (as applicable) of the definition of
"Permitted Acquisition"), to pledge to the Administrative Agent all of the
issued and outstanding Capital Stock of such Person and (ii) at any time when
the Aggregate Revolving Credit Exposure exceeds $175,000,000 hereunder, within
30 days thereafter, to pledge to the Administrative Agent all of the issued and
outstanding shares of the Capital Stock of the Subsidiary Borrower, such pledge
to thereafter remain in effect regardless of whether the Aggregate Revolving
Credit Exposure thereafter is less than $175,000,000.
(b) Further Assurances. The Company will, and will cause each of its
------------------
Subsidiaries to, take such action from time to time as shall reasonably be
requested by the Administrative Agent to effectuate the purposes and objectives
of this Agreement including this Section, and the other Loan Documents,
including entering into any pledge agreements in favor of the Administrative
Agent, and delivering to the Administrative Agent pursuant to such pledge
agreement the certificates evidencing the relevant pledged Capital Stock,
accompanied by undated stock powers executed in blank, in order to effectuate
the purposes of clause (a) of this Section and to take such other action as the
Administrative Agent shall reasonably request.
ARTICLE VII
NEGATIVE COVENANTS
------------------
Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full and
all Letters of Credit have expired or terminated and all LC Disbursements shall
have been reimbursed, each Borrower (on behalf of itself and each of its
Subsidiaries) covenants and agrees with the Lenders that:
SECTION 7.01. Indebtedness; Guarantees.
------------------------
(a) The Company will not, and will not permit any of its Subsidiaries to,
create, incur, assume or permit to exist any Indebtedness that would violate the
terms of this Agreement.
(b) The Company will not, and will not permit any of its Subsidiaries to,
assume, endorse, be or become liable for, or Guarantee, the obligations of any
Person (except by the endorsement of negotiable instruments for deposit or
collection in the ordinary course of business), except:
(i) Guarantees existing on the date hereof and set forth on Schedule
7.01;
-55-
(ii) Guarantees of the Company and its Subsidiaries not in excess of
an aggregate of $5,000,000 at any one time outstanding;
(iii) Guarantees by the Company or any Subsidiary of obligations of
the Subsidiaries; provided that the Company or any Subsidiary (other than
--------
any Foreign Subsidiary) may guarantee the Indebtedness of any Foreign
Subsidiary as long as the aggregate amount of Indebtedness which is so
guaranteed does not in the aggregate at any one time outstanding exceed
$20,000,000; and
(iv) Guarantees by a Subsidiary of obligations of either or both
Borrowers under leases for real or personal property, provided that such
--------
Subsidiary will utilize all or a portion of such property.
SECTION 7.02. Liens. The Company will not, and will not permit any of its
-----
Subsidiaries to, create, incur, assume or permit to exist any Lien on any
property or asset now owned or hereafter acquired by it, or assign or sell any
income or revenues (including accounts receivable) or rights in respect of any
thereof, except:
(a) Liens created pursuant to the Loan Documents;
(b) Permitted Liens;
(c) any Lien on any property or asset of the Company or any of its
Subsidiaries existing on the date hereof and set forth on Schedule 7.02
(excluding, however, following the making of the initial Loans hereunder as of
the Effective Date, Liens securing Indebtedness to be repaid with the proceeds
of such Loans, as indicated on Schedule 7.02); provided that (i) no such Lien
shall extend to any other property or asset of the Company or any of its
Subsidiaries and (ii) any such Lien shall secure only those obligations which it
secures on the date hereof and extensions, renewals, replacements and
combinations thereof that do not increase the outstanding principal amount
thereof or commitment therefor, in each case, as in effect on the date hereof;
(d) any Lien existing on any property or asset prior to the acquisition
thereof by the Company or any Subsidiary or existing on any property or asset of
any Person that becomes a Subsidiary after the date hereof prior to the time
such Person becomes a Subsidiary (including in connection with a Permitted
Acquisition); provided that (i) such Lien is not created in contemplation of or
--------
in connection with such acquisition or such Person becoming a Subsidiary, as the
case may be, (ii) such Lien shall not apply to any other property or assets of
the Company or any Subsidiary and (iii) such Lien shall secure only those
obligations which it secures on the date of such acquisition or the date such
Person becomes a Subsidiary, as the case may be and extensions, renewals and
replacements thereof that do not increase the original outstanding principal
amount thereof;
(e) Liens on fixed or capital assets acquired, constructed or improved by
the Company or any Subsidiary; provided that (i) such security interests secure
--------
Indebtedness
-56-
permitted by Section 7.01, (ii) such security interests and the Indebtedness
secured thereby are incurred prior to or within six months after such
acquisition or the completion of such construction or improvement, (iii) the
Indebtedness secured thereby does not exceed 100% of the cost of acquiring,
constructing or improving such fixed or capital assets and (iv) such security
interests shall not apply to any other property or assets of the Company or any
Subsidiary;
(f) Liens on specifically identified inventory and accounts receivable
covered by bankers' acceptances resulting from import letters of credit which do
not cover any assets other than those financed with such bankers' acceptances;
(g) additional Liens on any property or asset of any of the Foreign
Subsidiaries that, together with the aggregate amount of Liens on the property
or assets of the Foreign Subsidiaries existing on the date hereof and set forth
on Schedule 7.02, do not exceed 18% of Consolidated Net Worth at any time; and
(h) additional Liens on any property or asset of any Subsidiary (other than
any Foreign Subsidiary) in an aggregate amount not exceeding $15,000,000.
SECTION 7.03. Mergers, Consolidations, Etc. (a) The Company will not, and
----------------------------
will not permit any of its Subsidiaries to, enter into any transaction of merger
or consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), except that (i) any Subsidiary may be
merged or consolidated with or into any other such Subsidiary and any Borrower
(so long as a Borrower or a wholly-owned Subsidiary is the surviving entity) and
(ii) the Company or any of its Subsidiaries may make Permitted Acquisitions.
SECTION 7.04. Dispositions. The Company will not, and will not permit any
------------
of its Subsidiaries to, convey, sell, lease, transfer or otherwise dispose of,
in one transaction or a series of transactions, any part of its business or
property, whether now owned or hereafter acquired (including receivables and
leasehold interests), except:
(a) obsolete or worn-out property, tools or equipment no longer used or
useful in its business;
(b) any inventory or other property sold or disposed of in the ordinary
course of business and for fair consideration;
(c) any Subsidiary of the Company may sell, lease, transfer or otherwise
dispose of any or all of its property (upon voluntary liquidation or otherwise)
to the Company or any wholly owned Subsidiary of the Company;
(d) the Capital Stock of any Subsidiary of the Company may be sold,
transferred or otherwise disposed of to the Company or any wholly owned
Subsidiary of the Company; and
-57-
(e) the Company or any Subsidiary may sell, lease, transfer or otherwise
dispose of (i) its property and assets the fair market value of which does not
exceed in the aggregate in any fiscal year 5% of the consolidated assets of the
Company and its Subsidiaries as of the end of the immediately preceding fiscal
year of the Company for fair consideration and (ii) the Capital Stock of any
Subsidiary (x) the net revenues of which do not exceed in the aggregate in any
fiscal year 5% of the consolidated net revenues of the Company and its
Subsidiaries or (y) the assets of which do not exceed in the aggregate in any
fiscal year 5% of the consolidated assets of the Company and its Subsidiaries,
in each case, as of the end of the immediately preceding fiscal year of the
Company for fair consideration; provided that in no event may the Company or any
--------
of its Subsidiaries sell, lease, transfer or otherwise dispose of any Capital
Stock that is at any time pledged pursuant to the Security Documents.
SECTION 7.05. Lines of Business. The Company will not, and will not permit
-----------------
any of its Subsidiaries to, engage to any material extent in any business other
than businesses of the type conducted by the Company and its Subsidiaries on the
date hereof and businesses reasonably related thereto.
SECTION 7.06. Investments and Acquisitions. The Company will not, and will
----------------------------
not permit any of its Subsidiaries to, make or suffer to exist any Investment in
any Person or purchase or otherwise acquire (in one transaction or a series of
transactions) any assets of any other Person constituting a business unit,
except:
(a) Permitted Investments;
(b) Investments by the Company in the capital stock of its Subsidiaries;
(c) Guarantees constituting Indebtedness permitted by Section 7.01;
(d) Investments by either Borrower or any Subsidiary in entities related to
the business of either Borrower or any Subsidiary in an aggregate amount not to
exceed $5,000,000;
(e) Investments (other than Investments permitted under clauses (a) and (b)
of this Section) existing on the date hereof and set forth on Schedule 7.06;
(f) additional Investments (other than Guarantees permitted by Section
7.01) by the Company in any Subsidiary or by any Subsidiary in any other
Subsidiary or in the Company; provided that the Company or any Subsidiary (other
--------
than any Foreign Subsidiary) may make an Investment in any Foreign Subsidiary as
long as the aggregate amount of such Investments does not in the aggregate at
any one time outstanding exceed $50,000,000;
(g) the Company and its Subsidiaries may make Permitted Acquisitions;
(h) purchases of inventory and other property to be sold or used in the
ordinary course of business;
-58-
(j) Investments not exceeding in the aggregate $5,000,000.
SECTION 7.07. Restricted Payments. The Company will not, and will not
-------------------
permit any of its Subsidiaries to, declare or make, or agree to pay or make,
directly or indirectly, any Restricted Payment, except that (a) the Company may
declare and pay dividends with respect to its Capital Stock payable solely in
additional shares of its Capital Stock and (b) the Company may make Restricted
Payments so long as, at the time of such Restricted Payment and immediately
after giving effect thereto, no Default shall have occurred and be continuing;
provided that nothing herein shall be deemed to prohibit the payment of
dividends by any Subsidiary of the Company to the Company, any other Subsidiary
of the Company or, if applicable, any minority shareholder of such Subsidiary
(in accordance with the percentage of the Capital Stock of such Subsidiary owned
by such minority shareholder).
SECTION 7.08. Transactions with Affiliates. The Company will not, and will
----------------------------
not permit any of its Subsidiaries to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except:
(a) transactions in the ordinary course of business at prices and on
terms and conditions not less favorable to the Company or such Subsidiary
than could be obtained on an arm's-length basis from a Person that is not
an Affiliate;
(b) transactions between or among the Company and its wholly-owned
Subsidiaries not involving any other Affiliate;
(c) any Investments permitted by Section 7.06;
(d) any Restricted Payment permitted by Section 7.07; and
(e) any Affiliate who is a natural person may serve as an employee or
director of either Borrower and receive reasonable compensation for his
services in such capacity.
SECTION 7.09. Restrictive Agreements. The Company will not, and will not
----------------------
permit any of its Subsidiaries to, directly or indirectly, enter into, incur or
permit to exist any agreement or other arrangement that prohibits, restricts or
imposes any condition upon (a) the ability of the Company or any Subsidiary to
create, incur or permit to exist any Lien upon any of its property or assets, or
(b) the ability of any Subsidiary to pay dividends or other distributions with
respect to any shares of its capital stock or to make or repay loans or advances
to the Company or any other Subsidiary or to Guarantee Indebtedness of the
Company or any other Subsidiary; except:
(i) restrictions and conditions imposed by law or by this Agreement;
(ii) restrictions and conditions existing on the date hereof
identified on Schedule 7.09 (but shall apply to any extension or renewal
of, or any amendment or modification expanding the scope of, any such
restriction or condition);
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(iii) customary restrictions and conditions contained in agreements
relating to the sale of a Subsidiary pending such sale, provided that such
restrictions and conditions apply only to the Subsidiary that is to be sold
and such sale is permitted hereunder; and
(iv) (with respect to clause (a) above) (x) restrictions or conditions
imposed by any agreement relating to secured Indebtedness permitted by this
Agreement if such restrictions or conditions apply only to the property or
assets securing such Indebtedness and (y) customary provisions in leases
and other contracts restricting the assignment thereof.
SECTION 7.10. Swap Agreements. The Company will not, and will not permit
---------------
any of its Subsidiaries to, enter into any Swap Agreement, other than Swap
Agreements entered into in the ordinary course of business to hedge or mitigate
risks to which the Company or any Subsidiary is exposed in the conduct of its
business or the management of its liabilities.
SECTION 7.11. Financial Covenants.
-------------------
(a) Consolidated Leverage Ratio. The Company will not permit the
---------------------------
Consolidated Leverage Ratio as at the last day of any period of four consecutive
fiscal quarters of the Company to exceed 3.00 to 1.0.
(b) Consolidated Fixed Charges Ratio. The Company will not permit the
--------------------------------
Consolidated Fixed Charge Coverage Ratio for any period of four consecutive
fiscal quarters of the Company to be less than 4.00 to 1.0.
(c) Consolidated Net Worth. The Company will not permit the Consolidated
----------------------
Net Worth at any time to be less than the sum of (i) $275,000,000 and (ii) 50%
of consolidated net income of the Company and its Subsidiaries for each fiscal
quarter of the Company (beginning with the fiscal quarter ending December 31,
2006) for which such consolidated net income is positive.
SECTION 7.12. Stock Issuance. The Company will not, and will not permit any
--------------
of its Subsidiaries to, issue any additional shares, or any right or option to
acquire any shares or any security convertible into any shares, of the Capital
Stock of any Subsidiary, except (a) in connection with dividends in Capital
Stock permitted by Section 7.07 and (b) to either Borrower or a Subsidiary.
SECTION 7.13. Modifications of Certain Documents. The Borrowers will not
----------------------------------
consent to any modification, supplement or waiver of any of the provisions of
the charter, by-laws or other organizational documents of the Borrowers or any
of their respective Subsidiaries or any other agreement or instrument to which
the Company or any of its Subsidiaries is a party or is bound that could
reasonably be expected to have a Material Adverse Effect, in each case, without
the prior consent of the Administrative Agent (with the approval of the Required
Lenders).
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ARTICLE VIII
EVENTS OF DEFAULT
-----------------
If any of the following events ("Events of Default") shall occur:
-----------------
(a) the Borrowers shall fail to pay any principal of any Loan when and
as the same shall become due and payable, whether at the due date thereof
or at a date fixed for prepayment thereof or otherwise;
(b) the Borrowers shall fail to pay any reimbursement obligation in
respect of any LC Disbursement or any interest on any Loan or any fee or
any other amount (other than an amount referred to in clause (a) of this
Article) payable under this Agreement or under any other Loan Document,
when and as the same shall become due and payable, and such failure shall
continue unremedied for a period of five or more Business Days;
(c) any representation or warranty made or deemed made by or on behalf
of the Borrowers or any of the their respective Subsidiaries in or in
connection with this Agreement or any other Loan Document or any amendment
or modification hereof or thereof, or in any report, certificate, financial
statement or other document furnished pursuant to or in connection with
this Agreement or any other Loan Document or any amendment or modification
hereof or thereof, shall prove to have been false or misleading when made
or deemed made in any material respect;
(d) the Borrowers shall fail to observe or perform any covenant,
condition or agreement contained in Section 6.02, 6.03 (with respect to the
Borrowers' existence) or 6.09 or in Article VII or the Company shall
default in the performance of any of its obligations contained in Section
4.01 or 4.02 of the Pledge Agreement;
(e) either Borrower or any other Loan Party shall fail to observe or
perform any covenant, condition or agreement contained in this Agreement
(other than those specified in clause (a), (b) or (d) of this Article) or
any other Loan Document and such failure shall continue unremedied for a
period of 30 or more days after notice thereof from the Administrative
Agent (given at the request of any Lender) to the Company;
(f) the Company or any of its Subsidiaries shall fail to make any
payment (whether of principal or interest and regardless of amount) in
respect of any Material Indebtedness, when and as the same shall become due
and payable, and such failure shall continue unremedied for a period of
five or more Business Days;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables
or permits (with or without the giving of notice, the lapse of time or
both) the holder or holders of any Material Indebtedness or any trustee or
agent on its or their behalf to cause any Material Indebtedness to become
due, or to require the prepayment, repurchase, redemption or defeasance
thereof, prior to its scheduled maturity; provided that this clause (g)
--------
shall not
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apply to secured Indebtedness that becomes due as a result of the voluntary
sale or transfer of the property or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other
relief in respect of the Company or any Subsidiary having assets in excess
of $10,000,000 or its debts, or of a substantial part of its assets, under
any Federal, state or foreign bankruptcy, insolvency, receivership or
similar law now or hereafter in effect or (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official
for the Company or any such Subsidiary or for a substantial part of its
assets, and, in any such case, such proceeding or petition shall continue
undismissed for a period of 60 or more days or an order or decree approving
or ordering any of the foregoing shall be entered;
(i) the Company or any Subsidiary having assets in excess of
$10,000,000 shall (i) voluntarily commence any proceeding or file any
petition seeking liquidation, reorganization or other relief under any
Federal, state or foreign bankruptcy, insolvency, receivership or similar
law now or hereafter in effect, (ii) consent to the institution of, or fail
to contest in a timely and appropriate manner, any proceeding or petition
described in clause (h) of this Article, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Company or any such Subsidiary or for a
substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make
a general assignment for the benefit of creditors or (vi) take any action
for the purpose of effecting any of the foregoing;
(j) the Company or any of its Subsidiaries shall become unable, admit
in writing its inability or fail generally to pay its debts as they become
due;
(k) one or more judgments for the payment of money in an aggregate
amount in excess of $5,000,000 shall be rendered against the Company or any
of its Subsidiaries or any combination thereof and the same shall remain
undischarged for a period of 30 consecutive days during which execution
shall not be effectively stayed, or any action shall be legally taken by a
judgment creditor to attach or levy upon any assets of the Company or any
of its Subsidiaries to enforce any such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in a Material Adverse
Effect;
(m) a Change in Control shall occur; or
(n) the Liens created by the Security Documents shall at any time not
constitute a valid and perfected Lien on the collateral intended to be
covered thereby (to the extent perfection by filing, registration,
recordation or possession is required herein or therein) in favor of the
Administrative Agent, free and clear of all other Liens (other than Liens
permitted under Section 7.02 or under the respective Security Documents),
or, except for expiration in accordance with its terms, any of the Security
Documents shall for whatever
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reason be terminated or cease to be in full force and effect, or the
enforceability thereof shall be contested by any Loan Party;
then, and in every such event (other than any event described in clause (h) or
(i) of this Article), and at any time thereafter during the continuance of such
event, the Administrative Agent may, and at the request of the Required Lenders
shall, by notice to the Company, take either or both of the following actions,
at the same or different times: (i) terminate the Commitments, and thereupon the
Commitments shall terminate immediately, and (ii) declare the Loans then
outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared to be
due and payable), and thereupon the principal of the Loans so declared to be due
and payable, together with accrued interest thereon and all fees and other
obligations of the Borrowers accrued hereunder, shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by each Borrower; and in case of any event
described in clause (h) or (i) of this Article, the Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Borrowers accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by each Borrower.
ARTICLE IX
THE ADMINISTRATIVE AGENT
------------------------
Each of the Lenders and the Issuing Lender hereby irrevocably appoints the
Administrative Agent as its agent hereunder and under the other Loan Documents
and authorizes the Administrative Agent to take such actions on its behalf and
to exercise such powers as are delegated to the Administrative Agent by the
terms hereof or thereof, together with such actions and powers as are reasonably
incidental thereto.
The Person serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such
Person and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with the Company or any Subsidiary or other
Affiliate thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations except
those expressly set forth herein and in the other Loan Documents. Without
limiting the generality of the foregoing, (a) the Administrative Agent shall not
be subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing, (b) the Administrative Agent shall not
have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated hereby or
by the other Loan Documents that the Administrative Agent is required to
exercise in writing as directed by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances provided
in Section 10.02), and (c) except as expressly set forth herein
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and in the other Loan Documents, the Administrative Agent shall not have any
duty to disclose, and shall not be liable for the failure to disclose, any
information relating to the Company or any of its Subsidiaries that is
communicated to or obtained by the Person serving as Administrative Agent or any
of its Affiliates in any capacity. The Administrative Agent shall not be liable
for any action taken or not taken by it with the consent or at the request of
the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary under the circumstances provided in Section 10.02) or in the
absence of its own gross negligence or wilful misconduct. The Administrative
Agent shall be deemed not to have knowledge of any Default unless and until
written notice thereof is given to the Administrative Agent by the Company or a
Lender, and the Administrative Agent shall not be responsible for or have any
duty to ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with this Agreement or any other Loan Document, (ii)
the contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement, any other Loan Document or any other agreement,
instrument or document, or (v) the satisfaction of any condition set forth in
Article V or elsewhere herein or therein, other than to confirm receipt of items
expressly required to be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for a Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and exercise
its rights and powers by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor Administrative
Agent as provided in this paragraph, the Administrative Agent may resign at any
time by notifying the Lenders, the Issuing Lender and the Company. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Company, to appoint a successor. If no successor shall have been so appointed by
the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, on behalf of the Lenders and the Issuing
Lender, appoint a successor Administrative Agent which shall be a Lender with an
office in New York, New York or an Affiliate of a Lender. Upon the acceptance of
its appointment as
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Administrative Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. The fees payable by the
Company to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Company and such
successor. After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 10.03 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without reliance
upon the Administrative Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it shall from time
to time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any other Loan Document or any
related agreement or any document furnished hereunder or thereunder.
Notwithstanding anything herein to the contrary the Sole Bookrunner and the
Sole Lead Arranger and Co-Documentation Agents named on the cover page of this
Agreement shall not have any duties or liabilities under this Agreement, except
in their capacity, if any, as Lenders.
ARTICLE X
MISCELLANEOUS
-------------
SECTION 10.01. Notices.
-------
(a) Notices Generally. Except in the case of notices and other
-----------------
communications expressly permitted to be given by telephone (and subject to
paragraph (b) of this Section), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopy (i)
if to the Borrowers, the Administrative Agent or any Issuing Lender, as set
forth in Schedule 10.01 and (ii) if to any other Lender, to it at its address
(or telecopy number) set forth in its Administrative Questionnaire.
(b) Electronic Communications. Notices and other communications to the
-------------------------
Lenders hereunder may be delivered or furnished by electronic communications
pursuant to procedures approved by the Administrative Agent; provided that the
--------
foregoing shall not apply to notices pursuant to Article II unless otherwise
agreed by the Administrative Agent and the applicable Lender. The Administrative
Agent or a Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
--------
limited to particular notices or communications.
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(c) Change of Address, Etc. Any party hereto may change its address or
----------------------
telecopy number for notices and other communications hereunder by notice to the
other parties hereto. All notices and other communications given to any party
hereto in accordance with the provisions of this Agreement shall be deemed to
have been given on the date of receipt.
SECTION 10.02. Waivers; Amendments.
-------------------
(a) No Deemed Waivers; Remedies Cumulative. No failure or delay by the
--------------------------------------
Administrative Agent, the Issuing Lender or any Lender in exercising any right
or power hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent, the Issuing Lender and the Lenders
hereunder are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure by a Borrower therefrom shall in any event be effective
unless the same shall be permitted by paragraph (b) of this Section, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. Without limiting the generality of the foregoing,
the making of a Loan or issuance of a Letter of Credit shall not be construed as
a waiver of any Default, regardless of whether the Administrative Agent, any
Lender or the Issuing Lender may have had notice or knowledge of such Default at
the time.
(b) Amendments. Neither this Agreement nor any provision hereof may be
----------
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Borrowers and the Required Lenders or by the
Borrowers and the Administrative Agent with the consent of the Required Lenders;
provided that no such agreement shall:
- --------
(i) increase the Commitment of any Lender without the written consent
of such Lender;
(ii) reduce the principal amount of any Loan or LC Disbursement or
reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender adversely affected thereby;
(iii) postpone the scheduled date of payment of the principal amount
of any Loan or LC Disbursement, or any interest thereon, or any fees
payable hereunder, or reduce the amount of, waive or excuse any such
payment, or postpone the scheduled date of expiration of any Commitment,
without the written consent of each Lender adversely affected thereby;
(iv) change Section 2.16(b), (c) or (d) in a manner that would alter
the pro rata sharing of payments required thereby, without the written
consent of each Lender;
(v) change any of the provisions of this Section or the definition of
the term "Required Lenders" or any other provision hereof specifying the
number or percentage of Lenders required to waive, amend or modify any
rights hereunder or make any
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determination or grant any consent hereunder, without the written consent
of each Lender; or
(vi) release all or substantially all of the Guarantors from their
guarantee obligations under Article III or all or substantially all of the
collateral, in each case without the written consent of each Lender;
and provided further that no such agreement shall amend, modify or otherwise
--------
affect the rights or duties of the Administrative Agent or the Issuing Lender
hereunder without the prior written consent of the Administrative Agent or the
Issuing Lender, as the case may be.
Except as otherwise provided in this Section with respect to this
Agreement, the Administrative Agent may, with the prior consent of the Required
Lenders (but not otherwise), consent to any modification, supplement or waiver
under any of the Security Documents, provided that, without the prior consent of
each Lender, the Administrative Agent shall not (except as provided herein or in
--------
the Security Documents) release all or substantially all of the collateral or
otherwise terminate all or substantially all of the Liens under any Security
Document providing for collateral security, except that no such consent shall be
required, and the Administrative Agent is hereby authorized, to release any Lien
covering property (and to release any such guarantor) that is the subject of
either a disposition of property permitted hereunder or a disposition to which
the Required Lenders have consented.
SECTION 10.03. Expenses; Indemnity; Damage Waiver.
----------------------------------
(a) Costs and Expenses. The Borrowers shall pay (i) all reasonable
------------------
out-of-pocket expenses incurred by the Administrative Agent and its Affiliates,
including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent, in connection with the syndication of the credit
facilities provided for herein, the preparation and administration of this
Agreement and the other Loan Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) all reasonable
out-of-pocket expenses incurred by the Issuing Lender in connection with the
issuance, amendment, renewal or extension of any Letter of Credit or any demand
for payment thereunder, (iii) all out-of-pocket expenses incurred by the
Administrative Agent, the Issuing Lender or any Lender, including the fees,
charges and disbursements of any counsel for the Administrative Agent, the
Issuing Lender or any Lender, in connection with the enforcement or protection
of its rights in connection with this Agreement and the other Loan Documents,
including its rights under this Section, or in connection with the Loans made or
Letters of Credit issued hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect thereof
and (iv) and all reasonable costs, expenses, taxes, assessments and other
charges incurred in connection with any filing, registration, recording or
perfection of any security interest contemplated by any Security Document or any
other document referred to therein.
(b) Indemnification by the Borrowers. The Borrowers shall indemnify the
--------------------------------
Administrative Agent, the Issuing Lender and each Lender, and each Related Party
of any of the foregoing Persons (each such Person being called an "Indemnitee")
----------
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses,
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including the reasonable fees, charges and disbursements of any counsel for any
Indemnitee, incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement or any agreement or instrument contemplated hereby, the performance by
the parties hereto of their respective obligations hereunder or the consummation
of the Transactions or any other transactions contemplated hereby, (ii) any Loan
or Letter of Credit or the use of the proceeds therefrom (including any refusal
by the Issuing Lender to honor a demand for payment under a Letter of Credit if
the documents presented in connection with such demand do not strictly comply
with the terms of such Letter of Credit), (iii) any actual or alleged presence
or release of Hazardous Materials on or from any property owned or operated by
the Company or any of its Subsidiaries, or any Environmental Liability related
in any way to the Company or any of its Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
--------
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or wilful misconduct of such Indemnitee.
(c) Reimbursement by Lenders. To the extent that the Borrowers fail to pay
------------------------
any amount required to be paid by it to the Administrative Agent or the Issuing
Lender under paragraph (a) or (b) of this Section, each Lender severally agrees
to pay to the Administrative Agent or the Issuing Lender, as the case may be,
such Lender's Applicable Percentage (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount; provided that the unreimbursed expense or indemnified loss, claim,
--------
damage, liability or related expense, as the case may be, was incurred by or
asserted against the Administrative Agent or the Issuing Lender in its capacity
as such.
(d) Waiver of Consequential Damages, Etc. To the extent permitted by
------------------------------------
applicable law, neither Borrower shall assert, and each Borrower hereby waives,
any claim against any Indemnitee, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, this Agreement
or any agreement or instrument contemplated hereby, the Transactions, any Loan
or Letter of Credit or the use of the proceeds thereof.
(e) Payments. All amounts due under this Section shall be payable promptly
--------
after written demand therefor.
SECTION 10.04. Successors and Assigns.
----------------------
(a) Assignments Generally. The provisions of this Agreement shall be
---------------------
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby (including any Affiliate of the Issuing
Lender that issues any Letter of Credit), except that (i) neither Borrower may
assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of each Lender (and any attempted assignment or
transfer by a Borrower without such consent shall be null and void) and (ii) no
Lender may assign or otherwise transfer its rights or obligations hereunder
except in accordance with this Section. Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any
-68-
Person (other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Lender that issues any
Letter of Credit), Participants (to the extent provided in paragraph (c) of this
Section) and, to the extent expressly contemplated hereby, the Related Parties
of each of the Administrative Agent, the Issuing Lender and the Lenders) any
legal or equitable right, remedy or claim under or by reason of this Agreement.
(b) Assignments by Lenders.
----------------------
(i) Assignments Generally. Subject to the conditions set forth in paragraph
---------------------
(b)(ii) below, any Lender may assign to one or more assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans at the time owing to it) with the prior written
consent (such consent not to be unreasonably withheld) of:
(A) the Borrowers, provided that no consent of the Borrowers shall be
--------
required for an assignment to a Lender, an Affiliate of a Lender, an
Approved Fund or, if an Event of Default has occurred and is continuing,
any other assignee;
(B) the Administrative Agent; and
(C) the Issuing Lender.
(ii) Certain Conditions to Assignments. Assignments shall be subject to the
---------------------------------
following additional conditions:
(A) except in the case of an assignment to a Lender or an Affiliate of
a Lender or an assignment of the entire remaining amount of the assigning
Lender's Commitment or Loans, the amount of the Commitment or Loans of the
assigning Lender subject to each such assignment (determined as of the date
the Assignment and Assumption with respect to such assignment is delivered
to the Administrative Agent) shall not be less than $5,000,000 unless each
of the Borrowers and the Administrative Agent otherwise consent, provided
--------
that no such consent of the Borrowers shall be required if an Event of
Default has occurred and is continuing,
(B) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations
under this Agreement,
(C) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500, and
(D) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.
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(iii) Effectiveness of Assignments. Subject to acceptance and recording
----------------------------
thereof pursuant to paragraph (b)(iv) of this Section, from and after the
effective date specified in each Assignment and Assumption, the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Assumption, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.13, 2.14, 2.15 and 10.03). Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this Section shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (c) of this Section.
(iv) Maintenance of Register by the Administrative Agent. The
---------------------------------------------------
Administrative Agent, acting for this purpose as an agent of the Borrowers,
shall maintain at one of its offices a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses of
the Lenders, and the Commitment of, and principal amount of the Loans and LC
Disbursements owing to, each Lender pursuant to the terms hereof from time to
time (the "Register"). The entries in the Register shall be conclusive, and the
--------
Borrowers, the Administrative Agent, the Issuing Lender and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. The Register shall be available for inspection by the
Borrowers, the Issuing Lender and any Lender, at any reasonable time and from
time to time upon reasonable prior notice.
(v) Acceptance of Assignments by Administrative Agent. Upon its receipt of
-------------------------------------------------
a duly completed Assignment and Assumption executed by an assigning Lender and
an assignee, the assignee's completed Administrative Questionnaire (unless the
assignee shall already be a Lender hereunder), the processing and recordation
fee referred to in paragraph (b) of this Section and any written consent to such
assignment required by paragraph (b) of this Section, the Administrative Agent
shall accept such Assignment and Assumption and record the information contained
therein in the Register. No assignment shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this
paragraph.
(c) Participations.
--------------
(i) Participations Generally. Any Lender may, without the consent of the
------------------------
Borrowers, the Administrative Agent or the Issuing Lender, sell participations
to one or more banks or other entities (a "Participant") in all or a portion of
-----------
such Lender's rights and obligations under this Agreement and the other Loan
Documents (including all or a portion of its Commitment and the Loans owing to
it); provided that (A) such Lender's obligations under this Agreement and the
--------
other Loan Documents shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (C) the Borrowers, the Administrative Agent, the Issuing Lender and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement and
the other Loan Documents. Any agreement or instrument pursuant to
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which a Lender sells such a participation shall provide that such Lender shall
retain the sole right to enforce this Agreement and the other Loan Documents and
to approve any amendment, modification or waiver of any provision of this
Agreement or any other Loan Document; provided that such agreement or instrument
--------
may provide that such Lender will not, without the consent of the Participant,
agree to any amendment, modification or waiver described in the first proviso to
Section 10.02(b) that affects such Participant. Subject to paragraph (c)(ii) of
this Section, the Borrowers agree that each Participant shall be entitled to the
benefits of Sections 2.13, 2.14 and 2.15 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.08 as though it were a Lender, provided
--------
that such Participant agrees to be subject to Section 2.16(c) as though it were
a Lender.
(ii) Limitations on Rights of Participants. A Participant shall not be
-------------------------------------
entitled to receive any greater payment under Section 2.13 or 2.15 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrowers' prior written consent. A
Participant that would be a Non-U.S. Lender if it were a Lender shall not be
entitled to the benefits of Section 2.15 unless the Borrowers are notified of
the participation sold to such Participant and such Participant agrees, for the
benefit of the Borrowers, to comply with Section 2.15(e) as though it were a
Lender.
(d) Certain Pledges. Any Lender may at any time pledge or assign a security
---------------
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including without limitation any pledge or
assignment to secure obligations to a Federal Reserve Bank, and this Section
shall not apply to any such pledge or assignment of a security interest;
provided that no such pledge or assignment of a security interest shall release
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a Lender from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.
SECTION 10.05. Survival. All covenants, agreements, representations and
--------
warranties made by the Borrowers herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any Loans
and issuance of any Letters of Credit, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the
Administrative Agent, the Issuing Lender or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this Agreement is outstanding and unpaid or any
Letter of Credit is outstanding and so long as the Commitments have not expired
or terminated. The provisions of Sections 2.13, 2.14, 2.15, 3.03 and 10.03 and
Article IX shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision hereof.
SECTION 10.06. Counterparts; Integration; Effectiveness. This Agreement may
----------------------------------------
be executed in counterparts (and by different parties hereto on different
counterparts), each of
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which shall constitute an original, but all of which when taken together shall
constitute a single contract. This Agreement and any separate letter agreements
with respect to fees payable to the Administrative Agent constitute the entire
contract among the parties relating to the subject matter hereof and supersede
any and all previous agreements and understandings, oral or written, relating to
the subject matter hereof. Except as provided in Section 5.01, this Agreement
shall become effective when it shall have been executed by the Administrative
Agent and when the Administrative Agent shall have received counterparts hereof
which, when taken together, bear the signatures of each of the other parties
hereto, and thereafter shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. Delivery of an
executed counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.
SECTION 10.07. Severability. Any provision of this Agreement held to be
------------
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 10.08. Right of Setoff. If an Event of Default shall have occurred
---------------
and be continuing, each Lender and each of its Affiliates is hereby authorized
at any time and from time to time, to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations at any time owing
by such Lender or Affiliate to or for the credit or the account of either
Borrower against any of and all the obligations of either Borrower now or
hereafter existing under this Agreement held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement and
although such obligations may be unmatured. The rights of each Lender under this
Section are in addition to other rights and remedies (including other rights of
setoff) which such Lender may have. Each Lender agrees to notify each Borrower
and the Administrative Agent as promptly as practicable after any such setoff
and application; provided that the failure to give such notice shall not affect
--------
the validity of such setoff and application.
SECTION 10.09. Governing Law; Jurisdiction; Consent to Service of Process.
----------------------------------------------------------
(a) Governing Law. This Agreement shall be construed in accordance with and
-------------
governed by the law of the State of New York.
(b) Submission to Jurisdiction. Each Borrower hereby irrevocably and
--------------------------
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other
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manner provided by law. Nothing in this Agreement shall affect any right that
the Administrative Agent, the Issuing Lender or any Lender may otherwise have to
bring any action or proceeding relating to this Agreement against either
Borrower or its properties in the courts of any jurisdiction.
(c) Waiver of Venue. Each Borrower hereby irrevocably and unconditionally
---------------
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement in any court
referred to in paragraph (b) of this Section. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(d) Service of Process. Each party to this Agreement irrevocably consents
------------------
to service of process in the manner provided for notices in Section 10.01.
Nothing in this Agreement will affect the right of any party to this Agreement
to serve process in any other manner permitted by law.
SECTION 10.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
--------------------
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 10.11. Judgment Currency. This is an international loan transaction
-----------------
in which the specification of Dollars or any Foreign Currency, as the case may
be (the "Specified Currency"), and payment in New York City or the country of
------------------
the Specified Currency, as the case may be (the "Specified Place"), is of the
---------------
essence, and the Specified Currency shall be the currency of account in all
events relating to Loans denominated in the Specified Currency. The payment
obligations of each Borrower under this Agreement shall not be discharged or
satisfied by an amount paid in another currency or in another place, whether
pursuant to a judgment or otherwise, to the extent that the amount so paid on
conversion to the Specified Currency and transfer to the Specified Place under
normal banking procedures does not yield the amount of the Specified Currency at
the Specified Place due hereunder. If for the purpose of obtaining judgment in
any court it is necessary to convert a sum due hereunder in the Specified
Currency into another currency (the "Second Currency"), the rate of exchange
---------------
that shall be applied shall be the rate at which in accordance with normal
banking procedures the Administrative Agent could purchase the Specified
Currency with the Second Currency on the Business Day next preceding the day on
which such judgment is rendered. The obligation of each Borrower in respect of
any such sum due from it to the Administrative Agent or any Lender hereunder or
under any other Loan Document (in this Section called an "Entitled Person")
---------------
shall, notwithstanding the rate of
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exchange actually applied in rendering such judgment, be discharged only to the
extent that on the Business Day following receipt by such Entitled Person of any
sum adjudged to be due hereunder in the Second Currency such Entitled Person may
in accordance with normal banking procedures purchase and transfer to the
Specified Place the Specified Currency with the amount of the Second Currency so
adjudged to be due; and each Borrower hereby, as a separate obligation and
notwithstanding any such judgment, agrees to indemnify such Entitled Person
against, and to pay such Entitled Person on demand, in the Specified Currency,
the amount (if any) by which the sum originally due to such Entitled Person in
the Specified Currency hereunder exceeds the amount of the Specified Currency so
purchased and transferred.
SECTION 10.12. Headings. Article and Section headings and the Table of
--------
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 10.13. Confidentiality. Each of the Administrative Agent, the
---------------
Issuing Lender and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to
its and its Affiliates' directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedies hereunder or under any other Loan
Document or any suit, action or proceeding relating to this Agreement or any
other Loan Document or the enforcement of rights hereunder or thereunder, (f)
subject to an agreement containing provisions substantially the same as those of
this Section, to (i) any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement or (ii) any actual or prospective counterparty (or its advisors) to
any swap or derivative transaction relating to the Borrowers and their
obligations, (g) with the consent of the Borrowers or (h) to the extent such
Information (A) becomes publicly available other than as a result of a breach of
this Section or (iii) becomes available to the Administrative Agent, the Issuing
Lender or any Lender on a nonconfidential basis from a source other than a
Borrower. For the purposes of this Section, "Information" means all information
-----------
received from either Borrower relating to either Borrower or its business, other
than any such information that is available to the Administrative Agent, the
Issuing Lender or any Lender on a nonconfidential basis prior to disclosure by a
Borrower; provided that, in the case of information received from a Borrower
--------
after the date hereof, such information is clearly identified at the time of
delivery as confidential. Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information.
SECTION 10.14. USA PATRIOT Act. Each Lender hereby notifies the Borrowers
---------------
that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)), such Lender may be required to
obtain, verify and record information that identifies the Borrowers, which
information includes the name and address of each Borrower and other information
that will allow such Lender to identify the
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Borrowers in accordance with said Act.
SECTION 10.15. Authorization of Company. The Subsidiary Borrower hereby
------------------------
authorizes the Company to give on behalf of such Borrower all notices, consents
and other communications that may be given by such Borrower under or in
connection with this Agreement or any other Loan Document, and to receive on
behalf of such Borrower all notices, consents and other communications that may
be given to such Borrower under or in connection with this Agreement or any
other Loan Document (in each case, irrespective of whether or not such notice,
consent or other communication is expressly provided elsewhere in this Agreement
to be given or received by the Company on behalf of such Borrower). Such
notices, consents and other communications may include Borrowing Requests,
notices as to continuations, conversions and prepayments of Loans, notices and
demands in connection with Events of Default, and notices and demands in
connection with the exercise by the Administrative Agent or any Lender of
remedies. Such notices, consents and other communications may be given by or to
the Company in its own name or in the name of the Subsidiary Borrower. The
authority given by the Subsidiary Borrower in this Section is coupled with an
interest and is irrevocable until all the Commitments of the Lenders have
expired or been terminated and all the obligations of such Borrower under this
Agreement and the other Loan Documents have been paid in full.
SECTION 10.16. Confirmation of Security Interests. The Company, by its
----------------------------------
execution of this Agreement, hereby confirms and ratifies that all of its
obligations under the Pledge Agreement shall continue in full force and effect
for the benefit of the Administrative Agent and the Lenders with respect to this
amendment and restatement of the Existing Credit Agreement. The Company, by its
execution of this Agreement, hereby confirms that the security interests granted
by it under the Pledge Agreement shall continue in full force and effect in
favor of the Administrative Agent for the benefit of the Lenders and the
Administrative Agent with respect to the Existing Credit Agreement as amended
hereby.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
GRIFFON CORPORATION
By /s/Eric Edelstein
-----------------------------
Name: Eric Edelstein
Title: Exec. VP & CFO
U.S. Federal Tax Identification No.: 11-1893410
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TELEPHONICS CORPORATION
By /s/Donald C. Pastor
-----------------------------
Name: Donald C. Pastor
Title: Exec. V.P. - Operations & CFO
U.S. Federal Tax Identification No.:
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LENDERS
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JPMORGAN CHASE BANK, N.A.
individually and as Administrative Agent
By /s/John K. Budzynski
-----------------------------
Name: John K. Budzynski
Title: Senior Vice President
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BANK OF AMERICA, N.A.
By /s/Steven J. Melicharek
-----------------------------
Name: Steven J. Melicharek
Title: Senior Vice President
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HSBC BANK USA, NATIONAL ASSOCIATION
By /s/Christopher J. Mendelsohn
-----------------------------
Name: Christopher J. Mendelsohn
Title: First Vice President
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U.S. BANK NATIONAL ASSOCIATION
By /s/Patrick H. McGraw, Jr.
------------------------------
Name: Patrick H. McGraw, Jr.
Title: Vice President
U.S. Bank, N.A.
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MANUFACTURERS AND TRADERS TRUST COMPANY
By /s/Brian Stone
------------------------------
Name: Brian Stone
Title: Administrative
Vice President
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NORTH FORK BANK
By /s/Kevin Brown
------------------------------
Name: Kevin Brown
Title: Senior Vice President